BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1186|
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THIRD READING
Bill No: AB 1186
Author: Skinner (D), et al.
Amended: 8/24/12 in Senate
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 8-3, 6/19/12
AYES: Padilla, Corbett, De León, DeSaulnier, Pavley,
Rubio, Simitian, Wright
NOES: Fuller, Berryhill, Emmerson
NO VOTE RECORDED: Kehoe, Strickland
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-2, 7/2/12
AYES: Simitian, Hancock, Kehoe, Lowenthal, Pavley
NOES: Strickland, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : Not relevant
SUBJECT : School energy efficiency: grants
SOURCE : Superintendent of Public Instruction, Tom
Torlakson
Coalition for Adequate School Housing
School Energy Coalition
State Building & Construction Trades Council
DIGEST : This bill directs the California Energy
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Commission (CEC) to fund these same energy efficiency
improvements for K-12 schools through the existing Bright
Schools program and utilizes revenues from the sales of
emissions credits from the California Air Resources Board's
(ARB) cap and trade program.
Senate Floor Amendments of transfer program administration
from PUC to CEC.
ANALYSIS : Existing law:
1.Creates the Greenhouse Gas Reduction Fund as a special
fund in the State Treasury and requires any moneys
collected by the State Air Resources Board under the
California Global Warming Solutions Act of 2006 from the
auction or sale of allowances pursuant to a market-based
compliance mechanism to be deposited into the fund and
available for appropriation by the Legislature.
2.Requires a state agency, prior to expending any moneys
appropriated to it by the Legislature from the fund, to
prepare a record consisting of a description of proposed
expenditures and how they will further the regulatory
purposes of the California Global Warming Solutions Act
of 2006, how they will achieve specified greenhouse gas
emissions reductions, how the agency considered other
objectives of that act, and how the agency will document
expenditure results.
This bill:
1.Enacts the School Energy Efficiency and Greenhouse Gas
Reduction Act.
2.Creates the School Energy Efficiency and Greenhouse Gas
Reduction Fund as a special fund in the State Treasury.
3.Requires that 20% of specified revenues deposited during
the 2012-13 fiscal year in the Greenhouse Gas Reduction
Fund be transferred into the School Energy Efficiency and
Greenhouse Gas Reduction Fund.
4.Continuously appropriates the funds in the School Energy
Efficiency and Greenhouse Gas Reduction Fund to the State
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Energy Resources Conservation and Development Commission
for the purposes of a grant program for eligible K-12
schools for energy efficiency improvements that achieve
greenhouse gas reductions.
Background
The state currently administers several multiple energy
efficiency programs, including those specifically targeted
to K-12 schools. These programs are administered by the
PUC, the CEC, and the Office of Public School Construction.
The PUC issued a decision on May 10, 2012, establishing the
parameters by which electrical corporations will design
their efficiency programs 2013-2014, and includes specific
reference toward encouraging investment in municipalities,
universities, colleges, schools, and hospitals, but does
not make specific guidance on what level of funding should
be directed to schools. Those investment plans and budgets
were due to the PUC in July.
The CEC administers the Energy Conservation Assistance Act
which makes low interest loans for energy efficiency and
renewable energy to public schools, public hospitals and
local jurisdictions. Loans do not become due until energy
cost savings have occurred and are repaid from those cost
savings. According to the CEC, the program has issued 320
loans to schools totaling $45.1 million.
The School Facilities Program Modernization Program
provides bond funds on a 60/40 state and local match for
improvements to educationally enhance existing school
facilities. New construction is a 50/50 match. Projects
eligible under this program include modifications such as
air conditioning, plumbing, lighting, and electrical
systems. There is $267.4 million in modernization bond
funding remaining with new applications for funding in
excess of that amount pending before the Office of Public
School Construction.
School districts are permitted to use deferred maintenance
funds for energy efficiency projects. Prior to 2009, the
deferred maintenance program provides General Funds on a
50/50 state and local match. Since 2009, districts have
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been deemed in compliance with funding requirements and
have, therefore, not needed to match the state's share.
