BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 1918 - Williams Hearing Date:
June 17, 2014 A
As Amended: June 9, 2014 FISCAL B
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DESCRIPTION
Current law requires the State Energy Resources Conservation and
Development Commission (California Energy Commission or CEC) to
adopt energy efficiency regulations applicable to new
construction and remodeling of residential and commercial
buildings. (Public Resources Code � 25402 et seq.)
Current law establishes within the Department of Consumer
Affairs the Contractors State License Board (CSLB) and requires
the CSLB to license and regulate California's construction
contractors, investigate complaints against licensed and
unlicensed contractors, issue citations, suspend or revoke
licenses, and seek administrative, criminal, and civil sanctions
against violators. (Business and Professions Code � 7000 et
seq.)
Current law specifies construction work for which a contractor
or building owner is required to obtain a permit from local
building officials and required inspections to ensure that the
work complies with regulations, including energy efficiency
regulations. (Public Resources Code � 25402.1)
Current law requires the CEC to establish a continuing program
of technical assistance to local building departments in the
enforcement of all Title 24 building standards including those
for heating, ventilation, and air conditioning (HVAC). (Public
Resources Code � 25402.1)
This bill requires the CEC in consultation with the CSLB, local
building officials and other stakeholders to identify and
implement methods to simplify processes and procedures related
to compliance with energy efficiency building standards
reflected in Title 24.
This bill requires the California Public Utilities Commission
(CPUC) to expand an existing proceeding to design an enforcement
program to be administered by investor-owned utilities (IOUs) or
its program administrators to provide technical and financial
assistance to local governments to improve HVAC compliance with
the permitting process for heating and cooling equipment.
BACKGROUND
HVAC Inefficiency - As much as half of residential energy
consumption is attributed to heating and cooling and the U.S.
Environmental Protection Agency reports that "nearly half of all
heating and cooling equipment in U.S. homes never performs to
its advertised capacity and efficiency due to incorrect
installation, which means homeowners pay higher operating costs
over the life of the equipment."
California research also reveals that the full potential of
California's building energy efficiency policies are not being
realized because the effectiveness of these standards is
dependent on compliance. For building code violations, there is
reportedly a particularly prevalent problem of contractors,
often unlicensed, who are doing HVAC improvements without
pulling the proper permits at local building departments, so
there is no way to determine whether energy efficiency
improvements are being done according to code. The CEC
estimates that only 10% of replacement HVAC work is performed
with proper building permits, leaving the state hamstrung in its
ability to ensure the minimum performance standards and deliver
HVAC energy savings. Violations of these standards not only
threaten energy savings, they also result in a substantial
financial loss to consumers who purchase energy efficiency goods
and services, and represent unfair competition that dramatically
impacts the viability of legitimate businesses.
HVAC Efficiency Goals - The California Long Term Energy
Efficiency Strategic Plan adopted by the CPUC in 2008, is
intended as a roadmap to achieve maximum energy savings across
all major groups and sectors in California through 2020. It is
the state's first integrated framework of goals and strategies
for saving energy, covering government, utility, and private
sector actions, and holds energy efficiency to its role as the
highest priority resource in meeting California's energy needs.
The plan sets four goals for the HVAC sector:
Consistent and effective compliance, enforcement, and
verification of applicable building and appliance
standards;
Quality HVAC installation and maintenance becomes the
norm. The marketplace understands and values the
performance benefits of quality installation and
maintenance;
Building industry design and construction practices that
fully integrate building performance to reduce cooling and
heating loads; and
Develop new hot/dry climate HVAC technologies (equipment
and controls, including system diagnostics) and greatly
accelerate their marketplace penetration.
CPUC/IOU HVAC Efforts - In the most recent energy efficiency
program cycle, for 2013-14, the CPUC approved $117 million in
program funds to promote energy efficiency and peak load
reduction in the residential and small commercial HVAC market
with the intended goal of achieving 186 million kWh in
electricity savings, 61,000 kWh in demand reduction and gas
savings of 169,000 therms.
The IOU programs include:
Rebates or incentives when the customer certifies that
they have used a licensed contractor, and have followed
permitting requirements for the installation;
HVAC training to local agency building department staff
(including "plan examiners") to speed up permit issuance
time and improve accuracy;
Local Government Partnership programs designed to
proactively work with municipalities to promote and create
energy efficiency, energy-conservation and demand response
opportunities, including HVAC installations; and
Public Outreach/Technical Support/Computer Based
Permitting Tools through the production of HVAC fact sheets
and trigger sheets which are easy-to-understand guides to
assist both customers and local agency staff in determining
if proposed repair/addition/alteration to HVAC triggers the
need for a permit.
Specifically, the IOUs have allocated $2.8 million for an HVAC
compliance pilot "to code" incentives in the hotter climate
zones (climate zones 9-16) in 2013 and 2014. The program
"design identifies key decision points in the process that are
common for all change-outs and provides financial incentives" to
distributors or retailers and to encourage permit-pulls by
contractors and customers to finalize and close permits as well
as defray some of the cost from obtaining and finalizing a
permit.
