BILL NUMBER: AB 2249	CHAPTERED
	BILL TEXT

	CHAPTER  607
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 27, 2012
	PASSED THE SENATE  AUGUST 29, 2012
	PASSED THE ASSEMBLY  AUGUST 30, 2012
	AMENDED IN SENATE  AUGUST 22, 2012
	AMENDED IN SENATE  AUGUST 6, 2012
	AMENDED IN ASSEMBLY  MAY 25, 2012
	AMENDED IN ASSEMBLY  APRIL 17, 2012
	AMENDED IN ASSEMBLY  APRIL 9, 2012

INTRODUCED BY   Assembly Member Buchanan
   (Coauthors: Assembly Members Huffman, Wieckowski, and Williams)
   (Coauthor: Senator Wolk)

                        FEBRUARY 24, 2012

   An act to amend Sections 2861, 2862, 2863, 2864, 2865, and 2867.1
of the Public Utilities Code, relating to solar energy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2249, Buchanan. Solar Water Heating and Efficiency Act of 2007.

   The Solar Water Heating and Efficiency Act of 2007 makes findings
and declarations of the Legislature relating to the promotion of
solar water heating systems and other technologies that reduce
natural gas demand and defines terms for purposes of the act. The act
requires the Public Utilities Commission (PUC) to evaluate data
available from a specified pilot program, and, if it makes a
specified determination, to design and implement a program of
incentives for the installation of 200,000 solar water heating
systems, as defined, in homes and businesses throughout the state by
2017. The act requires the PUC, in consultation with the State Energy
Resources and Conservation Commission and interested members of the
public, to establish eligibility criteria for the solar water heating
systems receiving gas customer funded incentives. The act requires
the PUC to establish conditions on those incentives. The act defines
a solar water heating system as a solar energy device that has the
primary purpose of reducing demand for natural gas through water
heating, space heating, or other methods of capturing energy from the
sun to reduce natural gas consumption in a home, business, or any
building receiving natural gas sold or transported for consumption in
this state and that meets or exceeds the eligibility criteria. The
act excludes solar pool heating systems from that definition.
   This bill would expand the definition of a solar water heating
system to include a facility meeting the specified requirements and
would qualify the exclusion from the definition of a solar water
heating system as being limited to a single-family residential solar
pool heating system. The bill would delete the requirement that the
PUC evaluate data available from a specified pilot program before it
makes a specified determination to design and implement a program of
incentives for the installation of 200,000 solar water heating
systems in homes and business throughout the state by 2017. The bill
would revise certain eligibility criteria as being applicable to
installation of solar water heating systems at government, nonprofit,
and educational sites and would require the PUC to determine an
appropriate division of funds between solar water heating systems
that are and are not solar pool heating systems. The bill would
require the PUC, not later than February 1, 2014, to complete a
review of whether the rebate levels established by the PUC will be
sufficient to spur investment to reach the goals of the program and
to report the results of the review to the Legislature. The bill
would require the PUC to require a gas corporation or 3rd-party
administrator to implement the changes made to the act by the bill
not later than July 1, 2013. The bill would make other technical,
nonsubstantive changes to the act.
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the PUC
is a crime.
   Because the duties of gas corporations pursuant to the Solar Water
Heating and Efficiency Act of 2007 would be expanded by this bill, a
decision or order of the PUC would be required to implement the
program requirements, a violation of which would be a crime, the bill
would impose a state-mandated local program by expanding the
definition of a crime.
   The Solar Water Heating and Efficiency Act of 2007 requires the
governing body of each publicly owned utility providing gas service
to retail end-use gas customers to adopt, implement, and finance a
solar water heating system incentive program to meet certain
requirements.
   By expanding the definition of a solar water heating system to
include a facility meeting the specified requirements and qualifying
the exclusion from the definition of a solar water heating system as
being limited to a single-family residential solar pool heating
system, the bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for specified reasons.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2861 of the Public Utilities Code is amended to
read:
   2861.  As used in this article, the following terms have the
following meanings:
   (a) "Gas customer" includes both "core" and "noncore" customers,
as those terms are used in Chapter 2.2 (commencing with Section 328)
of Part 1, that receive retail end-use gas service within the service
territory of a gas corporation.
   (b) "kWth" means the kilowatt thermal capacity of a solar water
heating system, measured consistent with the standard established by
the SRCC.
   (c) "kWhth" means kilowatthours thermal as measured by the number
of kilowatts thermal generated, or displaced, in an hour.
   (d) "Low-income residential housing" means either of the
following:
   (1) Residential housing financed with low-income housing tax
credits, tax-exempt mortgage revenue bonds, general obligation bonds,
or local, state, or federal loans or grants, and for which the rents
of the occupants who are lower income households, as defined in
Section 50079.5 of the Health and Safety Code, do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
   (2) A residential complex in which at least 20 percent of the
total units are sold or rented to lower income households, as defined
in Section 50079.5 of the Health and Safety Code, and the housing
units targeted for lower income households are subject to a deed
restriction or affordability covenant with a public entity that
ensures that the units will be available at an affordable housing
cost meeting the requirements of Section 50052.5 of the Health and
Safety Code, or at an affordable rent meeting the requirements of
Section 50053 of the Health and Safety Code, for a period of not less
than 30 years.
