BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 217 (Bradford) - Electricity: solar electricity: low-income households. Amended: July 10, 2013 Policy Vote: EU&C 8-2 Urgency: No Mandate: Yes (see staff comment) Hearing Date: August 30, 2013 Consultant: Marie Liu SUSPENSE FILE. AS PROPOSED TO BE AMENDED. Bill Summary: AB 217 would extend the low-income programs of the California Solar Initiative (CSI) from 2016 until 2021, authorize the collection of an additional $108 million for these programs, and add additional standards to the program. Fiscal Impact (as proposed to be amended): Annual costs of $50,000 from the Public Utilities Reimbursement Account through 2021 for the administration of the low-income programs of the CSI. Annual costs of approximately $260,000 from General Fund and various special funds for CSI surcharges paid by the state as an IOU customer. Background: The CSI was established in 2007 to fund multiple programs to increase customer use of solar power throughout California, including through the investor-owned utilities (IOUs), the publically-owned utilities (POUs), and through the New Solar Homes Partnerships. The IOUs were approved for 10 years of funding with a $2.167 billion budget overall and a goal of installing 1,940 MW of new solar generation capacity through a general market program, the CSI thermal program, the Single-family Affordable Solar Home (SASH), and Multi-family Affordable Solar Housing (MASH) program. The SASH and MASH programs were originally established by the CPUC with a total budget of $217 million, and subsidized solar photovoltaic systems for low-income single- and multi-family homes, respectively. The CPUC adopted an incentive structure that provides a fully-subsidized 1 kilowatt photovoltaic solar energy system to "very-low income" households and a partial subsidy for qualified "low-income" households. The goal is to AB 217 (Bradford) Page 1 provide access to solar energy systems to decrease electricity bills without increasing household expenses. All parts of the CSI program are set to sunset in 2016. Section 382 of the Public Utilities Code requires that the CPUC ensure that eligible low-income electricity and gas customers are given the opportunity to participate in low-income energy efficiency programs. Pursuant to this section, the CPUC runs the Energy Savings Assistance Program, which provides no cost weatherization services to low-income households who meet income guidelines. Proposed Law: This bill would allow the CPUC to collect an additional $108 million from ratepayers served by San Diego Gas and Electric Company, Southern California Edison Company, and Pacific Gas and Electric Company to fund the SASH and MASH programs until December 31, 2021. Any unused general market portion of the CSI at the end of 2016 may also be used. The CPUC would be required to ensure that the low-income programs be cost-effective investment by ratepayers, require participants to enrolled in the Energy Savings Assistance Program, and provide job training and employment opportunities in solar energy and energy efficiency sectors of the economy. Staff Comments: This bill, by extending a portion of the CSI program also extends a portion of the CPUC's administrative costs to administer this program. The CPUC estimates that their current administrative costs for the SASH and MASH program are approximately $50,000 annually for a 0.5 PY. State agencies, as electricity consumers, will share in the ratepayer costs imposed by the bill. State agencies make up about 1.2 percent of total electricity use in the IOU territories. Therefore, the cost to state agencies over the next several years will be about $260,000 annually. This bill does not create a reimbursable state mandate as the bill only changes the definition of a crime. Proposed Author Amendments: Amend to specify that the additional collection shall not occur until existing funds available for low-income residential housing programs are exhausted in that AB 217 (Bradford) Page 2 IOU's territory. Amend to require that the CPUC shall ensure that the program is designed to maximize the overall benefit to taxpayers instead of ensuring that the program is a cost-effective investment for ratepayers.