BILL ANALYSIS Ó
SB 350
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Date of Hearing: July 6, 2015
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Anthony Rendon, Chair
SB
350 (De León) - As Introduced February 24, 2015
SENATE VOTE: 24-14
SUBJECT: Clean Energy and Pollution Reduction Act of 2015.
SUMMARY: This bill expands three related clean-energy goals to
be achieved by 2030: (1) reduce petroleum use in motor vehicles
by 50 percent; (2) double energy efficiency in existing
buildings; and (3) generate 50 percent of total retail sales of
electricity from specified renewable resources. Specifically,
this bill:
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1) Requires the California Air Resources Board (CARB) to adopt
and implement motor vehicle emission standards to achieve a
reduction in petroleum use in motor vehicles by 50% by
January 1, 2030.
2) Requires the California Energy Commission (CEC) to evaluate
the economic and environmental costs of transportation fuels
and further reduce petroleum use in the transportation sector
by 50% by January 1, 2030.
3) Requires, triennially beginning on or before January 1,
2017, the CEC to adopt and update the CEC's program to
achieve greater energy savings in California's existing
residential and nonresidential buildings toward achieving a
doubling of the energy efficiency of buildings by January 1,
2030.
4) Increases the current Renewable Energy Portfolio Standard
(RPS) from 33% by 2020 to 50% by 2030 with respect to the
amount of renewable energy that retail electricity sellers
and publicly owned utilities (POUs) must include in their
electricity portfolios and specifies compliance milestones.
5) Amends existing law related to a municipal solid waste
facility located in Stanislaus County.
6) Requires Community Choice Aggregators to participate in the
RPS program subject to the same terms and conditions
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applicable to electrical corporations.
7) Replaces "electrical corporation" with the phrase "retail
sellers" within the existing requirement for RPS plans to be
submitted to the CPUC.
8) Makes revisions to the California Public Utilities
Commission's (CPUC) RPS penalty authority requiring the CPUC
to adopt a schedule of penalties for electrical corporations
and other retail sellers, specifies penalties for
noncompliance cannot be collected in rates for electrical
corporations, and specifies that penalties collected be
deposited in the Electric Program Investment Charge Fund.
9) Specifies RPS compliance periods for retail sellers and POUs
of 40% by 2024, 45% by 2027, and 50% by 2030, and retains
existing 33% by 2020 requirement.
10)Revises cost limitation statute to retain a provision that
the CPUC set the RPS cost limitation at a level that prevents
disproportionate rate impacts and strikes that the CPUC not
include indirect expenses, including imbalance energy
charges, sale of excess energy, decreased generation from
existing resources, transmission upgrades, or the costs
associated with relicensing utility-owned hydroelectric
facilities.
11)Strikes a requirement that the CPUC provide a report no
later than January 1, 2016 that would assess whether
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electrical corporations can achieve a 33% RPS.
12)Strikes a requirement that the CPUC can propose a revised
RPS cost limitation that takes effect no earlier than January
1, 2017.
13)Revises an existing exemption from product content category
limits for an electrical corporation with 30,000 or fewer
customer accounts or had l,000 or fewer customer accounts and
was not connected to any transmission system or to the
California Independent System Operator (CAISO). These
electrical corporations must comply with the CEC accounting
system. The revision states the conditions must continue in
order to exercise this exemption.
14)Revises current statute authorizing CARB to assess penalties
on POUs for noncompliance if the CEC makes a referral to the
CARB and instead authorizes the CEC to assess penalties and
to place funds collected from penalties into the Electric
Program Investment Charge fund.
15)Specifies the CPUC and the CEC to further the meeting of the
state's clean energy and pollution reduction objectives and
shall:
a) Take into account the benefits of and promote the use of
distributed generation, particularly in disadvantaged
communities,
b) Allow for consideration of costs and benefits of grid
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integration,
c) Adopt rules, where feasible, for integrating renewable
energy that minimize system power and fossil fuel purchases
and increase the use of energy storage, demand response,
and other low-emission or zero-technologies to protect
system reliability, and
d) To the extent feasible, give priority to clean energy
and pollution reduction technologies that create employment
opportunities and increased investment in the state.
1) Requires the CPUC to direct electrical corporations to
include a strategy for procuring a diverse portfolio of
resources that provide reliability electricity supplies using
zero carbon-emitting resources to the maximum extent
reasonable, and allows capacity and resource adequacy costs
of these resources to be allocated on a nonbypassable basis
to:
a) Bundled service customers of the electrical corporation,
b) Customers that purchase electricity through a direct
transaction with other providers, and
c) Customers of community choice aggregators.
