BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: SB 723 Hearing Date: 4/21/2015
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|Author: |Pavley |
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|Version: |4/13/2015 As Amended |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: Energy efficiency: United States Armed Forces bases and
facilities
DIGEST: This bill seeks to increase the availability of funds
for energy efficiency upgrades at military facilities. Most
significantly, this bill authorizes military facilities to
calculate the savings from energy efficiency measures on military
facilities differently than savings for other energy efficiency
projects are calculated.
ANALYSIS:
Existing law requires the California Public Utilities Commission
(CPUC) to identify all potentially achievable cost-effective
electricity and natural gas efficiency savings and to establish
energy efficiency procurement targets and ratepayer-funded
programs for electrical and gas corporations. (Public Utilities
Code §§ 454.55 and 454.56.)
This bill:
1. Requires the CPUC to approve financial incentives for
energy efficiency upgrades at military facilities through
existing energy efficiency programs administered by the
investor-owned utilities (IOUs). The bill also requires the
CPUC to encourage the IOUs to expedite implementation of
energy efficiency measures at military facilities and to
enable achievement of additional energy goals by the
military, including demand response, self-generation, and
energy storage. The bill directs the CPUC to identify other
potential sources of funding to achieve energy efficiency
SB 723 (Pavley) Page 2 of ?
goals in military facilities, should it determine there are
insufficient ratepayer funds available to achieve the
military's energy efficiency goals.
2. Authorizes military facilities to calculate their energy
savings by comparing the facilities' existing energy usage,
as a whole, with the facilities' projected energy usage that
would be achieved from the implementation of the energy
efficiency measures.
Background
Energy Efficiency Sits Atop California Energy Policy . The "loading
order" guides the state's energy policies and decisions according
to the following order of priority: (1) decreasing electricity
demand by increasing energy efficiency; (2) responding to energy
demand by reducing energy usage during peak hours; (3) meeting new
energy generation needs with renewable resources; and (4) meeting
new energy generation needs with clean fossil-fueled generation.
This policy has been adopted by the energy agencies - the
California Energy Commission (CEC) and CPUC - and its principles
guide all energy programs.
California's IOUs 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, HVAC systems, whole-house
retrofits, and specialized programs aimed at a variety of sectors.
Military Receives Ratepayer Support for Energy Efficiency .
According to the CPUC, existing IOU programs already target
military facilities for efficiency improvements. In the 2010-2012
program cycle, military facilities in California received over $3
million dollars in energy efficiency incentives resulting in
almost 4,000 kW in peak savings and almost 350,000 therm in
natural gas savings. The table below breaks out, by IOU, the
level of incentives, number of projects, amount of anticipated
savings, and number of military participants.
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| | |
|US Military Customer Energy Efficiency Participation by | |
SB 723 (Pavley) Page 3 of ?
|IOU (2010 - 2012) | |
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|------+----------+--------+----------+--------+----------+---------|
| |# of | # of |Incentives| kW | kWh | Therm |
| |Customers |Projects| $| Savings| Savings| Savings|
| | | | | | | |
|------+----------+--------+----------+--------+----------+---------|
|SDG&E | 8| 285|$ | | | |
| | | | 2,400,925 | 1,716 | 14,329,133 | |
| | | | | | | 293,567 |
|------+----------+--------+----------+--------+----------+---------|
|SCE | 8| 27|$ | 1,183| 5,383,919| N/A|
| | | | 434,316 | | | |
|------+----------+--------+----------+--------+----------+---------|
|SCG | 1| 1|$ | N/A| N/A| |
| | | | 12,420 | | | |
| | | | | | | 14,966 |
|------+----------+--------+----------+--------+----------+---------|
|PG&E | 15| 88|$ | 957| 3,413,104| 38,567|
| | | | 383,282 | | | |
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| Total:| 32| 401| $3,230,942| 3,856| 23,126,156|347,100 |
| | | | | | | |
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Note: For the 2013 - 2014 (and the SB 723 DA) staff is waiting
for the results of a data request to confirm expenditures which
are expected to be similar annually to the 2010 - 2012 program
cycle.