   (e) "New Solar Homes Partnership" means the 10-year program,
administered by the Energy Commission, encouraging solar energy
systems in new home construction.
   (f) "Solar heating collector" means a device that is used to
collect or capture heat from the sun and that is generally, but need
not be, located on a roof.
   (g) "Solar water heating system" means a solar energy device that
has the primary purpose of reducing demand for natural gas through
water heating, space heating, or other methods of capturing energy
from the sun to reduce natural gas consumption in a home, business,
or any building or facility receiving natural gas that is subject to
the surcharge established pursuant to subdivision (b) of Section
2863, or exempt from the surcharge pursuant to subdivision (c) of
Section 2863, and that meets or exceeds the eligibility criteria
established pursuant to Section 2864. "Solar water heating systems"
include multifamily residential, governmental, educational, and
nonprofit solar pool heating systems, but do not include
single-family residential solar pool heating systems.
   (h) "SRCC" means the Solar Rating and Certification Corporation.
  SEC. 2.  Section 2862 of the Public Utilities Code is amended to
read:
   2862.  The Legislature finds and declares all of the following:
   (a) California is heavily dependent on natural gas, importing more
than 80 percent of the natural gas it consumes.
   (b) Rising worldwide demand for natural gas and a shrinking supply
create rising and unstable prices that can harm California consumers
and the economy.
   (c) Natural gas is a fossil fuel and a major source of global
warming pollution and the pollutants that cause air pollution,
including smog.
   (d) California's growing population and economy will put a strain
on energy supplies and threaten the ability of the state to meet its
global warming goals unless specific steps are taken to reduce demand
and generate energy cleanly and efficiently.
   (e) Water heating for domestic and industrial use relies almost
entirely on natural gas and accounts for a significant percentage of
the state's natural gas consumption.
   (f) Solar water heating systems represent the largest untapped
natural gas saving potential remaining in California.
   (g) In addition to financial and energy savings, solar water
heating systems can help protect against future gas and electricity
shortages and reduce our dependence on foreign sources of energy.
   (h) Solar water heating systems can also help preserve the
environment and protect public health by reducing air pollution,
including carbon dioxide, a leading global warming gas, and nitrogen
oxide, a precursor to smog.
   (i) Growing demand for these technologies will create jobs in
California as well as promote greater energy independence, protect
consumers from rising energy costs, and result in cleaner air.
   (j) It is in the interest of the State of California to promote
solar water heating systems and other technologies that directly
reduce demand for natural gas in homes and businesses.
   (k) It is the intent of the Legislature to build a mainstream
market for solar water heating systems that directly reduces demand
for natural gas in homes, businesses, schools, nonprofit, and
government buildings. Toward that end, it is the goal of this article
to install at least 200,000 solar water heating systems on homes,
businesses, and other buildings or facilities of eligible customer
classes throughout the state by 2017, thereby lowering prices and
creating a self-sufficient market that will sustain itself beyond the
life of this program.
   (l) It is the intent of the Legislature that the solar water
heating system incentives created by the article should be a
cost-effective investment by gas customers. Gas customers will recoup
the cost of their investment through lower prices as a result of
avoiding purchases of natural gas.
   (m) It is the intent of the Legislature that this article will
encourage the cost-effective deployment of solar heating systems in
both residential and commercial markets and in each end-use
application sector in a balanced manner. It is the intent of the
Legislature that the commission monitor and adjust incentives created
by the article so that they are cost-effective investments
sufficient to significantly increase markets and promote market
transformation. It is the intent of the Legislature that the
commission ensure that increased, uniform growth in each market
sector is achieved through program incentives or structure
adjustments that prevent overutilization of program resources by any
single sector.
  SEC. 3.  Section 2863 of the Public Utilities Code is amended to
read:
   2863.  (a) If, after a public hearing, the commission determines
that a solar water heating program is cost effective for ratepayers
and in the public interest, the commission shall do all of the
following:
   (1) Design and implement a program applicable to the service
territories of a gas corporation, to achieve the goal of the
Legislature to promote the installation of 200,000 solar water
heating systems in homes, businesses, and buildings or facilities of
eligible customer classes receiving natural gas service throughout
the state by 2017. Eligible customer classes shall include
single-family and multifamily residential, commercial, industrial,
governmental, nonprofit, and primary, secondary, and postsecondary
educational customers.
   (2) The program shall be administered by gas corporations or
third-party administrators, as determined by the commission, and
subject to the supervision of the commission.
   (3) The commission shall coordinate the program with the Energy
Commission's New Solar Homes Partnership to achieve the goal of
building zero-energy homes.
   (4) The commission shall determine an appropriate division of
funds between solar water heating systems that are and are not solar
pool heating systems.
   (b) (1) The commission shall fund the program through the use of a
surcharge applied to gas customers based upon the amount of natural
gas consumed. The surcharge shall be in addition to any other charges
for natural gas sold or transported for consumption in this state.
   (2) The commission shall impose the surcharge at a level that is
necessary to meet the goal of installing 200,000 solar water heating
systems, or the equivalent output of 200,000 solar water heating
systems, on homes, businesses, and buildings or facilities of
