Amended in Senate September 3, 2013

Amended in Senate July 10, 2013

Amended in Senate June 25, 2013

Amended in Assembly April 16, 2013

Amended in Assembly April 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 217

Introduced by Assembly Member Bradford

(Principal coauthor: Senator De León)

January 31, 2013

An act to amend Sections 2851 and 2852 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 217, as amended, Bradford. Electricity: solar electricity: low-income households.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations. Decisions of the commission adopted the California Solar Initiative administered by the state’s 3 largest electrical corporations and subject to the commission’s supervision. Existing law requires the commission to ensure that not less than 10% of the funds for the California Solar Initiative are utilized for the installation of solar energy systems, as defined, on low-income residential housing, as defined. Pursuant to this requirement, the commission adopted decisions that established the Single-Family Affordable Solar Homes Program (SASH) and the Multifamily Affordable Solar Housing Program (MASH), pursuant to which the electrical corporations provide monetary incentives for the installation of solar energy systems on low-income residential housing. The SASH and MASH programs will operate until December 31, 2016, or until funds collected for the above purposes are exhausted, whichever occurs sooner.

This bill would, upon the begin delete exhaustion end delete begin insert expenditure or reservation end insert of those funds begin insert reserved for low-income residential housing end insert , authorize the surcharge collected by the electrical corporations for the California Solar Initiative to continue to provide funding for the administration of the SASH and MASH programs. The bill would require the commission to ensure the total amount resulting from the continued collection of the charge does not exceed $108,000,000. The bill would extend the operation of the SASH and MASH programs to December 31, 2021, or until the exhaustion of that amount, whichever occurs sooner. The bill would require the SASH and MASH programs to meet specified requirements. The bill would make legislative findings and declarations that it is the goal of the state to install solar energy systems that have a generating capacity equivalent to 50 megawatts for low-income residential housing begin insert and that the commission designs a program that maximizes the overall benefit to ratepayers end insert . Because a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime, this bill would impose a state-mandated local program by extending the application of a crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares that it is the
goal of the state to install solar energy systems that have a
generating capacity equivalent to 50 megawatts for low-income
residential housing. It is also the intent of the Legislature to ensure
that the commission designs a program that begin delete reaches low-income
communities with a high-energy demand load so that it is
affordable for all end delete begin insert maximizes the overall benefit to end insert ratepayers.

SEC. 2.  

Section 2851 of the Public Utilities Code is amended
to read:

2851.  

(a) In implementing the California Solar Initiative, the
commission shall do all of the following:

(1) (A) The commission shall authorize the award of monetary
incentives for up to the first megawatt of alternating current
generated by solar energy systems that meet the eligibility criteria
established by the Energy Commission pursuant to Chapter 8.8
(commencing with Section 25780) of Division 15 of the Public
Resources Code. The commission shall determine the eligibility
of a solar energy system, as defined in Section 25781 of the Public
Resources Code, to receive monetary incentives until the time the
Energy Commission establishes eligibility criteria pursuant to
Section 25782. Monetary incentives shall not be awarded for solar
energy systems that do not meet the eligibility criteria. The
incentive level authorized by the commission shall decline each
year following implementation of the California Solar Initiative,
at a rate of no less than an average of 7 percent per year, and,
except as provided in subparagraph (B), shall be zero as of
December 31, 2016. The commission shall adopt and publish a
schedule of declining incentive levels no less than 30 days in
advance of the first decline in incentive levels. The commission
may develop incentives based upon the output of electricity from
the system, provided those incentives are consistent with the
declining incentive levels of this paragraph and the incentives
apply to only the first megawatt of electricity generated by the
system.

(B) The incentive level for the installation of a solar energy
system pursuant to Section 2852 shall be zero as of December 31,
2021.

(2) The commission shall adopt a performance-based incentive
program so that by January 1, 2008, 100 percent of incentives for
solar energy systems of 100 kilowatts or greater and at least 50
percent of incentives for solar energy systems of 30 kilowatts or
greater are earned based on the actual electrical output of the solar
energy systems. The commission shall encourage, and may require,
performance-based incentives for solar energy systems of less than
30 kilowatts. Performance-based incentives shall decline at a rate
of no less than an average of 7 percent per year. In developing the
performance-based incentives, the commission may:

(A) Apply performance-based incentives only to customer
classes designated by the commission.

