BILL NUMBER: AB 2017 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Muratsuchi FEBRUARY 20, 2014 An act to add Chapter 8.1 (commencing with Section 2846) to Part 2 of Division 1 of the Public Utilities Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST AB 2017, as introduced, Muratsuchi. Energy: financing: rental properties. (1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. Existing law authorizes the Public Utilities Commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable. This bill would authorize the commission to require an electrical or gas corporation with 250,000 or more service connections to develop and implement an on-bill repayment program providing financial assistance for energy efficiency, renewable energy, distributed generation, energy storage, or demand response improvements for rental properties by allowing for the repayment of the financial assistance to be included in the utility customer's utility bill. Because a violation of any part of any order, decision, rule, direction, demand, or requirement of the Public Utilities Commission is a crime, this bill would impose a state-mandated local program. (2) 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. Chapter 8.1 (commencing with Section 2846) is added to Part 2 of Division 1 of the Public Utilities Code, to read: CHAPTER 8.1. ENERGY IMPROVEMENTS FOR RENTAL PROPERTIES 2846. For the purposes of this chapter, the following the terms have the following meanings: (a) "OBR improvement" means an eligible energy improvement financed through an OBR obligation. (b) "OBR obligation" means an obligation to repay a financing provided to a utility customer by an OBR partner pursuant to an on-bill repayment program approved by the commission. (c) "OBR partner" means a person or entity providing financing for eligible energy improvements pursuant to an on-bill repayment program. OBR partners include, but are not limited to, banks, savings and loan institutions, credit unions, or project developers. Financing may be provided in the form of a loan, lease, power purchase agreement, energy service agreement, or other financing structure approved by the commission. (d) "On-bill repayment program" or "OBR program" means a program, which may include one or more pilot test programs, approved by the commission that enables financing of eligible energy improvements for rental properties to be repaid through OBR repayment charges to be associated with the same utility account or accounts where savings are anticipated to be realized as a result of the improvements. (e) "OBR repayment charge" means a charge, constituting repayment of all or a portion of any OBR obligation, that is included on a utility bill in accordance with a commission-approved utility tariff. (f) "Utility" means an electrical corporation or gas corporation that develops, or is required to develop, an on-bill repayment program. 2846.1. (a) The commission may require an electrical corporation or gas corporation with 250,000 or more service connections in the state to develop and implement one or more on-bill repayment programs for eligible energy efficiency, renewable energy, distributed generation, energy storage, or demand response improvements. (b) A utility shall not implement the on-bill repayment program without the express approval of the commission. (c) The commission shall supervise on-bill repayment programs to ensure that the programs are administered in compliance with the terms approved by the commission. 2846.2. In approving an OBR program, the commission shall consider whether the program contains appropriate rules and criteria including all of the following: (a) (1) Eligibility criteria for the types of energy improvements and technologies that would be financed by the OBR program. (2) The commission may include nonenergy reducing improvements as an eligible improvement for financing if it deems appropriate. (b) Rules prohibiting the unauthorized removal from the rental property of an OBR improvement. (c) Rules for project inspection and verification services to ensure the cost-effectiveness of the OBR program. (d) Requirements regarding the investment quality and performance of the financing instruments for the OBR program. (e) Consumer protections for low-income residential customers, including protections that prevent increases in the number of service terminations, a loan loss reserve, bill neutrality, prepayment options, and other mechanisms deemed appropriate by the commission. SEC. 2. 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.