BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2339|
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THIRD READING
Bill No: AB 2339
Author: Williams (D) and V. Manuel Perez (D)
Amended: 8/22/12 in Senate
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 11-0, 6/19/12
AYES: Padilla, Fuller, Berryhill, Corbett, De Le�n,
DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Wright
NO VOTE RECORDED: Simitian, Strickland
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 7-0, 7/2/12
AYES: Simitian, Strickland, Blakeslee, Hancock, Kehoe,
Lowenthal, Pavley
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/16/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
ASSEMBLY FLOOR : 76-0, 5/29/12 - See last page for vote
SUBJECT : Energy: geothermal technologies
SOURCE : California Geothermal Heat Pump Coalition
DIGEST : This bill, under the Warren-Alquist State Energy
Resources Conservation and Development Act, requires the
California Energy Commission (CEC), in consultation with
the Public Utilities Commission (PUC) and other
stakeholders, to evaluate and recommend policies and
implementation strategies related to overcoming barriers to
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the deployment and use of geothermal heat pumps (GHPs) and
geothermal ground loop technologies (geothermal
technologies). This bill requires the CEC to include those
evaluations and recommendations in the integrated energy
policy report that is required to be adopted for calendar
year 2013.
Senate Floor Amendments of 8/22/12 strike the requirement
that CEC consult with the State Air Resources Board (ARB)
on its evaluation of barriers to the deployment and use of
geothermal technologies.
ANALYSIS : Existing law, under the Warren-Alquist State
Energy Resources Conservation and Development Act:
1. Creates the CEC and requires the CEC, among other
things, to adopt an integrated energy policy report
(IEPR) every two years. The IEPR must contain an
overview of major energy trends and issues facing the
state, including supply, demand, pricing, reliability,
efficiency, and impacts on public health and safety, the
economy, resources, and the environment.
2. Under the California Global Warming Solutions Act of
2006 (CGWSA), requires the ARB to determine the 1990
statewide greenhouse gas (GHG) emissions level and
approve a statewide GHG emissions limit that is
equivalent to that level, to be achieved by 2020 and
specifies certain requirements for achieving that limit.
This bill requires the CEC to include those evaluations and
recommendations in the IERP that is required to be adopted
for calendar year 2013.
In its evaluation, the CEC must consider (1) the
quantitative costs and benefits to ratepayers to more
reliable or less costly gas or electrical service through
the use of geothermal technologies; (2) existing statutory
and permit requirements or other legal impediments that
impact the use of geothermal technologies; (3) the impact
of widespread use of geothermal technologies achieving the
(CGWSA) goals and achieving the state's energy efficiency
goals; and requires the CEC to include the above
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evaluations and recommendations in the IERP that are
required to be adopted for calendar year 2013.
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. 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 percent-600 percent) on the coldest of winter nights,
compared to 175 percent-250 percent 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 GHPs installed in the United States
each year.
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Benefits of GHP Systems . The biggest benefit of GHPs is
that they use 25 percent-50 percent 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 percent compared to air-source heat pumps and up
to 72 percent compared to electric resistance heating with
standard air-conditioning equipment. GHPs also improve
humidity control by maintaining about 50 percent relative
indoor humidity, making GHPs very effective in humid areas.
Integrated Energy Policy Report . The CEC is required to
prepare a biennial IERP 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
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policies; and issues facing California's nuclear power
plants.
Public Interest Energy Research (PIER) . 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 PUC which authorized a new surcharge termed the
"Electric Program Investment Charge." The PUC 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, up to
$100,000 from the Energy Resources Programs Account
(General Fund) for CEC to evaluate and make recommendations
for inclusion in the 2013 report update.
SUPPORT : (Verified 8/23/12)
California Geothermal Heat Pump Coalition (source)
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
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Geothermal National & International Initiative
Geothermal Resource Group
Ground Source Energy NW
HeatSpring Learning Institute
Martin Energetics
Meline Engineering Corp.
Plumas-Sierra Rural Electric Cooperative
Sierra Club California
WaterFurnace
OPPOSITION : (Verified 8/23/12)
Department of Finance
ASSEMBLY FLOOR : 76-0, 5/29/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman,
Halderman, Harkey, Hayashi, Roger Hern�ndez, Hill, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Torres, Valadao, Wagner,
Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Cedillo, Fletcher, Gorell, Hall
RM:d 8/24/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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