BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1150 (Levine) - Energy: University of California and
California State University partnership
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|Version: July 9, 2015 |Policy Vote: ED. 8 - 0, E., U., |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 1150 would require the California State University
(CSU) and request the Regents of the University of California
(UC) to expand its statewide institutional partnership with
invest-owned energy utilities (IOUs) as specified.
Fiscal
Impact:
Cost pressures to the General Fund and various special funds
that fund energy efficiency and GHG emission reduction
programs.
Minor and absorbable administrative cost to the General Fund
to the UC and CSU to expand the statewide institutional
partnership as specified in the bill
Minor and absorbable costs to the Energy Resources Control
Account (General Fund) to consult with UC and CSU on their
partnership.
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Minor and absorbable costs to the Public Utilities
Reimbursement Account (special) to consult with the UC and CSU
on their partnership.
Background: The California Public Utilities Commission (CPUC) regulates
all aspects of IOUs including overseeing public benefit programs
and ensuring rates are reasonable. Existing law requires the
CPUC to identify all potentially-achievable and cost-effective
electricity and natural gas efficiency savings in order to
establish energy efficiency procurement targets and
ratepayer-funded programs for electrical and gas corporations.
The responsibility to meeting this target is distributed
proportionately amongst the state's investor-owned utilities
(IOUs), who administer the energy efficiency programs. These
programs are paid by ratepayer funds that are approved by the
CPUC. Currently, the IOUs are collectively approved to collect
approximately $1 billion for various energy efficiency measures
programs including financial incentives, loans, and rebates for
installing energy efficient appliances, lighting, windows, HVAC
systems, whole-house retrofits, and specialized programs aimed
at a variety of sectors.
POUs are governed by their locally elected boards from the
service territory they represent. They are not regulated by the
CPUC, though it does have reporting responsibilities to the
California Energy Commission (CEC) for compliance with the
Renewable Energy Portfolio Standard requirements. Many of the
statutory requirements for IOUs do not apply to POUs.
In 2004, the UC and CSU each established partnerships with
California's four largest IOUs to provide an energy management
program called the "Energy Efficiency Partnership" in order to
improve the energy performance of existing buildings. However,
six CSU and UC campuses were unable to participate in the
partnership given that they are within the service territory of
a POU. Monies that IOUs receive from ratepayers for energy
efficiency projects must be spent in that IOU's territory.
Proposed Law:
This bill would require the CSU and encourage the UC, in
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consultation with the CPUC and CEC, to expand the statewide
institutional partnership with IOUs to include POUs that choose
to participate. The CEC would be required to request POUs
participate in this partnership.
This bill would also require that projects under this
partnership be evaluated upon the CPUC's energy efficiency and
savings protocols and, secondarily, upon the project's effect in
reducing emissions of greenhouse gases (GHG). The partnership
would be required to utilize whole-building or whole-campus,
meter based verification where feasible.
The CPUC and the CEC would be required to "authorize" the
existing partnership to "accommodate the potential for multiple
funding sources."
The bill would require that any future funding from the state
for energy efficiency or GHG-reducing projects be allocated
according to the partnership's existing administrative
framework.
The bill would also require the CSU and the UC to report
annually to each IOU and participating POU on the annual
reduction in emissions of GHG from the expanded partnership
within that utility's jurisdiction. Energy savings shall utilize
a baseline reflecting the existing conditions prior to the
efficiency project.
Staff
Comments: The UC and CSU report that they would have minor and
absorbable costs to expand their existing partnership with the
IOUs to POUs that chose to participate. Staff notes that there
is nothing in existing law that limits POUs participation in
this program.
The bill would require the CPUC and the CEC to "authorize" the
existing partnership to accommodate the potential for multiple
funding sources. The author's intent in this provision is
unclear as neither the CPUC or the CEC have the authority to
review the existing partnership. If the CPUC or the CEC
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interpreted this bill as giving them such authority, it is
unclear the basis on which they would be reviewing the
partnership or what benefit such an authorization would have.
Staff recommends that the bill be amended to remove the
requirement that the CPUC and CEC "authorize" the existing
partnership as it will not actually lead to any action of either
entity, nor would such an authorization make project eligible
for potential funding sources. The CEC and CPUC have not
estimated any costs with this section as they assume they would
not be taking any action as a result of this bill.
By suggesting that the partnership be authorized to accommodate
the potential for multiple funding sources, this bill appears to
be intending to increase the number of energy efficiency and GHG
emission reduction that would be eligible for funding under
various programs, creating cost pressures on those programs.
This bill would also allow all savings calculations to utilize a
baseline reflecting the existing conditions prior to the
upgrade. However, current CPUC protocols require that the energy
savings usually be calculated against the energy usage that the
building would have if it met current building code standards
for energy efficiency. Thus, allowing the savings calculations
to be based on existing conditions instead of current building
code standards, allows for the project to get credit for larger,
perhaps substantially larger, savings. If the projects are
calculated with a different baseline compared to other projects
within the IOU's or POU's jurisdiction, partnership projects
would receive a higher priority for funding. Staff notes that
this provision conflicts with an earlier requirement in the bill
that the project adhere to the CPUC's energy efficiency and
savings protocols, which do not always use existing conditions
as the baseline for calculating savings. Staff recommends that
this bill be amended to remove this inconsistency.
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