BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                        AB 719|
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                                    THIRD READING


          Bill No:  AB 719
          Author:   Roger Hernández (D)
          Amended:  8/12/13 in Senate
          Vote:     21


           SENATE ENERGY, UTIL. & COMMUNIC. COMM.  :  6-2, 6/18/13
          AYES:  Padilla, Corbett, DeSaulnier, Hill, Wolk, Wright
          NOES:  Fuller, Knight
          NO VOTE RECORDED:  Cannella, De León, Pavley

           SENATE APPROPRIATIONS COMMITTEE  :  4-1, 8/12/13
          AYES:  De León, Hill, Lara, Steinberg
          NOES:  Gaines
          NO VOTE RECORDED:  Walters, Padilla

          ASSEMBLY FLOOR  :  53-18, 5/16/13 - See last page for vote


           SUBJECT :    Energy:  energy efficiency:  street light poles

           SOURCE  :     Author


           DIGEST  :    This bill requires the California Public Utilities  
          Commission (PUC) to require investor-owned utilities (IOUs) to  
          offer a tariff for local governments to use to fund energy  
          efficiency improvements in street light poles owned by the  
          utility.

           ANALYSIS  :    Existing law requires California's electric  
          utilities to first meet their energy needs through cost  
          effective energy efficiency measures.
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          Current decisions of the PUC require IOUs to administer energy  
          efficiency programs in multi-year portfolios designed to meet  
          pre-established energy savings goals which are funded by  
          ratepayer charges, currently at about $1 billion per year.

          Current decisions of the PUC approve energy efficiency portfolio  
          programs that include, among many others, on-bill repayment  
          (OBR) and on-bill financing (OBF) so customers can pay off a  
          loan for an energy efficiency project through monthly bill  
          payments, and incentives for owners of streetlights to upgrade  
          to more efficient streetlights.

          This bill:
           
           1.States the intent of the Legislature that utility-owned street  
            light poles, whose electricity use is paid by local  
            governments be converted to use cost-effective technology that  
            reduces electricity consumption so the agency may achieve  
            lower utility bills.

          2.Requires the PUC, on or before March 1, 2014, to order IOUs to  
            submit, on or before July 1, 2015, a tariff that a local  
            government may use to fund energy efficiency improvements in  
            street light poles owned by the utility in order to reduce  
            energy bills, but with no cost shifts to nonparticipating  
            ratepayers.

          3.Provides that a local government financing an improvement  
            through such a tariff will be eligible to use any energy  
            efficiency rebate or incentive available for that improvement.

           Background
           
           Energy Efficiency Focus on Financing  .  Energy efficiency is  
          California's top strategy for reducing energy use and meeting  
          the state's energy needs.  California's utilities are required  
          to first meet their energy needs through cost-effective energy  
          efficiency measures before renewable and conventional  
          generation.  The state's IOUs and to a lesser extent the local  
          publicly owned utilities, administer hundreds of energy  
          efficiency programs that provide financial incentives and  
          rebates for installing energy efficient appliances, lighting,  
          windows, HVAC systems, and other technologies or measures.  A  

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          major focus is providing financing mechanisms that will entice  
          consumers to invest in measures that will provide energy savings  
          over time.  In the PUC's November 2012 decision approving $1.9  
          billion in ratepayer funds for IOU energy efficiency programs  
          for 2013-2014, the PUC approved $220 million for financing.   
          These include OBF and OBR, where a utility or private lender,  
          respectively, fronts the cost of an efficiency measure and the  
          customer pays off the loan with monthly payments added to the  
          charge for service on the utility bill.

           Street Lights  .  Each local agency pays the energy bill for the  
          street lights in its jurisdiction, although many agencies do not  
          own the street light poles and fixtures.  According to the PUC,  
          local governments 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                |
                |             |               |                       |
                 ----------------------------------------------------- 

          Local agencies that own the poles can convert those to more  
          efficient street lights, thereby reducing their energy use and  
          monthly bills.  Many California cities received loans and grants  
          to fund energy efficient streetlight replacements through the  
          American Recovery and Reinvestment Act of 2009.  The IOU energy  
          efficiency portfolios include rebates and incentives to street  
          light owners to upgrade to more efficient lights.  Of the local  
          government-owned poles, roughly 20% in Pacific Gas and  
          Electric's (PG&E's) 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's (SDG&E's) area poles  
          have been converted.

          Utilities may have little incentive to make energy efficiency  
          retrofits to street lights when they do not own the poles.  When  
          they do make such improvements, utilities can recover those  
          costs through rates paid by all ratepayers.  Very few  

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          utility-owned poles (less than 40 total) have been converted to  
          more efficient lighting.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee, onetime costs  
          of approximately $130,000 from the Public Utilities  
          Reimbursement Account (special) to develop the necessary  
          rulemaking.

           SUPPORT  :   (Verified  8/14/13)

          California Public Utilities Commission
          Cities of Carpinteria and Encinitas
          Pacific Gas and Electric Company
          San Diego Gas & Electric
          Sierra Club California

           ARGUMENTS IN SUPPORT  :    According to the author, "The purpose  
          of this bill is to encourage local agencies to install  
          high-efficiency light bulbs in street light fixtures.  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 taxpayers 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.  This bill provides a way for cities  
          and counties to achieve reduced energy use and lower energy  
          bills."

           ASSEMBLY FLOOR  :  53-18, 5/16/13
          AYES:  Achadjian, Alejo, Ammiano, Atkins, Bloom, Blumenfield,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson,  
            Eggman, Fong, Frazier, Garcia, Gatto, Gomez, Gordon, Gray,  
            Hall, Roger Hernández, Jones-Sawyer, Levine, Lowenthal,  
            Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V.  
            Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,  
            Ting, Torres, Waldron, Weber, Wieckowski, Williams, Yamada,  

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            John A. Pérez
          NOES:  Bigelow, Chávez, Conway, Dahle, Donnelly, Beth Gaines,  
            Hagman, Harkey, Jones, Linder, Logue, Maienschein, Mansoor,  
            Nestande, Olsen, Patterson, Wagner, Wilk
          NO VOTE RECORDED:  Allen, Fox, Gorell, Grove, Holden, Melendez,  
            Morrell, Stone, Vacancy


          JG:ej  8/14/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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