BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 802 Hearing Date: 9/10/2015
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|Author: |Williams |
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|Version: |9/4/2015 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: Energy efficiency
PURSUANT TO SENATE RULE 29.10 (c)
DIGEST: This bill addresses three distinct energy programs.
First, this bill expands the types and level of information the
California Energy Commission (CEC) may require to be submitted
to it and requires CEC to have reasonable policies and
procedures to protect customer information.
Second, this bill abolishes the existing CEC-administered "AB
1103" program of nonresidential building energy consumption
disclosure and replaces it with an energy use "benchmarking"
program for certain larger commercial and residential buildings.
Third, this bill requires the California Public Utilities
Commission (CPUC) to authorize electrical corporations or gas
corporations (IOUs) to provide incentives and assistance for
measures to conform a building to CEC's energy efficiency
standards for existing buildings and to allow IOUs to recover in
rates the reasonable costs of those incentives and assistance.
ANALYSIS:
Existing law:
AB 802 (Williams) PageB of?
1)Requires the CEC biennially to conduct assessments and
forecasts of all aspects of energy industry supply,
production, transportation, delivery and distribution, demand,
and prices and to use these assessments and forecasts to
develop energy policies that conserve resources, protect the
environment, and protect public health and safety. The CEC
publishes its assessments and forecasts every two years in its
Integrated Energy Policy Report (IEPR). (Public Resources
Code §25301.)
2)Requires each electrical and gas utility to maintain records
of the energy consumption of all nonresidential buildings to
which it provides service. The utility must upload energy
consumption data to a database upon authorization of a
nonresidential building owner or operator. The owner or
operator of a nonresidential building discloses the
benchmarking data and ratings for the building for the most
recent 12 months to a prospective buyer, lessee, or lender.
This is informally known as the "AB 1103" program. (Public
Resources Code §25402.10.)
3)Establishes a charge on electricity and natural gas
consumption to fund cost-effective energy efficiency and
conservation activities. (Public Utilities Code §§381 and
890)
1)Requires electrical corporation procurement plans to first
meet 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))
4)Requires the CPUC to identify all potentially achievable
cost-effective electricity and natural gas efficiency savings
and to establish energy efficiency procurement targets and
ratepayer-funded programs for IOUs. Requires a gas
corporation to first meet its unmet resource needs through all
available natural gas efficiency and demand reduction
resources that are cost effective, reliable, and feasible.
AB 802 (Williams) PageC of?
(Public Utilities Code §§454.55 and 454.56.)
2)Requires the CEC to develop and implement a comprehensive
program to achieve greater energy savings in California's
existing residential and nonresidential building stock.
(Public Resources Code §25943)
This bill:
Regarding CEC data collection and forecasts:
1)Expands the types of information the CEC, as part of its
biennial energy industry assessments and forecasts, may
require to be submitted to it to include individual customer
historic electric or gas service usage, or both, and
individual customer historic billing data, in a format and
level of granularity specified by the CEC.
2)Requires the CEC to maintain reasonable policies and
procedures to protect customer information from unauthorized
disclosure.
3)Directs the CEC, in consultation with the CPUC, to make all
reasonable adjustments to it energy demand forecasts to
account for its findings of market conditions and existing
baselines.
Regarding benchmarking:
4)States that building owner should have access to their
buildings' energy use to improve building management and
investment decisions.
5)States the intent of the Legislature that the CEC create a
benchmarking and disclosure program through which owners of
commercial and multifamily buildings above 50,0000 square feet
in gross floor area better understand their energy consumption
through standardized metrics.
AB 802 (Williams) PageD of?
6)Abolishes the "AB 1103" program of nonresidential energy use
disclosure, administered by the CEC.
7)Creates a new energy use benchmarking program for "covered
buildings," meaning (a) any building with no residential
utility accounts, or (b) any building with five or more active
utility accounts, residential or nonresidential.
8)Beginning January 1, 2016, requires a utility that sells
electricity, natural gas, steam, or fuel oil to a customer for
end uses addressed by the United States Environmental
Protection Agency's (US EPA's) ENERGY STAR Portfolio Manager
system to maintain records for 12 calendar months of the
energy usage data of all buildings to which they provide
service.
