BILL ANALYSIS �
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Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 122 (Rendon) - As Amended: April 23, 2013
SUBJECT : Energy: energy assessment: nonresidential buildings:
financing
SUMMARY : This bill requires the California Energy Commission
(CEC) to create a financing program for energy efficiency
improvements in nonresidential buildings. Specifically, this
bill :
1)Establishes the Act and states that its purpose is to
facilitate private financing to enable private, nonresidential
building owners and eligible public entities to invest in
clean energy improvements, renewable energy, and conservation
to incentivize private equity managers to invest in clean
energy improvements, integrate the smart energy economy, and
to stimulate the state economy by directly creating jobs.
2)Specifies that the Program shall provide financial assistance
for energy efficiency and renewable energy improvements when
the total energy and water cost savings realized by the
property owner and any successor(s) during the useful life of
the improvements are expected to equal or exceed the total
costs incurred by the owner under the program. Authorizes CEC
to waive this requirement if it adopts a finding that
additional improvements may be undertaken that significantly
increase energy efficiency and improve public health.
3)Requires CEC, by July 1, 2014, to develop a request for
proposal to establish an automated, asset-based underwriting
system for all eligible buildings in the state. The
third-party administrator shall provide consultation to the
CEC in developing guidelines for the program.
4)Specifies that upon mutual agreement of the participant and
the administrator, requires the administrator to establish an
annualized schedule for the repayment required by the
agreement, including the interest charged administrative cost
fee, and loan loss fee. Requires the Board of Equalization
(BOE) to collect the repayment installments.
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5)Requires the BOE to establish guidelines for remitting energy
loan payments.
6)Authorizes the California Alternative Energy and
Transportation Financing Authority (CAEATFA) to issue $2
billion in bonds for this program.
7)Establishes requirements for the application and related
information and requires the administrator to recommend to the
CEC on the approval or disapproval of the application.
Requires CEC to approve the application when both of the
following conditions are met:
a) The applicant is qualified; and,
b) Prior to receiving funding the applicant shall
demonstrate evidence of intent to make feasible energy
efficiency upgrades recommended and evidence of intent to
enroll in eligible demand response programs.
8)Requires CEC to determine the appropriate guarantees to ensure
cost neutrality of the improvements and may require the owner
to obtain insurance issued by an "A.M. Best or 'A' or better
rated insurance carrier" or a similar product approved by CEC.
9)Specifies that the period for repayment shall not exceed the
effective useful life of the improvements or 20 years,
whichever is shorter. The effective useful life of the energy
efficiency improvements shall be calculated using
methodologies adopted by CEC, in consultation with the
California Public Utilities Commission (PUC), at a publicly
noticed meeting. Exempts the calculation method from Office
of Administrative Law review.
10)Upon the failure of a participant to pay any installment of
the energy remittance payment, requires the BOE to assess a
penalty of 10 percent of the unpaid installment. Within 60
days of a failure to pay the scheduled payment, requires the
Board to issue a demand letter to the participant with notice
to the CEC. If the participant fails to "cure" the default
within the time allotted, the BOE may declare the entire
outstanding amount, including any interest due, penalties
assessed, and costs of collection incurred, immediately due
and owing and foreclose on the building by either judicial or
non-judicial foreclosure. Requires that revenue generated
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from the sale of an eligible building be distributed to
satisfy liens on the building in accordance with the priority
of the liens.
11)Upon the full repayment of the balance of the agreement,
including any interest and penalties, the BOE shall notify the
CEC and record a release of the agreement with the county.
12)Prior to approving an application or a modification of an
approved application, requires CEC to conduct a public
hearing, as specified. Specifies that the CEC approve an
application by adopting a resolution and recording the
agreement on the deed of the building, as specified.
13)Requires CEC to consider the creditworthiness of the
applicant and the effectiveness of the improvements using the
following criteria:
a) Whether the applicants are legal owners of the
underlying building;
b) Whether the applicants are current on any outstanding
mortgage and property tax payments;
c) Whether the applicants are in default or in bankruptcy
proceedings;
d) Whether the applicants have applied for incentives
available through the energy efficiency programs offered by
an electrical or gas corporation; and,
e) Whether improvements financed by the program follow
applicable standards, including any guidelines adopted by
CEC.
