BILL ANALYSIS Ó
AB 2379
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Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Mike Gatto, Chair
AB 2379
(Quirk) - As Introduced February 18, 2016
SUBJECT: Energy: home energy rating program: report
SUMMARY: Requires the California Energy Commission's (CEC)
biennial energy policy report to include additional information
related to home energy efficiency. Specifically, this bill
requires the report to include a comparison of actual energy
savings and the models or projections used to validate the Home
Energy Efficiency Rating program.
EXISTING LAW:
1)Requires the CEC to continuously carry out studies, technical
assessments, research projects, and data collection directed
to reducing wasteful, inefficient, unnecessary, or uneconomic
uses of energy, including improved appliance efficiency.
(Public Resources Code Section 25401)
2)Requires the CEC to adopt cost-effective energy efficiency
standards for appliances. (Public Resources Code Section
25402)
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3)Prohibits the sale of new appliances that do not meet the
energy efficiency standards adopted by the CEC. (Public
Resources Code Section 25402(c)(2))
4)Requires the CEC to certify compliance options for new
products, materials, and calculation methods in order to meet
the energy efficiency standards. (Public Resources Code
Section 25402.1(a)(2))
5)Establishes ratepayer-funded programs to assist low-income
households through billing discounts and weatherization and
appliance replacement programs. (Public Utilities Code
Sections 327 and 382)
6)Directs the California Public Utilities Commission (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)
7)Requires the CPUC to report annually on its effort to identify
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)
FISCAL EFFECT: Unknown.
COMMENTS:
1)Author's Statement: "One of the problems that we are finding,
[?] is that the models that are used to determine the energy
savings as a result of efficiency upgrades are frequently off
by significant margins. As a result, the efficiency scores
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under [Home Energy Rating Systems] may also be inaccurate and
giving homeowners the wrong picture about just how efficient
their homes are or how much potential there is to improve a
home's energy efficiency. In a California Public Utilities
Commission evaluation from 2010-2012, the CPUC looked at the
Whole House Retrofit program and determined that the 'program
as currently implemented is not meeting its energy savings
goals ? caused by a combination of factors that include [an]
overestimation of savings in the retrofit planning (building
modeling) phase.' Additionally, the report concluded that to
improve the program, better energy estimating tools would be
needed, including more complete data on energy use. This bill
will improve the Home Energy Rating System by requiring a
comparison of the estimated and actual savings that a home
experiences when property owners make energy efficiency
improvements that are recommended under [Home Energy Rating
System]. As a result, we will learn through better and more
complete data how the models that predict energy efficiency
are working and be better informed about how to improve them.
If we invest in energy efficiency to reduce energy consumption
and to reduce greenhouse gas emissions, we must be sure that
energy efficiency upgrades are actually yielding the results
we expect."
2)Energy Efficiency and Funding: California has pursued its
energy demand reduction goals through two primary avenues:
utility-sponsored programs to reduce end-user consumption, and
codes and standards designed to lower the energy use of
buildings and appliances through energy efficiency
improvements. By 2004, the CEC suggests these efforts have
cumulatively saved more than 40,000 gigawatt hours (GWh) of
electricity and 12,000 megawatts (MW) of peak electricity,
equivalent to 24 500-MW power plants. According to the CEC,
more than half of the statewide savings was from the building
and appliance standards, with the balance resulting from
programs implemented by the state's IOUs and local
publicly-owned utilities (POUs). As a result of these
efforts, the CEC states that California's energy use per
capita has remained stable for more than 30 years while the
national per capita average has increased by 40% and is nearly
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double that of California.
Energy efficiency is at the top of the "loading order," which
refers to a requirement that California utilities first meet
their energy needs through cost-effective energy efficiency
measures before meeting energy needs through renewable and
conventional generation. The state's IOUs and the publicly
owned utilities administer energy efficiency programs that
provide financial incentives and rebates for installing energy
efficient appliances, lighting, windows, Heating, Ventilation
and Air Conditioning (HVAC) systems and other technologies or
measures. The Legislative Analyst Office (LAO) reports that
these programs have totaled $9 billion in ratepayer funding
since IOUs began administering them in 1998.<1> The CPUC
reports the IOUs have requested roughly $2 billion in funding
for energy efficiency programs in 2013-14, including HVAC,
lighting, government partnerships, non-residential custom
projects, and financing programs. These programs are expected
to generate 4,670 GWh of energy savings in that cycle.
