BILL ANALYSIS Ó
AB 2460
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ASSEMBLY THIRD READING
AB
2460 (Irwin)
As Amended May 31, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |10-3 |Gatto, Burke, Eggman, |Patterson, Chávez, |
| | | |Obernolte |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Quirk, Santiago, | |
| | |Ting, Mark Stone | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, |
| | |Bonilla, Bonta, |Gallagher, Jones, |
| | |Calderon, Daly, |Obernolte, Wagner |
| | |Eggman, Eduardo | |
| | |Garcia, Roger | |
AB 2460
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| | |Hernández, Holden, | |
| | |Quirk, Santiago, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: 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 (CPUC). Specifically, this bill:
1)Extends, expands and modifies the existing program to promote
the installation of solar thermal systems throughout the
state. The original program was for solar water heating
systems only.
2)Establishes a $250 million funding cap for the program between
January 1, 2017, and July 31, 2022. 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: According to the Assembly Appropriations
Committee:
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1)This bill allocates up to $250 million 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.
2)Ongoing CPUC annual costs of approximately $130,000 to
implement and administer the revised and continued program
through 2027 (CPUC 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 CPUC 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 CSI 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 CPUC to
review the rebate amount more frequently, and increase the
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overall program budget.
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 CPUC, the current annual energy savings for
this program is more than 4.5 million therms, almost one
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 CPUC, the
California Energy Commission, and the Los Angeles Department
of Water and Power, 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.
AB 2460
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Analysis Prepared by:
Sue Kateley / U. & C. / (916) 319-2083 FN:
0003232