BILL ANALYSIS Ó
SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
Senator Ben Hueso, Chair
2015 - 2016 Regular
Bill No: SB 726 Hearing Date: 4/7/2015
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|Author: |Hueso |
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|Version: |2/27/2015 As Introduced |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Jay Dickenson |
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SUBJECT: Energy conservation assistance.
DIGEST: This bill enables the California Energy Commission
(CEC) to make loans to public agencies for energy efficiency
projects to address peak electrical load, whenever that load
occurs.
ANALYSIS:
Current law establishes the Energy Conservation Assistance Act
(ECAA) program, administered by the CEC. Statute authorizes the
CEC to low- or zero-interest loans to certain public agencies -
schools, hospitals, public care institutions, and local
governments - for cost-effective building energy efficiency
projects, as determined by the CEC. Loans made by the CEC
through the ECAA program may not exceed 20 years. Statute
requires the CEC to take steps to solicit loan applications to,
among other things, award loans in regions with high summer peak
loads, with high heating costs, or that have electrical or
natural gas system distribution constraints. (Public Resources
Code §25410 et seq.)
This bill removes the season-specific restriction on the CEC's
ability to take steps to solicit loan applications to awards
loans in regions with high peak loads.
Background
The ECCA program was established more than 30 years ago and is
one of the oldest of California's many programs designed to
SB 726 (Hueso) Page 2 of ?
reduce statewide energy consumption through energy efficiency
measures. The program makes low-interest loans to cover up to
100 percent of a project's costs. Repayment may span up to 20
years. Currently, interest rates vary - 0 percent for K-12
schools, and 1 percent for other eligible public entities. A
loan repayment amount cannot exceed the estimated energy savings
from a funded project. Funding for ECAA loans has been from a
variety of sources over the years, including the General Fund,
the Petroleum Violation Escrow Account, the American Recovery
and Reinvestment Act, tax-exempt revenue bonds, and Proposition
39 - The California Clean Energy Jobs Act of 2012.
Current law requires the CEC to take certain actions to
encourage receipt of ECAA loan applications to do all of the
following:
Encourage an equitable distribution of loans statewide.
Award loans in regions with high summer peak loads, with
high heating costs, or that have electrical or natural gas
system distribution constraints.
Place an emphasis on offering these loans in
disadvantaged communities.
This bill modifies the ECAA goals described in the preceding
bullets by removing the word "summer" as an adjective to
describe "peak loads." In doing so, the bill broadens the goals
of the ECAA loans to cover any period of peak load, regardless
of the season in which the peak load occurs.
Such a modification of the ECAA program may make sense in the
context of a changing climate. Traditionally, the state's
electrical system has experienced peak load on hot summer days
when high residential and commercial air conditioning use add to
electricity demand. It made sense to focus the efforts of the
ECAA program on summer peak load, given the traditional dynamic
of high summer demand.
However, generation and demand patterns are changing, as is the
climate, and in ways that are difficult to predict. It is
likely that some public areas of the state will experience peak
loads in seasons other than summer. Yet, the imperative of
energy efficiency remains. In such an atmosphere of change, it
makes sense to allow the CEC the flexibility to take actions to
encourage receipt of ECAA loans that address peak load,
regardless of the season in which that peak load occurs.
SB 726 (Hueso) Page 3 of ?
Prior/Related Legislation
None.
FISCAL EFFECT: Appropriation: No Fiscal
Com.: Yes Local: No
SUPPORT:
None on file.
OPPOSITION:
None on file.
ARGUMENTS IN SUPPORT: The author contends that, given the
changing patterns of electricity generation and demand, as well
as the changing climate, the CEC should be given the flexibility
to encourage solicitation of ECAA loans that reduce peak demand,
whenever that demand occurs.
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