BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 454| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 454 Page 2 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 CONTINUED SB 454 Page 3 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. CONTINUED SB 454 Page 4 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 CONTINUED SB 454 Page 5 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 CONTINUED SB 454 Page 6 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 **** END **** CONTINUED