14)Specifies that the agreement lien that is secured by a lien
recorded, shall have a prominent header on the document that
reads "Energy Remittance Repayment Agreement Lien" in 14-point
type and contains all of the following information related to
the affected real property:
a) The assessor's parcel number;
b) The owners of record;
c) The legal description; and,
d) The street address.
15)Specifies that, except as otherwise required by law, the
agreement is superior in priority to all subsequent liens
recorded on the deed, except where the first mortgage is
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refinanced, in which case the agreement shall remain secondary
to the primary mortgage.
16)Specifies that the sale of the building to enforce the
payment of general ad valorem taxes shall not extinguish the
agreement. Specifies that in the event of foreclosure, the
agreement shall not be "due and owing" during the time when
the building is owned by a financial institution taking title
by way of foreclosure. The amount owing does continue to
accrue and becomes due 60 days after a new, nonfinancial owner
takes title. States that notwithstanding any other law, in
the event of a foreclosure, the agreement shall not be
extinguished, unless the outstanding balance is fully paid
through the foreclosure proceeding.
17)Sixty days after the notice of recording of the agreement,
requires CEC to include the application in a portfolio posted
on its website.
18)Requires the BOE to deposit any moneys collected pursuant to
this Act into the Nonresidential Building Energy Retrofit Debt
Servicing Fund (Fund), which the bill establishes in the State
Treasury and continuously appropriates to pay the principal
and interest on bonds issued under the Act.
19)Authorizes the BOE to charge a program administration cost
fee on the owner of an eligible building to cover its costs,
as well as CAEATFA's and the CEC's costs, in implementing the
Act.
20)Specifies that a local government that has issued revenue
bonds for renewable energy, water efficiency, or energy
efficiency retrofit projects for nonresidential buildings may
apply to the CEC for participation in the Program.
21)As deemed necessary by the CEC, requires the CEC to:
a) Analyze and evaluate standards for nonresidential energy
building retrofits previously developed by various national
and international organizations to provide uniformity and
transparency for financial institutions evaluating loan
proposals for energy improvements, by January 1, 2015.
b) Establish standards, guidelines, and procedures
necessary to ensure the financial stability of the program
and prevent fraud and abuse.
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c) Establish measurement and verification standards
necessary to ensure that the energy efficiency improvements
financed pursuant to the Act are realized at a level
specified by CEC.
d) Consider reliance on existing trade certifications or
licensing requirements applicable to occupations that
perform the work funded by the agreement.
e) Establish qualifications for the certification of
contractors to construct or install energy efficiency
improvements.
f) Establish standards necessary to ensure that the
building energy efficiency improvements financed pursuant
to this chapter are realized at a level specified by the
commission.
g) Contract with a public or private party to provide
various monitoring and verification activities.
h) Monitor the number of participants.
i) Determine the average amount paid by contractor.
j) Calculate jobs created.
aa) Develop a model "energy aligned lease provision" that
modifies, upon the agreement of the owner and tenants of an
eligible building, a commercial lease agreement to allow
the owners to recover the costs of the renewable energy,
water efficiency, or energy efficiency retrofit
improvements that result in operational savings.
bb) Develop a request for proposal to contract with one or
more financial institutions to secure a short-term,
revolving credit facility (warehouse line of credit) for
the purpose of creating an interim financing mechanism for
the loans that would be aggregated to issue a revenue bond.
cc) Adopt a standard notice and disclosure form.
22)Requires CEC to do all of the following:
a) Consult with the PUC, representatives of Investor Owned
Utilities (IOUs) and Publicly Owned Utilities (POUs), local
governments, real estate licensees, commercial builders,
commercial property owners, small businesses, financial
institutions, commercial property appraisers, energy rating
organizations, and other entities the CEC deems
appropriate;
b) Hold at least one public hearing; and,
c) Adopt regulations and standards to implement the Act at
a public hearing.
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23)Beginning June 30, 2015, and every fifth year thereafter,
requires the State Auditor to conduct a performance audit of
the Program and to report the results and recommendations to
the Legislature.
