BILL ANALYSIS Ó
AB 2141
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Date of Hearing: April 13, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
AB 2141
(Ting) - As Introduced February 17, 2016
SUBJECT: Energy-efficient refrigeration program: low-income
communities
SUMMARY: Requires each electrical and gas corporation to
develop a program under the direction and supervision of the
California Public Utilities Commission (CPUC) that provides
incentives and assistance to owners, operators, or lessees of
corner stores in order to reduce their electricity and gas
bills. Specifically, this bill:
1)Requires the program to give priority to:
a) Low-income or lower-income areas and communities;
b) Areas and communities with limited access to healthy
food, including those that are considered to be food
deserts; and
c) Communities with higher rates of diet-related diseases.
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2)Requires participating corner stores to agree to sell fresh
produce and other healthy foods for a minimum of three years.
3)Authorizes the CPUC to impose other conditions to ensure the
integrity of the program and to protect ratepayers.
4)Requires the program to encourage and include outreach to
corner stores to promote participation.
5)Requires each electrical corporation and gas corporation to
submit its proposal for the program to the CPUC by January 1,
2018.
6)Authorizes the CPUC to approve the proposal, modify and
approve the proposal, or direct the utility to file a new
proposal with elements specified by the CPUC by a date
certain.
7)Requires the CPUC to implement equitable means to fund the
program, which may include, but is not limited to,
over-collections pursuant to the California Alternate Rates
for Energy (CARE) program, the Energy Savings Assistance
Program (ESAP), and other energy efficiency funds or programs
subject to the CPUC's oversight.
8)Defines a "corner store" as a small-scale store or grocery
store, either an independent store or a chain store, that
sells a limited selection of foods and other products, in
rural, urban, and suburban settings, including stores that are
not located on a corner and stores commonly referred to as
convenience stores or neighborhood stores.
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9)States the term "diet-related diseases" includes, but is not
limited to, obesity, diabetes, cancer, and cardiovascular
diseases.
10)Defines "food desert" to mean an area or community that lacks
or is absent of grocery stores or supermarkets that sell fresh
produce and healthy food options.
11)Defines "low-income or lower-income" to mean households with
annual incomes that are no greater than 400% of the federal
poverty level.
EXISTING LAW:
1)Directs the CPUC to administer cost-effective energy
efficiency programs funded by a nonbypassable system benefits
charge assessed on ratepayers to fund energy efficiency
programs. (Public Utilities Code Section 381)
2)Requires the California Energy Commission (CEC) to 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 final end uses of retail customers by January 1, 2030.
(Public Utilities Code Section 701.1)
3)Requires the CPUC to establish efficiency targets for
electrical corporations consistent with the state's 2030
energy efficiency goal and requires local publicly owned
electric utilities to establish annual targets for energy
efficiency savings and demand reduction consistent with that
goal. (Public Utilities Code Section 454.55)
4)Requires the CPUC to report annually on its effort to identify
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ratepayer-funded energy efficiency programs that are similar
to other state programs to ensure that the ratepayer-funded
programs complement and do not duplicate programs of other
state agencies (Public Utilities Code Section 747.6)
5)Establishes the CARE program to assist low-income electric and
gas customers with annual household incomes that are no
greater than 200% of the federal poverty guideline levels.
(Public Utilities Code Section 739.1)
6)Requires each electrical corporation and gas corporation,
subject to direction and supervision by the CPUC, to develop
and implement a program of rate assistance to eligible food
banks, as defined, at a fixed percentage determined by the
CPUC. (Public Utilities Code Section 739.3)
7)Establishes the Office of Farm to Fork (OF2F), within the
Department of Food and Agriculture (CDFA), to work with
various entities involved in promoting food access, and to
increase the amount of agricultural products available to
schools and underserved communities in the state. (Food and
Agriculture Code Section 49000)
8)Requires OF2F to identify urban and rural communities that
lack access to healthy food, and to coordinate with local,
state, and federal agencies to promote and increase awareness
of programs that promote greater food access. (Food and
Agriculture Code Section 49001)
9)Creates the Farm to Fork Account in the CDFA Fund consisting
of money made available from federal, state, industry, and
other sources, and would continuously appropriate the money
deposited in the account to carry out the purposes of OF2F.