This is part of the categorical relief provided to school
districts allowing the use of these funds for any
educational purpose. The 2012 Budget Act appropriated
$313 million for deferred maintenance.
The 2012 Budget Act estimates that cap-and-trade revenues
from the first set of auctions will be $1 billion in
2012-13. Actual revenues will not be known until the
auctions have been completed.
SB 1018 (Senate Budget Committee), Chapter 39, Statutes of
2012, establishes the Greenhouse Gas Reduction Fund and
would require any money collected by the Air Resources
Board from the auction or sale of allowances pursuant to a
market-based compliance mechanism to be deposited in the
fund. It also specifies that the fund be appropriated in
the annual Budget Act and requires the Department of
Finance to submit to the Legislature a proposal for
expenditure of the fund, unless the Legislature passes a
bill before August 31, 2012, specifying a process for
establishing a long-term spending plan that includes: a)
criteria and requirements for the use of the auction
proceeds, b) establishment of program categories eligible
for funding, and c) the specification of the process that
ARB use to develop the strategy. SB 1018 further requires
agencies expending moneys from the fund to prepare a record
describing the uses of the funds, how they further the
goals of the California Global Warming Solutions Act of
2006 (CGWSA), including attainment of the 2020 limit, how
non-GHG emissions objectives of the CGSWA were considered,
and a description of how the agency will document the
results of the expenditure.
The PUC will receive approximately 65.2 million allowances
for auction, which are scheduled for November, 2012,
February 2013 and May 2013. If the allowances are sold for
$10.00 each, the PUC will have up $652 million available to
be credited directly to the residential, small business,
and emissions (energy) intensive trade expose retail
customers of the electrical corporations. The PUC shall
allocate up to 15 percent of the revenues for clean energy
and energy efficiency projects established pursuant to
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statute that are administered by electrical corporations
and that are not otherwise funded by another funding
source.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, $250,000
in 2012-13 and 2013-14 from the Public Utilities
Reimbursement Account for a proceeding to establish a grant
program.
$115,000 annually from the Public Utilities Reimbursement
Account to award and monitor grants.
Unknown, up to $98 million annually from the Greenhouse
Gas Reduction Fund; actual revenues will not be known
until auctions have been completed.
SUPPORT : (Verified 8/27/12)
Superintendent of Public Instruction, Tom Torlakson
(co-source)
Coalition for Adequate School Housing (co-source)
School Energy Coalition (co-source)
State Building & Construction Trades Council (co-source)
Advancement Project
Alameda County Office of Education
Black Women for Wellness
Bonita Unified School District
Breathe California
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Teachers Association
Community Coalition
County Schools Facilities Consortium
Ella Baker Center for Human Rights
Environmental Defense Fund
Fagen Friedman & Fulfrost, LLP
Global Green USA
Homeboy Industries
Korean Resource Center
Los Angeles Community Action Network
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Los Angeles Unified School District
Marysville Joint Unified School District
McKinstry
Oakland Unified School District
Palm Springs Unified School District
Partnership for Children & Youth
PMSM Architects
West Contra Costa Unified School District
Western States Council of Sheet Metal Workers
William C. Velasquez Institute
ARGUMENTS IN SUPPORT : School Energy Coalition writes:
AB 1186 would achieve multiple purposes by providing
funding to schools for more efficient energy systems
and moving the state forward in attaining AB 32 goals.
This will provide the environmental improvements
sought through AB 32 while the savings on schools
generate on energy bills may be used for other general
fund purposes such as teacher support, equipment and
student books and supplies. There are over 1,000
school districts in the state, most with buildings
that are over 40 years of age. The installation of
these systems for schools also creates green jobs to
the benefit of the broader local community and the
savings from these investments provide a return to
California's students who are the workforce of
tomorrow.
In essence, these dollars would create a fiscal
"ripple effect" that goes beyond funding the initial
system upgrade to the benefit of students, teachers
and workers.
RM:n 8/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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