EXISTING LAW:
1)Provides CARB with primary responsibility for control of
mobile source air pollution, including adoption of rules for
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reducing vehicle emissions and the specification of vehicular
fuel composition. (Health and Safety Code Section 39000, et
seq., and Section 39500, et seq.)
2)Directs CARB to implement motor vehicle emission standards,
in-use performance standards, and motor vehicle fuel
specifications for the control of air contaminants and sources
of air pollution that CARB finds to be necessary, cost
effective, and technologically feasible, unless preempted by
federal law. (Health and Safety Code Section 43013, et seq.)
3)Directs the CEC to continually assess energy consumption
trends and to analyze the social, economic, and environmental
consequences of these trends; carry out, energy conservation
measures; and recommend to the Governor and the Legislature
new and expanded energy conservation measures. (Public
Resources Code Section 25200, et seq.)
4)Requires the CEC to develop and implement a comprehensive
program to achieve greater energy savings in California's
existing residential and nonresidential building stock.
(Public Resources Code Section 25943, et seq.)
5)Establishes the Electric Program Investment Charge Fund to
fund projects that benefit electricity ratepayers and lead to
technological advancement and breakthroughs to overcome the
barriers that prevent the achievement of the state's statutory
energy goals. (Public Utilities Code Section 25710, et seq.)
6)Requires retail sellers of electricity - investor-owned
utilities (IOU), community choice aggregators, energy service
providers, and POUs - to increase purchases of renewable
energy such that at least 33 percent of retail sales are
procured from renewable energy resources by December 31, 2020.
This is known as the RPS. The CPUC establishes the RPS for
retail sellers and ensures they progress in achieving it, and
levies penalties for failure. The governing board of each POU
establishes its own RPS. The CEC may issue a notice of
violation against a POU for failure to adequately progress in
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meeting RPS targets and refer the POU to the CARB, which may
assess penalties against it. The RPS provides numerous cost
containment provisions and exceptions to compliance
obligations. (Public Utilities Code Section 99.11, et seq.)
7)Requires all renewable electricity products to meet the
requirements of a "loading order" that mandates minimum and
maximum quantities of three product categories (or "buckets"),
which includes renewable resources directly connected to a
California balancing authority or provided in real time
without substitution from another energy source, energy not
connected or delivered in real time yet still delivering
electricity, and unbundled renewable energy credits (RECs).
(Public Utilities Code Section 399.16.)
FISCAL EFFECT:
According to Senate Appropriations:
1)First year costs of $440,000 and $400,000 ongoing from various
special funds to the CARB to create a petroleum use baseline
and to implement necessary measures to reduce use.
2)Unknown cost pressures to current programs from various
special funds to achieve a 50% petroleum reduction.
3)Annual costs of $7.24 million from the General Fund for the
CEC for ongoing updates of its energy efficiency plans for
existing buildings and to implement the plans.
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4)Annual costs of $900,000 from the Energy Resources Program
Account for the CEC for new responsibilities ensuring
compliance with RPS standards by the POUs.
5)Annual costs of $2.3 million for five years to the Public
Utilities Reimbursement Account for CPUC contract needs.
6)Annual costs of $471,000 for two years and $157,000 in the
third year. the Public Utilities Reimbursement Account for
CPUC proceedings to adjust existing RPS and Long Term
Procurement Plan programs.
7)Ongoing staffing needs of $350,000 annually to the Public
Utilities Reimbursement Account for CPUC staffing needs for
ongoing enforcement of the higher RPS standards.
8)Unknown ratepayer costs to the General Fund and various
special funds to the state as a ratepayer of electricity to
the extent that electricity prices may be affected by
increasing the RPS standard.
9)Unknown cost pressures to the Public Utilities Reimbursement
Account and the Energy Resources Program Account to the CPUC
and the CEC to review renewable integration needs and to
consider grid integration in proceedings implementing RPS
requirements.
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COMMENTS:
1)Author's Statement: "SB 350 enacts policies that build on our
economic growth by strengthening incentives for energy
efficiency and clean energy technology. The Golden State
Standards:
50% less petroleum use;
50% of electricity coming from renewable sources;
and 50% better efficiency in our buildings."
"These standards send a strong signal to California's
businesses and leave no doubt in the direction we're heading
in."
"These policies will drive innovation here, bring investment
here, bring jobs here, and bring revenue here."
1)Codifies the Governor's Goals: In the Governor's January 5,
2015 Inaugural Address, he stated the following with respect
to reducing carbon pollution and limiting the emissions of
heat-trapping gases to 431 million tons by 2020:
"Toward that end, I propose three ambitious goals to be
accomplished within the next 15 years:
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Increase from one-third to 50 percent our
electricity derived from renewable sources;
Reduce today's petroleum use in cars and trucks by
up to 50 percent;
Double the efficiency of existing buildings and make
heating fuels cleaner.