9)Beginning January 1, 2017, requires a utility to provide
aggregated energy usage data to the owner or operator of a
covered building, within four weeks of the owner or operator's
request, subject to the following requirements:
a. For a covered building with three or more active
utility accounts, the utility shall deliver the
aggregated energy usage data for all utility customers in
the same building for each of the prior 12 months, at a
monthly level unless otherwise specified by CEC. The
aggregated energy usage data shall not be deemed customer
utility usage information or confidential information by
the utility for purposes of delivery. The building owner
and utility shall not have any liability for any use or
disclosure of aggregated usage information delivered in
keeping with the bill's requirements.
b. For all other covered buildings, the utility shall
deliver aggregated energy usage data for all utility
customers in a given building for each of the prior 12
month, at a monthly level unless otherwise specified by
CEC, only if the accountholder provides written or
electronic consent to the building owner or operator.
AB 802 (Williams) PageE of?
10) Authorizes CEC to specify additional information a utility
must deliver to allow an owner or operator of a covered
building to complete energy use benchmarking.
11) Declares the building owner and utility shall not have
liability for any use or disclosure by others of usage
information delivered as required by this bill.
12) Directs CEC to adopt regulations governing the delivery to
CEC of benchmarking results, which are distinct from
aggregate energy usage data, and for the public disclosure
of the benchmarking results, and authorizes CEC, in adopting
the regulations, to make a number of determinations,
including additional covered buildings not subject to the
public disclosure requirement and categories of data that
are protected from release under existing laws.
13) States that CEC's regulations governing delivery and
public disclosure of benchmarking results shall not require
an owner of a building with 16 or fewer residential utility
accounts to collect or deliver usage information to the CEC
for public disclosure.
14) States that the reasonable cost of an IOU to deliver
information as required by this bill are recoverable in
rates.
15) States that the reasonable costs of a local publicly owned
utility in disclosing electrical usage data pursuant to this
bill may be considered "cost-effective demand-side
management services to promote energy efficiency and energy
conservation" and thereby reimbursable by the utility's
general fund.
Regarding energy efficiency measures for existing buildings:
AB 802 (Williams) PageF of?
16) Requires the CPUC, by September 1, 2016, to authorize an
IOU to provide incentives for the cost of energy efficiency
programs based on all estimated energy savings, including
energy savings from bringing existing buildings into
compliance with mandatory energy efficiency codes for
existing buildings issued by the CEC, and authorizes an IOU
to recover the costs in rates. States that the energy
efficiency measures described above may include savings and
reductions from measures to conform a building with existing
energy efficiency regulation, as well as certain
operational, behavioral, and retrocommissioning activities.
17) States that the CPUC may adjust the energy efficiency
procurement targets to reflect energy efficiency savings
achieved in meeting or exceeding mandatory energy efficiency
codes for existing buildings.
18) Authorizes the IOUs, effective January 1, 2016, to provide
the financial incentives and assistance described above for
"high opportunity projects or programs."
Background I - CEC's IEPR
CEC assessments and forecast: expanded authority. Statute
requires CEC to prepare a biennial integrated energy policy
report, known as the IEPR, that contains an assessment and
forecast of major energy trends and issues facing the state's
electricity, natural gas and transportation fuel sectors.
Statute directs the CEC to use the IEPR assessments and
forecasts to develop energy policies that conserve resources,
protect the environment, ensure reliable, secure, and diverse
energy supplies, enhance the state's economy and protect public
health and safety.
Statute provides CEC with broad authority to require the
submission of various types of information to enable it to
perform the assessments and forecasts that comprise the IEPR.
Statute specifically authorizes CEC to require submission of
demand forecasts, resource plans, market assessments, and
related outlooks. This bill expands the specific types of
information CEC may compel entities to provide it to include
individual customer historic electric or gas service usage, or
AB 802 (Williams) PageG of?
both, and individual customer historic billing data, in a format
and level of granularity specified by the commission. This bill
also expands the CEC IEPR responsibilities to include the
development and evaluation of energy policies and programs.
Finally, this bill directs CEC to maintain reasonable policies
and procedures to protect customer information from unauthorized
disclosure.