24)Authorizes CAEATFA, on behalf of CEC, to "incur indebtedness
and issue and renew negotiable bonds, notes, debentures, or
other securities of any kind or class" (bonds). Specifies
that all indebtedness shall be payable solely from moneys
received pursuant to the Act. Limits total indebtedness to $2
billion unless the Legislature authorizes additional bonds.
25)Requires CAEATFA to conduct a semiannual meeting to authorize
the issuance of bonds and establishes related requirements.
Specifies that every issue of bonds shall be general
obligations of CAEATFA or CEC payable from revenues or moneys
received pursuant to the Act. Establishes various
requirements and limitations relating to the management of the
bonds.
26)Specifies that bonds issued pursuant to the Act shall not be
deemed to constitute a debt or liability of the state or of
any political subdivision thereof, other than CAEATFA, or a
pledge of the faith and credit of the state or of any such
political subdivision. States that all bonds be payable
solely from funds obtained pursuant to the Act.
27)Authorizes CAEATFA to provide for the issuance of bonds for
the purpose of refunding any bonds, notes, or other securities
of [CAEATFA] then outstanding, including the payment of any
redemption premium thereon and any interest accrued or to
accrue to the earliest or subsequent date of redemption,
purchase, or maturity of such bonds. Specifies that any such
bonds may be applied to refund other bonds may be used at
maturity or placed in escrow.
28)Pending this use, specifies that any such escrowed proceeds
may be invested and reinvested by CAEATFA in obligations of,
or guaranteed by, the federal government, or in certificates
of deposit or time deposits secured by obligations of, or
guaranteed by, the federal government, maturing at such time
to ensure the prompt payment of the outstanding bonds.
29)Specifies that bonds issued by CAEATFA are legal investments
for all trust funds, the funds of all insurance companies,
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commercial and savings banks, trust companies, savings and
loan associations, and investment companies, for executors,
administrators, trustees, and other fiduciaries, for state
school funds, and for any funds that may be invested in
county, municipal, or school district bonds, as specified.
30)Exempts bonds issued under the Act from all taxation and
assessments imposed under state law.
31)By February 1, 2014, requires CEC to apply to the US
Department of Treasury under the Energy Tax Incentives Act of
2005 for CAEATFA to issue tax advantage bonds under the
federal Clean Renewable Energy Bonds program or any other
applicable program.
32)Establishes the Loan Loss Reserve Account in the Fund, into
which the Board is required to deposit the loan loss reserve
fee. Continuously appropriates the Account to CAEATFA to pay
outstanding balances due under an agreement on a building that
has been foreclosed if the proceeds from the foreclosure are
insufficient to pay any past due payments.
33)Establishes the Administration Account in the Fund, into
which CAEATFA is required to deposit the administration fee
and any penalties collected. Continuously appropriates these
funds to CAEATFA, CEC, and the BOE for the costs of
implementing the Act.
34)Allocates a loan from the General Fund of $1 million to the
Board and allocates a loan of up to $7 million from the
General Fund to CEC to implement the Act. Requires these
loans to be repaid by January 1, 2024 with interest at the
pooled money investment rate. If there are insufficient funds
to repay the loan by this date, requires the Director of
Finance to "discuss alternative repayment terms" with the
borrowing agencies.
35)Authorizes CEC, the BOE, and CAEATFA to promulgate
regulations to implement the Act.
36)Makes finding and declarations.
EXISTING LAW
1)Requires the CEC to establish criteria for adopting a
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statewide home energy rating program for residential
buildings, and requires the CEC to adopt the program in
consultation with representatives of the Department of Real
Estate, the Department of Housing and Community Development,
the PUC, investor-owned and municipal utilities, cities and
counties, real estate licensees, home builders, mortgage
lenders, home appraisers and inspectors, home energy rating
organizations, contractors who provide home energy services,
consumer groups, and environmental groups. (Public Resources
Code 25943)
2)Establishes several natural gas public purpose programs,
including a low-income rate assistance program, a research and
development program, and energy efficiency programs, which are
funded by a surcharge on natural gas bills of customers of
pipelines regulated by the PUC. (Public Utilities Code 739)
3)Establishes subsidy programs for the installation of solar
photovoltaic systems administered by the PUC and CEC. These
programs, known collectively as the California Solar
Initiative (CSI), are to provide $3.2 billion in subsidies
over 10 years in the form of rebates for the installation of
photovoltaic projects. CSI authorizes the PUC to award $101
million in subsidies for solar thermal and solar water heating
devices. (Public Utilities Code 2851)
4)Establishes the Solar Hot Water and Efficiency Act of 2007 to
fund the installation of 200,000 solar hot water systems in
California by 2017. (Public Utilities Code 2860)
5)Establishes the Self-Generation Incentive Program (SGIP)
within the PUC to incentivize clean, renewable distributed
generation resources. (Public Utilities Code 379.6)
6)Requires the CEC to adopt an integrated energy policy report
(IEPR) every two years to evaluate market trends and develop
energy policies that will "conserve resources, protect the
environment, ensure energy reliability, enhance the state's
economy, and protect public health and safety." (Public
Resources Code 25300)
7)Requires the PUC to have each electrical corporation identify
a separate rate component to collect revenue to fund
cost-effective energy efficiency and conservation activities.