(B) Design the performance-based incentives so that customers
may receive a higher level of incentives than under incentives
based on installed electrical capacity.

(C) Develop financing options that help offset the installation
costs of the solar energy system, provided that this financing is
ultimately repaid in full by the consumer or through the application
of the performance-based rebates.

(3) By January 1, 2008, the commission, in consultation with
the Energy Commission, shall require reasonable and cost-effective
energy efficiency improvements in existing buildings as a condition
of providing incentives for eligible solar energy systems, with
appropriate exemptions or limitations to accommodate the limited
financial resources of low-income residential housing.

(4) Notwithstanding subdivision (g) of Section 2827, the
commission may develop a time-variant tariff that creates the
maximum incentive for ratepayers to install solar energy systems
so that the system’s peak electricity production coincides with
California’s peak electricity demands and that ensures that
ratepayers receive due value for their contribution to the purchase
of solar energy systems and customers with solar energy systems
continue to have an incentive to use electricity efficiently. In
developing the time-variant tariff, the commission may exclude
customers participating in the tariff from the rate cap for residential
customers for existing baseline quantities or usage by those
customers of up to 130 percent of existing baseline quantities, as
required by Section 739.9. Nothing in this paragraph authorizes
the commission to require time-variant pricing for ratepayers
without a solar energy system.

(b) Notwithstanding subdivision (a), in implementing the
California Solar Initiative, the commission may authorize the award
of monetary incentives for solar thermal and solar water heating
devices, in a total amount up to one hundred million eight hundred
thousand dollars ($100,800,000).

(c) (1) In implementing the California Solar Initiative, the
commission shall not allocate more than fifty million dollars
($50,000,000) to research, development, and demonstration that
explores solar technologies and other distributed generation
technologies that employ or could employ solar energy for
generation or storage of electricity or to offset natural gas usage.
Any program that allocates additional moneys to research,
development, and demonstration shall be developed in
collaboration with the Energy Commission to ensure there is no
duplication of efforts, and adopted by the commission through a
rulemaking or other appropriate public proceeding. Any grant
awarded by the commission for research, development, and
demonstration shall be approved by the full commission at a public
meeting. This subdivision does not prohibit the commission from
continuing to allocate moneys to research, development, and
demonstration pursuant to the self-generation incentive program
for distributed generation resources originally established pursuant
to Chapter 329 of the Statutes of 2000, as modified pursuant to
Section 379.6.

(2) The Legislature finds and declares that a program that
provides a stable source of monetary incentives for eligible solar
energy systems will encourage private investment sufficient to
make solar technologies cost effective.

(3) On or before June 30, 2009, and by June 30th of every year
thereafter, the commission shall submit to the Legislature an
assessment of the success of the California Solar Initiative program.
That assessment shall include the number of residential and
commercial sites that have installed solar thermal devices for which
an award was made pursuant to subdivision (b) and the dollar value
of the award, the number of residential and commercial sites that
have installed solar energy systems, the electrical generating
capacity of the installed solar energy systems, the cost of the
program, total electrical system benefits, including the effect on
electrical service rates, environmental benefits, how the program
affects the operation and reliability of the electrical grid, how the
program has affected peak demand for electricity, the progress
made toward reaching the goals of the program, whether the
program is on schedule to meet the program goals, and
recommendations for improving the program to meet its goals. If
the commission allocates additional moneys to research,
development, and demonstration that explores solar technologies
and other distributed generation technologies pursuant to paragraph
(1), the commission shall include in the assessment submitted to
the Legislature, a description of the program, a summary of each
award made or project funded pursuant to the program, including
the intended purposes to be achieved by the particular award or
project, and the results of each award or project.

(d) (1) The commission shall not impose any charge upon the
consumption of natural gas, or upon natural gas ratepayers, to fund
the California Solar Initiative.

