BILL ANALYSIS                                                                                                                                                                                                    Ó






                                                                     AB 793


                                                                     Page A


          Date of Hearing:  April 13, 2015


                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE


                                Anthony Rendon, Chair


          AB 793  
          (Quirk) - As Introduced February 25, 2015


          SUBJECT:  Energy efficiency


          SUMMARY:  AB 793 would require that weatherization programs for  
          low-income customers, administered by electrical and gas  
          corporations, include home energy management technology and  
          education programs on how to use advanced meters.  Specifically,  
          this bill:  


          a)Modifies the existing statutory definition of weatherization  
            to include "home energy management technology."


          b)Defines "home energy management technology" and "home energy  
            monitor."


          c)Requires the California Public Utilities Commission (CPUC) to  
            require that electrical corporations develop and implement a  
            plan to educate customers on how to use advanced meters to  
            understand and control electricity use.


          d)Specifies that rebates become available no later than June 30,  
            2016, and specifies that the amount of the rebate be equal to  











                                                                     AB 793


                                                                     Page B


            an unspecified percent of the retail value of the product or  
            service.


          EXISTING LAW:  


          1)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)


          2)Requires the PUC to establish energy efficiency targets for  
            electrical and gas corporations.  (Public Utilities Code  
            454.55 and 454.56)


          3)Requires electric and gas corporations to provide  
            weatherization assistance and specifies that weatherization  
            means attic insulation, caulking, weatherstripping, a low flow  
            showerhead, water heater blanket, and door and building  
            envelope repairs to reduce air infiltration for low-income  
            customers.  (Public Utilities Code 2790 (a), (b))


          4)Specifies that weatherization may also include other building  
            conservation measures, energy-efficient appliances, and energy  
            education programs determined by the commission to be feasible  
            and considering the cost effectiveness of the measures as a  
            whole and the policy of reducing energy-related hardships  
            facing low-income households. (Public Utilities Code 2790 (c))


          FISCAL EFFECT:  Unknown.


          COMMENTS:  












                                                                     AB 793


                                                                     Page C



           1)Author's Statement.   AB 793 will help to increase the  
            deployment of energy management technologies, which will  
            provide customers with a better understanding of their energy  
            usage so that they may make informed decisions about how to  
            optimize their energy consumption and reduce their energy  
            bills. 
            As part of each IOUs smart grid deployment plan, the CPUC has  
            authorized the installation of advanced metering  
            infrastructure (AMI or smart meters) as a key component in  
            transforming California's distribution grid into an  
            intelligent, integrated network enabled by modern information  
            and control system technologies.  However, in order to take  
            full advantage of their smart meter's capabilities, the  
            customer must acquire energy management technologies, such as  
            an energy monitoring device.  These devices allow the customer  
            to access their smart meter's Home Area Network (HAN) function  
            so that they may monitor, in near real-time, their energy  
            consumption measured continuously by the smart meter, and in  
            the future, receive and respond to load control signals (also  
            referred to as demand response events).  


            Unfortunately, while millions of smart meters have been  
            installed throughout California, the deployment and use of  
            energy management technologies has not kept pace.  AB 793  
            would incentivize the adoption of these technologies by  
            requiring the IOUs to implement an outreach plan to educate  
            their residential and small business customers about these  
            technologies. 


           2)Realizing the benefits of Smart Grids.   According to the  
            CPUC's most recent annual Smart Grid report (published in  
















                                                                     AB 793


                                                                     Page D


            January 2010),<1> the primary driver of Smart Grid development  
            continues to be providing customers with tools to better  
            understand and manage their energy use.  Customers are  
            provided with access to their energy usage data, as well as a  
            variety of web-based tools to understand how they can use  
            energy more efficiently and at a lower cost. The IOUs have  
            been pursuing both pilot activities and full deployment of HAN  
            technologies. HAN, integrated with the smart meters, allows  
            connected customer devices (primarily In Home Displays and  
            thermostats) to provide information and control.  Although the  
            smart meters installed by the utilities provide HAN  
            capabilities, the utilities are also developing support for  
            third-party, Internet-based solutions for energy management.
            In the same report, the CPUC states that "HAN customer uptake  
            has been slow.  PG&E is still in the pilot phase with its HAN  
            offerings.  San Diego Gas and Electric has deployed HAN  
            devices (programmable communicating thermostats or PCTs) as  
            part of its air conditioner cycling program.  Southern  
            California Edison is primarily working with third parties on  
            Wi-Fi-connected solutions that don't necessarily involve the  
            use of the smart meter HAN."


           3)CPUC decision limits use of HANs.   In the recent PUC decision  
            reauthorizing energy efficiency budgets, the PUC limited  
            consideration of HANs and similar behavioral programs. First  
            by not directing that the technical, economic, and market  
            potential of behavior based programs be evaluated in the  
            CPUC's studies to assess the market potential of energy  
            efficiency measures.  Second, by maintaining a fixed, five  
            percent participation rate for behavior initiatives in utility  
            2015 energy efficiency programs.


           4)Are HANs helpful to energy efficiency?   Various studies see  
          ---------------------------


          <1>  
           http://www.cpuc.ca.gov/NR/rdonlyres/BCDBFE10-E89E-4933-8457-EA6B6 
          E3D5D52/0/SmartGridAnnualReport2014Final011215.pdf  









                                                                     AB 793


                                                                     Page E


            benefits from zero to as a high as eight percent reduction in  
            energy consumption.  Additionally, studies see benefits in  
            reducing demand during peak demand periods.  While the limited  
            data on these devices shows varying degrees of benefits, all  
            studies show some benefit.