Background II - Energy Usage Benchmarking and Public Disclosure
Death to benchmarking. Long live benchmarking. Benchmarking
compares the energy consumption per square foot of floor space
for comparable classes of buildings. It is a tool for
understanding the relative energy efficiency of buildings.
Under current law, CEC administers the Nonresidential Building
Energy Use Program, a benchmarking and public disclosure program
more commonly known as the AB 1103 program. Under this program,
an owner or operator of a large commercial building must
disclose energy consumption data to a prospective buyer, lessee
or lender. IOUs are required to maintain and disclose the
necessary data for the rankings by uploading it to the US EPA's
ENERGY STAR Portfolio Manager.
This bill replaces the AB 1103 program with a new energy use
benchmarking and public disclosure program. Under this new
program, a utility must maintain energy usage data for all
buildings to which it provides service for at least the most
recent 12 complete calendar months. The utility would need to
provide the benchmark data to a building owner or operator
within four weeks of request, and the CEC would develop
regulations to govern delivery of benchmark data to the
commission and the public disclosure of such data. This bill
includes language that states the intent of the Legislature that
the CEC create a benchmarking and disclosure program through
which owners of commercial and multifamily buildings 50,000
square feet and larger will better understand their energy
consumption through standardized energy use metrics.
The CEC acknowledges that the AB 1103 program has been less than
successful. It has delayed program implementation repeatedly.
In justifying its most recent delay of the program, the CEC
AB 802 (Williams) PageH of?
cited the following "substantial barriers" to program
success<1>:
Technical difficulties in the roll-out of the US EPA's
ENERGY STAR Portfolio Manager platform and software.
Ambiguity about when public disclosure of energy usage
data.
Infrequency of public disclosure of energy usage data.
Utilities and electric service providers requiring
tenant consent before releasing required energy use data to
building owners, causing delay and increasing transaction
costs.
Reported inability of smaller utilities to process
necessary program information.
Resistance to the requirements of program regulations.
The benchmarking program in this bill differs from the AB 1103
program in several significant ways that potentially improve the
program. Specifically, this bill:
Explicitly directs each utility to maintain energy use
data for all buildings to which it provides service and to
promptly provide the data to owners of covered buildings,
upon request.
Expands the benchmarking program to cover all commercial
and residential buildings.
Relieves owners of smaller buildings by focusing the
benchmarking program on buildings larger than 50,000 square
feet gross floor area (at least, as expressed in this
bill's intent language but, curiously, not in the codified
sections of this bill).
Allows CEC to specify in regulations when public
disclosure of benchmarking results is to occur, thereby
removing ambiguity about the timing of disclosure
requirements.
Privacy concerns. Some entities, including the California
Municipal Utilities Association (CMUA) and Northern California
Power Association (NCPA), express concern with explicitly
authorizing CEC to compel utilities and others to share
individual energy use data, and at a format and level specified
by CEC. These entities contend that customer energy usage data
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<1>
http://www.energy.ca.gov/ab1103/notices/2014-07-22_Notice_to_Cons
ider_Adoption_Emergency_Regs_1682c_and_11346-1_on_July_22_2014.pd
f
AB 802 (Williams) PageI of?
belongs to the customer and that the customer should decide who
receives such data.
This bill includes numerous provisions to protect customer data.
For example, in regards to CEC's energy industry assessments
and forecasts, this bill requires utilities and others to share
individual customer historic energy usage and billing data only
with CEC, and this bill requires CEC to maintain reasonable
policies and procedures to protect customer information from
unauthorized disclosure.
This bill also seeks to prevent the release of customer usage
data for benchmarking purposes. The bill requires utilities to
release aggregate energy usage data only to the owner of a
covered building upon request. This bill limits this reporting
mandate to commercial buildings with three or more active
utility accounts and residential buildings with five or more
active utility accounts. In most conceivable cases, it would be
somewhat difficult or impossible for a third party to glean much
about an individual tenant's energy use by reference to the
energy usage data provided to a building owner. This is because
the data is, as mentioned, in the aggregate for all of a
building's tenants and covering a year in twelve monthly
increments, and the utility will not provide individual tenant
energy usage data to the owner of a covered building without the
tenant's permission. What's more, many building owners have
access to the electric and gas meters of their tenants in any
case.
