BILL ANALYSIS                                                                                                                                                                                                    �




                                                                  AB 2581
                                                                  Page A

          ASSEMBLY THIRD READING
          AB 2581 (Bradford)
          As Amended  April 21, 2014
          Majority vote 

           UTILITIES & COMMERCE             13-0                
          APPROPRIATIONS      17-0        
          
           ----------------------------------------------------------------- 
          |Ayes:|Bradford, Patterson,      |Ayes:|Gatto, Bigelow,           |
          |     |Buchanan, Ch�vez, Dahle,  |     |Bocanegra, Bradford, Ian  |
          |     |Fong, Beth Gaines,        |     |Calderon, Campos,         |
          |     |Garcia, Roger Hern�ndez,  |     |Donnelly, Eggman, Gomez,  |
          |     |Jones, Mullin, Rendon,    |     |Holden, Jones, Linder,    |
          |     |Skinner                   |     |Pan, Quirk,               |
          |     |                          |     |Ridley-Thomas, Wagner,    |
          |     |                          |     |Weber                     |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Makes various changes in statutes related to the  
          California Energy Commission's (CEC) adoption and use of  
          appliance and building standards.  Specifically,  this bill  :  

             1)   Adds voluntary agreements to the list of actions CEC may  
               take to promote water and energy efficient appliances.

             2)   Requires CEC to rely upon the most current data  
               available, and when feasible, data that is no older than  
               one year, prior to commencing an appliance standard  
               rulemaking.

             3)   Authorizes CEC to repeal a standard that is duplicative  
               or inconsistent with federal law.

          4)Requires CEC to perform preliminary software tests using  
            examples of common residential and non-residential buildings  
            before approving a public domain computer program to estimate  
            energy consumption.  Requires CEC to make the results publicly  
            available.

          5)Requires CEC to ensure its computer program that estimates  
            energy consumption is publicly available at least six months  
            before the effective date of adopted or updated standards.









                                                                  AB 2581
                                                                  Page B


          6)Requires CEC to routinely adjust the software to improve  
            modeling accuracy for use within single-family residential  
            dwellings and multi-family residential dwellings.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee: 

          1)Increased costs to CEC in the $750,000 range for contracts and  
            staffing associated with new requirements relating to  
            appliance standards.  

           2)Increased costs to CEC in the $700,000 range for contracts and  
            staffing associated with new requirements relating to building  
            standards.  
          
           COMMENTS  :   

          1)Purpose: According to the author, the tools approved by CEC to  
            estimate energy usage are not accurate and consistently  
            overestimate energy usage.  This bill requires CEC to  
            routinely adjust public domain software that estimates energy  
            usage and disclose any potential differences between the model  
            and actual energy use patterns.

            The author also asserts that when standards are adopted or  
            updated, CEC software is not always fully tested and ready to  
            go.  This bill requires testing and approval to be completed  
            six months before standards go into effect.  Finally, this  
            bill assures the most current data is used when enacting  
            energy efficiency standards for appliances.

          2)An energy efficiency retrofits to existing housing: Energy  
            Upgrade California.<1> Energy Upgrade California is a  
            statewide initiative designed to help California meet the  
            climate action and energy efficiency goals.  By offering  
            financial incentives to homeowners who complete certain  
            energy-saving home improvements, the program guides  
            Californians to conserve energy, reduce demand on the  
            electrical grid, and make informed energy management choices.   
            Energy Upgrade California is an alliance of the California  
            Public Utilities Commission (PUC), CEC, utilities, regional  
            energy networks, local governments, businesses, and  



          ---------------------------
          <1> Energy Upgrade California.  http://energyupgradeca.org/en/  








                                                                  AB 2581
                                                                  Page C

            nonprofits. 

            Many organizations (PUC and California Alternative Energy  
            Transportation and Financing Authority, Property Assessed  
            Clean Energy Financing programs) offer financing for these  
            energy upgrades.

