BILL ANALYSIS �
AB 1124
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1124 (Skinner) - As Amended: April 7, 2011
SUBJECT : Energy: Low-Income Energy Efficiency Program.
SUMMARY : Adds furnaces and water heating systems to the list of
eligible energy efficiency (EE) improvements through the
Low-Income Energy Efficiency (LIEE) Program. Specifically, this
bill :
1) Defines "low-income multifamily rental apartment building"
for this section of code as a building that meets all of the
following requirements prior to receiving assistance: (a) has
at least five dwelling units; (b) at least 66 percent of the
total dwelling units are occupied by households with incomes
below 200 percent of the federal poverty level (FPL);(c) a deed
restriction or affordability covenant is held by a federal,
state, or local governmental entity that ensures that the
required percentage of units will be available at an affordable
rent for a period of at least 15 years following the
installation of EE improvements.
2) Requires the California Public Utilities Commission (PUC) to
establish certification requirements to implement this
subdivision "consistent with" the United States Department of
Energy's Weatherization Assistance Program (WAP) for Low-Income
Persons.
3) Requires the PUC to ensure that low-income multifamily rental
apartment buildings receive assistance pursuant to the
Low-Income Energy Efficiency (LIEE) program, a successor
program, or other EE program under its jurisdiction for EE
furnaces and water heating systems and energy audit recommended
EE measures in common areas.
4) Specifies that financial assistance for these measures shall
be 100 percent of the cost of the improvement less a percentage
equal to the percent of total dwelling units not occupied by
households with incomes 200 percent of the federal poverty
level.
5) Requires the PUC mandate the LIEE Program, as implemented by
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an electrical corporation or gas corporation, to use a whole
building, performance-based approach based on site-specific
measures recommended by an energy audit of the building; provide
a single point of entry for low-income multifamily rental
apartment building residents so that they can efficiently and
effectively access the LIEE program and other EE program
resources; and, eliminate barriers to accessing energy retrofit
programs for owners of low-income multifamily rental apartment
buildings when serving low-income multifamily rental apartment
buildings.
6) States it is the intent of the Legislature to do all of the
following:
a) Promote the investment of existing ratepayer energy
efficiency (EE) funds to increase the efficiency of furnace
and water heating systems in multifamily rental apartment
buildings occupied by low-income households to achieve the
maximum potential energy savings in the residential sector.
b) Promote the use of ratepayer funds to pay for EE heating
and water heater systems in multifamily rental apartment
buildings as defined and in particular in those that have
contracts with federal, state, or local governmental
agencies that require them to serve low-income households
in a majority of the units for not less than 30 years.
c) Modify the application of CPUC Decision 07-12-051,
insofar as these decisions disallowed the repair or
replacement of furnaces and water heaters through the LIEE
or other residential energy efficiency programs under the
CPUC's jurisdiction.
7) Makes Legislative findings.
EXISTING LAW :
1)Requires utilities to provide weatherization assistance to
low-income customers to reduce energy related hardships.
2)States that PUC has regulatory authority over public
utilities.
3)Authorizes PUC to fix the rates and charges for every public
utility and requires those rates and charges to be just and
reasonable.
4)Requires PUC to establish a program of assistance to
low-income electric and gas customers; the cost of which is
not to be borne solely by any single customer class.
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5)Requires PUC to create the California Alternative Rates for
Energy (CARE) program to assistance low-income electric and
gas customers and requires the PUC to ensure that the level of
discount for low-income electric and gas customers correctly
reflects the level of need.
6)Authorizes rebates, grants or loans for installation of solar
water heaters on low-income residential housing.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, this bill would allow the
use of ratepayer energy efficiency funds for heating and hot
water systems and common-area energy efficiency measures in
low-income multifamily rental apartment buildings. The PUC
restrictions on the Low-Income Energy Efficiency (LIEE) program
prevent the replacement or repair of heating and cooling systems
in multifamily rental apartment buildings. The author states
"forty-three percent of low-income households that are eligible
for the LIEE program live in multifamily buildings, such as
apartments. Current rules allow only minor adjustments of
heating and cooling systems generating minimal energy savings.
As a result, many low-income Californians are effectively denied
the most impactful benefits of the program, and California
ratepayers are denied a substantial conservation opportunity. "
Background : According to the PUC, more than 5.5 million
households qualify for utility low-income programs and many of
those households are barely able or unable to pay their
energy bills. According to the PUC, of the 5.5 million customers
in California who qualify for Low Income Energy Efficiency
(LIEE) programs, less than 170,000 received LIEE measures in
2006 and only 1.6 million have been served in the past ten
years. In December 2007, the PUC modified its program to
(D.07-12-051) to enable the investor owned utilities (IOUs) to
provide services to more eligible customers. LIEE programs are
funded via a public purpose program surcharge paid by
non-participating ratepayers.
