BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 2229 - Bradford Hearing Date:
June 23, 2014 A
As Amended: June 16, 2014 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities Commission
(CPUC) to establish energy efficiency procurement targets and
ratepayer-funded programs for electrical and gas corporations.
(Public Utilities Code �� 454.55 and 454.56)
This bill mandates that the CPUC, through 2019, approve
financial incentives for energy efficiency upgrades at military
bases and facilities and United States Coast Guard facilities,
and expedite implementation of energy efficiency measures.
This bill requires that the CPUC enable the achievement of
additional energy goals by the military, including demand
response, self-generation, and energy storage.
This bill requires that if there are not sufficient ratepayer
funds available to achieve the military's energy efficiency
goals, other potential sources of funding should be identified
to supplement funds collected from ratepayers to achieve those
savings goals.
BACKGROUND
Loading Order - The "loading order" guides the state's energy
policies and decisions according to the following order of
priority: (1) decreasing electricity demand by increasing energy
efficiency; (2) responding to energy demand by reducing energy
usage during peak hours; (3) meeting new energy generation needs
with renewable resources; and (4) meeting new energy generation
needs with clean fossil-fueled generation. This policy has been
adopted by the energy agencies - the California Energy
Commission (CEC) and CPUC - and its principles guide all energy
programs.
California Leads Nation in Energy Efficiency - California's
investor-owned utilities (IOUs) administer energy efficiency
programs with ratepayer funds approved by the CPUC. Currently
funded at about $1 billion per year, the programs include a
portfolio of financial incentives, loans, and rebates for
installing energy efficient appliances, lighting, windows, HVAC
systems, whole-house retrofits, and specialized programs aimed
at a variety of sectors. Each IOU has a "Statewide and
Institutional Partnerships" program to provide building
retrofit, commissioning, incentive, training, design advice and
other services to government agencies. The CEC states that
these efficiency programs have helped the state to keep per
capita energy consumption at nearly the same level for more than
35 years whereas those outside the state now consume about 60%
more per capita than in the 1970s. However, since California's
population has grown, electricity use has nearly doubled.
Energy Efficiency Benefits for the Military - According to the
CPUC the IOUs have many programs and partnerships that are
provided to the U.S. military and Coast Guard. Through these
existing programs and partnerships, the military and Coast Guard
are already engaged in pursuing electric and gas efficiency
improvements and facility operators are becoming more educated
about what kinds of efficiency measures needed in their
facilities. The IOUs continue to work with their military and
Coast Guard customers to pursue energy improvements.
Existing IOU programs do target military facilities for
efficiency improvements. In the 2010-12 program cycle, military
facilities in California received over $3.2 million in energy
efficiency incentives for 401 projects at 32 military
facilities.
COMMENTS
1. Author's Purpose . According to the author President
Obama and the Department of Defense have established goals
for military bases to reduce their energy consumption. The
Department of Defense indicates that energy and water
linked to the causes of military casualties and injuries.
As a result, there is a concentrated effort to ensure that
military facilities are doing all they can to capture
energy efficiency opportunities.
As large energy users, military bases are a large group of
customers with similar characteristics by geography and
demography. They can manage, deliver, and oversee their own
programs. They can fill specific gaps in areas that
utilities have not or cannot deliver. AB 2229 provides
military facilities located in California the opportunity
to achieve significant reductions in energy demand
(electricity and natural gas) and help California meet
energy efficiency goals as well as meet the President and
the Department of Defense goals.
2. Been There, Done That . This bill requires development
of a dedicated program to support federal executive orders
for military installations to reduce energy usage. But the
necessity of the bill is not apparent since the IOUs have
dedicated programs to support the military which included
$3.2 million in energy efficiency improvements for 401
projects at 32 facilities in the last program cycle. The
work continues in the current two-year cycle.
The bill takes the current program a step further by
mandating that the IOUs facilitate the military goals for
which the CPUC estimates a cost impact of more than $9
million per year through 2019.
3. Ratepayer Impact . The author expresses his intent that
this mandate not increase funding for existing ratepayers
but to meet the bill's mandate that would require the CPUC
to reduce funding for other existing energy efficiency
priorities regardless of whether the existing program
investments achieve greater energy savings than the
military program. The energy efficiency programs were
initially created not as entitlement programs but as a less
expensive procurement option to meet electric demand and
therefore are intended to get the most electricity savings,
and now environmental benefits, for the ratepayer dollar as
an alternative to new power plants.
4. Goal Setting . In a prior version of this bill, the CPUC
was mandated to require the IOUs to identify all
potentially achievable cost-effective electricity and gas
efficiency savings at military bases and facilities in the
state and establish efficiency targets for electrical
corporations to achieve at military bases and facilities.
This approach would require the IOUs to assist the military
in its goals but not mandate funding. The committee may
wish to consider deleting the mandates of this bill and
instead require the commission and the IOUs to continue
their work and to assist the military in identifying all
potentially achievable cost-effective electricity and gas
efficiency savings at military bases and facilities in the
state and establish efficiency targets for electrical and
gas corporations to achieve at military bases and
facilities.
ASSEMBLY VOTES
Assembly Floor (77-0)
Assembly Appropriations Committee (17-0)
Assembly Utilities and Commerce Committee
(14-0)
POSITIONS
Sponsor:
Author
Support:
Clean Power Campaign
Department of Defense, Regional Environmental Coordinator,
District 9
Pacific Gas and Electric Company, if amended
Oppose:
Office of Ratepayer Advocates
Kellie Smith
AB 2229 Analysis
Hearing Date: June 23, 2014