(2) Notwithstanding any other provision of law, any charge
imposed to fund the program adopted and implemented pursuant
to this section shall be imposed upon all customers not participating
in the California Alternate Rates for Energy (CARE) or family
electric rate assistance (FERA) programs, including those
residential customers subject to the rate limitation specified in
Section 739.9 for existing baseline quantities or usage up to 130
percent of existing baseline quantities of electricity.

(3) The costs of the program adopted and implemented pursuant
to this section may not be recovered from customers participating
in the California Alternate Rates for Energy or CARE program
established pursuant to Section 739.1, except to the extent that
program costs are recovered out of the nonbypassable system
benefits charge authorized pursuant to Section 399.8.

(e)  begin delete In end delete begin insert Except as provided in subdivision (f), end insert implementing the
California Solar Initiative, the commission shall begin delete , except as provided
in subdivision (f), end delete ensure that the total cost over the duration of
the program does not exceed three billion five hundred fifty million
eight hundred thousand dollars ($3,550,800,000). begin delete The end delete begin insert Except as
provided in subdivision (f), end insert financial components of the California
Solar Initiative shall consist of the following:

(1) Programs under the supervision of the commission funded
by charges collected from customers of San Diego Gas and Electric
Company, Southern California Edison Company, and Pacific Gas
and Electric Company. Except as provided in subdivision (f), the
total cost over the duration of these programs shall not exceed two
billion three hundred sixty-six million eight hundred thousand
dollars ($2,366,800,000) and includes moneys collected directly
into a tracking account for support of the California Solar Initiative.

(2) Programs adopted, implemented, and financed in the amount
of seven hundred eighty-four million dollars ($784,000,000), by
charges collected by local publicly owned electric utilities pursuant
to Section 2854. Nothing in this subdivision shall give the
commission power and jurisdiction with respect to a local publicly
owned electric utility or its customers.

(3) Programs for the installation of solar energy systems on new
construction, administered by the Energy Commission, and funded
by charges in the amount of four hundred million dollars
($400,000,000), collected from customers of San Diego Gas and
Electric Company, Southern California Edison Company, and
Pacific Gas and Electric Company.

(4) The changes made to this subdivision by Chapter 39 of the
Statutes of 2012 do not authorize the levy of a charge or any
increase in the amount collected pursuant to any existing charge,
nor do the changes add to, or detract from, the commission’s
existing authority to levy or increase charges.

(f)  begin delete Notwithstanding subdivision (e), upon exhaustion end delete begin insert Upon the
expenditure or reservation in any electrical corporation’s service
territory end insert of the amount specified in paragraph (1) of subdivision
(e) begin insert for low-income residential housing programs pursuant to
subdivision (c) of Section 2852 end insert , the commission shall authorize
the continued collection of the charge for the purposes of Section
2852. The commission shall ensure that the total amount collected
pursuant to this subdivision does not exceed one hundred eight
million dollars ($108,000,000). Upon approval by the commission,
an electrical corporation may use amounts collected pursuant to
subdivision (e) for purposes of funding the general market portion
of the California Solar Initiative, that remain unspent and
unencumbered after December 31, 2016, to reduce that electrical
corporation’s portion of the total amount collected pursuant to this
subdivision.

SEC. 3.  

Section 2852 of the Public Utilities Code is amended
to read:

2852.  

(a) As used in this section, the following terms have the
following meanings:

(1) “Affordable housing cost,” “affordable rent,” and “lower
income households” have the same meanings as in those set forth
in Chapter 2 (commencing with Section 50050) of Part 1 of
Division 31 of the Health and Safety Code.

(2) “California Solar Initiative” means the program providing
ratepayer-funded incentives for eligible solar energy systems
adopted by the Public Utilities Commission in Decision 05-12-044
and Decision 06-01-024.

(3) “Low-income residential housing” means any of the
following:

(A) A multifamily residential complex financed with
low-income housing tax credits, tax-exempt mortgage revenue
bonds, general obligation bonds, or local, state, or federal loans
or grants, and for which either of the following applies:

(i) The rents of the occupants who are lower income households
do not exceed those prescribed by deed restrictions or regulatory
agreements pursuant to the terms of the financing or financial
assistance.

