BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1186|
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THIRD READING
Bill No: AB 1186
Author: Skinner (D)
Amended: 8/6/12 in Senate
Vote: 21
SENATE ENERGY, UTILITIES & COMMUNIC. COMM. : 8-3, 6/19/12
AYES: Padilla, Corbett, De Le�n, DeSaulnier, Pavley,
Rubio, Simitian, Wright
NOES: Fuller, Berryhill, Emmerson
NO VOTE RECORDED: Kehoe, Strickland
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 5-2, 7/2/12
AYES: Simitian, Hancock, Kehoe, Lowenthal, Pavley
NOES: Strickland, Blakeslee
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : Not relevant
SUBJECT : Investor-owned utilities: school energy
efficiency
SOURCE : Superintendent of Public Instruction, Tom
Torlakson
Coalition for Adequate School Housing
School Energy Coalition
State Building & Construction Trades Council
CONTINUED
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DIGEST : This bill requires the Public Utilities
Commission (PUC) to establish a program to award grants to
K-12 public schools for energy efficiency improvements.
The PUC would be required to direct gas and electrical
corporations to implement that program within their
respective service areas.
ANALYSIS : Existing law requires the PUC has regulatory
authority over public utilities, including electrical
corporations and gas corporations and authorizes the
commission to fix just and reasonable rates and charges.
This bill requires the PUC to hold a proceeding to
establish a program to award grants to public schools
providing instruction in kindergarten or grades 1 to 12,
inclusive, for energy efficiency improvements including,
but not limited to, advanced controls, lighting, upgrades
to heating, ventilation, and air-conditioning systems, as
well as hot water and kitchen appliances. This bill
requires the PUC to direct gas corporations and electrical
corporations to implement that program within their
respective service areas.
Background
The state currently administers several multiple energy
efficiency programs, including those specifically targeted
to K-12 schools. These programs are administered by the
PUC, the California Energy Commission (CEC), and the Office
of Public School Construction.
The PUC issued a decision on May 10, 2012, establishing the
parameters by which electrical corporations will design
their efficiency programs 2013-2014, and includes specific
reference toward encouraging investment in municipalities,
universities, colleges, schools, and hospitals, but does
not make specific guidance on what level of funding should
be directed to schools. Those investment plans and budgets
were due to the PUC in July.
The CEC administers the Energy Conservation Assistance Act
which makes low interest loans for energy efficiency and
renewable energy to public schools, public hospitals and
local jurisdictions. Loans do not become due until energy
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cost savings have occurred and are repaid from those cost
savings. According to the CEC, the program has issued 320
loans to schools totaling $45.1 million.
The School Facilities Program Modernization Program
provides bond funds on a 60/40 state and local match for
improvements to educationally enhance existing school
facilities. New construction is a 50/50 match. Projects
eligible under this program include modifications such as
air conditioning, plumbing, lighting, and electrical
systems. There is $267.4 million in modernization bond
funding remaining with new applications for funding in
excess of that amount pending before the Office of Public
School Construction.
School districts are permitted to use deferred maintenance
funds for energy efficiency projects. Prior to 2009, the
deferred maintenance program provides General Funds on a
50/50 state and local match. Since 2009, districts have
been deemed in compliance with funding requirements and
have, therefore, not needed to match the state's share.
This is part of the categorical relief provided to school
districts allowing the use of these funds for any
educational purpose. The 2012 Budget Act appropriated
$313 million for deferred maintenance.
The 2012 Budget Act estimates that cap-and-trade revenues
from the first set of auctions will be $1 billion in
2012-13. Actual revenues will not be known until the
auctions have been completed.
