BILL ANALYSIS Ó
AB 719
Page 1
Date of Hearing: April 8, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 719 (Hernandez) - As Amended: February 21, 2013
SUBJECT : Energy Efficient Street Lights
SUMMARY : This bill would require an electrical corporation to
replace low-efficiency light bulbs with high-efficiency light
bulbs in street light poles that the electrical corporation
owns.
Specifically, this bill :
a)Requires electrical corporations, as part of the energy
efficiency targets established by the California Public
Utilities Commission (PUC), to replace low-efficiency light
bulbs with high-efficiency light bulbs in street light poles
that the electrical corporation owns, at the same rate as the
city, county, or city and county in which any of the
electrical corporation's street light poles are located or at
the highest rate of an adjacent city or county if the street
light poles are located in a city or county that does not own
any street light poles.
b)Expresses the intent of the Legislature that this program be
funded through existing collection mechanisms, and that the
implementation of this program not result in an increase in
any amount collected.
EXISTING LAW
1)Directs the PUC to administer cost-effective energy efficiency
programs funded by a nonbypassable system benefits charge
assessed on ratepayers to fund energy efficiency programs.
(Public Utilities Code 381)
2)Requires electrical corporations to first meet its unmet
resource needs through all available energy efficiency and
demand reduction resources that are cost effective, reliable,
and feasible. (Public Utilities Code 454.5 (b)(9)(C)).
3)Requires the PUC, in consultation with the California Energy
Commission (CEC), shall identify all potentially achievable
cost-effective electricity efficiency savings and establish
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efficiency targets for an electrical corporation to achieve.
(Public Utilities Code 454.55)
FISCAL EFFECT : Unknown
COMMENTS :
1)Author's Statement. According to the author, "Our street
lights are neglected public facilities that are operating on
outdated energy technology with cities footing the higher
energy costs associated with this old technology. Corporate
utilities that stand by without making energy efficiency
retrofits, profit from the status quo when more energy is
consumed by their customers, at the expense of the tax payers
and the environment. In my district, of the 653,209 street
lights that the servicing utility company owns, only 16 of
those have been replaced with energy efficiency lighting. That
is less than two tens of thousandths of one percent (0.000025)
of their street lights. Something has to be done to provide
relief to our cities and counties, particularly when they are
making strides and efforts of their own in addressing the
matter."
2)Who owns the Street Lights? Street light poles can be owned by
local governments, Investor Owned Utilities (IOUs), homeowner
associations, or private parties. According to data provided
by the PUC, local government and IOUs own the following number
of street light poles:
------------------------------------------
|Utility | IOU owned | Local |
| | | Government |
| | | Owned |
|----------------+-----------+-------------|
|PG&E | 175,585 | 554,000 |
|----------------+-----------+-------------|
|SCE | 653,209 | 115,460 |
|----------------+-----------+-------------|
|SDG&E | 27,981 |119,469 |
------------------------------------------
The local government pays the energy bill for the street light
regardless of whether the pole is owned by the government or
the utility.
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A number of cities in California have received loans and
grants to fund energy efficient streetlight replacements
through the American Recovery and Reinvestment Act of 2009
(AARA), administered by the California Energy Commission
(CEC). It is not known how many cities have converted street
lights without assistance or how many will be able to convert
assistance now that the grant program has stopped accepting
new applications (although some new assistance may be
available through revolving loan programs).
Of the local government owned poles, roughly 20% in Pacific
Gas and Electric (PG&E) area have been converted, about 1% in
Southern California Edison's (SCE's) area have been converted,
and about 40% of San Diego Gas & Electric (SDG&E) area poles
have been converted. Very few utility-owned poles (less than
40 total) have been converted.
3)Who's motivated to convert Street Lights? Generally it is the
entity paying the energy bill that has a motivation to reduce
energy consumption. In this situation, the pole is owned by
the utility and the local government pays the energy bill. As
a result, local governments are motivated to find ways to
reduce energy usage and save money.
The author suggests that utilities lack an incentive,
particularly for IOUs, to pursue street light efficiency
improvements. The PUC-approved rated schedule for PG&E and SCE
owned street and highway lighting requires the customer to pay
100% of the conversion cost of High Pressure Sodium Vapor
(HPSV) to Light Emitting Diode (LED).
Currently, local governments are eligible for ratepayer-funded
rebates to help reduce street light conversion costs. The PUC
has not allowed utilities to be eligible for ratepayer-funded
rebates for this purpose.
PG&E is proposing to replace up to 160,000 non-decorative
utility-owned streetlights in its 2014 General Rate Case. PG&E
is proposing that the costs for the program through an
adjustment in the facility charge for customers who elect to
participate in and benefit from the program. PG&E estimates
replacing HSPV with LEDs will saving 52.8 million
kilowatt-hours annually, reduce customer energy bills (which
includes the cost of the facility charge), and improve
reliability through fewer streetlight burnouts.
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4)New Technologies May or May not Meet the Service Requirements
for Street Lights. High Pressure Sodium Vapor (HPSV) lights
are the predominant type of street light technology. Energy
efficiency opportunities for improving street lights can be
accomplished via induction lights or light-emitting diode
lights. Depending on models and usage, induction lights can
reduce energy consumption by 10 to 50 percent and last up to
four times longer than HPSV lights. Light Emitting Diode (LED)
lights can reduce energy consumption by up to 50 percent and
last twice as long as HSPV lights.
LED lighting systems do not have established standards
therefore there may be financial risks with purchasing
currently-available technology that does not deliver the type
and level of lighting necessary to provide similar level of
lighting services that were provided by the HSPV technology.
