BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 454|
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                              UNFINISHED BUSINESS


          Bill No:  SB 454
          Author:   Pavley (D)
          Amended:  9/2/11
          Vote:     21

           
           SENATE ENERGY, UTILITIES & COMM. COMMITTEE  :  8-2, 04/05/11
          AYES:  Padilla, Corbett, De León, DeSaulnier, Pavley, 
            Rubio, Simitian, Wright
          NOES:  Fuller, Berryhill
          NO VOTE RECORDED:  Strickland

           SENATE BUS, PROF & ECON DEVELOP. COMMITTEE  :  6-3, 05/02/11
          AYES:  Price, Corbett, Correa, Hernandez, Negrete McLeod, 
            Vargas
          NOES:  Emmerson, Walters, Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  6-2, 05/26/11
          AYES:  Kehoe, Alquist, Lieu, Pavley, Price, Steinberg
          NOES:  Walters, Runner
          NO VOTE RECORDED:  Emmerson

           SENATE FLOOR  :  24-15, 6/2/11
          AYES:  Alquist, Calderon, Corbett, De León, DeSaulnier, 
            Evans, Hancock, Hernandez, Kehoe, Leno, Lieu, Liu, 
            Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio, 
            Simitian, Steinberg, Vargas, Wolk, Wright, Yee
          NOES:  Anderson, Berryhill, Blakeslee, Cannella, Correa, 
            Dutton, Emmerson, Fuller, Gaines, Harman, Huff, La Malfa, 
            Strickland, Walters, Wyland
          NO VOTE RECORDED:  Runner
           
          ASSEMBLY FLOOR  :  Not available
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           SUBJECT  :    Energy efficiency standards

           SOURCE  :     Natural Resources Defense Council
                      State Building Construction Trades Council, 
          AFL-CIO


           DIGEST  :    This bill authorizes the California Energy 
          Commission to adopt an administrative enforcement process, 
          including civil penalties, for violations of its appliance 
          efficiency standards.  Requires utility energy efficiency 
          rebates to be provided only if work complies with 
          applicable permitting and contractor licensing 
          requirements. 

           Assembly Amendments  (1) clarify that rebates or incentives 
          offered by a public utility for an energy efficiency 
          improvement or installation of energy efficient components, 
          equipment, or appliances in buildings shall be provided 
          only if the recipient of the rebate or incentive certifies 
          that the improvement or installation has complied with any 
          applicable permitting requirements and, if a contractor 
          performed the installation or improvement, that the 
          contractor holds the appropriate license for the work 
          performed; (2) prohibit the California Energy Commission 
          (CEC), from initiating an administrative enforcement 
          process pursuant to those regulations under specified 
          circumstances and until certain events have taken place, as 
          specified; (3) require the CEC, in assessing the amount of 
          an administrative penalty for a violation of its appliance 
          efficiency standards, to consider the harm to consumers and 
          to the state that resulted from the amount of energy wasted 
          due to the violation; and (4) clarify that the CEC may not 
          initiate an administrative enforcement process until 30 
          days after an alleged violator receives written notice of 
          the alleged violation.  

           ANALYSIS  :    

          Existing law:

          1. Requires the CEC to take specified actions to reduce the 

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             wasteful, uneconomic, inefficient, or unnecessary 
             consumption of energy, including adopting energy and 
             water efficiency standards for appliances that the CEC 
             determines use a significant amount of energy or water 
             on a statewide basis. 

          2. Prohibits the sale of any new appliance unless it is 
             certified by the manufacturer to be in compliance with 
             the CEC standards. 

          3. Requires the standards to be drawn so that they do not 
             result in any added total costs for consumers over the 
             designed life of the appliance. 

          4. Provides that, if the CEC finds any actual or imminent 
             violation of the provisions of law relating to CEC's 
             authority or operations, the Attorney General is 
             required to petition a court to enjoin the violation. 

          This bill:

          1. Authorizes the CEC to establish an administrative 
             enforcement process for violations of its appliance 
             efficiency standards, including administrative civil 
             penalties up to $2,500 for each violation, in compliance 
             with existing law governing administrative hearings and 
             adjudication. 

