BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 488 - Pavley Hearing Date:
April 27, 2009 S
As Amended: April 14, 2009 FISCAL B
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DESCRIPTION
Current law requires each electrical corporation and each gas
corporation to disclose on the residential customer's billing
statement specified information on usage and cost, and contact
information for the California Public Utilities Commission's
(CPUC) Consumer Affairs Branch, and to make available online to
residential customers specified information on usage and energy
conservation measures.
Current law requires the CPUC, as part of the general rate case
of an electrical corporation or gas corporation, to assess
opportunities to improve the quality of information contained in
the utility's periodic billings.
This bill requires each electrical corporation, gas corporation
and publicly owned electric and gas utility to periodically
disclose on the billing statement of a residential subscriber,
information documenting the amount of energy used by the metered
residence compared to similar residences in the subscriber's
geographical area.
This bill requires each electrical corporation, gas corporation,
and each publicly owned electric utility to identify those
residences that used significantly more energy during the period
than was used by similar residences in the subscriber's
geographical area. The utility shall provide those heavy users
with information on energy saving strategies and programs
available to assist in financing energy efficiency improvements.
BACKGROUND
Energy efficiency is the most cost-effective way in reducing
energy consumption. State energy policies prioritize energy
efficiency as a way to reduce energy usage reducing the need for
new power plants and transmission lines and support multibillion
dollar energy efficiency programs.
The California Energy Commission (CEC) has established
regulations for a Home Energy Rating System (HERS) Program to
certify home energy rating services in California.<1> HERS is a
voluntary program with a goal of providing reliable information
to differentiate the energy efficiency levels among California
homes and to guide investment in cost-effective home energy
efficiency measures.
Academic research suggests that high energy using customers
reduce their energy use when they are presented information
comparing their usage to that of their neighbors. Major
utilities, such as San Diego Gas & Electric, Southern California
Edison, and SMUD already have pilot programs in place that
monitor the energy consumption of a group of customers compared
to a controlled group. Other investor owned and publicly owned
utilities are looking into similar programs. These pilot
programs are too new to have any reported results.
COMMENTS
1. Importance of the Bill - A number of utilities are
already running pilot programs that do this, and are
enjoying considerable success. Last March, SMUD began a
pilot program with 35,000 residents. These customers
receive notices telling them how their energy usage
compares to that of customers of similar size. When
compared to 50,000 homes that didn't receive the notices,
SMUD found that those who received the notices reduced
their energy use by 2.4 percent in April - just one month
after the program started. Households with higher than
average energy use receive specific tips for reducing
energy use, and information about available programs.
2. Pilot Programs Already in Place - Many utilities already
have pilot programs in place, however, a complete analysis
of all the data has not yet been produced and whether the
programs have been completely successful cannot be stated.
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<1> Public Resources Code Section 25942
3. Premature? - Cost of mandating a program that documents
energy consumption may be high. It will cost the utility
approximately $10 per resident per year to have the
statements of energy use mailed to the resident. There will
also be costs incurred by the utilities, and therefore
their customers, for reprogramming, billing messages and/or
data on utility bills, and developing a system to target
high-use customers for additional energy efficient
information. Because the costs and benefits of this
program are not well known, it may be premature to require
all utilities to implement such a program for all their
residential customers. Instead, the author and committee
may wish to consider requiring the utilities to implement
pilot programs, in order for the utilities to incorporate
this program in the best way possible for their customers.
Then, after the completion of the pilot, the CPUC can
determine whether to mandate such programs for the
investor-owned utilities. Similarly, the author and
committee may wish to consider requiring the municipal
utilities to implement pilot programs and report the
outcomes to the CEC. If such programs are successful the
municipal utility will have every incentive to expand it to
its entire residential customer base.
4. Household Size Too - The bill states that similar
residences will be compared within their geographical area.
But that does not consider household size, a major factor
in energy usage. The author and committee may wish to
consider revising the comparison to include homes with
similar household size.
5. "Periodically" Defined - Because this bill would require
utilities to "periodically" disclose on the billing
statement of a residential subscriber, information
documenting the amount of energy used, the term
"periodically" needs to be defined to mean one of the
following: weekly, monthly, annually. The author and
committee may wish to address and define the term
"periodically" in the bill.
POSITIONS
Sponsor:
Author
Support:
American Federation of State, County and Municipal Employees,
AFL-CIO
California Association of Realtors
Coalition of California Utility Employees
Positive Energy
Oppose:
Northern California Power Agency
Melissa Macias
SB 488 Analysis
Hearing Date: April 27, 2009