BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 719|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 719
Author: Roger Hernández (D)
Amended: 8/22/13 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.
Senate Floor Amendments of 8/22/13 clarify that electrical
corporation shall perform energy efficiency improvements to
street light poles in accordance with all applicable safety
CONTINUED
AB 719
Page
2
orders of the PUC.
ANALYSIS : Existing law requires California's electric
utilities to first meet their energy needs through cost
effective energy efficiency measures.
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.
4.States that the IOU that owns the street light poles shall
install or otherwise make the energy efficiency improvements
selected by the local government with an appropriately trained
workforce in accordance with all applicable safety orders of
the PUC.
Background
CONTINUED
AB 719
Page
3
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
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
CONTINUED
AB 719
Page
4
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
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, one-time costs
of approximately $130,000 from the Public Utilities
Reimbursement Account (special) to develop the necessary
rulemaking.
SUPPORT : (Verified 8/26/13)
California Public Utilities Commission
Cities of Carpinteria and Encinitas
Coalition of California Utility Employees
International Brotherhood of Electrical Workers
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
CONTINUED
AB 719
Page
5
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,
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 8/27/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****
CONTINUED