(Food and Agriculture Code Section 49002)
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FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: "The overall health of a person is
closely linked to their income and proximity to grocery
stores. According to the USDA, nearly 10% percent of the U.S.
population, or 29.7 million people, live in low-income areas
more than 1 mile from a supermarket. As a result, this
population must resort to purchasing and consuming unhealthy
foods that are often found at local corner stores or fast food
restaurants. This contributes to diet-related diseases and
ultimately, to poor health. This bill brings energy efficiency
and refrigeration to neighborhood corner stores in an effort
to provide fresh produce and healthy food options to
communities that are low-income or communities that lack
access to grocery stores due to geographic barriers.
Specifically, AB 2141 requires utility providers to develop a
program that encourages owners of corner stores to participate
in the state's energy efficiency programs to expand healthy
food choices."
2)Existing Ratepayer Assistance Programs: For decades, the state
and federal governments have overseen low-income programs to
provide low-income customers discounts on their utility bills
to the extent the customer meets the program eligibility
requirements. The following is a breakdown of select programs:
a) The CARE program offers eligible customers a 20%
discount on their electricity and natural gas bill.
b) The Family Electric Rate Assistance (FERA) program
offers assistance to families whose household income
slightly exceeds the low-income energy program allowances
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by billing some of their electricity usage at a lower rate.
c) ESAP provides no-cost weatherization services to
low-income households who meet the CARE income guidelines.
Services provided include attic insulation, energy
efficient refrigerators, energy efficient furnaces, weather
stripping, caulking, low-flow showerheads, water heater
blankets, and door and building envelope repairs which
reduce air infiltration.
d) The Department of Community Services and Development
administers Federal low-income home energy assistance,
energy crisis intervention, and low-income weatherization
programs (LIHEAP). These programs are funded by federal
grants to provide weatherization services and financial
assistance to help low-income customers pay their energy
bills.
e) The Emergency Food Assistance Program (EFAP) provides
low-income individuals and households with surplus
commodities donated by the USDA. The California Department
of Social Services is responsible for overseeing EFAP and
ensures that USDA commodities are provided and distributed
to eligible individuals and households in all 58 California
counties. Program-eligible recipients may receive
commodities through congregate feeding sites which serve
meals, or through distribution sites, which distribute food
for household consumption. There are 48 food banks that
coordinate distribution to more than 2,300 food banks in
their regions.
3)AB 2218 (Bradford), Chapter 581, Statutes of 2014: AB 2218
requires each electrical corporation and gas corporation,
subject to direction and supervision by the CPUC, to develop
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and implement a program of rate assistance to eligible food
banks, at a fixed percentage determined by the CPUC. This law
authorizes the CPUC to adjust the fixed percentage of rate
assistance as appropriate. Furthermore, this law encourages
the governing board of each local publicly owned electric
utility to develop and implement a program of rate assistance
to eligible food banks at a fixed percentage.
The program created under AB 2218 is substantially similar to
the program this bill attempts to create in its mission and
method of implementation. However, this statute is not yet
implemented.
4)Need for Refrigeration: According to the "Healthy Corner
Stores Q & A" published by the Healthy Corner Store Network,
one major barrier to stocking and selling fresh produce in
corner stores is the lack of proper refrigeration equipment.
This report goes on to state:
Corner stores have small square footage with limited
shelving and refrigeration, which can make it hard for them
to expand their inventory or stock perishable items. Many
store owners do not have the time or resources to invest in
store upgrades, and are not aware of financing options or
how to apply for grants or loans.
Another study published in the American Journal of Public
Health in 2012 identified similar barriers to increasing
healthy food options in corner stores including lack of space
and refrigeration.
5)What Does an Energy Efficient Refrigerator Look Like?
Refrigerators can be retrofitted or designed for energy
efficiency. For example, refrigerators with glass doors can be
upgraded to provide automatic door closures to better retain
cold air. Motors and evaporators can be optimized and
retrofitted to function more efficiently. Some motors are
designed to shut off under certain conditions.
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It may be more difficult to ensure that refrigerators
specifically used for produce are energy efficient. Produce
refrigerators tend to be open-air rather than closed with a
door. Although these types of refrigerators may not be as
efficient as those with a closing door, open-air refrigerators
can become more efficient in other ways. These refrigerators
can use low-heat lighting, such as LED lightbulbs, have
roll-down screens or covers to hold in cold air when the store
is closed, and can operate in conjunction with a condensate
pump to manage condensation issues in high humidity areas.
