BILL ANALYSIS
SB 1340
Page 1
Date of Hearing: June 28, 2010
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1340 (Kehoe) - As Amended: June 17, 2010
SENATE VOTE : 23-4
SUBJECT : Alternative fuels and vehicle technologies
SUMMARY : Would facilitate the installation of electric vehicle
charging infrastructure. Specifically, this bill :
1)Clarifies that the costs of homeowners' electrical work needed
to fuel electric vehicles are eligible for subsides under the
California Energy Commission's (CEC) Alternative and Renewable
Fuel and Vehicle Technology Program.
2)Expands the use of the voluntary contractual assessment to
finance electric vehicle charging infrastructure affixed on
real property.
3)Expands the Property Assessed Clean Energy (PACE) Reserve
program to assist local jurisdictions in financing the
installation of electric vehicle charging infrastructure.
EXISTING LAW :
1)Establishes the Alternative and Renewable Fuel and Vehicle
Technology Program, administered by the CEC, that provides
grants, revolving loans, loan guarantees, loans, or other
appropriate funding measures to public agencies, vehicle
consortia, businesses, consumers, recreational boaters, and
academic institutions to develop and deploy innovative
technologies that transform California fuel and vehicle types
to help attain the state's climate change policies.
2)Authorizes a public agency and a property owner to enter into
voluntary contractual assessments to finance the installation
of distributed generation renewable energy sources or energy
or water efficiency improvements that are permanently affixed
on real property.
3)Requires the California Alternative Energy and Advanced
Transportation Financing Authority to establish the PACE
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Reserve program to assist local jurisdictions in financing the
installation of distributed generation renewable energy
sources or energy or water efficiency improvements meeting
specified requirements that are permanently affixed on real
property through the use of a voluntary contractual
assessment.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, "the Alternative and
Renewable fuel and Vehicle Technology Program currently is not
specifically set up to address the needs of plug-in electric
vehicle (PEVs) or plug-in hybrid electric vehicle (PHEVs) owners
who will have to have their homes (garage to power-box) upgraded
to handle the additional power needs of these vehicles to
properly and safely charge them.
Additionally, there are other financing programs, like PACE,
that currently exist that should also include electric vehicle
charging infrastructure into their program. The use of
electrically-fueled vehicles will lead to greenhouse gas
emission reductions as more and more consumers swap out their
petroleum-fueled vehicles with electric ones. However, public
perception and confidence in these vehicles will quickly erode
if PEV and PHEV vehicle owners have to confront costly in-home
electrical issues in order to operate these vehicles. As a
solution, this bill specifically requires the CEC to administer
a program that will provide funding for homeowners who purchase
a plug-in electric vehicle to offset costs associated with
modifying electrical sources to include residential electric
vehicle charging stations. This bill's recent amendment allows
electric vehicle charging infrastructure into the PACE program."
Alternative and Renewable Fuel and Vehicle Technology Program :
As administered by the CEC, the Alternative and Renewable Fuel
and Vehicle Technology Program authorizes funding to develop
and deploy alternative and renewable fuels and advanced
transportation technologies to help attain the state's climate
change policies. CEC has an annual program budget of
approximately $100 million to support projects that, among other
items:
1)Develop and improve alternative and renewable low-carbon
fuels.
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2)Optimize alternative and renewable fuels for existing and
developing engine technologies.
3)Produce alternative and renewable low-carbon fuels in
California.
4)Decrease, on a full fuel cycle basis, the overall impact and
carbon footprint of alternative and renewable fuels and
increase sustainability.
5)Expand fuel infrastructure, fueling stations, and equipment.
6)Improve light-, medium-, and heavy-duty vehicle technologies.
7)Expand infrastructure connected with existing fleets, public
transit, and transportation corridors.
The funds for the program come from additional fees on vehicle
and vessel registrations as well as $10 million from The Public
Interest Research, Development and Demonstration Fund.
The CEC does not currently have an electrical vehicle upgrade
program in place. The Alternative and Renewable Fuel and
Vehicle Technology Program provides that "Alternative and
renewable fuel infrastructure, fueling stations, and equipment"
shall be eligible for funding under this program. Alternative
and renewable fuel projects include "electricity, ethanol,
dimethyl ether, renewable diesel, natural gas, hydrogen, and
biomethane among others." Taken together, it would seem that
CEC currently has the authority to create a program such as the
one in this bill. This bill clarifies that cost offsets for
residential charging stations are an eligible expense.
