BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 1124 - Skinner Hearing Date:
June 19, 2012 A
As Amended: June 12, 2012 Non-FISCAL
B
1
1
2
4
DESCRIPTION
Current law requires California's electric utilities to first
meet their energy needs through all available, feasible, and
cost-effective energy efficiency measures before renewable and
conventional generation.
Current decisions of the California Public Utilities Commission
(CPUC) require investor-owned utilities (IOUs) to administer
energy efficiency programs in multi-year portfolios designed to
meet pre-established energy savings goals and funded by ratepayer
charges, currently at about $1 billion per year.
Current law and CPUC decisions establish the Energy Savings
Assistance Program (ESAP) to provide eligible low-income
households free weatherization and energy efficiency services
administered in multi-year portfolios by the IOUs as approved by
the CPUC and funded by ratepayer charges, currently at about $320
million per year.
Current law requires the CPUC to ensure that by December 31,
2020, all eligible low-income customers are given the opportunity
to participate in ESAP, including customers occupying apartments
or similar multiunit residential structures.
Current law requires multifamily rental housing to maintain
specified characteristics, including adequate heating and hot
water systems, in order to meet health and safety habitability
standards.
This bill provides that the law establishing multifamily
habitability requirements shall not be interpreted to prohibit a
tenant or owner of rental properties from qualifying for heating
and hot water system repair or replacement under a utility energy
efficiency program.
BACKGROUND
LIEE Becomes ESAP - The California Alternate Rate for Energy
(CARE) program provides a minimum 20 percent energy rate discount
to eligible low-income households earning at or below 200 percent
of the federal poverty level. Customers who meet the CARE
requirements also are eligible for the ESAP, formerly known as
Low Income Energy Efficiency (LIEE) program, which provides
no-cost weatherization and other services such as attic
insulation, energy efficient refrigerators, energy efficient
furnaces, weatherstripping, caulking, low-flow showerheads, water
heater blankets, and door and building envelope repairs that
reduce air infiltration.
The ESAP is administered in multi-year portfolios by the IOUs as
approved by the CPUC and funded by ratepayer charges, currently
at about $320 million per year. A proposed decision to approve
the ESAP program elements for the next three-year cycle is
pending before the CPUC.
CPUC Cites Habitability Requirements - In several prior ESAP
decisions the CPUC has denied eligibility for furnace and hot
water repair and replacement in rental buildings. Advocates
claim that these large central systems present the primary
opportunity for significant energy savings in multifamily
buildings. But the CPUC ruled in 2007 and 2008 that these
systems are the responsibility of the landlord, citing the Civil
Code habitability requirements (D.07-12-051 and D.08-11-031).
The CPUC states that the staggering costs of upgrading these
central systems could derail the CPUC from meeting its statutory
mandate to provide energy efficiency measures to all low-income
customers and could result in "over-subsidizing landlords." The
ESAP proposed decision currently pending before the CPUC also
concludes that these systems are the responsibility of landlords
and that their repair and replacement should not be funded by
ratepayers.
Social Justice and Energy Efficiency - Affordable housing
advocates, including the sponsor of this bill, claim that energy
efficiency in multifamily housing is an issue of social justice
and equity as well as energy policy. They claim that low-income
households, especially those residing in multifamily buildings,
represent the greatest need for energy efficiency improvements,
but have a very low participation rate in existing programs.
According to the author, more than one-third of low-income
households that are eligible for ESAP live in multifamily
buildings but get only minimal energy savings from
weatherstripping and limited measures suited to individual rental
units. Thus, these advocates claim that existing programs are
leaving behind the poorest of the poor, who live in the oldest,
least efficient buildings and pay the highest percentage of
household income on energy costs.
Other Energy Efficiency Programs for Multifamily Housing - In
addition to ESAP, the larger energy efficiency programs the IOUs
administer include some programs for multifamily housing. For
example, San Diego Gas and Electric Company and Southern
California Gas Company offer multifamily rebate programs for
common area systems including central water heaters and boilers.
More multifamily programs, including whole building pilot
programs, are pending approval by the CPUC.
COMMENTS
1. Author's Purpose . According to the author, this bill
clarifies that the habitability requirements for rental
housing in the Civil Code have no bearing on public policy
goals to increase energy efficiency in residential housing
and shall not be interpreted to prohibit a tenant or owner
of a rental property from qualifying for heating and hot
water system repair or replacement under ESAP.
2. Removing Legal Barrier . As stated by the sponsor, this
bill is "narrowly focused" to prevent the CPUC from citing
the Civil Code habitability requirements as a reason for
making rental property heating and hot water repair and
replacement ineligible for ESAP measures. The bill makes no
change to habitability requirements.
3. Policy Discretion Remains with CPUC . Other than
eliminating the Civil Code habitability requirements as a
barrier to eligibility in ESAP, this bill makes no change to
law governing the ESAP and does not affect the CPUC's policy
discretion in administering the ESAP and establishing
program criteria consistent with applicable statutory
provisions.
4. Ratepayer Impact . To the extent this bill removes a legal
barrier to large central systems in rental housing eligible
for ESAP funds, and the CPUC exercises its discretion to
make them eligible, this bill could require an increase in
the ratepayer surcharge that funds these programs.
ASSEMBLY VOTES
Assembly Floor (54-21)
Assembly Appropriations Committee (12-5)
Assembly Utilities and Commerce Committee
(11-2)
POSITIONS
Sponsor:
California Housing Partnership Corporation
Support:
BRIDGE Housing Corporation
California Housing Consortium
Century Housing Corporation
Coalition for Economic Survival
East Bay Housing Organizations
Enterprise Community Partners
MidPen Housing Corporation
Napa Valley Community Housing
National Housing Law Project
Non-Profit Housing Association of Northern California
San Diego Housing Federation
Sheet Metal Worker's Local Union #104
Ward Economic Development Corporation
Oppose:
None on file
Jacqueline Kinney
AB 1124 Analysis
Hearing Date: June 19, 2012