BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 343 - De León Hearing Date:
May 3, 2011 S
As Amended: April 25, 2011 FISCAL B
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DESCRIPTION
Current law sets targets for the state's utilities, in procuring
energy, to first meet their resource needs through
cost-effective energy efficiency and demand reduction resources
before renewable and conventional generation.
Current law that sunsets January 1, 2012, requires the CPUC to
require each investor owned utility (IOU) to assess as a
ratepayer surcharge, commonly known as the Public Goods Charge
(PGC), $228 million per year for energy efficiency and
conservation activities, $65.5 million for renewable energy, and
$62.5 million per year for research, development and
demonstration.
Current law requires the $65.5 million of the PGC for renewable
energy to be deposited into the Renewable Resources Trust Fund
(RRTF) for renewable energy resources programs administered by
the California Energy Resources Conservation and Development
Commission (CEC).
This bill would require the CEC to expend, upon appropriation by
the Legislature, an unspecified amount of the funding in the
Emerging Renewable Resources Account of the RRTF for energy
efficiency retrofits for commercial buildings.
Current law requires publicly owned utilities (POUs) to collect
a PGC and gives them discretion to use it to fund programs for
any or all of energy efficiency, renewable energy, energy
research, and rate discounts and other services for low-income
customers.
This bill would require each POU to dedicate a portion of funds
collected for energy efficiency to a program for energy
efficiency retrofits for commercial buildings.
Current law requires the CPUC, by December 31, 2020, to ensure
that low-income customers eligible for reduced rates are given
the opportunity to participate in low-income energy efficiency
programs, including customers occupying apartments or similar
multiunit residential structures, and requires IOUs to make all
reasonable efforts to coordinate ratepayer-funded programs with
other energy efficiency programs.
This bill would require IOUs to dedicate an unspecified portion
of the moneys collected for low-income energy efficiency to a
program of grants to be made available on a competitive basis to
community-based organizations (CBOs) for purposes of energy
efficiency retrofits.
This bill would require the CPUC to open a new proceeding or
expand the scope of an existing proceeding to consider
establishment of a program by electrical and gas corporations to
provide on-bill financing for energy efficiency retrofits.
BACKGROUND
Commercial Buildings - Commercial buildings consume more
electricity than any other end-use in California and provide a
major opportunity for achieving energy savings, especially old
buildings that do not meet the state's Title 24 energy
efficiency standards first adopted in 1982. AB 758 (Skinner,
2011) required the CEC, by March 1, 2010, to open a proceeding
to develop a comprehensive program to achieve greater energy
savings in the state's residential and nonresidential building
stock. To date, the CEC has authorized pilot programs,
including commercial building retrofits, to determine how best
to achieve cost-effective savings. Information from CEC states
that its plan will incorporate the commercial building energy
use disclosure requirements mandated by AB 1103 (Saldana, 2007),
for which implementing regulations are pending, as well as a
system of energy assessments and ratings for commercial
buildings that are being developed. In September 2009, the
CPUC opened a proceeding to investigate the ability of utilities
to provide energy efficiency financing options to implement the
CEC's AB 758 program, as required by that legislation
(D.09-09-047). The CPUC expects a comprehensive energy
efficiency financing report to be released by the end of June.
PGC for Energy Efficiency - The $228 million in PGC funds for
energy efficiency is retained by the IOUs and is the base of the
budgets for their energy efficiency programs approved in
three-year cycles by the CPUC and supplemented with funding from
rates. The IOUs' total annual energy efficiency program cost is
about $1 billion. According to the CPUC, about 29 percent of
IOU energy efficiency budgets for the 2010-2012 program cycle
are for commercial buildings with a variety of offerings for
whole-building retrofits.
COMMENTS
1. Author's Purpose . According to the author, the intent
of this bill it to require that a portion of all funding
for energy efficiency under existing programs be dedicated
to energy efficiency retrofits for commercial buildings.
2. Commercial Energy Efficiency Retrofits . This bill would
require the CEC to dedicate an unspecified amount of
funding in the Emerging Renewable Resources Account in the
RRTF to a program for energy efficiency retrofits for
commercial buildings. The Emerging Renewables program, for
which this account is intended, is for fostering the
development of wind and fuel cell technologies in
distributed applications and not for energy efficiency.
The author indicates that the intent of the bill is to
provide CEC discretion to develop and administer this new
program upon appropriation of RRTF funds for this purpose.
Current law requiring the PGC that funds the RRTF sunsets
on January 1, 2012.
3. Energy Efficiency Grants for CBOs . This bill appears to
require that IOUs dedicate an unspecified portion of the
moneys collected for low-income energy efficiency programs
to a program of grants to be made available on a
competitive basis to CBOs for purposes of energy efficiency
retrofits. The Low-Income Energy Efficiency (LIEE)
program, recently renamed the Energy Savings Assistance
Program (ESAP), currently offers eligible residents no-cost
weatherization services that include 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. IOUs choose weatherization
contractors through a competitive process. In addition,
IOUs already use CBOs as an effective means to implement
energy efficiency programs that are part of their
portfolios approved by the CPUC, especially to reach
populations where culture and language may present a
challenge. The CPUC has given IOUs discretion to
administer these programs and select contractors that best
meet the needs of their service territories. If it is the
author's intent to make energy efficiency retrofits part of
the no-cost services available under ESAP, then the author
and committee may wish to consider amending the bill to
require each IOU to identify and develop a plan for
offering ESAP-eligible customers energy efficiency
retrofits, in coordination with their energy efficiency
portfolios, which may include contracting with CBOs.
4. POUs and Energy Efficiency . This bill requires the POUs
to dedicate a portion of funds they collect for energy
efficiency for retrofits for commercial buildings. Current
law gives POUs discretion to spend their PGC on any of the
four program areas identified, one of which is energy
efficiency. No other law requires POUs to collect funding
specifically for energy efficiency. To achieve his
intended purpose, the author has indicated he would accept
a technical amendment to clarify that the bill would
require POUs to dedicate a portion of PGC funds for energy
efficiency retrofits for commercial buildings.
The California Municipal Utilities Association (CMUA)
argues that POUs should retain flexibility to determine how
their PGC funds are spent based on the needs of their
service territories. CMUA also claims that this bill is
unnecessary because POUs already are making investments in
energy efficiency upgrades for commercial buildings. POU
reports to the CEC on their energy efficiency expenditures
indicate that not all POUs spend PGC funds on energy
efficiency.
5. On-Bill Financing . On-bill financing is a way to
finance energy efficiency upgrades without incurring any
up-front costs. A utility provides customers with
unsecured loans that cover 100 percent of equipment and
installation costs (minus rebates and other incentives) at
0 percent interest. Customers then re-pay the loans
through charges added to their regular utility bills. IOUs
currently offer on-bill financing as part of their energy
efficiency portfolios approved by the CPUC. In addition,
on-bill financing is being reviewed in the pending CPUC
proceeding opened in response to AB 758. Thus, the author
has indicated that he would like to amend the bill to
delete the provisions requiring the CPUC to open a
proceeding on on-bill financing.
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
California Municipal Utilities Association
Jackie Kinney
SB 343 Analysis
Hearing Date: May 3, 2011