           5)Real time energy data?   When it comes to making a purchase,  
            almost nothing is more opaque than electricity and natural gas  
            purchases from a utility.  When someone purchases gasoline  
            they see a real time measurement of how much gasoline is  
            delivered to the vehicle and how much it costs.  Same thing  
            with bananas at the grocery store - weigh the bananas and  
            multiply them by the cents per pound.  Electric and gas  
            customers don't get real time information.  Usage and charges  
            are delivered monthly, weeks or days after the end of the  
            billing period.  The billing information cannot provide help  
            to customers who would like to modify their usage, if they  
            can, to reduce their energy bill.  Yet, this information is  
            critical to knowing when usage is being charged at a higher  
            rate under the inclining block rate structure that is used in  
            California.


            HANs provide a way for customers who are interested in knowing  
            how much energy they have used in real time and give those  
            customers an opportunity to slow down on their consumption, if  
            they choose to and can.


           6)What about non-HAN technologies?   Other technologies are  
            available or soon to be available that will deliver similar or  
            the same information in real time without using Smart Meter  
            data. AB 793 does not exclude consideration of those other  
            technologies.  However, the current definition in the bill  
            could be interpreted to limit use of those other technologies.


             The author may wish to consider clarifying amendments to  











                                                                     AB 793


                                                                     Page F


            ensure inclusion of other energy management techniques and  
            services.


          7)Rebates and incentives.   The current version of AB 793 leaves  
            blanks for specifying incentive levels for energy management  
            technologies.  


            The author may wish to strike the section that would specify  
            an amount for a rebate and replace it with language that will  
            allow the CPUC to develop an appropriate incentive program.


          8)Support and Opposition. 
             


            The Office of Ratepayer Advocates supports AB 793 if amended  
            to require an integrated approach to promote in-home energy  
            management solutions using the CPUC's existing statewide  
            education and outreach program.





           9)Suggested amendments.  


            Specifically, these proposed amendments are:



            2790. (c)"Weatherization" may also include other building  
            conservation measures,  home  energy management technology,   
            energy-efficient appliances, and energy education programs  
            determined by the commission to be feasible, taking into  
            consideration for all measures both the cost-effectiveness of  











                                                                     AB 793


                                                                     Page G


            the measures as a whole and the policy of reducing  
            energy-related hardships facing low-income households. 

            (e) For purposes of this section, the following terms have the  
            following meanings:
            (1) "  Home energy   Energy  management technology" is a product  ,   
            or service,  or software  that allows a customer to better  
            understand and manage energy use in the customer's home  or  
            business.   and may include, but is not limited to, a home  
            energy monitor.  


             (2) "Home energy monitor" is a device that is able to provide  
            household electricity consumption in real-time by connecting  
            to an advanced meter equipped with home area network  
            functionality.


             SEC. 2.  Section 8365 is added to the Public Utilities Code,  
            to read:



            8365.  (a) The commission shall require each electrical  
            corporation to do the following:
            (1) Develop and implement a plan by June 30, 2016, to educate  
            its residential customers and  small  business customers  whose  
            homes or places of business are equipped with an advanced  
            meter about how they can use data from the advanced meter  to  
            better understand and control their use of electricity.  The  
            plan shall include notification of the  rebate   incentive   
            program developed pursuant to paragraph (2).


            (2)  Develop a rebate program no later than June 30, 2016, to  
            reimburse a residential customer or small business customer  
            who purchases energy management technology for use in the  
            customer's home or place of business. The rebate shall be an  
            amount equal to ___ percent of the retail value of the product  











                                                                     AB 793


                                                                     Page H


            or service, not to exceed ___.   Develop a program no later than  
            June 30, 2016 to provide incentives to a residential or  
            business customer who acquires an energy management technology  
            for use in the customer's home or place of business.  For  
            energy management technology programs administered by  
            electrical corporations, or third-parties or local governments  
            under contract with electric corporations to administer energy  
            efficiency programs, such programs shall allow third parties  
            or local governments to apply for incentives on behalf of  
            customers.  Electric corporations shall work with third  
            parties, local governments, and other interested parties in  
            developing such programs.


            (3) Electric corporations shall establish incentive amounts at  
            a level necessary to encourage adoption of energy management  
            technologies that demonstrate the ability to achieve  
            progressively higher savings.


            (4) Electric corporations shall annually report to the  
            commission on actual customer savings resulting from the  
            education and incentive program established pursuant to this  
            section.


             (b) For purposes of this section, the following terms have the  
            following meanings:


            (1) "Energy management technology" is a product  ,  or service  ,  
            or software  that allows a customer to better understand and  
            manage electricity use in the customer's home or place of  
            business   .  and may include, but is not limited to, an energy  
            monitor.


            (2) "Energy monitor" is a device that is able to provide  
            electricity consumption in real-time or near real-time by  











                                                                     AB 793


                                                                     Page I


            connecting to an advanced meter equipped with home area  
            network functionality. 


           REGISTERED SUPPORT / OPPOSITION:




          Support


          Environmental Defense Fund


          Mission Data (if amended)


          Office of Ratepayer Advocates (if amended)




          Opposition


          None on file




          Analysis Prepared by:Sue Kateley / U. & C. / (916) 319-2083


















                                                                     AB 793


                                                                     Page J