(Public Utilities Code 381)
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8)Requires all electric utilities, in procuring energy, to first
acquire all available energy efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
(Public Utilities Code 454.5(b)(9)(C))
9)Under the California Constitution and the General Obligation
Bond Law, authorizes the Legislature to issue general
obligation bonds for specified purposes with a two-thirds vote
of both the Senate and the Assembly. These bonds only become
enacted if they are approved by a majority vote of the state's
electorate. State law authorizes specified state agencies to
issue revenue bonds and other credit instruments without voter
approval. (Government Code 16720)
10)Authorizes the California Alternative Energy and Advanced
Transportation Financing Authority (CAEATFA) to provide
financing for facilities that use alternative energy sources
and technologies. CAEATFA can issue revenue bonds (without
voter approval), make loans, loan loss reserves, and loan
guarantees to develop and commercialize advanced
transportation technologies that conserve energy, reduce air
pollution, and promote economic development and jobs. State
law limits CAEATFA's total debt to $1 billion. (Public
Resources Code 26011)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement . "California needs a statewide program to
finance energy retrofits for non-residential buildings.
Setting statewide standards, aggregating loans, and backing
the financing with State revenue bonds will help minimize the
interest rates paid by building owners, thereby promoting more
widespread adoption of energy efficiency and renewable energy
facilities connected to buildings."
1)State Energy Efficiency Program History . In response to a
directive in the 2012-13 Budget Package the Legislative
Analyst's Office (LAO) released a report in December 2012
titled "Energy Efficiency and Alternative Energy Programs."
The report explored over a dozen major programs that are
intended to support the development of energy efficiency and
alternative energy in the state. It found that over the past
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10 to 15 years, the state has spent a combined total of
approximately $15 billion on such efforts, the majority of
which has been funded by utility ratepayers.
In November 2012, the PUC adopted 2013-2014 budgets for
ratepayer-funded energy efficiency programs at $1 billion per
year over the two year program.
It is unclear whether and how much actual demand reduction
occurred as a result of these investment.
In addition, the State has some of the most aggressive energy
efficiency and appliance standards. Building owners replacing
obsolete or broken equipment will automatically acquire high
efficiency improvements when replacing this equipment.
1)Characterizing Commercial Building Energy Use . According to
the CEC report (August 2012) on Comprehensive Energy
Efficiency Retrofits for Existing Buildings, energy
consumption is greatest in the miscellaneous building
category, the retail sector is the next largest, both in
number of buildings and their aggregate electricity
consumption, and the electricity use in the retail sector is
more than five times larger than the next largest electricity
consuming sectors, large offices and healthcare.
The report goes on to state that:
"the nonresidential sector is dominated by buildings that
predate Californias energy code for new construction; CEC
projections indicate that, by 2022, nearly 50 percent of
buildings will be pre1970 and 74 percent pre1990. Within the
nonresidential sector, there is a great variety of building
types, and each contains a different profile of energy
consumption.
Since the late 1970s the CEC has adopted and implemented the
state's energy efficiency standards for buildings and
appliances. As older equipment (such as heating and air
conditioning systems) is replaced some of the older building
inventory may already have made energy efficiency
improvements, particularly, if they took advantage of prior
energy efficiency incentives.
