BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 723 (Pavley) - Energy efficiency: United States Armed Forces
bases and facilities
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|Version: April 27, 2015 |Policy Vote: E., U., & C. 11 - |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 4, 2015 |Consultant: Marie Liu |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 723 would require the California Public Utilities
Commission (CPUC), to authorize a pilot program that would allow
an alternative energy savings calculation to be used to evaluate
energy efficiency projects located on Armed Forces bases and
facilities until January 1, 2020.
Fiscal
Impact:
Ongoing costs of up to $130,000, but potentially minor, from
the Public Utilities Reimbursement Account (special) for the
CPUC to design, provide oversight, and evaluate the required
pilot project.
Ongoing costs of up to $140,000 from the Energy Resources
Programs Account (General Fund) to the California Energy
Commission (CEC) to consult with the CPUC on evaluating the
effects of the pilot program.
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Unknown, but likely minor, impacts to various special funds
and the General Fund to the state as an electricity and
natural gas ratepayer for changes to the energy efficiency
program budget.
Background: PUC §§454.55 and 454.56 requires the 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.
Under existing CPUC-approved investor-owned utility (IOU) energy
efficiency projects, the project's energy savings is calculated
as the amount of savings generated above the baseline, which is
the amount of energy a building would use if it met the current
building code requirements. As building code requirements are
generally not applied retroactively, the actual savings are
likely greater than this calculation because the actual energy
use is greater than the baseline.
Proposed Law:
This bill would create a pilot program for energy efficiency
projects located on Armed Forces bases and facilities that would
allow the energy savings to be calculated using the facilities'
existing energy usage (as opposed to the energy usage that the
facility should have if it met current building standards). The
CPUC would be required to approve financial incentives based on
this alternative energy savings calculation. The CPUC would be
required to consult with the California Energy Commission and
the United States Armed Forces in authorizing the pilot program.
The pilot program would sunset on January 1, 2020.
Related
Legislation: AB 2229 (Bradford, 2014) would have required the
CPUC to approve financial incentives for energy efficiency
upgrades at military bases and facilities in a manner
substantially similar to this bill. The April 21st version of AB
2229 required the CPUC to authorize a separate energy efficiency
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program for military projects. AB 2229 was held by the Senate
Energy, Utilities, and Communication Committee.
Staff
Comments: Based on calculations made in connection with AB 2229
last year, the CPUC estimates that a pilot program for the
military could involve up to $36 million in project funding for
energy efficiency projects on military bases and facilities,
depending on the design of the pilot program. The CPUC estimates
that it could design, evaluate and provide oversight to the
pilot program required by this bill within existing resources
since it would not be a large program. However, staff notes that
the CPUC estimated annual costs of approximately $130,000 to
implement the military-specific energy efficiency program that
would have been required under the April 21st version of AB
2229. The only appreciable difference between the April 21st
version of AB 2229 and this bill seem to be that AB 2229
included Coast Guard facilities.
The CEC estimates that it would need up to one position at an
annual cost of $140,000 to consult with the CPUC to design and
evaluate the pilot program.
Staff notes that there are unknown potential impacts to the
state as a ratepayer. As mentioned above, the CPUC is required
to identify all energy efficiency savings and targets to reach
those savings. Under the energy savings calculation methodology
that would be allowed by this bill, more military projects will
become cost effective. On the one hand, these projects will
allow IOUs to meet their existing energy efficiency savings
targets with less money resulting in savings to ratepayers; on
the other hand, the CPUC could also raise those targets as
additional cost effective projects are now identified. Higher
targets would require additional ratepayer funds to achieve.
Ultimately staff believes that this bill's impact to the state
as a ratepayer, as either a cost or a savings, is speculative
but likely to be small given the size of the pilot program.
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