Further, some product manufacturers will provide, at no- or
low-cost, point-of-purchase refrigerators to assist with
marketing their products. According to one popular soda
vendor's literature, some of their refrigeration equipment is
certified by the federal EnergyStar program and are equipped
with energy management devices. It is unclear if similar
programs exist for refrigerators that can be used to market
healthy foods or whether there is a potential to utility
partnernerships with healthy food vendors.
6)Energy Bill Reduction: In its current form, this bill requires
each gas and electrical corporation to help reduce the
electricity and gas bills of participating corner stores
through conservation and energy efficiency improvements.
However, there is no guarantee that the addition of an energy
efficient refrigerator will reduce energy usage or the monthly
energy bill for a participating corner store. If a corner
store has an existing refrigerator, the store may choose to
keep the older refrigerator and begin using the new energy
efficient refrigerator simultaneously. Now with two
refrigerators, the energy consumption level and monthly energy
bill would increase. Monthly energy bills could also increase
in stores that did not previously own a refrigerator.
This bill should attempt to reduce energy costs if feasible
and seek to provide more energy efficiency overall in a
store's current consumption. Corner store owners should
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understand when choosing whether or not to participate in the
program that their energy bill is not guaranteed to be
reduced.
The author may wish to consider an amendment to clarify
assistance to owners, operators, or lessees of corner stores
to is intended to assist with using electricity and natural
gas efficiently through conservation and energy efficiency
improvements, including, but not limited to, the placement or
replacement by providing incentives and assistance to owners,
operators, or lessees of corner stores.
7)Office of Farm to Fork: In its current strategic plan, the
OF2F includes the following objectives related to the purpose
of this bill:
a) To provide resources for corner stores to carry
healthier foods as a means to increase access points for
consumers to purchase healthy foods.
b) Facilitate access to existing federal and state funds to
increase the number to food retail outlets in areas with
limited food access.
c) Work closely with local, state, and federal agencies to
leverage existing programs and broaden new ones.
d) Support nutrition education.
e) Provide tools to help schools who want to improve meal
program options and food literacy.
8)Other Barriers to Healthy Foods in Corner Stores: The Healthy
Corner Store Network identifies in their 2010 report that many
store owners are not used to selling fresh produce or other
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perishable items. They may not know how to price, buy, handle
or market these items or be aware of distribution options
available to them. These stores do not have the buying power
of larger stores, which can make it difficult for store owners
to meet minimum order requirements or receive lower prices
from distributors. Further, changing a product mix can be
risky and many corner store owners believe the products they
sell reflect customer demand. The study published in the
American Journal of Public Health in 2012 also described
customer demand as a barrier to selling healthy foods at
corner stores.
This bill does not require corner stores to participate in
incentive programs, leaving corner stores to determine for
themselves whether or not it would be profitable for them to
participate in the program. However, there is a possibility
that very few corner stores would choose to participate in the
program considering how many barriers prevent corner stores
from selling perishable produce and healthy food,
refrigeration being one of those barriers. Nevertheless, every
electric and gas corporation would be required to develop a
program and the CPUC would be required to review, approve, and
modify project proposals from each utility. Program
development costs may not be rewarded with the environmental,
social, and health rewards the author hopes to achieve if
proper consumer and store owners education of does not occur.
This bill requires the programs to encourage and include
outreach to corner stores to promote participation. This may
address some of the issues related to awareness and access
that could lead to low participation. However, this clause
does not address issues with customer demand.
The author may wish to consider an amendment that would
require electrical and gas corporations to consult with the
OF2F in their efforts to provide resources for corner stores
to carry healthier foods and support nutrition education.
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9)Healthy and Fresh Foods: It is unclear how "healthy and fresh
food options" are defined in this bill or if the communities
this bill aims to serve are in demand for these food options
in their corner stores. This bill does not require corner
stores to participate in the program, but would create an
incentivized option for corner store owners who feel the
program would benefit their business to participate and adopt
energy efficient refrigeration within their stores.
The author may wish to consider an amendment that would
require the electrical and gas corporations to consult with
the OF2F in order to determine which foods should be
considered fresh and healthy under this bill and how much
refrigerated space should be available under this program for
healthy food options.