PACE program : The PACE program permits local public agencies
and utility districts to provide up-front financing to property
owners to install solar or other renewable energy-generating
devices or make specified water or energy efficiency
improvements to their properties. This financing mechanism was
first used by Berkeley through its Charter Cities authority, and
then authorized statewide by AB 811 (Levine), Chapter 159,
Statutes of 2008, and AB 474 (Blumenfield), Chapter 444,
Statutes of 2009.
Under the PACE program, a city, county, or other public agency
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issues bonds and uses the proceeds to make loans to property
owners to finance energy retrofits. These loans are repaid by
the property owner over 20 years via an annual assessment on the
owner's property tax bill. The assessment remains on the
property even if it is sold or transferred. From the property
owner's perspective, the added property tax assessments are
partly or fully offset by energy savings resulting from the
retrofit. The loan repayments from the property owners are
dedicated by the municipalities to the repayment of the revenue
bonds.
This bill allows electric vehicle charging infrastructure into
the PACE program.
Committee oversight hearings : The Assembly Transportation
Committee recently held two oversight hearings, the first
hearing held jointly with the Assembly Utilities and Commerce
Committe, to explore California's readiness to adopt electrice
vehicles. Cited repeatedly in these hearings as a significant
factor in acclerating consumer adoption of electric vehicles was
the ease and timeliness of installing home charging stations.
Arguments in Support : The author points out that major auto
manufacturers will be introducing new electric vehicles and
plug-in electric vehicles in the fall of 2010 and early 2011,
and as consumers seek to purchase these vehicles many will
require electrical improvements at their homes. Costs for these
improvements can range from a few hundred dollars to several
thousand dollars. Despite the air quality and energy efficiency
benefits of the technology, many potential electric vehicle
purchasers may be dissuaded from buying an electric-drive
vehicle if it additionally requires hundreds of dollars of
initial costs at their homes. This bill gives clear legislative
authority for the CEC to design an AB 118-funded program that
helps to off-set these costs as well as expanding the PACE
program for clean vehicle purposes.
Arguments in Opposition : Current law authorizes cities,
counties, and specified special districts to provide up-front
financing to property owners to install solar or other renewable
energy-generating devices or make specified energy or water
efficiency improvements to their properties through a system of
contractual assessments. Under the contractual assessments, the
property owner or owners within a designated area choose to
assess themselves for the cost of energy efficiency improvements
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or public works projects (i.e., under grounding of power lines
or installation of streetlights). The local government then
provides the up-front funds for the project, and the property
owners pay an annual assessment (normally 20 years) until those
funds, plus interest, are repaid. The underlying purpose is to
create a means by which a project that provides both a public
benefit and an incidental benefit to particular property owners
can be financed without imposing the cost on property owners in
other parts of the city who derive no benefit.
Of concern is that, under the PACE program, the contractual
assessments stay with the property and any subsequent owner
would be subject to the assessment. In regards to the
installation of an EV charging system, the new property owner
would be faced with paying the assessment regardless of
ownership of an EV. The financing of improvements such as solar
panels or solar water heaters could be of benefit to any
subsequent property owner but the assessment upon a new property
owner who does not own an EV may not be as beneficial.
Related bills : AB 32, Nunez and Pavley (Chapter 488, 2006),
requires California to reduce greenhouse gas emissions (GHG) to
1990 levels by 2020. Requires the California Air Resources
Board to develop a "Scoping Plan" that provides the guidelines
on how the state is to achieve these GHG reductions. The
December 2008 a "Scoping Plan", identified on-road
transportation as the single largest sector for California GHG
representing 36% of all emissions.
AB 118, Nunez (Chapter 750, 2007) creates the Alternative and
Renewable Fuel and Vehicle Technology Program. This program,
administered by the CEC provides loans, grants, and other
supportive measures to businesses, consumers and academic
institutions to develop and deploy transportation technologies
that help California achieve its AB 32 goals.
SB 77, Pavley (Chapter 15, 2010) requires the California
Alternative Energy and Advanced Transportation Financing
Authority to establish a PACE program to assist local
jurisdictions in financing the installation of distributed
generation or renewable energy sources or energy or water
efficiency improvements.
SB 626 (Kehoe, Chapter 355, 2009) requires the California Public
Utilities Commission to examine issues specific to electric
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vehicles and plug-in electric vehicles that include incentives,
emissions reductions and electrical infrastructure needs.
Double-referral : This bill is double-referred to the Assembly
Local Government Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Bay Area Air Quality Management District
California Air Pollution Control Officers
Nissan North America
Pacific Gas and Electric Company
Plug In America
Sacramento Municipal Utility District
San Diego Gas & Electric Company
Sempra Energy utilities
Sierra Club California
Southern California Edison
Southern California Gas Company
Opposition
None on file
Analysis Prepared by : Ed Imai / TRANS. / (916) 319-2093