          2. Requires the CEC, in assessing the amount of an 
             administrative penalty for a violation of its appliance 
             efficiency standards, to consider the harm to consumers 
             and to the state that resulted from the amount of energy 
             wasted due to the violation.

          3. Authorizes the CEC to refer violations to the Attorney 
             General to petition a court to enjoin the violation, and 
             authorizes a court to grant injunctive relief and assess 
             a civil penalty up to $2,500 for each violation. 

          4. Requires penalties to be deposited into the Appliance 
             Efficiency Enforcement Subaccount, which is established 
             by the bill, to be expended by the CEC, upon 
             appropriation, for appliance efficiency enforcement and 
             public education. 

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          5. Provides that a CEC-imposed civil penalty shall be 
             subject to judicial review by petition for writ of 
             mandate in the superior court. 

          6. Provides that a person subject to a CEC-imposed civil 
             penalty shall not be liable for a court-imposed civil 
             penalty. 

          7. Prohibits the CEC from assessing a penalty against a 
             party that has submitted certification of a product's 
             compliance on which CEC has yet to make a determination. 


          8. Prohibits the CEC from taking an enforcement action 
             until 60 days after its regulations are published in the 
             California Register and an alleged violator has had 30 
             days after written notice to comply with any regulatory 
             requirements. 

          9. Requires the court, upon granting relief to the CEC for 
             an action brought to enforce its appliance efficiency 
             standards, to award the CEC its reasonable costs in 
             investigating and prosecuting the action. 

          10.Requires that any energy efficiency rebate or incentive 
             offered by a public utility (i.e., investor-owned 
             electrical and gas corporations regulated by the Public 
             Utilities Commission) be provided only if work complies 
             with applicable permitting and contractor licensing 
             requirements. 

           Comments  

          Among its regulatory powers, the CEC has authority to adopt 
          regulations describing the standards for minimum levels of 
          efficiency for appliances that use a significant amount of 
          energy or water.  These regulations include standards for 
          both federally-regulated appliances and 
          non-federally-regulated residential and commercial 
          appliances including water heaters, clothes washers, 
          dishwashers, traffic signals, lighting, and heat and air 
          conditioning systems to be sold in California.  The CEC's 
          appliance regulations are designed to achieve significant 

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          energy savings state-wide that are feasible, attainable, 
          and do not result in added costs to the consumer for the 
          estimated lifetime of the regulated appliance.  With one 
          exception (power plant certification), the CEC does not 
          have administrative civil penalty authority and must refer 
          enforcement matters to the Attorney General to petition a 
          court to grant injunctive relief and/or impose civil 
          penalties. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  Yes

          According to the Assembly Appropriations Committee, minor 
          special fund costs in the tens of thousands of dollars to 
          the CEC for regulations and enforcement.

           SUPPORT  :   (Verified  9/7/11)

          Natural Resources Defense Council (co-source) 
          State Building Construction Trades Council, AFL-CIO 
          (co-source) 
          Apollo Alliance
          California Energy Efficiency Industry Council
          California Labor Federation
          California League of Conservation Voters
          Environmental Defense Fund
          Environmental Entrepreneurs
          Osram Sylvania
          Sierra Club California

           ARGUMENTS IN SUPPORT  :    According to the author's office, 
          this bill will increase compliance with the state's energy 
          efficiency regulations for buildings and appliances with 
          better enforcement against building contractors who are 
          unlicensed and do not obtain required building permits and 
          against manufacturers who sell appliances that are not 
          certified as meeting the appliance regulations.  The author 
          claims that this will level the playing field in the 
          building industry, ensure that contractors who violate the 
          law do not have an unfair advantage over law-abiding 
          contractors, and help ensure that California realizes the 
          energy savings that compliance with these regulations are 
          designed to achieve.  The author claims that the CSLB "does 
          not have energy efficiency expertise" and, therefore, the 

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          CEC, as the agency that adopted the energy efficiency 
          building and appliance regulations, should have authority 
          to enforce the regulations and impose civil penalties.


          RM:mw  9/8/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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