BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 802 (Williams) - Public utilities: energy efficiency savings.
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|Version: June 22, 2015 |Policy Vote: E., U., & C. 9 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 802 would require the California Public Utilities
Commission (CPUC) to authorize an electrical or gas corporation
to recover in rates financial incentives and support given to
customers to increase the energy efficiency of existing
buildings based on all energy savings and use reductions, even
those measures that bring an existing building into conformity
with Title 24 building code standards for new buildings.
Fiscal
Impact:
Unknown costs, but likely in the low millions of dollars, to
the Public Utilities Reimbursement Account (special), for
additional staff at the CPUC to oversee, evaluate, and review
the energy efficiency program.
Unknown costs, but potentially in the millions of dollars, to
the General Fund and various special funds to the state as a
ratepayer of investor-owned utilities for additional energy
efficiency program costs.
AB 802 (Williams) Page 1 of
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Background: Existing law requires that the state's energy needs first be
met by increasing energy efficiency under the "loading order."
Consistent with the loading order, existing law requires
electric and gas investor-owned utilities (IOUs) to meet unmet
resources with all available energy efficiency and demand
reduction that is cost-effective, reliable, and feasible. To
achieve these targets, the IOUs administer energy efficiency
programs with ratepayer funds approved by the CPUC. Currently,
ratepayers pay for approximately $1 billion for financial
incentives, loans, and rebates for installing energy efficient
appliances, lighting, windows, HVAC systems, whole-house
retrofits, and sector-specific efforts.
Under the CPUC's existing rules, the IOU's energy savings is
calculated against a baseline, which is based on (1) "natural
occurring savings," (2) standard industry practice, and (3)
Title 24 energy efficiency standards for existing buildings.
Thus, when the energy efficiency project involves an existing
building, the actual energy efficiency savings could actually be
higher, perhaps substantially higher, than the savings over the
baseline.
Title 24 of the California Code of Regulations establishes
building standards for energy efficiency. They were first
adopted in 1978 and are currently updated approximately every
three years. The standards are developed by the California
Energy Commission (CEC) and are applied when a building permit
is issued.
Proposed Law:
This bill would require the CPUC in a separate or existing
proceeding, by July 1, 2016, to authorize an electrical or gas
corporation to recover in rates the costs from financial
incentives and support given to customers to increase the energy
efficiency of existing buildings based on all estimated energy
savings and energy usage reductions, including those savings or
reductions that are a result of brining an existing building
into compliance with the requirements of Title 24 building code
standards.
AB 802 (Williams) Page 2 of
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Staff
Comments: This bill would dramatically increase the number of
projects that are seen as cost effective, and therefore could
increase the CPUC's energy efficiency budget from approximately
$1 billion to approximately $3.3 billion. The CPUC estimates
that it would need between 12 and 24 new positions at an annual
cost of $1.4-$2.8 million dollars. The new positions would be
required to alter many of its documents, databases, and studies
that are used to guide energy efficiency policy within the CPUC.
Additionally, the CPUC anticipates needing to review a large
number of new efficiency pilot programs.
The state is a ratepayer of electricity and gas. To the extent
that the additional energy efficiency budget results in
increased ratepayer costs, this bill would have additional costs
to the state. Given that the CPUC estimates that the energy
efficiency budget might grow to $3.3 billion under this bill,
state ratepayer costs could be in the millions of dollars.
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