            The improvements are based on tools that estimate energy usage  
            and savings.

          3)Energy assessments and ratings.  An energy assessment examines  
            energy saving opportunities in a particular building, in order  
            to define potential upgrades.  Ratings are used to compare the  
            energy efficiency of one building to others based on standard  
            assumptions of occupant behavior.  Both anecdotal evidence and  
            controlled studies have raised concerns about the accuracy of  
            energy assessments.<2> A recent report found that modeling  
            software consistently overestimated the energy use of each  
            home:<3> 

            a)   Mean modeled total annual use was 40% greater than billed  
            use. 

            b)   Mean modeled annual kilowatts use was 56-68% greater than  
            billed use.

            c)   Mean modeled annual gas use was 39-43% greater than  
            billed use.

            The same study found that estimates prepared by the different  
            assessment tools yielded results that were significantly  
            different from each other and overestimated energy use. 

            The CEC agrees that "simulation results should be calibrated  
            to actual energy usage to help homeowners understand how their  
            investment will likely affect their energy use if their  
            occupant behavior remains the same after improvements are  

            --------------------------
          <2> National Renewable Energy Laboratory. Assessing and  
          Improving the Accuracy of Energy Analysis for Residential  
          Buildings  http://www.nrel.gov/docs/fy11osti/50865.pdf  
          <3> 2010-2012 PG&E and SCE Whole House Retrofit Program Process  
          Evaluation Study.










                                                                  AB 2581
                                                                  Page D

            installed."<4>

          4)Appliance standards. California is a leader in energy  
            efficiency regulations, setting standards for various  
            appliances years before the United States Department of  
            Energy.<5> Since 1976, California law has required that  
            certain appliances meet efficiency standards; therefore each  
            appliance must be tested and certified to the state before it  
            can be sold.<6>

            Various studies have found that the CEC has based analyses  
            related to appliance standards on outdated data.  One report  
            argues that the CEC's 2011 analysis of battery chargers and  
            self-contained lighting controls was based on outdated data  
            which overstated product savings and understated the  
            incremental costs of compliance.<7>  Another claimed that  
            analyses regarding consumer electronics (such as TVs, compact  
            audio products, DVD players, and more) utilized "outdated  
            power draw values to develop an energy-consumption baseline  
            that, in many cases, does not appear to reflect the  
            performance of typical new devices."<8>

          5)Building Standard Compliance Tools. When building energy  
            efficiency standards are adopted or updated, CEC compliance  
            tools are not always fully tested and ready to go.  This bill  
          ---------------------------
          <4> California Energy Commission. Comprehensive Energy  
          Efficiency Program For Existing Buildings Scoping Report, August  
          2012.  
           http://www.energy.ca.gov/2012publications/CEC-400-2012-015/CEC-40 
          0-2012-015.pdf  
          <5>  
           http://www.energy.ca.gov/appliances/documents/CAEnergyEfficiencyS 
          tandards.pdf  
          <6>  
           http://www.energy.ca.gov/2012publications/CEC-400-2012-FS/CEC-400 
          -2012-FS-003-En.pdf  
          <7> Wazzan and Eash. 2011. A Critique of the Regulations on  
          Battery Charging Systems Proposed by the California Energy  
          Commission.  
           https://www.ce.org/CorporateSite/media/Government-Media/Green/201 
          1-CECreportBatteryChargers.pdf  
          <8> TIAX. Assessment of Analyses Performed for the California  
          Energy Efficiency Regulations for Consumer Electronics Products.  
           http://www.ce.org/CorporateSite/media/Government-Media/Green/2006 
          -CECreportPower.pdf  









                                                                  AB 2581
                                                                  Page E

            requires testing and approval to be completed six months  
            before standards go into effect.  

           
          Analysis Prepared by  :    Brandon Gaytan / U. & C. / (916)  
          319-2083 


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