PUC Directed Programs : The California Alternative Rates for
Energy (CARE) Program provides a 20% discount on monthly
electric and gas bills for qualified low-income customers and
master-metered housing (master-metered housing qualifies only if
the property managers pass the CARE discount through to the
tenants). Qualifications are based on the number of people
living in the home and the total annual household income. The
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CPUC determines the appropriate level of funding and
qualifications. The income levels to qualify for CARE, (in
effect through May 31, 2011) are:
$31,300 for a household of 1-2; $36,800 for a household of 3;
$44,400 for a household of 4; $52,000 for a household of 5;
$59,600 for a household of 6; and $7,600 for each additional
individual.
Customers may also be eligible for CARE if they are enrolled in
public assistance programs such as Medicaid/Medi-Cal; Women,
Infants and Children Program (WIC); Healthy Families A & B;
National School Lunch's Free Lunch Program (NSL); Food
Stamps/SNAP; Low Income Home Energy Assistance Program (LIHEAP);
Head Start Income Eligible (Tribal Only); Supplemental Security
Income (SSI); Bureau of Indian Affairs General Assistance; and,
Temporary Assistance for Needy Families (TANF) or Tribal TANF.
The Low-Income Energy Efficiency (LIEE) initiative began in the
1980s when the PUC instituted EE programs in response to the
energy crisis of the 1970s. The PUC broadened these programs in
1981 to encourage participation by renters, the elderly, and
low-income or non-English speaking persons. It subsequently
ordered Pacific Gas & Electric (PG&E) and Southern California
Gas Company (SoCalGas) to offer low-income customers $200 in
credit for EE installations and San Diego Gas & Electric (SDG&E)
to provide free weatherization.
The investor owned utilities' LIEE programs provide substantial
energy savings and reduce the bills of program participants.
Average lifecycle bill savings from the 2006 programs are
estimated to be more than $703 a year in PG&E's territory, $669
a year for SDG&E, $780 a year for Southern California Edison
(SCE) and $196 a year for SoCalGas. Cumulative energy savings
in 2006 were about 13.8 megawatts (MW), 60 million kilowatt
hours and 2.57 million therms.
The Energy Savings Assistance (ESA) Program : The ESA provides
no-cost weatherization services (attic insulation, energy
efficient refrigerators, energy efficient furnaces,
weather-stripping, caulking, low-flow showerheads, water heater
blankets, and door and building envelope repairs). The income
levels effective June 1, 2010 through May 31, 2011 are the same
as CARE.
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On Sept. 18, 2008, the CPUC adopted its first Long Term Energy
Efficiency Strategic Plan (Plan) to be a single roadmap to
achieve energy savings across all major groups and sectors in
California. The Plan had marketing, education, and outreach
(ME&O) components to increase consumer awareness and
participation in demand-side management activities and to
encourage behavior changes that save energy, reduce greenhouse
gas emissions, and support clean energy solutions.
To that end, the "Engage 360" brand was developed through a
year-long process between PUC staff and the IOUs. Additionally,
the PUC developed a new statewide brand name for its low income
energy efficiency program: the Energy Savings Assistance Program
(ESAP) - providing weatherization and energy efficient measures
to income-qualified households.
Federal Program : The Weatherization Assistance (WAP) Program was
created 1976 and is administered by the Department of Energy
(DOE). The program was designed to save imported oil and cut
heating bills for low-income households, including senior
citizens living on fixed incomes and Social Security, who were
especially hard hit by rising energy bills. The program
currently provides a offers a variety of weatherization retrofit
measures. Beginning in 1984, the DOE allowed states to use the
WAP funding to provide energy efficiency improvements to space
heating and water heating systems. In 1985, furnace and boiler
replacement was added as an allowed measure.
EE for multifamily units : According to PUC, nearly half of all
eligible low-income households live in multifamily building such
as apartment stock and that 25% of LIEE participants are
multifamily (MF) residents. To qualify an entire building for
the LIEE program, at least 80% of all units must be occupied by
income-qualified households. If this condition is met, then the
other 20% will qualify as well regardless of income.
CPUC has been resistant to funding landlord furnace and water
heater repairs :
"We are not convinced that utility ratepayers should assume the
costs of appliance repairs and replacements. Section 1941.1 of
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the California Civil Code requires landlords to provide space
heating and hot water to renters. California law also requires
landlords to be responsible for certain household repairs, to
assure the unit is habitable and to repair problems that make
the unit uninhabitable. It is the landlord's responsibility to
assure rental property is safe." (pgs. 72-73)
The CPUC broadened the objectives of the LIEE program: On
December 2007, the PUC issued D. 07-12-051, which updated and
expanded its policy direction for LIEE programs to include
measures that may not be cost effective but that may also
promote the quality of life of participating customers.
