BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1124|
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                                 THIRD READING


          Bill No:  AB 1124
          Author:   Skinner (D)
          Amended:  6/12/12 in Senate
          Vote:     21

           
           SENATE ENERGY, UTILITIES & COMMUNIC. COMM.  :  12-0, 6/19/12
          AYES:  Padilla, Fuller, Berryhill, Corbett, De León, 
            DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Simitian, 
            Wright
          NO VOTE RECORDED:  Strickland

           ASSEMBLY FLOOR :  Not relevant


           SUBJECT  :    Landlord and tenant

           SOURCE  :     California Housing Partnership Corporation


           DIGEST  :    This bill provides that the law establishing 
          multifamily habitability requirements shall not be 
          interpreted to prohibit a tenant or owner of rental 
          properties from qualifying for heating and hot water system 
          repair or replacement under a utility energy efficiency 
          program.

           ANALYSIS  :    Existing law requires California's electric 
          utilities to first meet their energy needs through all 
          available, feasible, and cost-effective energy efficiency 
          measures before renewable and conventional generation.
           
          Existing decisions of the California Public Utilities 
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          Commission (PUC) require investor-owned utilities (IOUs) to 
          administer energy efficiency programs in multi-year 
          portfolios designed to meet pre-established energy savings 
          goals and funded by ratepayer charges, currently at about 
          $1 billion per year.

          Existing law and PUC decisions establish the Energy Savings 
          Assistance Program (ESAP) to provide eligible low-income 
          households free weatherization and energy efficiency 
          services administered in multi-year portfolios by the IOUs 
          as approved by the PUC and funded by ratepayer charges, 
          currently at about $320 million per year.

          Existing law requires the PUC to ensure that by December 
          31, 2020, all eligible low-income customers are given the 
          opportunity to participate in ESAP, including customers 
          occupying apartments or similar multiunit residential 
          structures.

          Existing law requires multifamily rental housing to 
          maintain specified characteristics, including adequate 
          heating and hot water systems, in order to meet health and 
          safety habitability standards.

           Background

          Low Income Energy Efficiency Becomes ESAP .  The California 
          Alternate Rate for Energy (CARE) program provides a minimum 
          20 percent energy rate discount to eligible low-income 
          households earning at or below 200 percent of the federal 
          poverty level.  Customers who meet the CARE requirements 
          also are eligible for the ESAP, formerly known as Low 
          Income Energy Efficiency program, which provides no-cost 
          weatherization and other services such as attic insulation, 
          energy efficient refrigerators, energy efficient furnaces, 
          weatherstripping, caulking, low-flow showerheads, water 
          heater blankets, and door and building envelope repairs 
          that reduce air infiltration.  

          The ESAP is administered in multi-year portfolios by the 
          IOUs as approved by the PUC and funded by ratepayer 
          charges, currently at about $320 million per year.  A 
          proposed decision to approve the ESAP program elements for 
          the next three-year cycle is pending before the PUC.

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           PUC Cites Habitability Requirements.   In several prior ESAP 
          decisions the PUC has denied eligibility for furnace and 
          hot water repair and replacement in rental buildings.  
          Advocates claim that these large central systems present 
          the primary opportunity for significant energy savings in 
          multifamily buildings.  But the PUC ruled in 2007 and 2008 
          that these systems are the responsibility of the landlord, 
          citing the Civil Code habitability requirements 
          (D.07-12-051 and D.08-11-031).  The PUC states that the 
          staggering costs of upgrading these central systems could 
          derail the PUC from meeting its statutory mandate to 
          provide energy efficiency measures to all low-income 
          customers and could result in "over-subsidizing landlords." 
          The ESAP proposed decision currently pending before the PUC 
          also concludes that these systems are the responsibility of 
          landlords and that their repair and replacement should not 
          be funded by ratepayers.

           Social Justice and Energy Efficiency.   Affordable housing 
          advocates, including the sponsor of this bill, claim that 
          energy efficiency in multifamily housing is an issue of 
          social justice and equity as well as energy policy.  They 
          claim that low-income households, especially those residing 
          in multifamily buildings, represent the greatest need for 
          energy efficiency improvements, but have a very low 
          participation rate in existing programs. According to the 
          author, more than one-third of low-income households that 
          are eligible for ESAP live in multifamily buildings but get 
          only minimal energy savings from weatherstripping and 
          limited measures suited to individual rental units.  Thus, 
          these advocates claim that existing programs are leaving 
          behind the poorest of the poor, who live in the oldest, 
          least efficient buildings and pay the highest percentage of 
          household income on energy costs.  

           Other Energy Efficiency Programs for Multifamily Housing  .  
          In addition to ESAP, the larger energy efficiency programs 
          the IOUs administer include some programs for multifamily 
          housing.  For example, San Diego Gas and Electric Company 
          and Southern California Gas Company offer multifamily 
          rebate programs for common area systems including central 
          water heaters and boilers.  More multifamily programs, 
          including whole building pilot programs, are pending 

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          approval by the PUC.  
           
           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  6/20/12)

          California Housing Partnership Corporation (source) 
          Adobe Communities
          BRIDGE Housing Corporation
          Burbank Housing
          California Housing Consortium 
          Century Housing
          Coalition for Economic Survival
          East Bay Housing Organizations
          Emerald Cities
          Enterprise Community Partners
          Global Green
          Mercy Housing
          Mid-Peninsula Housing
          Napa Valley Community Housing
          National Consumer Law Center
          National Housing Law Project
          Non-profit Housing Association of Northern California
          Resources for Community Development
          Sacramento - Yolo Mutual Housing Association
          San Diego Housing Federation
          Sheet Metal Workers Local 104
          Tenderloin Neighborhood Development Corporation
          US Green Building Council
          Ward Economic Development Corporation


          RM:n  6/20/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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