SB 1018 (Senate Budget Committee), Chapter 39, Statutes of
2012, establishes the Greenhouse Gas Reduction Fund and
would require any money collected by the Air Resources
Board from the auction or sale of allowances pursuant to a
market-based compliance mechanism to be deposited in the
fund. It also specifies that the fund be appropriated in
the annual Budget Act and requires the Department of
Finance to submit to the Legislature a proposal for
expenditure of the fund, unless the Legislature passes a
bill before August 31, 2012, specifying a process for
establishing a long-term spending plan that includes: a)
criteria and requirements for the use of the auction
proceeds, b) establishment of program categories eligible
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for funding, and c) the specification of the process that
ARB use to develop the strategy. SB 1018 further requires
agencies expending moneys from the fund to prepare a record
describing the uses of the funds, how they further the
goals of the California Global Warming Solutions Act of
2006 (CGWSA), including attainment of the 2020 limit, how
non-GHG emissions objectives of the CGSWA were considered,
and a description of how the agency will document the
results of the expenditure.
The PUC will receive approximately 65.2 million allowances
for auction, which are scheduled for November, 2012,
February 2013 and May 2013. If the allowances are sold for
$10.00 each, the PUC will have up $652 million available to
be credited directly to the residential, small business,
and emissions (energy) intensive trade expose retail
customers of the electrical corporations. The PUC shall
allocate up to 15 percent of the revenues for clean energy
and energy efficiency projects established pursuant to
statute that are administered by electrical corporations
and that are not otherwise funded by another funding
source.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, $250,000
in 2012-13 and 2013-14 from the Public Utilities
Reimbursement Account for a proceeding to establish a grant
program.
$115,000 annually from the Public Utilities Reimbursement
Account to award and monitor grants.
Unknown, up to $98 million annually from the Greenhouse
Gas Reduction Fund; actual revenues will not be known
until auctions have been completed.
SUPPORT : (Verified 8/20/12)
Superintendent of Public Instruction, Tom Torlakson
(co-source)
Coalition for Adequate School Housing (co-source)
School Energy Coalition (co-source)
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State Building & Construction Trades Council (co-source)
Advancement Project
Black Women for Wellness
Bonita Unified School District
Breathe California
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Teachers Association
Community Coalition
County Schools Facilities Consortium
Ella Baker Center for Human Rights
Environmental Defense Fund
Fagen Friedman & Fulfrost, LLP
Global Green USA
Homeboy Industries
Korean Resource Center
Los Angeles Community Action Network
Los Angeles Unified School District
Marysville Joint Unified School District
McKinstry
Oakland Unified School District
Partnership for Children & Youth
PMSM Architects
West Contra Costa Unified School District
Western States Council of Sheet Metal Workers
William C. Velasquez Institute
OPPOSITION : (Verified 8/17/12)
Sempra Energy Utilities
ARGUMENTS IN SUPPORT : School Energy Coalition writes:
AB 1186 would achieve multiple purposes by providing
funding to schools for more efficient energy systems
and moving the state forward in attaining AB 32 goals.
This will provide the environmental improvements
sought through AB 32 while the savings on schools
generate on energy bills may be used for other general
fund purposes such as teacher support, equipment and
student books and supplies. There are over 1,000
school districts in the state, most with buildings
that are over 40 years of age. The installation of
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these systems for schools also creates green jobs to
the benefit of the broader local community and the
savings from these investments provide a return to
California's students who are the workforce of
tomorrow.
In essence, these dollars would create a fiscal
"ripple effect" that goes beyond funding the initial
system upgrade to the benefit of students, teachers
and workers.
ARGUMENTS IN OPPOSITION : Sempra Energy Utilities (SEU)
writes:
Lack of funds is not the barrier we have seen that
keeps schools from implementing energy efficiency
improvements. Instead, the lack of technical
expertise and, due to budget cuts, lack of staff to
manage the application process for these funds
prevents schools from taking full advantage of energy
efficiency programs. It is not apparent how a grant
program would change this. Grants would pay for
equipment but not the installation. Direct install
pays for equipment and installation while providing
technical assistance throughout the process. This
seems like a more appropriate way to assist schools
with lack of staff and technical expertise.
Finally, AB 1186 does not specify a funding source.
This would leave the door open for the PUC to use
cap-and-trade funds or to pull fund from other energy
efficiency programs which would impact the budgets of
those programs. Alternatively, the PUC could raise
rates to pay for the grant program. SEU would have
concerns about any of these funding sources.
RM:n 8/20/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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