BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1918 (Williams) - Energy: design and construction standards.
Amended: June 9, 2014 Policy Vote: EU&C 9-1
Urgency: No Mandate: Yes (see staff comment)
Hearing Date: June 30, 2014 Consultant:
Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1918 would require the California Energy
Commission (CEC) and the California Public Utilities Commission
(CPUC) to take actions and implement programs to improve
compliance with state building standard code compliance.
Fiscal Impact:
Annual costs, likely in the mid- to high- hundreds of
thousands from the Energy Resources Programs Account (General
Fund) to the CEC identify and implement best practices to
improve building permit compliance. Costs include contract
costs in the mid-hundreds of thousands.
One-time costs of approximately $275,000 from the Public
Utilities Commission Utilities Reimbursement Account (special)
to the CPUC to authorize the required program.
Background: Public Resources Code �54402 et seq. requires the
CEC to adopt energy efficiency regulations applicable to new
construction and remodeling of residential and commercial
buildings. The building department of every city and county is
responsible with enforcing these regulations, which are often
referred to as the "Title 24 building standards," generally by
requiring a building a permit. The CEC is required to provide
technical assistance to local building departments to assist in
their enforcement of Title 24 building standards, including
those for heating, ventilation, and air conditioning (HVAC). The
full potential of the energy efficiency policies are dependent
on compliance with Title 24 building standards. However, 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 that the minimum performance standards are
delivering energy savings.
AB 1918 (Williams)
Page 1
The CPUC requires the investor-owned utilities (IOUs) to offer
programs that promote energy efficiency and peak load reduction
in the residential and small commercial HVAC market. In
2013-14, $117 million in program funds were approved, including
$2.8 million in incentives to bring HVAC compliance to code in
the hotter climate zones in 2013 and 2014.
Proposed Law: This bill would require the CEC to identify and
implement methods to simplify processes and procedures related
to compliance with Title 24 standards. The CEC would be required
to consult with the Contractors' State License Board, local
building officials, and other stakeholders in this effort.
This bill would also require the CPUC, by January 1, 2016, to
authorize, through existing energy efficiency programs, a
program to improve compliance with the Title 24 requirements and
any applicable local ordinances for HVAC equipment. This program
may include assistance for local governments in using
"innovative approaches" to increase compliance with HVAC
requirements and technical or financial support for local
government efforts. The CPUC would be required to evaluate the
program design and quantify increased permit compliance and
energy savings as a result of permit compliance.
Staff Comments: Under this bill, the CEC would be required to
first identify what issues are barriers to compliance and to
develop best practices to maximize compliance. These costs are
likely to be in the mid- to high- hundreds of thousands of
dollars, including contract costs in the mid-hundreds of
thousands of dollars for data collection and field work among
the hundreds of building departments throughout the state.
Ongoing costs are unknown as they would depend on the best
practices that the CEC identifies for implementation, though the
CEC estimates that these costs would remain in the mid- to high-
hundreds of thousands of dollars and may including activities
such as establishing online permitting or other streamlined
permitting processes.
The CPUC responsibilities required in this bill would be handled
within the next energy efficiency proceeding but would expand
the scope of that proceeding significantly, thus requiring
one-time costs of approximately $275,000 for one year for an
Administrative Law Judge II and a Public Utilities Regulatory
Analyst III.
AB 1918 (Williams)
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This bill also would impose significant cost pressures as the
program would be authorized to include financial assistance to
local governments to improve compliance with Title 24 building
standards and other applicable local ordinances. These cost
pressures could be very significant as it could include
assistance to help building departments with costs such as
establishing online permitting. Ultimately, this bill implies
that these costs would be borne by ratepayer funds, of which a
portion will be provided by the state as a ratepayer. However,
it is unclear whether the CPUC could establish the justification
necessary to allocate ratepayer funds to support activities of
local building departments. Funding for local building
departments is traditionally the responsibility of local
governments and is provided through building permit fees.
Because a violation of any rule or order of the CPUC is a crime,
by establishing a new requirement of the CPUC, this bill creates
a state-mandate local program. However, under the state
constitution, such a mandate is not reimbursable by the state.