Amended in Assembly April 22, 2014

Amended in Assembly March 11, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2017

Introduced by Assembly Member Muratsuchi

February 20, 2014

An act begin insert to add Section 2851.7 to, and end insert to add Chapter 8.1 (commencing with Section 2846) to Part 2 of Division 1 of the Public Utilities Code, relating to energy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2017, as amended, Muratsuchi. Energy: financing: rental properties.

(1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. Existing law authorizes the Public Utilities Commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.

This bill would authorize the commission to require an electrical or gas corporation with 250,000 or more service connections to develop and implement an on-bill repayment program providing financial assistance for energy efficiency improvements for rental properties by allowing for the repayment of the financial assistance to be included in the utility customer’s utility bill. Because a violation of any part of any order, decision, rule, direction, demand, or requirement of the Public Utilities Commission is a crime, this bill would impose a state-mandated local program.

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(2) Decisions of the Public Utilities Commission adopted the California Solar Initiative, which is administered by the state’s electrical corporations pursuant to the regulatory supervision of the commission. The commission is authorized, pursuant to the initiative, to award monetary incentives for solar thermal and solar water heating devices in a total amount up to $100,800,000.

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The Solar Water Heating and Efficiency Act of 2007 requires the Public Utilities Commission, in consultation with the State Energy Resources Conservation and Development Commission, to establish eligibility criteria for solar water heating systems receiving gas customer funded incentives under the act. The act requires the criteria to include eligibility requirements for residential solar water heating systems or solar collectors used in systems for multifamily residential, commercial, government, nonprofit, educational, or industrial water heating systems, as specified.

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This bill would provide that residential solar water heating devices shall be eligible for any energy efficiency rebate program or financing program, or both, offered by a gas corporation for purposes of reducing natural gas demand for water heating.

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(2)

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begin insert ( end insert begin insert 3) end insert  The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Chapter 8.1 (commencing with Section 2846) is
added to Part 2 of Division 1 of the Public Utilities Code, to read:

 

Chapter  8.1. Energy Improvements for Rental Properties

 

2846.  

For the purposes of this chapter, the following the terms
have the following meanings:

(a) “OBR improvement” means an eligible energy efficiency
improvement financed through an OBR obligation.

(b) “OBR obligation” means an obligation to repay a financing
provided to a utility customer by an OBR partner pursuant to an
on-bill repayment program approved by the commission.

(c) “OBR partner” means a person or entity providing financing
for eligible energy efficiency improvements pursuant to an on-bill
repayment program. OBR partners include, but are not limited to,
banks, savings and loan institutions, credit unions, or project
developers. Financing may be provided in the form of a loan, lease,
power purchase agreement, energy service agreement, or other
financing structure approved by the commission.

(d) “On-bill repayment program” or “OBR program” means a
program, which may include one or more pilot test programs,
approved by the commission that enables financing of eligible
energy efficiency improvements for rental properties to be repaid
through OBR repayment charges to be associated with the same
utility account or accounts where savings are anticipated to be
realized as a result of the improvements.

(e) “OBR repayment charge” means a charge, constituting
repayment of all or a portion of any OBR obligation, that is
included on a utility bill in accordance with a commission-approved
utility tariff.

(f) “Utility” means an electrical corporation or gas corporation
that develops, or is required to develop, an on-bill repayment
program.

2846.1.  

(a) The commission may require an electrical
corporation or gas corporation with 250,000 or more service
connections in the state to develop and implement one or more
on-bill repayment programs for eligible energy efficiency
improvements.

(b) A utility shall not implement the on-bill repayment program
without the express approval of the commission.

(c) The commission shall supervise on-bill repayment programs
to ensure that the programs are administered in compliance with
the terms approved by the commission.

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(d) Implementation of any on-bill repayment program shall be
done incrementally, beginning with residents of low-income
housing. For purposes of this subdivision, “low-income housing”
means a residential building that meets all of the following
requirements:

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(1) Is financed or supported with low-income housing tax
credits, tax-exempt mortgage revenue bonds, general obligation
bonds, or local, state, or federal loans, grants, rental assistance,
or operating subsidies.

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(2) Rents charged to lower income households, as defined in
Section 50079.5 of the Health and Safety Code, do not exceed rents
prescribed by applicable law, deed restrictions, regulatory
agreements, or program contracts pursuant to the terms of the
financing or financial assistance.

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(3) Not less that 25 percent of the dwelling units within the
building are designated for occupancy by lower income
households, as defined in Section 50079.5 of the Health and Safety
Code.

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(e) Upon completion of the phase of the program for residents
of low-income housing, the commission shall perform a review to
evaluate how the requirements of this section have been met and
shall make any revisions that it determines are necessary before
authorizing the expansion of the program to residents of other
types of housing.

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2846.2.  

In approving an OBR program, the commission shall
begin delete consider whether end delete begin insert ensure that end insert the program begin delete contains appropriate
rules and criteria including end delete begin insert includes end insert all of the begin delete following: end delete begin insert following
rules and criteria: end insert

(a) (1) Eligibility criteria for the types of energy efficiency
improvements that would be financed by the OBR program.

(2) The commission may include nonenergy reducing
improvements as begin delete an end delete eligible begin delete improvement end delete begin insert improvements end insert for
financing if it deems appropriate.

(b) Rules prohibiting the unauthorized removal from the rental
property of an OBR improvement.

(c) Rules for project inspection and verification services to
ensure economic benefits for tenants of properties with an OBR
begin delete improvement. end delete begin insert improvement, including guidelines for collecting
data and monitoring tenant impacts over time. end insert

(d) Consumer protections for begin delete customers subject to an OBR
repayment charge, including protections that prevent increases in
the number of service terminations, a loan loss reserve, bill
neutrality, and end delete begin insert customers, including preventing increases in the
number of service terminations, requiring a loan loss reserve and
bill neutrality, providing a fair dispute resolution process for
tenants, and establishing end insert other mechanisms deemed appropriate
by the commission.

begin insert

(e) Criteria for determining benchmarks for program success,
including mechanisms for reducing ratepayer support while
maintaining an effective program.

end insert begin insert

(f) Mechanisms to ensure energy savings, including all of the
following requirements:

end insert begin insert

(1) Each OBR improvement is recommended based upon a
performance-based energy audit.

end insert begin insert

(2) An OBR obligation is limited to 90 percent of the energy
savings recommended by a performance-based energy audit.

end insert begin insert

(3) Correct installation of each OBR improvement is verified
by a qualified entity.

end insert begin insert

(4) Energy savings performance of OBR improvements is subject
to monitoring and annual reporting to assist in the implementation
of the consumer protections required by this chapter and in the
evaluation of OBR program energy efficiency performance.

end insert

begin insert

begin insert 2846.3. end insert   

OBR repayment charges shall be subject to the
provisions of subdivision (a) of Section 779.2.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 2851.7 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

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begin insert 2851.7. end insert   

Notwithstanding any other law, residential solar water
heating devices shall be eligible for any energy efficiency rebate
program or financing program, or both, offered by a gas
corporation for purposes of reducing natural gas demand for water
heating.

end insert

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.