BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 2249 (Buchanan) - Solar energy. Amended: August 6, 2012 Policy Vote: E,U&C 10-0 Urgency: No Mandate: Yes Hearing Date: August 16, 2012 Consultant: Bob Franzoia SUSPENSE FILE. AS PROPOSED TO BE AMENDED. Bill Summary: AB 2249 would expand eligibility for incentives under the California Solar Initiative CSI thermal program to include multifamily residential, governmental, educational, and nonprofit solar pool heating systems. Fiscal Impact: $166,000 from the Public Utilities Reimbursement Account in 2012-13 and 2013-14 to the Public Utilities Commission to implement expanded program eligibility requirements. $120,000 annually beginning 2014-15 to monitor the program and ensure that the new requirements are met by the utilities' program administrators. Unknown, likely major accelerated CSI thermal program expenditures annually. Background: In 2007, the commission established the CSI, a $2.16 billion ratepayer funded incentive program with a goal of installing 1,940 megawatts of generation and creating a sustainable solar industry. The thermal program (natural gas displacing) has a balance of approximately $240 million. Single family residential systems are and would remain ineligible. Staff Comments: This bill would require the commission to (1) determine an appropriate division of funds between solar water heating systems and solar pool heating systems (2) review whether rebate levels established by the commission will be sufficient to spur investment to reach the goals of the program and to report the results to the Legislature by no later than July 1, 2013 and (3) direct gas corporations or third-party administrators to implement the program changes made by this bill no later than July 1, 2013 and marketing of the program as revised commencing by August 1, 2013. > (>) Page 1 In general, requiring entities to complete relatively complex tasks within six months of the effective date of a bill will result in increased costs. Staff recommends this bill be amended to change reporting and implementation date from July 1, 2013 to January 1, 2014. Also, it is unclear why language stating it is the intent of the Legislature that the solar water heating system incentives should be a cost effective investment by gas customers is being struck. This would be inconsistent with other commission market support programs which require ratepayer benefit. The proposed amendments would delay the PUC reporting date from July 1, 2013 to February 1, 2014 and delete the requirement that the marketing of the revised program commence by August 1, 2013.