CEC HVAC Efforts - As mandated, the CEC provides extensive free
training opportunities for local government official for the
2008 and 2013 residential and nonresidential energy efficiency
building standards and in code compliance. Programs include the
training of local officials in building technology and
enforcement procedures related to energy conservation, and the
development of complementary training programs conducted by
local governments, educational institutions, and other public or
private entities. The technical assistance program includes the
preparation and publication of forms and procedures for local
building departments in performing the review of building plans
and specifications. The CEC specifically reports that it:
Provides a telephone-and-email hotline that building
departments can call to ask how the standards apply to
specific construction projects;
Publishes an electronic newsletter that provides
information related to frequently asked questions and about
new provisions of the Standards;
Provides fact sheets regarding specific aspects of the
Standards; and
Provides some training to local building departments on
request.
The CEC also works extensively with the CSLB to inform
contractors about requirements under the building standards that
affect the building industry. They help contractors comply with
requirements under the building code, provide training on code
changes, assist contractors in filling out the appropriate
forms, use compliance manuals, and increase energy efficiency
savings statewide.
COMMENTS
1. Author's Purpose . The primary issue AB 1918 attempts to
address are the lost energy savings from improperly
installed and uninspected HVAC. The full potential of our
building efficiency policies are not being realized because
the effectiveness of these standards is dependent on
compliance.
As an added stressor, California building codes are
progressively becoming more complex, necessitating more
training and education for building officials performing
permitting, plan-checking, and inspections. Providing this
education in tandem with incentives for beyond-code
performance will motivate both local building departments
and contractors to prioritize energy efficiency performance
in their day-to-day operations.
To address this multifactorial problem, AB 1918 requires
the CPUC consider a program to create an incentive program
primarily for local governments to improve building code
compliance. The program elements are varied, but target
those actions that have been identified in some form or
another in either stakeholder discussions or in HVAC Action
Plan as strategies for improving code compliance. For
example, an online permitting system could decrease the
wait time for a permit. In fact, El Centro, Oakley,
Antioch, Fairfield, Big Bear, Napa, Plumas and Vacaville
were at one point experimenting with online permitting.
It's not clear, however, if those cities are still offering
online permits.
2. Current Efforts Address the Problem . The CEC, CPUC, and
the state's electric and gas utilities have dedicated a
great deal of resources to addressing the issue of local
compliance with the Title 24 building standards which
embody the HVAC standards. Heightened awareness of lax
compliance with HVAC standards has fueled several
significant initiatives to address the same problem this
bill seeks to address which are outlined in the background
above.
To some degree the bill restates the current charge and
efforts of the CEC, CPUC, and IOUs to enhance compliance
with HVAC codes to which the CPUC alone has dedicated more
than $117 million of gas and electric ratepayer funds in
the current two-year energy efficiency portfolio. The new
consideration proffered is that the CPUC consider using
electric and gas ratepayer funds to finance local
government permit compliance work including on-line
permitting. The funding of local building departments is
traditionally the responsibility of those local governments
and supported with building permit fees. The
appropriateness of using ratepayer funds for this purpose
is not apparent.
There are more than 500 local government agencies
responsible for residential and commercial building
permits.
The author opines that:
?current programs do not go far enough and do not
include any consultation or coordination with the
local governments, and the entirety of the funding
goes solely to addressing financial concerns among two
of the market players. The full extent of the problem
includes many other considerations, including lack of
homeowner knowledge about permit requirements, lack of
homeowner understanding about long term costs, lack of
resources at the local government to streamline or
improve the permitting process, inadequate oversight
of contractor license verification, and a need for a
more integrated relationship between contractors and
building departments. Local governments understand
these issues well, but lack a voice at the CPUC in the
development and consideration of pilots such as these.
This bill would establish the importance of local
governments in developing and implementing solutions
to this problem, and ensure that investor owned
utilities and city/county governments work together in
a way that builds on the advantages and roles of each.
ASSEMBLY VOTES
Assembly Floor (64-15)
Assembly Appropriations Committee (12-5)
Assembly Utilities and Commerce Committee
(10-3)
POSITIONS
Sponsor:
Natural Resources Defense Council
United States Green Building Council
Western States Council Sheet Metal, Air, Rail & Transportation
Support:
BlueGreen Alliance
Breathe California
California Apartment Association
California Building Industry Association
California Business Properties Association
California's Coalition for Adequate School Housing
California State Council of Electrical Workers
California State Pipe Trades Council
Joint Committee on Energy and Environmental Policy
Rising Sun Energy Center
Sierra Club California
Western States Council of the Sheet Metal Workers
Oppose:
None on file
Kellie Smith
AB 1918 Analysis
Hearing Date: June 17, 2014