(ii) The affordable units have been or will be initially sold at an
affordable housing cost to a lower income household and those
units are subject to a resale restriction or equity sharing agreement
pursuant to the terms of the financing or financial assistance.

(B) A multifamily residential complex in which at least 20
percent of the total housing units are sold or rented to lower income
households and either of the following applies:

(i) The rental housing units targeted for lower income
households are subject to a deed restriction or affordability
covenant with a public entity or nonprofit housing provider
organized under Section 501(c)(3) of the Internal Revenue Code
that has as its stated purpose in its articles of incorporation on file
with the office of the Secretary of State to provide affordable
housing to lower income households that ensures that the units
will be available at an affordable rent for a period of at least 30
years.

(ii) The housing units have been or will be initially sold at an
affordable cost to a lower income household and those units are
subject to a resale restriction or equity sharing agreement, for
which the homeowner does not receive a greater share of equity
than described in paragraph (2) of subdivision (c) of Section 65915
of the Government Code, with a public entity or nonprofit housing
provider organized under Section 501(c)(3) of the Internal Revenue
Code that has as its stated purpose in its articles of incorporation
on file with the office of the Secretary of State to provide affordable
housing to lower income households.

(C) An individual residence sold at an affordable housing cost
to a lower income household that is subject to a resale restriction
or equity sharing agreement, for which the homeowner does not
receive a greater share of equity than described in paragraph (2)
of subdivision (c) of Section 65915 of the Government Code, with
a public entity or nonprofit housing provider organized under
Section 501(c)(3) of the Internal Revenue Code that has as its
stated purpose in its articles of incorporation on file with the office
of the Secretary of State to provide affordable housing to lower
income households.

(4) “Solar energy system” means a solar energy device that has
the primary purpose of providing for the collection and distribution
of solar energy for the generation of electricity, that produces at
least one kilowatt, and produces not more than five megawatts,
alternating current rated peak electricity, and that meets or exceeds
the eligibility criteria established by the commission or the Energy
Commission.

(b) In establishing the California Solar Initiative, no moneys
shall be diverted from any existing programs for low-income
ratepayers, or from cost-effective energy efficiency or demand
response programs.

(c) (1) The commission shall ensure that not less than 10 percent
of the funds for the California Solar Initiative, as specified in
subdivision (e) of, or moneys collected pursuant to subdivision (f)
of, Section 2851, are utilized for the installation of solar energy
systems on low-income residential housing. Notwithstanding any
other law, the commission may modify the monetary incentives
made available pursuant to the California Solar Initiative to
accommodate the limited financial resources of low-income
residential housing.

(2) The commission may incorporate a revolving loan or loan
guarantee program into the California Solar Initiative for
low-income residential housing. All loans outstanding as of January
1, 2022, shall continue to be repaid consistent with the terms and
conditions of the program adopted and implemented by the
commission pursuant to this subdivision, until repaid in full.

(3) All moneys set aside for the purpose of funding the
installation of solar energy systems on low-income residential
housing that are unexpended and unencumbered on January 1,
2022, and all moneys thereafter repaid pursuant to paragraph (2),
except to the extent those moneys are encumbered pursuant to this
section, shall be utilized to augment existing cost-effective energy
efficiency measures in low-income residential housing that benefit
ratepayers.

(d) In supervising a program implementing the California Solar
Initiative pursuant to this section, the commission shall ensure that
the program does all of the following:

begin delete

(1) Is a cost-effective investment by ratepayers in peak
electricity generation capacity where low-income residential
programs are designed to reach low-income communities with a
high-energy demand load.

end delete begin insert

(1) Is designed to maximize the overall benefit to ratepayers.

end insert

(2) Requires participants who receive monetary incentives to
enroll in the Energy Savings Assistance Program established
pursuant to Section 382, if eligible.

(3) Provides job training and employment opportunities in the
solar energy and energy efficiency sectors of the economy.

SEC. 4.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.