BILL ANALYSIS Ó AB 2249 Page 1 ASSEMBLY THIRD READING AB 2249 (Buchanan) As Amended May 25, 2012 Majority vote UTILITIES & COMMERCE 14-0 APPROPRIATIONS 17-0 ----------------------------------------------------------------- |Ayes:|Bradford, Buchanan, Fong, |Ayes:|Fuentes, Harkey, | | |Fuentes, Furutani, | |Blumenfield, Bradford, | | |Gorell, Roger Hernández, | |Charles Calderon, Campos, | | |Huffman, Knight, Ma, | |Davis, Donnelly, Gatto, | | |Nestande, Skinner, | |Ammiano, Hill, Lara, | | |Swanson, Valadao | |Mitchell, Nielsen, Norby, | | | | |Solorio, Wagner | |-----+--------------------------+-----+--------------------------| | | | | | | | | | | ----------------------------------------------------------------- SUMMARY : Expands the definition of a solar water heating system and revises exclusions from the definition of a solar water heating system. Specifically, this bill : 1)Requires investor owned gas utilities to implement a solar water heating incentive program. 2)Prescribes criteria to qualify for the solar water heating incentive program. EXISTING LAW establishes an incentive program to support installation of 200,000 solar water heaters by 2017. FISCAL EFFECT : According to the Assembly Appropriations Committee, first-year special fund costs to the California Public Utilities Commission (PUC) of around $150,000 (full-time regulatory analyst and part-time administrative law judge) to implement the expanded program eligibility requirements. Ongoing costs would be about $115,000 for one position to monitor the program and ensure that the new requirements are met by the utilities' program administrators. COMMENTS : According to the author, "AB 2249 will include non-residential solar pool heating systems in the types of solar AB 2249 Page 2 water heating systems eligible to receive installation incentives as part of the existing California Solar Initiative (CSI) Thermal Program. AB 2249 will help encourage the installation of solar hot water systems by expanding the current program to include non-residential pools. This will remove the upfront cost barriers that currently prevent municipalities, schools and non-profits from using solar to heat their swimming pools. Budget cuts have severely impacted schools and municipalities and pool closures are becoming the norm. Solar heating systems can significantly lower the astronomical operating costs associated with heating swimming pools. These cash-strapped organizations would benefit from significant savings associated with heating their pools while also greatly reducing their emissions of greenhouse gases and other criteria pollutants." In 2007, the Legislature passed AB 1470 (Huffman) Chapter 536, Statutes of 2007, which created the Solar Water Heating and Efficiency Act of 2007. In January 2010, the PUC formalized the program as CSI Thermal Program and provided for approximately $280 million in financial incentives. The existing pot of money is not being utilized due to a number of factors, including a lack of program awareness. There is a current unspent balance of more than $250 million. The program expires in 2017. CSI Thermal Program has had a slow uptake in applications due to several factors: the PUC delayed several years implementing the program and has not yet initiated the marketing campaign to educate the public on the availability of the incentives; there have been natural gas prices and gas rate structures for commercial customers. This bill will modify incentive eligibility criteria to include non-residential solar pool heating systems in CSI Thermal Program to remove upfront cost barriers that currently prevent municipalities, schools and non-profits from going solar through this program and heating their swimming pools. These cash-strapped organizations will benefit from significant operating cost savings associated with heating their pools while also greatly reducing their pollutant emissions. Solar water heating for residential pools is a well-accepted AB 2249 Page 3 technology because it provides cost-effective heating and extends the pools use by warming the pool water earlier in the year and keeping it warm later in the year. According to the California Solar Energy Industries Association, heated high school pools in the San Francisco, California bay area, for example, will spend between $30,000 and $60,000 annually to heat their pools. Analysis Prepared by : Susan Kateley / U. & C. / (916) 319-2083 FN: 0003960