BILL ANALYSIS Ķ
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: AB 1150 Hearing Date: 6/30/2015
-----------------------------------------------------------------
|Author: |Levine |
|-----------+-----------------------------------------------------|
|Version: |5/14/2015 As Amended |
-----------------------------------------------------------------
------------------------------------------------------------------
|Urgency: |No |Fiscal: |Yes |
------------------------------------------------------------------
-----------------------------------------------------------------
|Consultant:|Nidia Bautista |
| | |
-----------------------------------------------------------------
SUBJECT: Energy: University of California and California State
University partnership
DIGEST: This bill requests the Regents of 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.
ANALYSIS:
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. (California Constitution, Article IX, §9)
2)Confers upon the CSU Trustees the powers, duties, and functions
with respect to the management, administration, and control of
the CSU system. (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 CPUC. (Public Resources Code §25410-25474)
4)Requires POUs to encourage energy savings and greenhouse gas
AB 1150 (Levine) Page 2 of ?
(GHG) emissions reductions in existing residential and
non-residential buildings, while taking into consideration the
effect of the program on rates, reliability, and financial
resources. (Public Utilities Code §9503)
This bill:
1) Requests the Regents of the UC and requires the CSU, in
consultation with the CEC and the CPUC, to expand their
statewide institutional partnership with the IOUs to include
those POU that chose to participate.
2) Requires UC and CSU campuses, as a condition of participation,
to report to their respective utilities the annual reduction of
GHG emissions from the partnership.
Background
In 2004, the UC and the CSU each established partnerships with
California's four largest IOUs (Pacific Gas & Electric, San Diego
Gas & Electric, Southern California Edison and Southern California
Gas) 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
(Partnership) given that they are located within the service
territory of a POU. Those campuses include: UC at Los Angeles, UC
at Riverside, UC Davis Medical Center, and California State
University campuses at Los Angeles, Northridge and Sacramento.
State energy loading order. The state's energy "loading order"
guides the state's energy policies and decisions according to the
following order of priority: (1) decreasing electricity 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.
AB 1150 (Levine) Page 3 of ?
Investor-Owned Utilities vs. Publicly-Owned Utilities. CPUC
regulates all aspects of IOUs including overseeing public benefit
programs and ensuring rates are reasonable. POUs are governed by
their locally elected boards from the service territory they
represent. POUs represent roughly a quarter of the state's
electricity through 35, mostly small and mid-sized local agencies.
While IOUs are required to use a portion of ratepayer funds for
projects that comply with CPUC requirements, the CPUC can not make
such requirements of POUs.
UC adopts carbon neutrality goal. In November 2013, UC President
Janet Napolitano announced the Carbon Neutrality Initiative, which
commits UC to emitting net zero GHG from its buildings and vehicle
fleet by 2025. UC has noted that it will need bold steps to
expand its energy efficiency efforts and dramatically increase its
use of energy from renewable resources.
Greenhouse Gas Reduction Funds (GGRF). The state budget adopted
in June 2014 included an allocation of $20 million to the CEC from
the GGRF in order to finance energy efficiency retrofits and clean
energy projects in state buildings, including the UC and CSU
campuses. The Governor's proposed budget for the 2015-16 fiscal
year includes funding for the same purpose to the Department of
General Services (DGS). According to the CEC, the initial funding
from the 2014-15 budget has not been awarded in anticipation of
the Administration's desire to move the funding to DGS. The
Legislature and Governor have held off allocations of this budget
cycle's allocation of funding from the GGRF until later this
session.
Is this bill necessary? POUs are not currently prevented from
working with their respective CSU and UC campuses to address
energy efficiency. This bill will request, but not require, POUs
to participate in the Partnership. Therefore, POUs will need to
decide whether incentive programs for these campuses are to the
benefit of the ratepayers in their respective territories.
Energy Savings vs. Greenhouse Gas Emissions. This bill alters the
goal of the existing Partnership from specific energy savings
requirements based on project type to focus on GHG emissions
reductions. With the passage of the Global Warming Solutions Act
of 2006 (AB 32, Nuņez/Pavley), California adopted a goal to reduce
GHG emissions to 1990 levels by 2020. In his 2015
State-of-the-State speech, Governor Brown announced the need to
further advance California's efforts towards a 2030 and 2050
AB 1150 (Levine) Page 4 of ?
target. However, as it relates to energy efficiency, a project
that provides the most energy savings may or may not provide the
most GHG emissions reductions. The CPUC provides guidance and
requirements over the IOUs public benefit programs, including
energy efficiency programs, such as the Partnership. The goal of
reducing GHG emissions is clearly of importance to the state.
However, a given project's energy savings is still important
factor in calculating and prioritizing among energy efficiency
projects.
In order to ensure consistency with CPUC efforts, the author and
committee may wish to amend the bill to include the goal of energy
savings achieved in a manner consistent with the CPUC's evaluation
protocols for IOU ratepayer programs.
Prior/Related Legislation
AB 1959 (Skinner, 2014) would have required the CEC to develop a
financial assistance program for energy efficiency projects on the
UC and CSU campuses. The bill died in the Senate Committee on
Appropriations.
SB 35 (Pavley, 2013) would have established the Higher Education
Energy Solutions Fund to fund energy retrofits at UCs, CSUs and
California Community Colleges (CCC) and required each entity to
establish a system-wide energy action plan. The bill was
subsequently amended and chaptered with unrelated language.
AB 29 (Williams, 2013) would have allocated $152 million in five
consecutive fiscal years to the CEC to administer grants, loans,
or other financial assistance for the UC, CSU, and CCC to reduce
energy demand and consumption. The bill was held in Assembly
Committee on Utilities and Commerce.
FISCAL EFFECT: Appropriation: No Fiscal Com.:
Yes Local: No
PRIOR VOTES :
Senate Education Committee (8-0)
Assembly Floor (76-0)
Assembly Appropriations Committee (15-0)
Assembly Higher Education Committee (12-0)
AB 1150 (Levine) Page 5 of ?
SUPPORT:
University of California (source)
California State University
Sierra Club California
OPPOSITION:
None received
ARGUMENTS IN SUPPORT: According to the UC, the sponsor of the
bill: "Under AB 1150, UC facilities served by POUs will be able to
participate in the partnership program, provided that the
partnership remains in compliance with existing CPUC requirements
for IOU ratepayer resources. AB 1150 enters the expanded
partnership program into statute and establishes clear roles for
all parties involved. This formalization will break down silos
between the state's energy agencies, producing significant
efficiencies across all participating UC programs and facilitating
the exchange of information among our campuses."
-- END --