A partial summary of funding of previous and ongoing programs
follows:
a) $1 billion per year from IOU ratepayers for programs
approved by the CPUC through 2014, with $220 million for
financing and expansion of the "Energy Upgrade California"
program offering residential energy efficiency incentives
and rebates up to $4,500 per customer.
b) $25 million in ratepayer funds for a "Clean Energy
Upgrade Financing" program required by AB 14 X1 (Skinner),
Chapter 9, Statutes of 2011-12 First Extraordinary Session,
to finance energy efficiency retrofits with loans
administered by the California Alternative Energy and
--------------------------
<1> Roberts, T., Simbol, A., and Taylor, M. "Energy Efficiency
and Alternative Energy Programs", LAO, 2012
http://www.lao.ca.gov/laoapp/PubDetails.aspx?id=2677
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Advanced Transportation Financing Authority (CAEATFA)
within the State Treasurer's Office.
c) $300 million per year from IOU ratepayers for free
energy efficiency and weatherization services for IOU
low-income customers approved by the CPUC.
d) $30 million per year in federal funding for free
weatherization services for low-income residents
administered by the California Department of Community
Services and Development (CDCS).
e) $185 million in one-time funding for free weatherization
services for low-income residents from the American
Recovery and Reinvestment Act of 2009 (ARRA) administered
by CDCS.
f) $280 million in one-time ARRA funds for energy
efficiency programs administered or coordinated by the
CEC), including Energy Upgrade California and several pilot
programs designed to develop best practices for energy
efficiency retrofits of California's buildings constructed
prior to adoption of Title 24 energy efficiency building
standards. These pilots are intended to help CEC develop a
comprehensive energy efficiency strategy for this old
building stock, as required by AB 758 (Skinner), Chapter
470, Statutes of 2009.
3)AB 758 (Skinner): Requires the CEC, in collaboration with the
California Public Utilities Commission (CPUC) and
stakeholders, to develop a program to achieve greater energy
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efficiency in the state's existing buildings.<2> This effort
is closely tied to California's Global Warming Solutions Act
of 2006 (AB 32 (Núñez), Chapter 488), which seeks to reduce
the state's greenhouse gas emissions to 1990 levels by 2020.
One mechanism to reduce greenhouse gas emissions is to reduce
energy consumption in existing homes - a goal to be met by AB
758. The first phase of AB 758 implementation, funded by the
ARRA, established state and local pilot programs supporting
energy efficiency upgrades.<3>
4)Energy Upgrade California:<4> Energy Upgrade California is a
statewide initiative designed to help California meet the
climate action and energy efficiency goals of AB 32 and AB
758, respectively. By offering financial incentives to
homeowners who complete certain energy-saving home
improvements, the program guides Californians to conserve
energy, reduce demand on the electrical grid, and make
informed energy management choices. Energy Upgrade California
is an alliance of the CPUC, CEC, utilities, regional energy
networks, local governments, businesses, and nonprofits. The
financial incentives are designed to reward homeowners who
address energy efficiency needs through a comprehensive "whole
house" approach. Depending on their improvement needs and
budget, homeowners can choose between various incentives -
typically upgrades such as air sealing, attic insulation, and
duct sealing must be combined with upgrades to wall, floor,
and duct insulation and/or heating and cooling equipment.
5)Energy assessments and ratings: An energy assessment examines
energy saving opportunities in a particular building, in order
to define potential upgrades. Ratings are used to compare the
energy efficiency of one building to others based on standard
assumptions of occupant behavior. A variety of software tools
---------------------------
<2> California Energy Commission. Comprehensive Energy
Efficiency Program for Existing Buildings.
http://www.energy.ca.gov/ab758
<3> California Energy Commission. AB 758 Pilots.
http://www.energy.ca.gov/ab758/pilot-programs.html
<4> Energy Upgrade California. http://energyupgradeca.org/en/
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are available to perform assessments and ratings, and some
contractors have created proprietary in-house tools. These
methods involve inputting information about a building into a
building energy simulation program and running the program to
predict energy use. Examples of modeling software that
estimate energy usage include EnergyPro, Home Energy Saver
(HES), and Home Energy Efficient Design (HEED).
6)Both anecdotal evidence and controlled studies have raised
concerns about the accuracy of energy analysis software.<5>
Generally, it has been observed that software-based energy
analysis of inefficient existing homes tends to over-predict
pre-retrofit energy use and retrofit energy savings. For
example, a recent report found that modeling software
consistently overestimated the energy use of each home.<6>
Modeled pre-retrofit annual energy use was compared with
actual billing data for 30 jobs, showing:
a) Mean modeled total annual use was 40% greater than
billed use.
b) Mean modeled annual kilowatt hour use was 56-68% greater
than billed use.
c) Mean modeled annual gas use was 39-43% greater than
billed use.
The same study found that estimates prepared by the EnergyPro
and eQUEST software were significantly different from each
other and overestimated energy use.
--------------------------
<5> National Renewable Energy Laboratory. Assessing and
Improving the Accuracy of Energy Analysis for Residential
Buildings http://www.nrel.gov/docs/fy11osti/50865.pdf
<6> 2010-2012 PG&E and SCE Whole House Retrofit Program Process
Evaluation Study.
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Another study compared software-based energy use projections
for 192 existing homes to actual energy bills and calculated
the percent errors.<7> SIMPLE had a mean absolute percent
error of 25.1%, compared to HES-Full with 33.4%, REM/Rate with
43.7%, and HES-Mid with 96.6%. In other words, SIMPLE
predicted energy use on average within plus or minus 25.1% of
actual use.