eligible customer classes receiving natural gas service in California
by 2017. Funding for the program established by this article shall
not, for the collective service territories of all gas corporations,
exceed two hundred fifty million dollars ($250,000,000) over the
course of the 10-year program.
   (3) The commission shall annually establish a surcharge rate for
each class of gas customers. Any gas customer participating in the
California Alternate Rates for Energy (CARE) or Family Electric Rate
Assistance (FERA) programs shall be exempt from paying any surcharge
imposed to fund the program designed and implemented pursuant to this
article.
   (4) Any surcharge imposed to fund the program designed and
implemented pursuant to this article shall not be imposed upon the
portion of any gas customer's procurement of natural gas that is used
or employed for a purpose that Section 896 excludes from being
categorized as the consumption of natural gas.
   (5) The gas corporation or other person or entity providing
revenue cycle services, as defined in Section 328.1, shall be
responsible for collecting the surcharge.
   (c) Funds shall be allocated for the benefit of gas customers to
promote utilization of solar water heating systems.
   (d) In designing and implementing the program required by this
article, no moneys shall be diverted from any existing programs for
low-income ratepayers or cost-effective energy efficiency programs.
  SEC. 4.  Section 2864 of the Public Utilities Code is amended to
read:
   2864.  (a) The commission, in consultation with the Energy
Commission and interested members of the public, shall establish
eligibility criteria for solar water heating systems receiving gas
customer funded incentives pursuant to this article. The criteria
should specify and include all of the following:
   (1) Design, installation, and energy output or displacement
standards. To be eligible for rebate funding, a residential solar
water heating system shall, at a minimum, have an SRCC OG-300 Solar
Water Heating System Certification. Solar collectors used in systems
for multifamily residential, commercial, government, nonprofit,
educational, or industrial water heating shall, at a minimum, have an
SRCC OG-100 Solar Water Heating System Certification.
   (2) Require that solar water heating system components are new and
unused, and have not previously been placed in service in any other
location or for any other application.
   (3) Require that solar water heating collectors have a warranty of
not less than 10 years to protect against defects and undue
degradation.
   (4) Require that solar water heating systems are in buildings or
facilities connected to a natural gas utility's distribution system
within the state.
   (5) Require that solar water heating systems have meters or other
kWhth measuring devices in place to monitor and measure the system's
performance and the quantity of energy generated or displaced by the
system. The criteria shall require meters for systems with a capacity
for displacing over 30 kWth. The criteria may require meters for
systems with a capacity of 30 kWth or smaller.
   (6) Require that solar water heating systems are installed in
conformity with the manufacturer's specifications and all applicable
codes and standards.
   (b) Gas customer funded incentives shall not be made for a solar
water heating system that does not meet the eligibility criteria.
  SEC. 5.  Section 2865 of the Public Utilities Code is amended to
read:
   2865.  (a) The commission shall establish conditions on gas
customer funded incentives pursuant to this article. The conditions
shall require both of the following:
   (1) Appropriate siting and high-quality installation of the solar
water heating system based on installation guidelines that maximize
the performance of the system and prevent qualified systems from
being inefficiently or inappropriately installed. The conditions
shall not impact housing designs or densities presently authorized by
a city, county, or city and county. The goal of this paragraph is to
achieve efficient installation of solar water heating systems and
promote the greatest energy production or displacement per gas
customer dollar.
   (2) Appropriate energy efficiency improvements in the new or
existing home or facility where the solar water heating system is
installed.
   (b) The commission shall set rating standards for equipment,
components, and systems to ensure reasonable performance and shall
develop standards that provide for compliance with the minimum
ratings.
  SEC. 6.  Section 2867.1 of the Public Utilities Code is amended to
read:
   2867.1.  (a) Not later than July 1, 2010, the commission shall
report to the Legislature as to the effectiveness of the program and
make recommendations as to any changes that should be made to the
program. This report shall include justification for the size of the
rebate program in terms of total available incentive moneys as well
as the anticipated benefits of the program in its entirety. To
facilitate the understanding of how solar water heating systems
compare with other clean energy and energy efficiency technologies,
all documents related to and rebates provided by this program shall
be measured in both kWhth and therms of natural gas saved.
   (b) Not later than February 1, 2014, the commission shall complete
a review of whether the rebate levels established by the commission
will be sufficient to spur investment to reach the program goal of
installing 200,000 solar water heating systems in homes, businesses,
and other buildings or facilities receiving natural gas service
throughout the state by 2017, and shall report to the Legislature on
the results of its review. The report submitted pursuant to this
subdivision shall be submitted in compliance with Section 9795 of the
Government Code.
  SEC. 7.  The Public Utilities Commission shall require a gas
corporation or third-party administrator to implement the program
changes made to the Solar Water Heating and Efficiency Act of 2007
(Article 2 (commencing with Section 2860) of Chapter 9 of Part 2 of
Division 1 of the Public Utilities Code) by this act not later July
1, 2013.
  SEC. 8.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because a
local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act or because costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or
infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.