According to the CEC:
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"?existing state [energy efficiency] targets are not
consistent. Some appear unrealistically aggressive, such as
achieving zero net energy levels of energy efficiency in half
of all commercial buildings by 2030, while others seem overly
conservative, like the current estimates of economic potential
for savings from IOU efficiency programs. One target, 25
percent of buildings decreasing electricity use by 75 percent
by 2030, assumes deep reductions can be accomplished in a
smaller portion of the total building stock. This projection
would rely upon achieving deep savings in fewer buildings.
This can be compared to the effect of achieving 30 percent
energy reductions in 75 percent of the total building stock by
2030.
"Designing a program for the commercial sector that targets
improvements in these categories could accomplish something
close to the 30 percent reduction in 75 percent buildings
goal; such a program may focus on small offices, retail, and
the miscellaneous sector, which account for the greatest
number of commercial buildings. However, such a program design
would largely rely on improvements in plug load, which are
hard to guarantee from one building occupant to the next, or
even over time."
2)Commercial Building Energy Usage. According to the PUC's
January 2011 Energy Efficiency Strategic Plan, "The sector's 5
billion-plus square feet of space is very diverse-not only
office buildings but stores, restaurants, warehouses, schools,
hospitals, public buildings and facilities, and others-in
aggregate accounting for 38 percent of the state's power use
and over 25 percent of natural gas consumption." The PUC
established a goal to achieve "250 million square feet (1/20th
of existing space) per year through 2030 reach deep levels of
energy efficiency improvements and clean, distributed
generation through whole building approaches."
According to the CEC report on Comprehensive Energy Efficiency
Retrofits for Existing Buildings, it distinguishes between
electricity use from equipment and systems that can transfer
with commercial property versus electricity use that is
related to specific operation of a particular building.
Movable equipment, such as refrigerators, monitors, and
machinery related to the operations of the occupant could have
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a major impact on the building energy use if the movable
equipment is not kept in place upon change in occupancy over
the 20 year life of the loan.
This bill limits loans to the energy use that is permanent to
the building.
This bill requires that any on site renewable energy
generation be sized to meet the customer's load as well as
requiring building owners to provide "evidence of intent" to
make feasible energy efficiency improvements. The bill does
not require that the building owner also acquire all
cost-effective energy efficiency improvements prior to or in
conjunction with any improvements that would provide on-site
renewable generation. This bill allows that preference by
requiring renewable energy generation could be sized as if all
cost effective energy efficiency measures were installed to
prevent oversizing the system.
The bill requires applicants to provide information on whether
the building owner has applied for all available incentives
from an electrical or gas corporation. The PUC would prefer
that this provision be removed because it is not known if
incentives will be available in the future. This program
should be available statewide, including in areas served by
publicly owned utilities. This bill also requires that loans
be reduced by the amount of any incentives received.
3)Are Energy Efficiency Loans Risky ? According to the CEC, "One
of the biggest challenges for private lenders who are
interested in creating loan products for energy efficiency
upgrades is that there are no established underwriting
standards, which has two effects: First, risk analysis is
challenging due to a lack of statistical data on the
performance of energy efficiency upgrades, and second, the
lack of standardization makes it difficult for the primary
lender to package multiple loans to sell onto a secondary
market."
This issue also impacts the viability of these loans to be
repaid from the expected bill savings that accrue from the
energy efficiency improvements. This is made more challenging
due to the great variety of building types and different
profiles of energy consumption.
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According to the PUC's report on energy efficiency financing:
"The non-residential sector has long been challenging to serve
with financing products. Small, medium and large businesses
that occupy commercial buildings are often leveraged with
debt, and taking on additional debt is often difficult or
impossible. In addition, many businesses are unwilling to take
on new debt for activities that are not central to their
business."
This bill directs the CEC to assess this program identify any
modifications needed, if any, after the first two years of
this or the first $250 million in loans, whichever comes first
and, prior to expanding it to the full $2 billion bond
indebtedness.
Currently, PG&E offers a zero interest on bill financing
program for business and government customers. PG&E business
customers may qualify for loans between $5,000 and $100,000,
with loan periods of up to 60 months. Government agencies may
qualify for loans between $5,000 and $250,000 per PG&E meter,
with loan periods of up to 120 months. This bill provides that
the CEC will establish loan limits for each type of eligible
improvement.