A Different Measure . This bill has four provisions, all related to
energy efficiency projects on military bases.
First, it allows military facilities to calculate their
energy efficiency savings by comparing the facilities'
existing energy usage, as a whole, with the facilities'
projected energy usage that would be achieved from the
implementation of the energy efficiency measures.
Second, it directs the CPUC to encourage electrical and
gas IOUs to expedite the implementation of energy efficiency
measures on military facilities and to enable the achievement
of additional energy goals, for example, microgrids, demand
response, self-generation, and energy storage, at Armed
SB 723 (Pavley) Page 4 of ?
Forces bases and facilities.
Third, it directs the CPUC to approve financial incentives
for energy efficiency upgrades at military facilities through
existing energy efficiency programs administered by
electrical and gas IOUs.
Finally, it directs the CPUC, working with the CEC and
United States Armed Forces, to identify other potential
sources of funding to supplement funds collected from
ratepayers to achieve energy savings goals.
Of these four provisions, the first is, by far, the most
significant. The third provision is, essentially, existing CPUC
practice, consistent with existing law. The second and fourth
provisions are not inconsequential and may be helpful to efforts
by the military to increase energy efficiency at its facilities.
But the first provision is the heart of the bill.
The bill requires a calculation of the savings from IOU-funded
energy efficiency projects at military bases that differs from the
methodology by which other IOU-funded energy efficiency projects
calculate such savings. As explained by the CPUC, the current
method for calculating energy savings for a given energy
efficiency measure compares energy use in absence of the energy
efficiency measure and energy use with the energy efficiency
measure. In contrast, this bill requires, for military facilities
only, comparison of current energy use with projected usage that
would follow implementation of the efficiency measure. In other
words, the bill requires use of a special energy efficiency
baseline for military facilities.
Use of a different baseline at military facilities has
consequences. Existing law requires the IOUs to capture all
cost-effective energy efficiency. Use of the more-generous
measurement required by this bill would likely result in more
energy efficiency projects at military facilities being "cost
effective."
There is a good argument for changing the methodology for
calculating the energy savings from efficiency measures. In fact,
the CPUC is considering such a change as part of its current
energy efficiency proceeding. However, there is nothing to that
argument that is specific to military facilities. If it makes
sense to measure the energy efficiency savings of measures based
SB 723 (Pavley) Page 5 of ?
upon current use, then it makes sense generally.
That said, the military can be an effective partner in pursuit of
California's energy and environmental goals. As the author notes,
the US military is undertaking ambitious, mission-driven energy
efficiency and alternative energy efforts.
The author also notes that the CPUC has authorized the IOUs to
undertake pilot projects that will use a baseline measurement
similar to that required by this bill. Those pilot projects -
still under development - are very limited in scope and designed
to evaluate the effects of using an alternative baseline energy
efficiency methodology. The author and the committee may wish to
require the CPUC to authorize a similar IOU-funded pilot project
for military facilities.
Prior/Related Legislation
AB 2229 (Bradford, 2014) was identical in effect to this bill. AB
2229 was held by this committee.
FISCAL EFFECT: Appropriation: No Fiscal Com.:
Yes Local: Yes
SUPPORT:
Sierra Club California
US Air Force
US Army
US Marine Corps
US Navy
OPPOSITION:
Office of Ratepayer Advocates, unless amended
ARGUMENTS IN SUPPORT: The author and supporters contend this bill
will allow achievement of additional energy efficiency and related
projects at California military facilities, thereby helping
California reach its energy and environmental goals.
ARGUMENTS IN OPPOSITION: Opponents protest the use of a measure
of energy efficiency savings for projects at military facilities
that differs from the measure used for similar IOU-funded
SB 723 (Pavley) Page 6 of ?
projects. ORA fears the use of the military-specific measure may
reduce funding for non-military projects that, when consistently
measured, are more cost effective.
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