BILL ANALYSIS Ó
AB 2460
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Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2460 (Irwin) - As Amended April 20, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill extends and modifies an existing incentive program for
solar water heating systems administered by investor-owned
utilities under the supervision of the California Public
Utilities Commission (PUC). Specifically, this bill:
1)Extends, expands and modifies the existing program to promote
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the installation of solar thermal systems throughout the
state. The original program was for solar water heating
systems only.
2)Establishes a $1 billion funding cap for the program between
January 1, 2017, and July 31, 2027. The previous funding cap
was $250 million over the first 10 years of the program.
3)Requires 50% of the total program budget for projects in
low-income residential housing or in buildings in
disadvantaged communities, as defined by CalEnviro Screen.
Reserves 10% of the total program for industrial applications.
4)Requires the governing body of each publicly-owned utility
providing gas service to adopt, implement, and finance a solar
thermal system incentive program until August 1, 2027.
FISCAL EFFECT:
1)This bill allocates up to $1 billion from ratepayers to fund
this incentive program through the year 2027,
Currently, the program is designed to support the installation
of 200,000 solar water heaters by 2017 funded by up to $250
million in ratepayer surcharges. The current program has been
included in rates since 2007 and has expended $45 million of
the original $250 million allocated.
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2)Ongoing PUC annual costs of approximately $130,000 to
implement and administer the revised and continued program
through 2027 (PUC Utilities Reimbursement Account).
COMMENTS:
1)Purpose. According to the author, although the enabling
legislation was passed in 2007, California Solar Initiative
(CSI) Thermal rebates were not made available until 2010. In
addition, it is unclear whether the PUC has authorized
sufficient marketing and education about this program.
In 2014, the State Auditor issued a report on California
Alternative Energy and Energy Efficiency Initiatives where it
stated that the California Solar Initiative Thermal Program
will not install enough solar water heating systems to meet
its goal by the time the program ends in 2017. The State
Auditor recommended the Legislature consider whether it wants
to continue authorizing the collection of ratepayers' money to
fund the program.
The author intends this bill to extend the program in order to
give it time to work as intended, dedicate at least 50% of
rebates to disadvantaged communities, require the PUC to
review the rebate amount more frequently, and increase the
overall program budget.
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2)Background. In 2007, AB 1470 (Huffman), Chapter 536, created
the CSI Thermal rebate program to reduce the use of natural
gas in buildings through solar heating technologies. CSI
Thermal rebates were made available in 2010.
According to the PUC, the current annual energy savings for
this program is more than 4.5 million therms, almost 1 million
kilowatt hours, and nearly 25 thousand tons of greenhouse gas
(GHG) emission reductions. The current program has paid out
about $45 million in incentives since 2010. The majority of
these funds have been used to fund commercial multifamily
housing and low income multifamily housing projects ($35
million).
As part of the proposed action plan developed by the PUC, the
California Energy Commission (CEC), and the Los Angeles
Department of Water and Power (LADWP), reprioritizing the
existing solar thermal program to fund projects installable by
summer 2017 is recommended. The plan notes that funds from
this program for low-income customers have been fully
utilized. This bill apportions 50% of the budget to low income
and disadvantaged communities.
Solar thermal can be used to meet the needs of food, beverage,
textiles, paper and pulp industries. Processes like
sterilizing, pasteurizing, drying, hydrolyzing, distillation
and evaporation, and washing and cleaning do not require high
temperatures and could benefit from the use of solar thermal
technologies.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
AB 2460
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