IOU 2009-2011 LIEE program portfolios : The PUC provided
guidance to the IOUs in their development of a comprehensive
long-term statewide strategic plan as directed in Decision
07-10-032. The PUC directed the IOUs to propose programs and
budgets for their 2009-2011 LIEE applications that would help
them move toward this programmatic initiative and the Plan.
This appears to be the crux of some opposition. The East Los
Angeles Community Union (TELACU) claims to be the largest
Community Development Corporation in the United States and
exists to serve, empower, advance and create self-sufficiency in
low-income communities. In opposition, TELACU writes that the
PUC's Energy Division (ED) recently disseminated its "Energy
Division Recommendations for a Multi-Family Pilot" which appear
to direct the IOUs to prepare in their upcoming ESAP
applications a multi-family pilot program. Further, TELACU
claims the ED's recommendations for the pilot are based on the
multi-family proposal submitted 12-16-10 to PG&E and the ED by
the California Housing Partnership Corporation (CHPC) entitled
"Low Income Energy Efficient (LIEE) Comprehensive Retrofits for
Multifamily Properties."
In D.08-11-031 the PUC authorized a pilot program to provide 250
replacement high-efficiency furnaces, at a budget of $2900 per
unit for residential low income homeowners. (pg. 150) In this
same ruling, the PUC reaffirmed its the position in Decision
07-12-051 stating that "no furnace repair and replacement or
water heater repair or replacement work shall occur in violation
of our holding in D.07-12-051 that heating and water heating in
rental housing are the responsibility of the landlord." (pg. 39)
It is TELACU's opinion that sequestering ESAP funds for the use
of assisted housing owners/developers does little to assist
low-income families and very little to assist the families
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already living in assisted family housing. It fears that the
unintended consequences of AB 1124 will be to take away benefits
currently restricted for low-income families' energy savings and
give those benefits to developers who should be paying for their
own capitol repairs through other means. As owner/developers,
TELACU states it assumes this responsibility for each and every
one of its buildings.
The author and this committee might seek a clarifying amendment
limiting total expenditures on furnace and water heating
replacement to no more than $2,700 per unit served; require the
landlord to pass through bill savings to the tenants; restrict
expenditures to the value of the equipment and installation cost
only (i.e., does not cover the cost of hiring a consultant to
perform an energy audit); and publish data on the installed cost
of these products similar to what is made available through the
CSI program in order to provide monitoring on progress toward
goals .
REGISTERED SUPPORT / OPPOSITION :
Support :
A Community of Friends (ACOF)
Abode Communities
Affordable Housing Associates (AHA)
Asian Neighborhood Design
BRIDGE Housing Corporation
Burbank Housing Development Corporation
California Advocacy Committee of the United States Green
Building Council (USGBC CAC)
California Association of Housing Authorities
California Catholic Conference, Inc.
California Coalition for Rural Housing
California Housing Consortium
California Housing Partnership Corporation (CHPC) (Sponsor)
California Rural Legal Assistance Foundation
Century Housing
Charities Housing
Coalition for Economic Survival
Consolidated Area Housing Authority
County of Los Angeles
Division of Ratepayer Advocates (DRA) (if amended)
EAH Housing
East Bay Asian Local Development Corporation
East Bay Housing Organizations (EBHO)
East Los Angeles Community Corporation
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Ecumenical Association for Housing (EAH)
Eden Housing, Inc.
Emerald Cities Collaborative
Emerald Cities Oakland
Enterprise Community Partners
Global Green USA
Housing Leadership Council of San Mateo
Kennedy Commission
LINC Housing
Little Tokyo Service Center
Los Angeles County Board of Supervisors
Low Income Investment Fund
Mammoth Lakes Housing
Mercy Housing
MidPen Housing
Napa Valley Community Housing
National Housing Law Project
National Housing Trust
Non-Profit Housing Association of Northern California (NPH)
PolicyLink
Sacramento Housing Alliance
Sacramento Mutual Housing Association (SMHA)
San Diego Housing Federation
San Francisco Mayor's Office of Housing
San Francisco Planning and Urban Research Association (SPUR)
Self-Help Enterprises
Southern California Association of Non-Profit Housing (SCANPH)
Tenderloin Neighborhood Development Corporation
Venice Community Housing Corporation
Ward Economic Development Corporation (WEDC)
Western Center on Law and Poverty
Yolo Mutual Housing
Opposition :
American Insulation, Inc.
Association of California Community and Energy Services (ACCES)
CarrollCo
Greenlining Institute
Empire Insulation, Inc.
Energy Efficiency, Inc.
Pacific Energy Policy Center
Pacific Gas and Electric (PG&E)
Pacific Power (unless amended)
San Diego Gas & Electric (SDG&E)
Southern California Gas Company (SCG)
Synergy Companies
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The East Los Angeles Community Union (TELACU)
Analysis Prepared by : DaVina Flemings and Sue Kateley / U. &
C. / (916) 319-2083