Similarly, this bill's provisions regarding public disclosure of
benchmarking results seek to protect individual customer data.
This bill prohibits the CEC from requiring the owner of a
building with 16 or fewer residential utility accounts to
collect or deliver energy usage information data to CEC for
public disclosure. This bill also authorizes CEC to identify
additional covered building types that are not subject to the
public disclosure requirement. And the CEC is subject, as this
bill notes, to the confidentiality and other requirements of the
Public Records Act, Information Practices Act and other laws
protecting privacy and confidentiality.
Despite these protections, it may be possible to learn something
of an individual tenant based on aggregated customer energy
usage. As an illustration, NCPA describes a large building with
three commercial tenants, two of which are very small. Some of
AB 802 (Williams) PageJ of?
NCPA's member utilities report of industrial customers who are
very protective of their industrial data. Such customers
imagine a rival discerning business activity, such as an
upcoming product release, based upon an increase in a building's
aggregate energy use over the course of a month. Of course,
statute prevents a building owner from disclosing such data to a
third party. (See California Civil Code §1798.98.) However,
such information might be quite valuable, and disclosure could
happen, legal prohibition notwithstanding.
In addition, this bill explicitly authorizes CEC to require
utilities to make covered building usage data aggregated at a
sub-monthly level. Were the CEC to do so, such frequent
interval energy usage data could be quite revealing indeed. And
even the requirement that CEC maintain reasonable policies and
procedures to protect customer information provides only so much
comfort: no one, the CEC included, is immune to cyber theft,
especially of the sophisticated kind.
Drafting error? According to the author, the current version of
this bill includes a drafting error in Public Resources Code
§25401.10 (d)(1): there should be a period after the word
"commission;" however, this bill erroneously includes the words
"for public disclosure" after the word "commission." The
effect, if any, of inclusion of these three words is unclear.
It seems, and the author reports his intent that, the addition
of "for public disclosure" does not imply that the owner of a
building with 16 or fewer utility accounts may be required to
deliver usage information to the CEC if used for a purpose other
than public disclosure. In any case, the committee may wish to
amend this bill as follows:
Public Resources Code §25401.10(d)(1)
This subdivision shall not require the owner of a building
with 16 or fewer residential utility accounts to collect or
deliver usage information to the commission for public
disclosure .
Many terms, few meanings? This bill's benchmarking provisions
seem to use different terms for the same concepts. For example,
this bill uses the following similar terms:
Aggregated customer information.
Aggregated energy usage data.
Aggregated energy usage.
Aggregated usage information.
AB 802 (Williams) PageK of?
Benchmarking of the energy use.
Benchmarking results.
Energy usage data.
Usage data.
According to the author, the following groups of terms have
equivalent meanings, as used in this bill:
Aggregated customer information; aggregated energy usage
data; aggregated energy usage; aggregated usage
information.
Benchmarking of the energy use; benchmarking results.
Energy usage data; usage data.
The committee may wish to amend this bill to make consistent use
of these terms.
Background III - Energy Efficiency of Existing Buildings
Energy efficiency atop the load. The "loading order" guides the
state's energy policies and decisions according to the following
order of priority: (1) decreasing energy 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 CEC
and CPUC - and its principles guide all energy programs.
Consistent with the loading order, statute requires both
electrical 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 these targets, the IOUs (and, in some cases,
community choice aggregators) 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 sector-specific efforts.
Setting the bar high. According to existing CPUC rules, each
IOU claims credit for energy savings from the portfolio of
energy efficiency measures in its energy efficiency program.
The CPUC evaluates the claimed energy savings and, after
AB 802 (Williams) PageL of?
adjustment, authorizes financial rewards for the IOU.
The CPUC measures claimed savings against a baseline, which the
CPUC generally defines as being comprised of three factors: (1)
"naturally occurring savings," (2) standard industry practice
and (3) the CEC's Title 24 energy efficiency standards for
existing buildings. The CPUC sets the baseline at this level to
avoid "free ridership," that is, credit for energy savings that
would have occurred absent the IOUs' energy efficiency programs.