10)Arguments in Support: According to PolicyLink, " California
has lead the nation in advancing state energy efficiency
policies and programs, such as the Clean Energy and Pollution
Reduction Act of 2105 and the develop of the [CARE] program
that offers discount rates for low income gas and electric
consumers. However, given that half of California residents
are renters, these constituents have not yet directly
benefitted from these policies. AB 2141would enable these
residents to benefit from these efforts by providing
incentives for local store owners to invest in energy
efficient refrigeration and other upgrades in neighborhood
corner stores, allowing them to sell fresh produce and other
healthier food options. Existing regulations already require
electric and gas companies to develop and implement a program
of rate assistance to eligible food banks through the [CPUC],
and this bill would create a similar program for local corner
stores, another important community fixture through which many
low-income consumers rely on for food.
11)Suggested Amendments:
SECTION 1.
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Section 748 is added to the Public Utilities Code, to read:
748. (a) For purposes of this section, the following terms
have the following meanings:
(1) "Corner store" means a small-scale store or grocery store,
either an independent store or a chain store, that sells a
limited selection of foods and other products, in rural,
urban, and suburban settings. "Corner store" includes stores
that are not located on a corner and stores commonly referred
to as convenience stores or neighborhood stores.
(2) "Diet-related diseases" includes, but is not limited to,
obesity, diabetes, cancer, and cardiovascular diseases.
(3) "Food desert" means an area or community that lacks or is
absent of grocery stores or supermarkets that sell fresh
produce and healthy food options.
(4) "Low-income or lower income" means households with annual
incomes that are no greater than 400 percent of the federal
poverty level.
(b) (1) Subject to the direction and approval of the
commission, each electrical corporation and gas corporation
shall develop and implement a program to provide incentives
and assistance to owners, operators, or lessees of corner
stores to use electricity and natural gas efficiently through
conservation and energy efficiency improvements, including,
but not limited to, the placement or replacement of free or
low-cost energy-efficient refrigeration in order to improve a
community's access to healthy and fresh food options.
(2) The program shall require participating corner stores to
agree to sell fresh produce and other healthy foods for a
minimum of three years. The commission may impose other
conditions to ensure the integrity of the program and to
protect ratepayers. The three year requirement shall not be
enforceable if the individual or entity, or its successor,
owning, operating, or leasing the corner store ceases all of
its retail food sales operations.
(3) The program shall give priority to, but is not limited to,
the following:
(A) Low-income or lower income areas and communities.
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(B) Areas and communities with limited access to healthy food,
including those that are considered to be food deserts.
(C) Communities with higher rates of diet-related diseases.
(4) The program shall encourage and include outreach to corner
stores to promote participation.
(c) (1) Each electrical corporation and gas corporation shall
submit its proposal for the program to the commission by
January 1, 2018.
(1) In designing its programs, each electrical corporation and
gas corporation shall consult with store owners, product
vendors, refrigeration manufacturers, and the Office of Farm
to Fork and submit proposals for the program to the commission
by January 1, 2018.
(2) Electrical and gas corporations shall consult with the
Office of Farm to Fork to determine which foods should be
considered fresh and healthy under this bill and how much
refrigerated space should be available under this program for
healthy food options.
(2) (3) The commission may approve the proposal, modify and
approve the proposal, or direct the utility to file a new
proposal with elements specified by the commission by a date
certain.
(3) The commission shall authorize or deny implementation of
the program by July 1, 2018.
(d) The commission shall implement an equitable means to fund
the program, which may include, but is not limited to,
overcollections pursuant to the California Alternate Rates for
Energy (CARE) program, the Energy Savings Assistance Program
established pursuant to Section 382, and other energy
efficiency funds or programs subject to the commission's
oversight.
12)Prior Legislation:
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AB 2218 (Bradford), Chapter 581, Statutes of 2014: Requires
each electrical corporation and gas corporation, subject to
direction and supervision by the CPUC, to develop and
implement a program of rate assistance to eligible food banks,
as defined, at a fixed percentage determined by the CPUC.
SB 491 (Rosenthal), Chapter 947, Statutes of 1994: Established
the CARE program, which provides assistance to low-income
electric and gas customers.
REGISTERED SUPPORT / OPPOSITION:
Support
Brightline Defense Project (Sponsor)
California Association of Food Banks
California Grocers Association
Food Bank of Contra Costa & Solano
Hunger Action Los Angeles
PolicyLink
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Sierra Club California
Western Center on Law & Poverty
Opposition
None on file.
Analysis Prepared by:Darion Johnston / U. & C. / (916) 319-2083