BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON EDUCATION
                              Senator Carol Liu, Chair
                                2015 - 2016  Regular 

          Bill No:             AB 1150            
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          |Author:    |Levine                                               |
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          |Version:   |May 14, 2015                               Hearing   |
          |           |Date:    June 17, 2015                               |
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          |Urgency:   |No                     |Fiscal:    | Yes            |
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          |Consultant:|Olgalilia Ramirez                                    |
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          Subject:  Energy:  University of California and California State  
          University partnership

            NOTE:   This bill has been referred to the Committee on  
          Education and the Committee on Energy, Utilities and  
          Communications.  A "do pass" motion should include referral to  
          the Committee on Energy, Utilities and Communications.

            SUMMARY
          
          This bill requests the University of California (UC) and  
          requires the California State University (CSU), in consultation  
          with the California Energy Commission (CEC) and the California  
          Public Utilities Commission (CPUC), to expand their partnership  
          with the investor-owned utilities (IOU) to include those  
          publicly owned utilities (POU) that choose to participate. 

            BACKGROUND
          
          Existing law:

          1)Establishes the UC as a public trust, administered by the  
            Regents and provides that statutes related to UC are  
            applicable only to the extent that the UC Regents make such  
            provisions applicable.  (Constitution of California, Article  
            IX, Section 9)

          2)Confers upon the CSU Trustees the powers, duties, and  
            functions with respect to the management, administration, and  
            control of the CSU system. 







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            (Education Code § 66606)

          3)Requires the CEC to develop and administer a series of  
            programs to provide cost-effective energy efficiency and  
            conservation contracts, grants, and loans to eligible  
            entities. Additional financial assistance is available through  
            IOUs, as required by the PUC.  (Public Resources Code §  
            25410-25474)

          4)Requires POUs to encourage energy savings and greenhouse gas  
            emissions reductions in existing residential and  
            non-residential buildings, while taking into consideration the  
            effect of the program on rates, reliability, and financially  
            resources. (PUC  § 9503)






            ANALYSIS
          
          This bill:

          1)Requests the University of California (UC) and requires the  
            California State University (CSU), in consultation with the  
            California Energy Commission (CEC) and the California Public  
            Utilities Commission (CPUC), to do all of the following:

             a)   Expand their partnership with the investor-owned  
               utilities (IOU), known as the Energy Efficiency  
               Partnership, to include those publicly owned utilities  
               (POU) that choose to participate.

             b)   Create integrated and flexible programs across all the  
               CSU and UC facilities.

             c)   Evaluate projects based on their effect in reducing  
               emissions of greenhouse gases and the cost effectiveness in  
               achieving those reductions, as specified.

          2)Requires the use of meter based verification in order to  
            reduce costs and streamlines the existing administrative  
            framework related to energy projects in order to accommodate  








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            for multiple funding sources, as specified.

          3)Requires UC and CSU to report to the applicable utilities  
            their annual reduction in emissions of greenhouse gases as a  
            result of the project performed under the expanded  
            partnership.

          4)Requires funds associated with an investor-owned energy  
            utility to be used only for projects that comply with CPUC  
            requirements at facilities located within its service  
            territory. 

          5)Makes a variety of Legislative findings and declarations  
            regarding UC's commitment to achieving carbon neutrality and  
            developing renewable energy resources through various measures  
            including expanding its statewide partnerships.

          6)Specifies, that the provision of this bill does not affect UC  
            and CSU eligibility to receive or leverage resources from  
            various entities.
                
          7)Defines various terms for the purposes of this bill.

          STAFF COMMENTS
          
          1)Need for the bill: According to the author, current law limits  
            the UC's and CSU's energy efficient program known as the  
            Energy Efficiency Partnership, to those campuses located  
            within an IOU service territory. This approach limits a POU  
            served campus from participating in the program. Additionally,  
            the program's current structure is outdated and the provisions  
            in this bill provide for advanced and long-lasting "deep"  
            energy efficient projects that will ultimately deliver ongoing  
            savings and assist UC and CSU in meeting their energy goals.

            This bill codifies and streamlines the expanded partnership  
            program, proposes a new metric of carbon reduction for  
            evaluating energy efficiency projects and updates the existing  
            administrative framework related to energy efficiency programs  
            to accommodate future funds.   

          2)Energy Efficiency Partnership:  In 2004 the University of  
            California (UC) and the  California State University (CSU)  
            each established partnerships with California's four largest  








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            IOUs (Pacific Gas and Electric, San Diego Gas and Electric,  
            Southern California Edison and Southern California Gas  
            Company) to provide an energy management program and improve  
            the energy performance of existing buildings. As a result of  
            this partnership, UC has achieved an annual savings of 373  
            million kilowatt-hours (electricity), and 18.7 million  
            therms-per-year (gas) through 2014. In total, the UC has  
            received $63.6 million in incentives from utilities.  

            However, six CSU and UC campuses are unable to participate in  
            the Energy Efficiency Partnership given that they are located  
            within a publicly owned utilities (POU) service territory.  
            Those campuses include the University of California at Los  
            Angeles, University of California at Riverside, UC Davis  
            Medical Center, and California State University at Sacramento,  
            Northridge, and Los Angeles. A key difference between a public  
            and investor owned utility is that investor-owned utilities  
            (IOU) are required to use a portion of ratepayer funds for  
            projects that comply with California Public Utilities  
            Commission (CPUC) requirements.  In contrast, POU's are  
            independent of the CPUC requirements and are regulated by  
            locally elected boards or city councils each with their own  
            methods for reaching energy saving goals. According to the UC,  
            the absence of the partnership incentives for POU served  
            campuses has limited the ability of some campuses to implement  
            energy efficiency projects.

            This bill would help position UC and CSU campuses located  
            within the territories of POU's to receive incentives  
            generated as a result of the partnership by inviting POU's to  
            participate if they so choose. It is unclear if there are  
            implications of publicly-owned utilities participating in a  
            partnership with investor-owned utilities. This issue can be  
            explored in the next committee.  

          3)Prior Legislation

            AB 1959 (Skinner, 2014) would have required the California  
            Energy Commission (CEC) to develop a financial assistance  
            program for energy efficiency projects on the UC and CSU  
            campuses.  This bill died in the Senate Appropriations  
            Committee.

            SUPPORT








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          Sierra Club California 
          University of California

            OPPOSITION
           
           None received. 

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