BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2339 - Williams Hearing Date:
June 19, 2012 A
As Amended: June 12, 2012 FISCAL B
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DESCRIPTION
Current law establishes the California Energy Commission (CEC)
which is charged with, among other duties, developing energy
policies that conserve resources, protect the environment,
ensure energy reliability, enhance the state's economy, and
protect public health and safety. Those policies are reported
biennially in the Integrated Energy Policy Report (IEPR).
Current law requires the CEC to develop, implement, and
administer a program the Public Interest Energy Research Program
(PIER) the purpose of which is to develop, and help bring to
market, energy technologies that provide increased environmental
benefits, greater system reliability, lower system costs, and
tangible benefits to electric utility customers. PIER was funded
under prior law with a public goods charge of $62.5 million per
year assessed on electric customers in the territories of the
investor-owned utilities (IOUs).
This bill would require the CEC to evaluate and recommend
policies and implementation strategies to overcome barriers to
the deployment of geothermal heat pump and geothermal ground
loop technologies.
BACKGROUND
Geothermal Heat Pump Systems - According to the U.S. Department
of Energy, geothermal heat pumps (sometimes referred to as
GeoExchange, earth-coupled, ground-source, or water-source heat
pumps) have been in use since the late 1940s. Geothermal heat
pumps (GHPs) use the constant temperature of the earth as the
exchange medium instead of the outside air temperature. This
allows the system to reach fairly high efficiencies (300%-600%)
on the coldest of winter nights, compared to 175%-250% for
air-source heat pumps on cool days.
While many parts of the country experience seasonal temperature
extremes - from scorching heat in the summer to sub-zero cold in
the winter - a few feet below the earth's surface the ground
remains at a relatively constant temperature. Depending on
latitude, ground temperatures range from 45?F (7?C) to 75?F
(21?C). Like a cave, this ground temperature is warmer than the
air above it during the winter and cooler than the air in the
summer. The GHP takes advantage of this by exchanging heat with
the earth through a ground heat exchanger.
As with any heat pump, geothermal and water-source heat pumps
are able to heat, cool, and, if so equipped, supply a building
with hot water. Some models of geothermal systems are available
with two-speed compressors and variable fans for more comfort
and energy savings. Relative to air-source heat pumps, they are
quieter, last longer, need little maintenance, and do not depend
on the temperature of the outside air.
Even though the installation price of a geothermal system can be
several times that of an air-source system of the same heating
and cooling capacity, the additional costs are returned to the
consumer in energy savings in 5-10 years. System life is
estimated at 25 years for the inside components and 50+ years
for the ground loop. There are approximately 50,000 geothermal
heat pumps installed in the United States each year.
Benefits of Geothermal Heat Pump Systems - The biggest benefit
of GHPs is that they use 25%-50% less electricity than
conventional heating or cooling systems. This translates into a
GHP using one unit of electricity to move three units of heat
from the earth. According to the Environmental Protection
Agency, geothermal heat pumps can reduce energy consumption -
and corresponding emissions - up to 44% compared to air-source
heat pumps and up to 72% compared to electric resistance heating
with standard air-conditioning equipment. GHPs also improve
humidity control by maintaining about 50% relative indoor
humidity, making GHPs very effective in humid areas.
Integrated Energy Policy Report - The CEC is required to prepare
a biennial integrated energy policy report that contains an
assessment of major energy trends and issues facing the state's
electricity, natural gas, and transportation fuel sectors and
provides policy recommendations to conserve resources; protect
the environment; ensure reliable, secure, and diverse energy
supplies; enhance the state's economy; and protect public health
and safety. The CEC prepares these assessments and associated
policy recommendations every two years as part of the IEPR.
Preparation of the IEPR involves close collaboration with
federal, state, and local agencies and a wide variety of
stakeholders in an extensive public process to identify critical
energy issues and develop strategies to address those issues.