I envision a wide range of initiatives: more distributed
power, expanded rooftop solar, micro-grids, an energy
imbalance market, battery storage, the full integration of
information technology and electrical distribution and
millions of electric and low-carbon vehicles. How we
achieve these goals and at what pace will take great
thought and imagination mixed with pragmatic caution. It
will require enormous innovation, research and investment.
And we will need active collaboration at every stage with
our scientists, engineers, entrepreneurs, businesses and
officials at all levels."
1)History of RPS: Established in 2002 under SB 1078 (Sher,
Chapter 516, Statutes of 2002), California's RPS was
accelerated in 2006 under SB 107 (Simitian, Chapter 464,
Statutes of 2006) by requiring that 20% of electricity retail
sales be served by renewable energy resources by 2010.
Finally, SB X1-2 (Simitian, Chapter 1, Stadtutes of 2011)
established a 33% by 2020 goal and was signed by Governor
Brown in 2011.
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2)RPS Product Compliance Categories (a.k.a. "Buckets): The RPS
requires electricity from renewable resources be procured by
retail electricity sellers. The RPS includes three renewable
product categories that allow flexibility in meeting the RPS
requirements:
a) Product Compliance Category 1: Products must be
interconnected with a California balancing authority, have
a first point of interconnection with distribution
facilities used to serve end users within a balancing
authority area, or are scheduled from the eligible
renewable energy resource into a California balancing
authority without substituting electricity from another
source. Alternatively, the product can have an agreement
to dynamically transfer electricity to a California
balancing authority.
b) Product Compliance Category 2 : A product that is a
firmed and shaped eligible renewable energy resource
providing incremental electricity and scheduled into a
California balancing authority.
c) Product Compliance Category 3: Products, including
"unbundled" RECs that do not qualify under Categories 1 or
2. An unbundled REC refers to the renewable energy
attribute sold separately from the electricity generated by
the renewable energy facility. Unbundled RECs can be bought
and sold. Buyers are typically parties who are short on
meeting their renewable energy goals or who would like to
demonstrate a commitment to clean energy. Note that
purchases of unbundled RECs do not include delivery of the
electricity from the renewable resource. Statute also
specifies that Category 3 products cannot be counted as
excess procurement under the provision that allows banking
of excess procurement for future compliance years.
Entities required to meet the RPS are limited in the amount of
Category 2 and 3 procurement. This ensures that the RPS is
driving procurement of actual delivered renewable generation.
The proportions required for procurement under the current RPS
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for Category 1 increases over time until it reaches 75% of
procurement beginning in January 2017. Category 3 drops to no
more than 10% beginning in January 2017.
The RPS also requires that the REC can be counted only once
and that the REC is registered so that ownership can be
tracked for compliance purposes. REC certificates are created
for each whole megawatt-hour generated. These certificates
can be bought and sold.
1)RPS: Distributed Energy Resources: For the most part, the
utility RPS procurement process has resulted in utility
procurement of large scale renewable projects. This may be
because of the economies of scale in negotiating contracts
with the utilities (smaller projects may not have the revenue
potential to offset the costs of contract development). The
CPUC recognized the RPS presented barriers to smaller
renewable projects and authorized a program called the
"Renewable Auction Mechanism" to facilitate an increase in
projects sized below 20 megawatts (MWs). In addition, the
Legislature enacted a small generator feed in tariff for
projects sized below 3 MWs. Many of these smaller projects
are located in the Central Valley (Kern County) and sell power
to retail sellers of electricity throughout the state.
Other programs, such as the California Solar Initiative, the
Self-Generation Incentive Program, the Feed in Tariff for
Small Renewable Generators, and the Combined Heat and Power
Tariff have focused on increasing the use of distributed
power, expanding the market for rooftop solar, microgrids, and
battery storage located at or near a customer's site.
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On-site renewable generation typically means that the
generation is delivered and consumed at the site. In Decision
07-01-018, the CPUC determined that facilities that serve
onsite load (e.g., facilities receiving incentives from the
California Solar Initiative or Self-Generation Incentive
Program) own their RECs. In other words, the facility owner
owns the RECs, and they are not transferred to the utility.
That means that a facility owner can either make green claims
(e.g., "our company is powered by solar") if it retains the
RECs, or the owner can sell the RECs so another entity can
make green claims. Statute specifies the REC can only be owned
by one entity which means that when the facility owner sells
the REC they can no longer claim to be using renewable energy.
Currently, rooftop solar can meet Product Compliance Category
1 if it meets the criteria laid out in statute. But when the
REC is unbundled from the rooftop solar generation, it is
treated as Product Compliance Category 3. Thus, much rooftop
solar is not counted toward the RPS.