Over the life of the building it is likely that the customer's
electricity or natural gas rates will change. In order to
create a consistent baseline assumption for estimating savings
over the life of a particular measure, it may be necessary to
establish standard assumptions regarding average electricity
and gas rates and projected increases in those rates.
Currently, these assumptions are developed by sellers of these
services and can be used to either inform or mislead building
owners with regard to how much an improvement will cost or
save the building owner. This bill includes a provision that
the CEC develop standard assumptions for future electricity
rates and rate escalation to be used in calculating estimated
savings for projects financed through these loans and that the
CEC establish standard metrics for estimating performance of
eligible improvements for different building types and
different profiles of energy consumption to be used in
underwriting these loans.
4)Effective Useful Life of Energy Efficiency and Renewable
Energy Measures. This bill provides that the CEC will
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establish the useful life of the building efficiency
improvements and that the CEC's determination is exempt from
review by the Office of Administrative Law.
The range of possible equipment, both commercially available
and new technology, is extensive. In order to establish the
useful life of the technologies the CEC should hold at least
one public workshop to take comments from the public,
manufacturers, and interested parties. In addition, the CEC
should update the assumptions on useful life as new
information becomes available and when new technologies become
available. This information is useful to the public and
consumers so it should also be made publicly available.
In addition, a technology may not meet its effective life
expectations if the technology is improperly installed or has
manufacturing defects. The CEC should have the authority to
make ineligible for loans those companies that do not properly
install technologies or those technologies that have known
manufacturing defects. This information is useful to the
public and consumers so it should also be made publicly
available.
This bill provides that the CEC must hold at least one public
meeting on the useful life of eligible technologies and shall
update the assumptions on useful life as new information
becomes available and when new technologies become available
and that the CEC should make this information publicly
available on its Internet website. In addition, the bill
provides the CEC with authority to make technologies
ineligible for loans if the improvement is no longer
manufactured or if the those improvements have known
manufacturing defects.
5)Standards, guidelines, procedures, and Transparency. This bill
permits the CEC to determine whether it is necessary to
establish standards, guidelines, and procedures necessary to
ensure the financial stability of the program and prevent
fraud and abuse, establish standards to ensure that the energy
efficiency improvements financed are realized at a level
specified by CEC, consider reliance on existing trade
certifications or licensing requirements applicable to
occupations that perform the work funded by the agreement,
establish qualifications for the certification of contractors
to construct or install energy efficiency improvements,
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establish standards necessary to ensure that the building
energy efficiency improvements financed pursuant to this
chapter are realized at a level specified by the commission,
determine the average amount paid by contractor, and adopt a
standard notice and disclosure form. If the CEC determines
these provisions are necessary then it is required to do them.
A recent report provided by the Contractors State License
Board, shows that in 2012 it received approximately 2000
complaints against Heating and Air Conditioning, Glaziers,
Insulation, and Solar Contractors. The majority of these
complaints were for failure to meet trade standards,
permitting violations, failure to comply with regulations, and
contract violations.
These particular items relate to quality control and are
critical to ensuring a successful outcome.
This bill requires the CEC to ensure quality control and
prevent fraud and abuse and make technical amendments in the
disclosure language as shown.
In addition, the bill provides program transparency through a
publicly available database on its Internet website to provide
information on program participation, location of projects,
loan amount, estimated energy savings, actual demand
reduction, and measures installed.
6)Model Energy Aligned Lease . The bill allows the CEC to develop
a "model energy aligned lease" if it deems it is necessary to
do so. A model energy aligned lease creates a pass-through
structure where the lessor and lease share the costs and
benefits of energy retrofits by agreeing on a predicted amount
of annual savings and having the tenant pay the owner recovery
costs based on the predicted savings. There is risk that the
tenant could be asked to pay more than the actual energy
savings from the efficiency improvements. In New York City,
this type of lease has been developed and includes a buffer to
ensure that as the expenses are passed through to tenants it
includes a buffer to ensure that the tenants do not pay more
than the measures can provide in bill savings. It is unclear
if the CEC has the requisite expertise to develop such as
lease. This bill requires the CEC to consult with commercial
real estate experts and the Department of Real Estate on the
model energy aligned lease.
