BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        AB 793|
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                                    THIRD READING


          Bill No:  AB 793
          Author:   Quirk (D)
          Amended:  8/18/15 in Senate
          Vote:     21  

           SENATE ENERGY, U. & C. COMMITTEE:  6-1, 6/30/15
           AYES:  Hueso, Hill, Lara, Leyva, McGuire, Pavley
           NOES:  Morrell
           NO VOTE RECORDED:  Fuller, Cannella, Hertzberg, Wolk

          SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  77-0, 5/7/15 (Consent) - See last page for  
            vote

           SUBJECT:   Energy efficiency


          SOURCE:    Author


          DIGEST:  This bill furthers the adoption of energy management  
          technology  meaning a product, service, or software that allows  
          a customer to better understand and manage energy use in the  
          customers home or business - through mandatory education  
          efforts, monetary awards and inclusion of such technology in  
          home weatherization programs for low-income electric or gas  
          utility customers.


          ANALYSIS:  Existing law:
          
          1)Requires an electrical corporation to first meet its unmet  
            resource needs through all available energy efficiency and  
            demand reduction resources that are cost effective, reliable,  








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            and feasible.  (Public Utilities Code §454.5 (b)(9)(C)) 

          2)Requires the California Public Utilities Commission (CPUC) 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 to low-income customers and  
            specifies that weatherization may include attic insulation,  
            caulking, weatherstripping, a low-flow showerhead, water  
            heater blanket, and door and building envelope repairs to  
            reduce air infiltration.  (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 CPUC 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)) 

          5)Requires the CPUC to establish policies and procedures by  
            which any party, including, but not limited to, a local entity  
            that establishes a community choice aggregation program, may  
            apply to become administrators for cost-effective energy  
            efficiency and conservation programs.  (Public Utilities Code  
            Section 381.1)

          This bill:

          1)Adds energy management technology (EMT) to the list of things  
            that may also be considered as weatherization, if determined  
            by the CPUC to be feasible.

          2)Directs the CPUC to require an electrical or gas corporation  
            to (a) develop a program, by January 1, 2017, to provide  
            incentives to residential or small or medium business  
            customers to acquire EMT for use in the customer's home or  
            business, and to (b) develop, by June 30, 2016, a plan to  
            educate residential and small and medium business customers  
            about the incentive program described above.









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          3)Specifies the CPUC may require that the education plan  
            described in (2) be integrated into, or coordinated with, any  
            education campaign required by the CPUC. 

          4)Requires each electrical or gas corporation to report annually  
            to the CPUC on actual energy savings resulting from the  
            incentive program.

          5)Requires the CPUC to evaluate all electrical or gas  
            corporation energy savings claims achieved pursuant to the  
            incentive program in a manner consistent with  
            commission-adopted evaluation protocols and determine if the  
            program shall continue or be modified.

          6)States that bill's provisions do no amend or limit the ability  
            of a community choice aggregator (CCA) to apply to administer  
            an energy efficiency or conservation program or a demand-side  
            management program.

          Background

          Energy management technology.  EMT, as used in this bill, refers  
          to a broad range of products, services, or software that allows  
          a customer to better understand and manage energy use in their  
          home or place of business.  Based on supporting documents  
          provided by this bill's proponents, such technology seems to  
          have in common the ability to allow a customer to read his or  
          her energy usage in real time or near real time through,  
          generally, communication with a home or business's smart meter.   
          Bill proponents contend that such technologies have the  
          potential to allow customers to better understand and manage  
          their energy usage, thereby leading to reductions in energy use.  
           These proponents note that, to date, adoption of such  
          technologies, especially by residential and smaller business  
          customers, has been very limited.  

          The author's office and many bill supporters blame this current  
          low level of adoption of EMT on a lack of education and  
          outreach.  The author seeks to remedy this situation by: (1)  
          including EMT among the measures and products that might be  
          included in the weatherization services the CPUC requires  
          electric and gas utilities to provide to low-income customers,  








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          and (2) requiring electrical and gas corporations to offer a  
          rebate program, within the existing energy efficiency program,  
          for customers who purchase EMT devices.  Both the existing  
          weatherization program and the existing energy efficiency  
          program are described below.


          Weatherization services for low-income customers.  In keeping  
          with statute, the CPUC created the Energy Savings Assistance  
          Program by which the investor-owned utilities (IOUs) provide  
          no-cost weatherization services to low-income households who  
          meet the California Alternate Rates for Energy, known as CARE  
          income guidelines.  (According to the CPUC, customers are  
          CARE-eligible if their household income falls below certain  
          defined amounts.)  Services provided include attic insulation,  
          energy efficient refrigerators, energy efficient furnaces,  
          weatherstripping, caulking, low-flow showerheads, waterheater  
          blankets, and door and building envelope repairs which reduce  
          air infiltration.  Statute governing this program is worded  
          strangely in that it lists measures and technologies that may be  
          included, when feasible, as weatherization, and then separately  
          lists additional measures and technologies that may also be  
          included as weatherization, if determined by the CPUC to be  
          feasible, taking into consideration cost-effectiveness of the  
          measures as a whole and the policy of reducing energy-related  
          hardships facing low-income households.  This bill adds EMT to  
          the list of measures and technologies that may also be included  
          as weatherization, if it determined by CPUC to meet the  
          specified standards.
          
