BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1330


                                                                    Page  1


          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          1330 (Bloom)


          As Amended August 9, 2016


          Majority vote


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          |ASSEMBLY:  |      |(June 4, 2015) |SENATE: |26-12 |(August 24,      |
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                 (vote not relevant)




          Original Committee Reference:  U. & C.


          SUMMARY:  Requires the California Public Utilities Commission  
          (CPUC) to ensure that sufficient monies are available for  
          electrical and gas corporations to meet efficiency targets.  


          The Senate amendments: 


          1)Delete the contents of the bill which would have created an  
            energy efficiency resource standard.
          2)Require the CPUC to ensure that sufficient monies are  
            available for electrical and gas corporations to meet  
            efficiency targets.  










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          EXISTING LAW: 


          1)Establishes a charge on electricity and natural gas  
            consumption to fund cost-effective energy efficiency and  
            conservation activities.  (Public Utilities Code Sections 381  
            and 890) 


          2)Requires the CPUC to establish policies and procedures by  
            which an entity, including a community choice aggregator  
            (CCA), may apply to become administrators for cost-effective  
            energy efficiency and conservation programs.  (Public  
            Utilities Code Section 381.1) 


          3)Requires electric corporation procurement 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 Section 454.5)  



          4)Requires each local publicly-owned electric utility, in  
            procuring energy to serve the load of its retail end-use  
            customers, to first acquire all available energy efficiency  
            and demand reduction resources that are cost effective,  
            reliable, and feasible.  (Public Utilities Code Section 961.5)  



          5)Requires the California Energy Commission (CEC), every two  
            years, to adopt an integrated energy policy report containing  
            an overview of major energy trends and issues facing the  
            state, including, but not limited to, supply, demand, pricing,  
            reliability, efficiency, and impacts on public health and  
            safety, the economy, resources, and the environment.  (Public  
            Resources Code Section 25302) 


          6)Requires the CEC to develop a statewide estimate of all  
            potentially achievable cost-effective electricity and natural  








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            gas savings, and establish targets for statewide annual energy  
            efficiency savings and demand. 


          FISCAL EFFECT:  According to Senate Appropriations Committee,  
          annual costs in the range of $700,000 for two years to Public  
          Utilities Reimbursement Account (special Fund) for the CPUC to  
          develop the procurement goal.


          COMMENTS:  


          1)Energy loading order:  Following the 2001 energy crisis, the  
            Legislature codified a "loading order" of preferred energy  
            resources, requiring the investor-owned utilities (IOU)  
            electricity procurement plans to first meet unmet resources  
            needs through all cost-effective, reliable, and feasible  
            energy efficiency and demand response.


          2)Energy efficiency funded programs:  Consistent with the  
            loading order, statute requires both electrical and gas IOU 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, coalitions of local governments  
            and CCAs) 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, heating, ventilation,  
            and air conditioning systems, whole-house retrofits, and  
            sector-specific efforts.


          3)Doubling energy efficiency savings:  SB 350 (De León), Chapter  
            547, Statutes of 2015, enacted the Clean Energy and Pollution  
            Reduction Act of 2015, which established targets to increase  
            retail sales of renewable electricity to 50% by 2030 and  
            double energy efficiency savings in electricity and natural  








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            gas uses by 2030.  Under the statute, the CEC, in consultation  
            with the CPUC and local publicly owned utilities, must  
            establish annual targets for statewide energy efficiency  
            savings and demand reduction that will achieve a cumulative  
            doubling of statewide energy efficiency savings in electricity  
            and natural gas by January 1, 2030.  The targets must be  
            established through a public process.  In furtherance of that  
            effort, the targets must be established by November 1, 2017.  


          4)Current process: Currently, the CPUC approves a 10-year  
            authorization of funding for IOU energy efficiency and demand  
            reduction investments, known as a rolling portfolio.  Rolling  
            portfolios represent a 10-year authorization for activities,  
            with annual reviews of progress and effectiveness, and annual  
            updates/true ups needed for specific aspects of the portfolio  
            (savings estimates, goals, evaluation results) through a  
            formal filing with the CPUC via a public and stakeholder  
            process.  The rolling portfolio mechanism was adopted to  
            smooth out the start-stop nature of a three-year  
            authorization, revision, re-adoption by the CPUC.  The CPUC is  
            currently in its first year of implementing rolling portfolios  
            and learning how to improve the effort.


          Analysis Prepared by:  Sue Kateley / U. & C. / (916) 319-2083     
            FN: 0004851