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7)Complex Program, Complex Assumptions and Targeting Areas of
Need. The loan program contemplated by this bill creates an
opportunity to achieve important state energy policy goals.
However, the building owner may not have the requisite
expertise to evaluate various proposals to determine which of
the many possible energy upgrades are the most appropriate for
a particular building's situation. As pointed out by the CEC's
report - commercial buildings have a great degree of variation
in energy use and different patterns of energy consumption.
Currently this bill does not provide an independent third
party resource to those building owners to assist those who
may need help in analyzing the various proposals. In the City
of Boulder Colorado, it used American Recovery and
Reinvestment Act (ARRA) funds to establish an Energy Smart
program that included energy advising services that provided
advisory services to businesses. The City hired an independent
contractor to perform these services for businesses. The City
of Boulder found that this assistance created a better success
rate, increased the chances of implementation, and ensured
that outcomes were achieved. This bill requires the CEC's 3rd
party administrator to provide an Independent Energy Advisor
to assist businesses in evaluating energy upgrade proposals
and to help identify available incentive programs for various
energy efficiency measures.
8)Pending Amendments to Address Bank and BOE Concerns. The
author is working with the banking industry to address loan
subordination and the BOE to address loan servicer default.
The author plans to address these issues in subsequent
hearings.
9)Related Legislation .
AB 29 (Williams, 2013) requires the CEC to administer, in
coordination with University of California, California State
University and California Community College, grants, loans or
other financial assistance for energy demand and consumption
reducing projects at these institutions, consistent with Prop
39.
AB 39 (Skinner, 2013) requires the CEC to administer grants,
loans, or other financial assistance to K-12 public schools
and community colleges to reduce energy demand.
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AB 239 (Hagman, 2013) requires the Office of Public School
Construction, in consultation with the CEC and PUC, to fund a
zero-interest revolving loan program (60 percent) and a grant
program (40 percent) for energy efficiency retrofit or clean
energy installation projects at public schools.
AB 270 (Bradford, 2013) order Investor-Owned Utilities (IOUs)
to establish, by June 1, 2014, a publicly available Internet
Web site containing specified information regarding
ratepayer-funded energy efficiency programs while maintaining
customer confidentiality.
AB 416 (Gordon, 2013) requires the Air Resources Board to
establish a Local Emission Reduction Program to provide grants
and other financial assistance to eligible local government
recipients for the purposes of developing and implementing
greenhouse gas emissions reduction projects
SB 37 (De Leon, 2013) authorizes the CPUC to require IOUs to
develop and implement residential on-bill repayment (OBR)
programs for eligible energy efficiency, renewable energy,
distributed generation, energy storage, or demand response
improvements under which a customer pays down a loan from a
third-party lender with payments that are listed as a separate
line item on the customer's utility bill.
SB 39 (De Leon & Steinberg, 2013) On November 6, 2012,
California voters passed Proposition 39, this bill establishes
the Clean Energy Job Creation Fund and requires moneys in the
fund to be available for appropriation during specified fiscal
years for, among other things, the purposes of funding energy
efficiency projects in school facilities.
SB 1130 (De Leon, 2011-2012) would have established the
Nonresidential Building Energy Retrofit Financing Act of 2012
(Act) and required the CEC to establish the Nonresidential
Building Energy Retrofit Financing Program to provide
financial assistance through revenue bonds for owners of
eligible buildings to implement energy efficiency improvements
and renewable energy generation. Died in the Assembly
Appropriations Committee.
AB 811 (Levine & Beall, Chapter 159, Statutes of 2008)
authorizes all cities and counties in California to designate
areas within which city officials and willing property owners
AB 122
Page 18
may enter into contractual assessments to finance the
installation of distributed generation renewable energy
sources and energy efficiency improvements.
REGISTERED SUPPORT / OPPOSITION :
Support
California Energy Efficiency Industry Council
California Public Utilities Commission (CPUC) (if amended)
East Bay Municipal Utility District (EBMUD)
John Chiang, California State Controller
OSRAM SYLVANIA, Inc.
Pacific Gas and Electric Company (PG&E)
Sierra Club California
SolarCity (if amended)
South Coast Air Quality Management District (SCAQMD)
Southern California Edison (SCE)
Opposition
None on file.
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083