BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 758 - Skinner/Bass Hearing Date:
July 7, 2009 A
As Amended: April 14, 2009 FISCAL B
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DESCRIPTION
Current law requires the California Energy Commission (CEC) to
establish criteria for a statewide home energy rating system
(HERS) for residential buildings and to develop an informational
booklet to educate and inform homeowners, rental property
owners, and other parties, about HERS.
Current law requires the California Public Utilities Commission
(CPUC), in consultation with the CEC, to identify all
potentially achievable cost-effective electricity and natural
gas efficiency savings and establish efficiency targets for an
electrical corporation to achieve those targets.
Current law permits the CPUC to require energy conservation
programs for the customers of investor-owned utilities (IOUs)
and requires IOUs to perform home weatherization services for
low-income customers.
This bill requires the CEC by March 1, 2010 to establish a
regulatory proceeding to develop and implement a comprehensive
program to achieve greater energy savings in existing
residential and commercial buildings. The program may include
energy audits, energy efficiency improvements and financing
options.
This bill requires the CPUC to investigate the ability of IOUs
to provide energy efficiency financing options.
Current law requires publicly-owned utilities (POUs) to first
acquire all available energy efficiency and demand reduction
resources that are cost effective, reliable and feasible and to
annually report to the CEC on specified programs and
expenditures.
This bill requires POUs to implement energy efficiency programs
consistent with the Legislature's intent to encourage energy
savings and greenhouse gas reductions and to report annually on
specified achievements.
BACKGROUND
In 2005 the CEC released the report "Options for Energy
Efficiency in Existing Buildings" which included recommended
strategies to increase energy efficiency in existing buildings.
Approximately 75% of California's homes and apartments - more
than 8 million homes - were built prior to the 1982 Building
Standards. This was the first version of the Standards to
include energy performance requirements, sometimes referred to
as the "Second Generation Standards." Prior to that time the
Department of Housing and Community Development had adopted
insulation only standards in 1975 and the CEC had adopted
whole-building prescriptive standards in 1977. On average,
these pre-1982 homes are smaller than new homes and have less
energy-using equipment (such as air conditioning), and hence use
less energy. Many have been upgraded since they were initially
constructed and have been made more efficient through
participation in utility efficiency programs or because of
applicable standards. Generally, though, considerable potential
for increasing the efficiency of energy use in California's
older homes remains untapped. Older commercial buildings in
California, where half of the floor area was built prior to the
first energy standards, are similarly affected by
underinvestment in efficiency.
California's commercial building stock is much more diverse than
the residential stock. Approximately 46 percent of commercial
building space was built before the 1978 building standards.
Large offices, retail and non-refrigerated warehouses represent
approximately half of the total nonresidential space. These data
indicate that over five million square feet of nonresidential
buildings may benefit from efficiency upgrades amounting to
significant further savings.
Based on the CEC analysis the potential cost effective savings
of energy efficiency from electricity and natural gas
represented from 15 to 18 percent of current statewide
consumption in 2005.
COMMENTS
1. Trigger Points - This bill is directed at bringing
energy efficiency improvements to existing residential and
commercial building stock in California. California has
been a leader in energy efficiency. Myriad programs have
been developed which include building standards for new
construction, consumer education, on-line audit tools,
replacing incandescent light bulbs with compact fluorescent
bulbs, motion sensor controls for exterior lighting,
weatherization and appliance efficiency standards.
Additionally, the IOUs have been directed to prepare a
single, comprehensive statewide long-term energy efficiency
plan under broad parameters. The energy efficiency
achievements achieved by these programs to date are not
trivial. While per capita energy consumption across the
United States has increased by more than 50% in the last 35
years, California's consumption has remained flat.
The primary question presented with this bill is whether
and when a focused and thorough energy efficiency audit and
retrofit program should be mandated for existing
residential and commercial buildings. To date energy
efficiency improvements for some commercial buildings occur
through mandated IOU efficiency programs. However those
programs are generally targeted at very large structures
where the IOU can go in and achieve significant efficiency
savings in one stop. In the meantime, efficiency
improvements for existing residential units are generally
limited to generic on-line audits. Rental housing goes
largely untouched. This bill provides broad discretion to
the CEC to develop an audit and retrofit program with
specified limitations including minimizing costs, not
unreasonably or unnecessarily affecting home purchases or
the ability of individuals to rent housing, and not having
an undue economic impact on businesses.
As a result of this bill, the CEC would have authority to
mandate cost-effective audits or improvements on existing
residential and commercial properties including at the time
of sale or a change in leasehold on a property, the
replacement of equipment and components installed on the
premises, and refinancing, remodeling, renovation or
rehabilitation events. Studies have shown that providing
information about each specific building's energy
efficiency potential and access to efficiency programs
would be most effective at those times. These trigger
points are also candidates for mandating the provision of
relevant information and efficiency investments when
appropriate.
2. Potential Program Overlap - The CPUC argues that
provisions of this bill would create confusion over the
roles of the CEC and CPUC and should be clarified to avoid
disrupting currently mandated IOU programs administered by
the CPUC. The author and committee may wish to consider
amending the bill as follows to avoid overlapping functions
between the commissions:
a) Page 3, lines 27-28, strike "expanded
utility energy efficiency programs";
b) Page 4, lines 11-12, strike ",to meet the
statewide reduction targets and goals in subdivision
(b) of Section 381.2 of the Public Utilities Code";
c) Page 4, line 36, after "establishing"
insert "and implementing";
d) Page 5, between lines 20 and 21, insert
"(7) Coordinate with, and avoid duplication of,
existing proceedings of the Public Utilities
commission and programs administered by the
utilities.";
e) Page 5, line 38, after commission" insert
"by opening a new proceeding or amending an existing
proceeding" and strike "open a proceeding"; and
f) Page 6, strike lines 3-11.
1. Technical Amendments - The author has proposed the
following technical amendments to further clarify the bill
and ensure that the program is administered as efficiently
as possible:
a) Change all references in the bill to
non-residential where commercial is used;
b) Page 4, line 22, after "period" insert "or
cost-effectiveness";
c) Page 4, line 39, after "audits," insert
"ratings,";
d) Page 5, line 39, after "electrical" insert
"and gas";
e) Page 6, line 27, strike "9604" and insert
"224.3";
f) Page 6, line 33, after "(b)" strike "A"
and insert "In the report prepared pursuant to
section 9615, each";
g) Page 6, lines 33-34, strike "report
annually to its customers and the Energy Commission"
and insert "include";
h) Page 6, line 38, strike lines 38-40; and
i) Page 7, strike lines 1-6.
4. Related Legislation - In 2008 nearly identical
legislation (AB 2678, Nunez) was approved by this committee
and held in the Senate Appropriations Committee.
ASSEMBLY VOTES
Assembly Floor (50-29)
Assembly Appropriations Committee (12-5)
Assembly Utilities and Commerce Committee
(11-4)
POSITIONS
Sponsor:
Global Green USA
Support:
American Lung Association of California
Breathe California
California Association of REALTORS
California Business Properties Association
Ella Baker Center for Human Rights
Global Green USA
Sacramento Municipal Utility District (if amended)
Sierra Club California
South Coast Air Quality Management District
Southern California Edison (if amended)
The Utility Reform Network (if amended)
Union of Concerned Scientists
US Green Building Council LA
Oppose:
California Municipal Utilities Association
California Public Utilities Commission (unless amended)
Kellie Smith
AB 758 Analysis
Hearing Date: July 7, 2009