It has been recommended that a study compare model results to
pre- and post-upgrade utility bills. This could determine the
accuracy of each software program relative to the particular
measure, and establish the steps needed to calibrate the
models to the actual use. The National Renewable Energy
Laboratory has begun to identify, investigate, and correct
input and software issues.<8>
The CEC agrees that "simulation results should be calibrated
to actual energy usage to help homeowners understand how their
investment will likely affect their energy use if their
occupant behavior remains the same after improvements are
installed."<9>
7)Consumer Protection: Homeowners are encouraged to address
energy efficiency depending on their improvement needs.
---------------------------
<7> Energy Trust of Oregon. Energy Performance Score 2008 Pilot.
http://www.earthadvantage.org/assets/documents/EPSPilotReport_200
8.pdf
<8> National Renewable Energy Laboratory. Assessing and
Improving the Accuracy of Energy Analysis for Residential
Buildings http://www.nrel.gov/docs/fy11osti/50865.pdf
<9> California Energy Commission. Comprehensive Energy
Efficiency Program For Existing Buildings Scoping Report, August
2012.
http://www.energy.ca.gov/2012publications/CEC-400-2012-015/CEC-40
0-2012-015.pdf
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However, projected energy savings compared to actual energy
bills studied had a margin of error of roughly 25%.
Therefore, consumers are likely investing in home improvements
to increase energy efficiency without accurate information
regarding the actual impact on their energy bill. This
discrepancy between projected and actual energy savings could
have an exacerbated negative financial impact on households
that are middle and lower income. The state is also a
consumer when government subsidies and other financial
incentives are invested in energy efficiency home
improvements. To ensure consumers and the state are
appropriately investing finances in energy efficiency
projects, it is important to have accurate information on
actual energy savings resulting from these projects.
8)Measuring Savings vs. Consumption: The bill requires the
California Energy Commission's (CEC) biennial energy policy
report to include a comparison of actual energy savings and
the models or projections used to validate the Home Energy
Efficiency Rating program.
9)Suggested Amendments:
It may be difficult to measure energy savings with validity
considering energy consumption fluctuates based on various
factors independent of energy efficiency technologies in a
home such as climate changes, changes in family life, or
changes in time spent in the home.
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The author may wish to consider an amendment that would
require the CEC to include in their biennial report a
comparison of the models or projections used to qualify the
rating program to actual energy consumption as opposed to
actual savings to better define what is being measured.
SECTION 1.
Section 25942 of the Public Resources Code is amended to read:
25942.
(a) On or before July 1, 1995, the commission shall establish
criteria for adopting a statewide home energy rating program
for residential dwellings. The program criteria shall include,
but are not limited to, all of the following elements:
(1) Consistent, accurate, and uniform ratings based on a
single statewide rating scale.
(2) Reasonable estimates of potential utility bill savings,
and reliable recommendations on cost-effective measures to
improve energy efficiency.
(3) Training and certification procedures for home raters and
quality assurance procedures to promote accurate ratings and
to protect consumers.
(4) In coordination with home energy rating service
organization databases, procedures to establish a centralized,
publicly accessible, database that includes a uniform
reporting system for information on residential dwellings,
excluding proprietary information, needed to facilitate the
program. There shall be no public access to information in the
database concerning specific dwellings without the owner's or
occupant's permission.
(5) Labeling procedures that will meet the needs of home
buyers, homeowners, renters, the real estate industry, and
mortgage lenders with an interest in home energy ratings.
(b) The commission shall adopt the program pursuant to
subdivision (a) in consultation with representatives of the
Department of Real Estate, the Department of Housing and
Community Development, the Public Utilities Commission,
investor-owned and municipal utilities, cities and counties,
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real estate licensees, home builders, mortgage lenders, home
appraisers and inspectors, home energy rating organizations,
contractors who provide home energy services, consumer groups,
and environmental groups.
(c) On and after January 1, 1996, no home energy rating
services may be performed in this state unless the services
have been certified, if such a certification program is
available, by the commission to be in compliance with the
program criteria specified in subdivision (a) and, in
addition, are in conformity with any other applicable element
of the program.
(d) On or before July 1, 1996, the commission shall consult
with the agencies and organizations described in subdivision
(b), to facilitate a public information program to inform
homeowners, rental property owners, renters, sellers, and
others of the existence of the statewide home energy rating
program adopted by the commission.
(e) The commission shall, as part of the integrated energy
policy report prepared pursuant to Section 25302, report on
the progress made to implement a statewide home energy rating
program. The report shall include an evaluation of the energy
savings attributable to the program, a comparison of actual
energy savings consumption and the models or projections used
to qualify the rating program, and a recommendation concerning
which means and methods will be most efficient and
cost-effective to induce home energy ratings for residential
dwellings.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file.
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Opposition
None on file.
Analysis Prepared by:Darion Johnston / U. & C. / (916) 319-2083