BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1414|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 1414
Author: Wolk (D), et al.
Amended: 4/12/16
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE: 9-1, 4/19/16
AYES: Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire,
Pavley, Wolk
NOES: Gaines
NO VOTE RECORDED: Morrell
SENATE APPROPRIATIONS COMMITTEE: 5-1, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Nielsen
NO VOTE RECORDED: Bates
SUBJECT: Energy
SOURCE: Author
DIGEST: This bill directs the California Energy Commission
(CEC) to develop a system to track central heating and air
cooling equipment sales and installations to verify compliance
with permitting and other requirements. This bill also
prohibits an investor-owned utility (IOU) from paying out a
rebate or incentive for energy efficiency upgrades unless the
recipient proves closure of regulatory permitting and compliance
with any requirements of the state's building standards for
energy efficiency.
ANALYSIS:
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Existing law:
1)Authorizes the State Building Standards Commission to review
and approve building construction standards proposed by state
agencies, resolve conflict, duplication, and overlap in
construction standards, and ensure highly consistent
construction standards among state and local jurisdictions.
(Health and Safety Code §18930)
2)Requires the CEC to adopt energy efficiency regulations
applicable to new construction and remodeling of residential
and commercial buildings. (Public Resources Code
§25402(b)(1))
3)Establishes within the Department of Consumer Affairs the
Contractors State License Board (CSLB) and requires the CSLB
to license and regulate California's construction contractors,
investigate complaints against licensed and unlicensed
contractors, issue citations, suspend or revoke licenses, and
seek administrative, criminal, and civil sanctions against
violators. (Business and Professions Code §7000)
4)Specifies construction work for which a contractor or building
owner is required to obtain a permit from local building
officials and requires inspections to ensure that the work
complies with regulations, including energy efficiency
regulations. (Business and Professions Code §7030)
5)Requires any rebates or incentives offered by an IOU for an
energy efficiency improvement or installation of energy
efficient components, equipment, or appliances in buildings be
provided only if the recipient of the rebate or incentive
certifies that the improvement or installation has complied
with any applicable permitting requirements and, if a
contractor performed the installation or improvement, that the
contractor holds the appropriate license for the work
performed. (Public Resources Code §399.4(b)(1))
This bill:
1)Requires CEC, in consultation with CSLB, local building
officials, and other stakeholders, to develop a system to
track central heating and air cooling equipment sales and
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installations, statewide, to verify compliance with
permitting, inspection, and equipment testing requirements.
2)Conditions the provision of any rebate or incentive offered by
an IOU for energy efficiency upgrades upon the recipient
providing proof of permit closure and certification of
compliance with California's energy efficiency building
standards.
Background
California's air conditioners use a lot of energy; unpermitted
installations might be rampant. Air conditioning use is common
in California. Today, 95 percent of new homes built in
California include central air conditioning. Our homes are
bigger than they once were, too. As a result, it took seven
times as much energy to power California's air conditioners in
2008 as it did in 1970. Much of the need to power our air
conditioners came at times of peak system demand, traditionally
the most costly, most polluting times to supply electric power.
Yet, according to a document jointly issued by the CEC and the
California Public Utilities Commission, as of 2008, fewer than
10 percent of HVAC [heating, ventilation, and air conditioning]
systems obtained legally required pre-installation local
building permits; 30-50 percent of new central air conditioning
systems were not being properly installed, leading to a 20-30
percent increase in peak energy needed cool the state's
buildings. [California Energy Efficiency Strategic Plan January
2011 Update (http://www.energy.ca.gov/ab758/documents
/CAEnergyEfficiency StrategicPlan_Jan2011.pdf).] The state
energy agencies conclude the installation of cooling systems
without proper permitting "represents a huge lost opportunity
for energy savings."
This bill attempts to provide a method for filling this
information gap. This bill requires CEC, in consultation with
CSLB, local building officials, and other stakeholders, to
develop a system to track central heating and air cooling
equipment sales and installations, statewide. This bill
explicitly state's the purpose of the system to be developed by
CEC: to verify compliance with permitting, inspection, and
equipment testing requirements.
Rebates for bad actors? Current law makes certain requirements
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of any rebate or incentive offered by an IOU for energy
efficiency upgrades. One common type of project for which IOUs
offer rebates or incentives is HVAC installation. Relevant to
this bill, current law requires that, before an IOU provide a
recipient with the rebate or incentive, the recipient certify
(1) the improvement or installation complies with any applicable
permitting requirements and (2) if a contractor performed the
installation or improvement, that the contractor holds the
appropriate license for the work performed. This bill modifies
this process in that it newly requires an applicant for an IOU
rebate or incentive, in addition to the certification described
above, (1) to provide proof of closure of the permit for the
project and (2) to certify that the project or installation
complies with any specifications or requirements in Title 24 of
the California building code (the code section that includes the
CEC's building energy efficiency standards).
Related/Prior Legislation
AB 1918 (Williams, 2014) would have required the CEC, along with
stakeholders, to identify and implement methods to simplify
processes and procedures related to compliance with Title 24
energy efficiency building standards. It also would have
required CPUC to design an enforcement program to provide
technical and financial assistance to local governments to
improve HVAC compliance with the permitting process. The bill
died in the Senate Appropriations Committee.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Unknown, but significant, one-time costs (Energy Resources
Programs Account) to the CEC develop the tracking system.
Ongoing costs of $1.3 million (Energy Resources Programs
Account) to the CEC for staff and system maintenance.
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SUPPORT: (Verified5/27/16)
Building Owners & Managers Association of California
California Apartment Association
California Building Industry Association
California Building Officials
California Business Properties Association
California Retailers Association
California State Pipe Trades Council
Center for Sustainable Energy
International Council of Shopping Centers
NAIOP of California, the Commercial Real Estate Association
Sierra Club California
The Utility Reform Network
U.S. Green Building Council, California
Western States Council of Sheet Metal Workers
OPPOSITION: (Verified5/27/16)
Pacific Gas and Electric Company
San Diego Gas & Electric Company
Silver Shield Heating & Air Conditioning
Southern California Gas Company
ARGUMENTS IN SUPPORT: According to the author, "Program
Administrators (PAs) of energy efficiency programs funded by the
ratepayers of California's three IOUs do not currently require
program participants to demonstrate proof of code compliance to
be eligible for ratepayer incentives. PAs also claim a large
portion of their energy efficiency savings from code compliance.
Research shows that code compliance is low and that the full
energy efficiency savings from code are not being captured.
This requirement would close this loop and ensure that ratepayer
funds are spent on code-compliant projects."
ARGUMENTS IN OPPOSITION:Representatives of the IOUs contend this
bill adds unknown, but potentially significant, administrative
complexity and cost to the energy efficiency rebate programs.
Prepared by:Jay Dickenson / E., U., & C. / (916) 651-4107
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5/28/16 16:46:12
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