BILL ANALYSIS Ó AB 802 Page 1 (Without Reference to File) CONCURRENCE IN SENATE AMENDMENTS AB 802 (Williams) As Amended September 10, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |74-0 |(June 2, 2015) |SENATE: | |(September 11, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (vote not available) Original Committee Reference: U. & C. SUMMARY: Requires the California Public Utilities Commission (CPUC) to authorize electrical corporations or gas corporations - investor-owned utilities (IOUs) - to provide incentives and assistance for measures to conform a building to California Energy Commission's (CEC) energy efficiency standards for existing buildings and to allow IOUs to recover in rates the reasonable costs of those incentives and assistance. AB 802 Page 2 The Senate amendments: 1)Requires the CEC to make adjustments to its energy demand forecasts. 2)Requires the CEC to use its assessments and forecasts relating to various aspects of the energy industry to develop and evaluate energy policies and programs. 3)Requires utilities to maintain records of the energy usage data of all buildings to which they provide service for at least the most recent 12 complete months, and require each utility, upon the request and the written authorization or secure electronic authorization of the owner, owner's agent, or operator of a covered buildings, to deliver or provide aggregated energy usage data for a covered building to the owner, owner's agent, operator, or to the owner's account in the ENERGY STAR Portfolio Manager, as specified. 4)Authorizes the CEC to specify additional information to be delivered by utilities for certain purposes. 5)Deletes the requirement that an owner or operator of a building disclose the energy performance information to a prospective buyer, lessee of the entire building, or lender that would finance the entire building. 6)Requires CEC to adopt regulations providing for the delivery to the Commission and public disclosure of benchmarking results for covered buildings. 7)The bill would authorize the CEC to impose a civil fine, as provided, for a violation of these data submission requirements. 8)Make technical clarifying amendments. AB 802 Page 3 EXISTING LAW: 1)Requires a charge on electricity and natural gas consumption to fund cost-effective energy efficiency and conservation activities. (Public Utilities Code Sections 381 and 890) 9)Requires electric corporation procurement plans 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 Sections 454.5 (b)(9)(C)) 10)Requires the CPUC to establish targets for all potentially achievable cost-effective electricity and gas efficiency savings. (Public Utilities Code Sections 454.55 and 454.56) 11)Requires the CEC to develop a statewide estimate of all potentially achievable cost-effective electricity and natural gas savings, establish targets for statewide annual energy efficiency savings, and demand reduction for the next 10-year period. (Public Resources Code Section 25310) 12)Requires the CEC to adopt cost-effective energy and water efficiency standards for new buildings and appliances. (Public Resources Code Section 25402) 13)Prohibits the sale of new appliances that do not meet the AB 802 Page 4 energy and water efficiency standards adopted by the CEC. (Public Resources Code Section 25402(c)(2)) 14)Requires an owner or operator of a nonresidential building to disclose the United States Environmental Protection Agency's ENERGY STAR Portfolio Manager benchmarking data and ratings for the most recent 12-month period to a prospective buyer, lessee of the entire building, or lender that would finance the entire building based on a schedule developed by the CEC. (Public Resources Code Section 25402.10(d)) 15)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 Section 25943) FISCAL EFFECT: According to Senate Appropriations Committee: 1)Ongoing costs of $1.7 million to the Energy Resources Program Account (General Fund) for additional workload and contracts to implement the new benchmarking program and to incorporate additional energy efficiency information into the CEC's assessments and forecasts. 2)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. 3)Unknown costs, but potentially in the millions of dollars to the General Fund and various special funds to the state as a ratepayer of IOUs for additional energy efficiency program costs. AB 802 Page 5 COMMENTS: 1)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 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 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. 2)Below-code buildings not eligible. Under the CPUC's existing rules, the IOUs energy savings is calculated against a baseline, which is based on a) "natural occurring savings," b) standard industry practice, and c) Title 24 energy efficiency standards for existing buildings. Thus, when the energy efficiency project involves an existing building, only those savings above the baseline are eligible for incentives and assistance. 3)Minimum efficiency standards continue to tighten. 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 CEC, and are applied when a building permit is issued. 4)Energy Forecasts. Following a hearing in January 2013, before AB 802 Page 6 the Senate Energy, Utilities, and Commerce Committee, the CPUC, CEC, and the California Independent System Operator (CAISO) committed to aligning their respective processes to coordinate energy efficiency so that there is proper accounting; align the key milestones of the demand forecasting process, including projections for energy efficiency; CEC modifying its existing models to support forecasting at more granular geographic levels in response to the needs of the CPUC and CAISO; and developing new modeling methods to more robustly capture efficiency impacts. Customer-specific energy data could improve the accuracy of those forecasts. In response to concerns regarding the privacy of energy data, the author submitted a letter to the Senate Journal stating that AB 802 does not require small residential property owners of buildings with 16 or fewer residential utility accounts to collect or deliver energy usage or building characteristic information to the CEC. Rather, the bill gives owners of buildings the right to receive such information. Analysis Prepared by: Sue Kateley / U. & C. / (916) 319-2083 FN: 0002439