          Energy utility energy efficiency programs.  The "loading order"  
          guides the state's energy policies and decisions according to  
          the following order of priority: (1) decreasing electricity  
          demand by increasing energy efficiency; (2) responding to energy  
          demand by reducing energy usage during peak hours; (3) meeting  
          new energy generation needs with renewable resources; and (4)  
          meeting new energy generation needs with clean fossil-fueled  
          generation.  This policy has been adopted by the energy agencies  
          - the California Energy Commission and CPUC - and its principles  
          guide all energy programs.

          Consistent with the loading order, statute requires both  








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          electric and gas IOUs to meet unmet resource needs with all  
          available energy efficiency and demand reduction that is  
          cost-effective, reliable and feasible.  The CPUC uses these  
          criteria to establish energy efficiency targets for the IOUs.   
          To achieve those targets, the IOUs (and, in some cases, CCAs  
          such as Sonoma Clean Power) administer energy efficiency  
          programs with ratepayer funds approved by the CPUC.  Currently  
          funded at about $1 billion per year, the programs include a  
          portfolio of financial incentives, loans, and rebates for  
          installing energy efficient appliances, lighting, windows, HVAC  
          systems, whole-house retrofits, and specialized programs aimed  
          at a variety of sectors.  According to existing CPUC rules, each  
          IOU claims credit for energy savings from the energy efficiency  
          measures resulting from its program.  The CPUC evaluates the  
          claimed energy savings and, after adjustment, authorizes  
          financial rewards for the IOUs.  

          This bill requires the electrical and gas corporations to  
          implement programs, within the existing energy efficiency  
          programs, to provide incentives to a residential or small- or  
          medium-sized business customer who acquires EMT for use in the  
          customer's home or place of business.  In addition, this bill  
          requires the electrical and gas corporations to implement a plan  
          to educate residential and small and medium business customers  
          about the incentive program. 

          Prior/Related Legislation

          AB 802 (Williams, 2015) directs the CPUC to change is its  
          calculation of savings from an energy efficiency project so as  
          to allow IOUs to recover in rates the cost energy efficiency  
          savings to bring  an existing building up to code.  The bill  
          passed the Assembly on a vote of 74-0 and is currently awaiting  
          consideration by the Senate Committee on Appropriations. 

          AB 1330 (Bloom, 2015) establishes an annual energy efficiency  
          resource standard for every retail seller of electricity and  
          every gas utility.  The bill passed the Assembly on a vote of  
          46-29 and is currently awaiting consideration by the Senate  
          Committee on Appropriations. 

          SB 350 (De Leon, 2015) requires the California Energy Commission  








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          to adopt and periodically update a program to achieve a doubling  
          of the energy efficiency of buildings by January 1, 2030.  The  
          bill passed the Senate on a vote of 24-14 and is currently  
          awaiting consideration by the Assembly Committee on  
          Appropriations.
          
          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes


          SUPPORT:   (Verified8/19/15)


          California Energy Efficiency Industry Council
          Center for Sustainable Energy
          Clean Power Campaign
          Environmental Defense Fund
          Marin Clean Energy
          Mission:data Coalition
          Office of Ratepayer Advocates
          Sierra Club California
          Silicon Valley Leadership Group
          TechNet


          OPPOSITION:   (Verified8/19/15)


          None received

          ARGUMENTS IN SUPPORT:  The education plan required by this bill,  
          and deployment of EMT that the bill incentivizes, will arm  
          residential and business customers with a better understanding  
          of their energy usage.  This will allow them to make informed  
          decisions on how to optimize their energy consumption and reduce  
          their bills.  Customer will be able to monitor their electricity  
          usage and costs in real-time or near real-time, allowing them to  
          adjust their usage instantaneously in response to changes in  
          prices or system reliability events. This will increase overall  
          energy efficiency, alleviate pressure on the system's energy  
          grid, and help reduce Greenhouse Gas emissions by reducing the  
          need for gas-fired "peaker" plants to meet high demand.








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          ASSEMBLY FLOOR:  77-0, 5/7/15
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,  
            Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,  
            Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  
            Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones,  
            Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,  
            Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,  
            Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark  
            Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,  
            Wood, Atkins
          NO VOTE RECORDED:  Campos, Roger Hernández, Steinorth

          Prepared by:Jay Dickenson / EUC / (916) 651-4107
          8/20/15 13:52:33


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