BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 802|
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THIRD READING
Bill No: AB 802
Author: Williams (D)
Amended: 9/10/15 in Senate
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-0, 7/13/15
AYES: Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire,
Pavley, Wolk
NO VOTE RECORDED: Fuller, Morrell
SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/27/15
AYES: Lara, Beall, Hill, Leyva, Mendoza, Nielsen
NO VOTE RECORDED: Bates
SENATE ENERGY, U. & C. COMMITTEE: 8-2, 9/10/15 (pursuant to
Senate Rule 29.10)
AYES: Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, Pavley,
Wolk
NOES: Fuller, Morrell
NO VOTE RECORDED: McGuire
SENATE APPROPRIATIONS COMMITTEE: 5-2, 9/10/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 74-0, 6/2/15 - See last page for vote
SUBJECT: Energy efficiency
SOURCE: Author
DIGEST: This bill addresses three distinct energy programs.
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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 CEC-administered "AB 1103" program of
nonresidential building energy consumption disclosure and
replaces it with an energy use "benchmarking" program for larger
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:
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. (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 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)
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1)Requires electrical corporation 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.
(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 usage 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.
Regarding benchmarking:
3) States that building owner should have access to their
buildings' energy use to improve building management and
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investment decisions, and 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.
4) Abolishes the "AB 1103" program of nonresidential energy use
disclosure.
5) 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.
6) Requires, beginning January 1, 2016, 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.
7) Requires, beginning January 1, 2017, 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.
8) Authorizes CEC to specify additional information a utility
must deliver to allow benchmarking of a covered building.
9) 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.
10)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
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the benchmarking results
11)States that the reasonable cost of an IOU to deliver
information as required by this bill are recoverable in rates
and 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:
12)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.
13)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.
14)Authorizes the IOUs, effective January 1, 2016, to provide
the financial incentives and assistance described above for
"high opportunity projects or programs."
Background
CEC assessments and forecast: expanded authority. Statute
requires CEC to prepare a biennial integrated energy policy
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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 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 both, and individual customer historic billing
data, in a format and level of granularity specified by the
commission.
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 the 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 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.
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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
adjustment, authorizes financial rewards for the IOU.
The CPUC measures claimed savings against a baseline, which the
CPUC generally defines as 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' 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.
Some parties complain the CPUC-established baseline of energy
efficiency measures prevents realization of additional,
cost-effective energy savings. This is because the baseline
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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
cost-effective energy efficiency savings are represented by
projects that are below the CEC's building code standards.
Proponents 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, however, does not define or further
describe high opportunity projects and programs.
Related Legislation
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
utilities to maintain records of energy consumption of all
nonresidential buildings to which they provide service and to
upload this data to US EPA ENERGY STAR Portfolio Manager. The
bill also required the owner or operator of a nonresidential
building to disclose the Portfolio Manager benchmarking data and
ratings for the building to a prospective buyer, lessee, or
lender.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Ongoing costs of $1.7 million to the Energy Resources Program
Account (General Fund) for additional workload and contracts
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to implement the new benchmarking program and to incorporate
additional energy efficiency information into the CEC's
assessments and forecasts.
Unknown costs, but at least $900,000 to the Public Utilities
Reimbursement Account (special), for additional staff at the
CPUC to oversee, evaluate, and review the energy efficiency
program and to provide an expedited authorization of high
opportunity projects.
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.
SUPPORT: (Verified9/10/15)
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
Clean Power Campaign
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
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The Utility Reform Network
Union of Concerned Scientists
Western States Council of Sheet Metal Workers
OPPOSITION: (Verified9/10/15)
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
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.
ASSEMBLY FLOOR: 74-0, 6/2/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu,
Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman,
Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley,
Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer,
Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,
McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen,
Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NO VOTE RECORDED: Brough, Chang, Chávez, Grove, Mayes,
Obernolte
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
9/10/15 23:15:31
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