Currently, the CPUC assumes that measures to bring an existing
building into compliance with CEC's energy efficiency standards
would have occurred absent the IOUs' energy efficiency programs.
(See figure below.)
Recently, some parties have complained that the CPUC-established
baseline of energy efficiency measures prevents realization of
additional, cost-effective energy savings. This is because the
baseline prevents the IOUs from receiving ratepayer monies for
encouraging energy-saving building measures that fall below
CEC's energy efficiency building standards. In fact, Pacific
Gas and Electric (PG&E) reports the results of two studies -
both commissioned by PG&E and, as yet, not reviewed by an
independent third party - that show that most potential
AB 802 (Williams) PageM of?
cost-effective energy efficiency savings are represented by
projects that are below the CEC's building code standards.
PG&E, and others, contend that the state will not be able to
attain the ambitious energy efficiency goals currently
contemplated by the Legislature unless the CPUC credits the IOUs
with the energy savings that result from below-code projects.
Proponents additionally contend that the most cost-effective
energy efficiency projects are those below the energy efficiency
building standards.
High opportunity projects or programs. This bill authorizes
IOUs, effective January 1, 2016, to provide financial incentives
and other assistance for below-code high opportunity projects or
programs. This bill directs the CPUC to provide expedited
authorization of high opportunity projects and programs to apply
the savings baseline provisions in subdivision. This bill,
however, does not define or further describe high opportunity
projects and programs.
Related Legislation
AB 1094 (Williams, 2015) authorizes the CEC to analyze energy
consumption of plug-in equipment and set energy efficiency
targets and require the CPUC to work with the CEC to address
electricity consumption by plug-in equipment. The bill was held
in the Assembly Committee on Appropriations.
SB 350 (De León, 2015) enacts the Clean Energy and Pollution
Reduction Act of 2015. The bill is currently under
consideration by the Assembly Floor.
AB 531 (Saldana, Chapter 323, Statutes of 2009) gave the CEC
authority to set a schedule for compliance with the requirements
of AB 1103.
AB 1103 (Saldana, Chapter 533, Statutes of 2007) required
electricity and gas utilities to maintain records of the energy
consumption of all nonresidential buildings to which they
provide service and to upload energy consumption data to US EPA
ENERGY STAR Portfolio Manager upon authorization of a
nonresidential building owner or operator. The bill also
required the owner or operator of a nonresidential building to
disclose the Portfolio Manager benchmarking data and ratings for
the building for the most recent 12 months to a prospective
buyer, lessee, or lender.
AB 802 (Williams) PageN of?
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
Bay Area Regional Energy Network
Building Owners and Managers Association of California
California Building Industry Association
California Business Properties Association
California Energy Efficiency Industry Council
California Housing Partnership Corporation
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
Center for Sustainable Energy
City of Berkeley Mayor, Tom Bates
Coalition of California Utility Employees
Commercial Real Estate Development Association
EnerNOC, Inc.
Institute of Heating & Air Conditioning Industries, Inc.
Institute of Market Transformation
International Council of Shopping Centers
Mission:data Coalition
National Association of Energy Service companies
Natural Resources Defense Council
Pacific Gas and Electric Company
San Diego Gas & Electric Company
Sempra Energy Utilities
Southern California Edison
Southern California Gas
TechNet
The Utility Reform Network
Union of Concerned Scientists
Western States Council of Sheet Metal Workers
OPPOSITION:
California Municipal Utilities Association
ARGUMENTS IN SUPPORT: The author and proponents contend the
benchmarking program created by this bill will allow for better
management of building energy efficiency. PG&E, Sempra Energy
Utilities and Southern California Gas and Electric write in
AB 802 (Williams) PageO of?
support of the energy efficiency components of this bill,
contending the state will be unable to achieve its energy
efficiency goals unless the IOUs are able to provide incentives
and receive credit for projects to bring existing buildings up
to the CEC's energy efficiency standards for existing buildings.
ARGUMENTS IN OPPOSITION: The CMUA expresses opposition to the
benchmarking provisions of this bill, which CMUA describe as
violating the customer's ownership right of energy use
information.
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