BILL ANALYSIS Ó AB 2339 Page 1 Date of Hearing: May 16, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 2339 (Williams) - As Amended: May 2, 2012 Policy Committee: UtilitiesVote:12-1 Natural Resources 9-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill requires the California Energy Commission (CEC), by July 1, 2013, and in consultation with other parties, to evaluate state policies for overcoming barriers to the widespread deployment of geothermal heat pump and geothermal ground loop technologies, and, in this regard, to consider the benefits and costs to ratepayers, the impact of existing statutory and permit requirements, and the impact on achieving the state's greenhouse gas reduction and energy efficiency goals. FISCAL EFFECT One-time special fund costs of about $100,000 for the CEC to complete the study, which will be absorbed within the balance of the Public Interest Energy Research (PIER) funds. COMMENTS Background and Purpose . Geothermal heat pumps can be sized to heat and cool any building, in any climate. A series of plastic pipes, called ground loops, are buried underground at a depth where temperatures are constant between 40 degrees and 80 degrees throughout the year, depending on a particular location. The pipes are sealed tight and connected to a heating and cooling system inside the building. Water circulates through the underground pipes. During summer months, unwanted heat indoors is transferred outside through water in the pipes for cooling by the earth. The cool water is then circulated to the geothermal system indoors to provide air conditioning. During the winter, AB 2339 Page 2 the process is reversed. According to the author, geothermal heat pumps and solar heating and cooling technologies can play an important role in reducing electricity demand and increasing energy efficiency. Last year, the CEC released a study, "Overcoming Barriers to Ground Source Heat Pumps in California," which identified the following constraints on increased use of ground source heat pumps: little awareness of this technology by consumers, industry and, government and high first costs. Compared to other states, California also has significant regulatory barriers, which include inconsistent permitting, confused work classifications and fee schedules, aggressive licensing requirements, and gaps of knowledge in local jurisdictions. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081