According to a 2011 report by the Rensselaer Polytechnic
Institute's Lighting Research Center which tested various
streetlight technologies against design criteria specified by
the American National Standards Institute (ANSI), the tested
LED streetlights required from 3% to 92% more poles per mile
than the base case to meet the ANSI standard. Pole
configuration (staggered vs. single sided). The study found
that with the additional poles necessary to achieve equivalent
lighting the net energy consumption would increase an average
of 51% to 41% more per mile. Rensselaer estimated that an
incentive range of $250 to $1550 per streetlight in addition
to a volume discount for an LED with a life of 25, 000 hours
or longer or an induction streetlight would be needed to
achieve a lower life-cycle cost per mile than the study's base
case. As lighting technologies improve, it is likely these
issues will be addressed.
Alternatively, or in addition, control technologies could help
reduce street light energy consumption by dimming or turning
off the lamp during certain specified time periods.
5)Street Lights Perform a Service . Communities use street lights
to provide a public benefit. Examples of public benefit
include providing enhanced visibility at intersections where
vehicles might encounter pedestrians or to deter criminals who
benefit from the cover of darkness. According to the U.S.
Department of Justice, it street lighting is not always that
straightforward and some crime-prevention experts hypothesize
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that street light can sometimes increase crime (nighttime as
well as daytime). For purposes of safety, the U.S. Department
of Justice, in its report on "Improving Street Lighting to
Reduce Crime in Residential Areas," they describe several
considerations for police to consider for specific lighting
improvement projects:
a. Product life
b. Energy Efficiency
c. Color rendering (the perceived color of an object),
d. Optical Control (direction of light distribution)
e. Brightness (of the object and the light emanating
from the lamp)
f. Vertical illumination (the measure of light
delivered at a sufficient height from the ground so that
people can see the faces of other pedestrians) and
g. Glare.
6)Who pays for the conversion? The bill intends that streetlight
conversions of utility-owned poles be funded through existing
mechanisms without increasing collections from ratepayers. The
existing mechanisms are ratepayer-funded energy efficiency
programs. The PUC has established collections from ratepayers
of approximately $1 billion annually for the current energy
efficiency programs.
The ratepayer funds have been allocated to specific programs
for residential, commercial, industrial, agriculture, and
local government energy efficiency improvements. In order to
protect the ratepayer dollars used to fund these programs,
they must be cost-effective. According to AB 719, the program
is not to cause an increase to existing funding mechanisms.
This would result in reduced funding for some currently funded
programs or future programs.
7)Unintended Consequences? Because AB 719 does not require the
street light owner (the IOU) to fund any of the costs for the
lighting retrofit, AB 719 could establish a precedent for this
level of ratepayer funding for other energy efficiency
programs. In addition, it would set a precedent for using
ratepayer funds for energy efficiency improvements at/on
utility-owned facilities.
Through the current energy efficiency programs, utilities also
receive an incentive for achieving energy efficiency goals. AB
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719 could result in IOU shareholders receiving 100% funding
for these conversions and an additional incentive for the
deemed savings for these conversions.
8)Proposed Amendments. To address the issues of reducing demand
for electricity and reducing electricity costs paid by local
governments for utility owned streetlights, without impacting
other ratepayers, the author may wish to amend the bill to
allow local governments to voluntarily elect to a new rate
plan that will 1) fund the energy efficiency improvements over
time through the tariff remitted by the local government, 2)
achieve lower electricity bills, and 3) be eligible for
ratepayer-funded rebates to help offset the cost of the
improvement. Additionally, the author may wish to set a
deadline by which the new rate plans are filed at the PUC by
the IOUs.
384.5. (a) It is the intent of the Legislature that the
program created by this section be funded through existing
collection mechanisms for the purposes of achieving
cost-effective electricity savings and establishing energy
efficiency targets, and that the implementation of this
program not result in an increase in any amount collected for
these purposes utility owned street light poles, whose
electricity use is paid by local governments, are converted to
use cost-effective technology that reduces electricity
consumption so that a city, county, or city and county will
achieve lower utility bills for the electricity used by these
street lights poles. The commission shall order, by March 1,
2014, electrical corporations to submit a tariff to be used,
at the discretion of the local government, to fund energy
efficiency improvements in street lights pole owned by the
electrical corporations to ensure reduced energy consumption
and lower electricity bills for local governments who are the
streetlight customers covered by these tariffs.
(b) As part of the energy efficiency targets created pursuant
to Section 454.55, an electrical corporation shall, for street
light poles the electrical corporation owns, implement a
program targeting the replacement of low-efficiency light
bulbs with high-efficiency light bulbs. The tariff shall be
designed to allow local governments to remit the cost of the
improvement through the tariff over time, result in lower
energy consumption and lower energy bills, without shifting
costs to non-participating ratepayers.
(c) (1) For street light poles owned by an electrical
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corporation, the electrical corporation shall install
high-efficiency light bulbs in those street light poles at the
same rate that the city, county, or city and county in which
those street light poles are located has installed
high-efficiency light bulbs. The conversion performed pursuant
to the tariff submitted pursuant to subdivision (a) shall be
eligible for any rebate or incentives available through
ratepayer funded programs intended to increase energy
efficiency.
(2) For street light poles located in a city, county, or city
and county that do not own any street lighting infrastructure,
the electrical corporation shall install high-efficiency light
bulbs in those street light poles owned by the electrical
corporation at the rate of installation of an adjacent city or
county with the highest rate of installation.
9)Related Legislation. AB 1235 (Hernández, 2011- 2012) was
amended in the Senate and was not heard.
REGISTERED SUPPORT / OPPOSITION :
Support
Sierra Club California
Opposition
San Diego Gas & Electric (SDG&E)
Southern California Edison (SCE) (unless amended)
Pacific Gas and Electric (PG&E)
Analysis Prepared by : Susan Kateley / U. & C. / (916)
319-2083