BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 904
                                                                  Page  1

          Date of Hearing:   May 18, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 904 (Skinner) - As Amended:  May 10, 2011 

          Policy Committee:                              Utilities and 
          Commerce     Vote:                            14-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              No

           SUMMARY  

          This bill requires the Public Utilities Commission (PUC) to 
          evaluate the efficacy of energy efficiency programs within the 
          commission's jurisdiction. Specifically, this bill requires the 
          PUC, as part of a specified existing proceeding, to ensure that 
          energy efficiency programs under review in that proceeding:

          1)Result in real, absolute reductions in energy consumption.

          2)Examine alternatives to traditional administration, delivery, 
            and evaluation mechanisms for energy efficiency services.

          3)Evaluate alternatives for financing residential retrofits, 
            including heating, ventilation, and air conditioning.

           FISCAL EFFECT  

          Annual special fund costs of $240,000 to $360,000 for two to 
          three senior analyst positions for up to two years to address 
          the subjects outlined above. �Public Utilities Reimbursement 
          Account]

           COMMENTS  

           Purpose  . According to the author, this bill seeks to discover 
          whether energy efficiency programs, which encompass billions of 
          dollars for the investor-owned utilities (IOUs), are run 
          efficiently. The author states that the IOUs have received 
          incentive payments for these programs, even though in the view 
          of the Division of Ratepayer Advocates (DRA) and The Utility 
          Reform Network (TURN), they did not effectively and efficiently 








                                                                  AB 904
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          meet their energy savings goals. 

          Each of California's utilities administers energy efficiency 
          programs designed specifically for their customers' needs. The 
          utilities oversee a set of programs to decrease energy use in 
          lighting and appliances, heating, ventilation, air conditioning 
          (HVAC) systems and motors. The utilities also administer 
          programs that target customers when investment decisions are 
          made during retrofits and renovations and during the new 
          construction on buildings and homes. The retrofits and 
          renovations programs are designed to: 1) increase energy 
          efficient investments at the time of retrofit, renovation, or 
          sale of a home; 2) link interested customers with providers of 
          energy retrofit services, and 3) increase the training of 
          professionals who perform energy efficient retrofits. In 
          September 2009, the PUC approved $3.1 billion in funding for the 
          2010-2012 IOU energy efficiency program cycle. This amount is 
          42% higher than the prior three-year cycle.

          This bill seeks to address whether there exists a more 
          innovative round of policies which can lead to actual reductions 
          in energy consumption throughout the system.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081