The most recent IEPR included a summary of priority energy
issues currently facing California with strategies and
recommendations to further the state's goal of ensuring
reliable, affordable, and environmentally responsible energy
sources. Energy topics covered in the report include progress
toward statewide renewable energy targets and issues facing
future renewable development; efforts to increase energy
efficiency in existing and new buildings; progress by utilities
in achieving energy efficiency targets and potential; improving
coordination among the state's energy agencies; streamlining
power plant licensing processes; results of preliminary
forecasts of electricity, natural gas, and transportation fuel
supply and demand; future energy infrastructure needs; the need
for research and development efforts to support statewide energy
policies; and issues facing California's nuclear power plants.
Public Interest Energy Research - PIER program has been the
state's energy research development and demonstration program,
advancing science and technology in the fields of energy
efficiency, renewable energy, advanced electricity technologies,
energy-related environmental protection, and transmission and
distribution, and transportation technologies. Historically the
program was funded through the public goods charge the source of
which was a surcharge on electric ratepayers. The authority for
that funding sunset January 1, 2012 and the CEC is transitioning
its research program to conform to action by the California
Public Utilities Commission (CPUC) which authorized a new
surcharge termed the "Electric Program Investment Charge
(EPIC)." The CPUC has directed the investor-owned utilities to
collect from ratepayers and send to the CEC $115 million
annually to fund applied research, technology demonstration and
deployment and market support programs.
COMMENTS
1. Author's Purpose . According to the author AB 2339
requires the CEC to identify and address existing barriers
to the widespread deployment of geothermal heat pumps and
geothermal ground loop technologies. There should be a
statewide effort to identify and address why such readily
available, efficient and cost effective technologies are
not widely used in California.
He further reports that increased deployment of geothermal
heat pumps will reduce the need for fossil fuel powered
peak generation, improve utility load factor, provide
on-site consumer energy savings without the need for
rebates and provide all of the benefits that drive the
desire for renewable energy standards without putting
pressure on electric rates or ratepayer's energy bills.
2. CEC Direction . The bill broadly requires the CEC to
research and develop policy strategies for the expanded use
of GHPs. The CEC has two general programs for research and
policy development - the Public Interest Energy Research
Program and the Integrated Energy Policy Report. However,
the bill does not reference which evaluative tool is to be
used. The approach, funding and outcome of each program
are very different. In this case the IEPR appears to be
the best avenue to achieve the author's purpose which is to
enhance the deployment of use of the technology (IEPR) not
research the technical aspects or effectiveness of the
technology (PIER). Historically the Legislature has not
dictated the use of PIER funds to specified projects
because it sidesteps the integrity of the research process
and the goals of the PIER program as outlined by the
Legislature. Consequently, the committee may wish to
consider amendments that move the directive in this bill
under the rubric and funding of the IEPR.
3. Double Referral . Should this bill be approved by the
committee, it should be re-referred to the Senate Committee
on Environmental Quality for its consideration.
ASSEMBLY VOTES
Assembly Floor (76-0)
Assembly Appropriations Committee (17-0)
Assembly Natural Resources Committee
(9-0)
Assembly Utilities and Commerce Committee
(12-1)
POSITIONS
Sponsor:
California Geothermal Heat Pump Coalition
Support:
Air Connection
Bosch Thermotechnology Corp.
California Groundwater Association
ClimateMaster
Colorado Geo Energy and Heat Pump Association
Crystal Air
Desert GeoExchange
Energy Control Inc.
Enertech Global, LLC
Environmental Defense Center
Gaia Geothermal, LLC
Geothermal Exchange Organization
Geothermal National & International Initiative
Geothermal Resource Group
Ground Source energy NW
HeatSpring Learning Institute
Meline Engineering Corp.
Plumas-Sierra Rural Electric Cooperative
WaterFurnace
Oppose:
None on file
Kellie Smith
AB 2339 Analysis
Hearing Date: June 19, 2012