Financing companies that own rooftop solar, through either a
lease or power-purchase agreement with a customer, typically
transfer the ownership of the renewable attribute to the
financing company (as a result of this transfer the customer
no longer owns the REC and cannot legitimately claim to be
using renewable energy).
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A number of the financing companies argue the unbundled REC
should be eligible under Product Category 1. Utilities
recognize on-site renewable generation is occurring within
their service areas and also suggest the product should be
considered as Product Category 1.
The United States Constitution includes a provision known as
the "Commerce Clause" and confers authority to the United
States Congress to enact laws regulating interstate commerce.
This, by implication, limits state authority over interstate
commerce. Electricity generation is subject to interstate
commerce laws.
If on-site renewables located in California were included as
eligible under Product Category 1, it raises concerns over
whether this would invite litigation under the Commerce
Clause. If on-site renewables were allowed as Product
Category 1 without a location requirement to address concerns
about the Commerce Clause, then arguably on-site renewable
generation located elsewhere in the mainland United States
could be eligible to count toward California's RPS goals.
At the same time, on-site renewable generation is clearly
renewable generation. Californians broadly support on-site
renewable generation, and the amount of on-site generation
continues to increase throughout California.
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To address this, the author may wish to consider an amendment
to allow the CPUC to create a program designed specifically
for on-site renewable generation procurement for new
distributed renewable energy resources within their service
areas. Such a program should include metering and
registration requirements and registration of the REC.
399.13 (f)(3) The commission may authorize a procurement
entity to procure ____ percent of retail sales of on-site
generation within the area served by the procurement entity to
serve local electricity needs. On-site renewable generation
shall meet the definition of renewable generation specified in
section 399.12(e) and meet the certification requirements
specified in section 399.12. Estimation of energy production
from on-site generation is not sufficient to meet the
requirements of this section.
399.30(c)(4) A locally owned public utility may authorize a
procurement entity to procure ____ percent of retail sales of
on-site generation within the area served by the procurement
entity to serve local electricity needs. On-site renewable
generation shall meet the definition of renewable generation
specified in section 399.12(e) and meet the certification
requirements specified in section 399.12. Estimation of
energy production from on-site generation is not sufficient to
meet the requirements of this section.
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2)RPS: Transportation Electrification and Potential Renewable
Energy Curtailment: One of the methods which can assist with
achieving a reduction in petroleum fuel use is transportation
electrification. It is, however, possible that decreased
petroleum use (and the associated emissions) will be
transferred to some extent into the electric generation system
even though California's electric generation system is
relative clean and moving toward an even cleaner generation
profile. In addition, accurately estimating future
electricity demand that results from transportation
electrification may be difficult until the market for electric
transportation is better established. Flexibility in the RPS
statute to address these issues is warranted.
The author may wish to consider amendments to address
transportation electrification to assist with achieving
success in this area and provide sufficient flexibility in RPS
compliance to address unexpected changes in electricity
demand. Specifically,
Section X is added to the Health and Safety Code, to read:
X. The state board shall identify and adopt appropriate
policies to remove regulatory disincentives facing retail
sellers from facilitating the achievement of greenhouse gas
emission reductions in other sectors through increased
investments in transportation electrification. Those policies
shall include, but not be limited to, an allocation of
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greenhouse gas emissions allowances to retail sellers to
account for increased greenhouse gas emissions in the electric
sector from transportation electrification.
Add Section 237.5 to the Public Utilities Code as follows:
237.5. "Transportation electrification" means the use of
grid electricity to power all or part of vehicles, vessels,
trains, ships, boats and other equipment that are mobile
sources of air pollution and greenhouse gases.
Amend Section 399.15 of the Public Utilities Code as follows:
399.15 (b)(5)(C) Unanticipated curtailment of eligible
renewable energy resources necessary to address the needs of a
balancing authority. that does not result in an increase in
greenhouse gas emissions.
(D) Unanticipated increase in retail sales due to
transportation electrification. In making a finding that this
condition prevents timely compliance, the commission shall
consider all of the following:
(i) Whether transportation electrification significantly
exceeded forecasts in that retail seller's service territory,
based on the best and most recently available information
filed with the state board, energy commission or other state
agency.
(ii) Whether the retail seller has taken reasonable measures
to procure sufficient resources to account for unanticipated
increases in retail sales due to transportation
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electrification.
Amend Public Utilities Code Section 701.1 as follows:
701.1. (a) The Legislature finds and declares that, in
addition to other ratepayer protection objectives, a principal
goal of electric and natural gas utilities' resource planning
and investment shall be to minimize the cost to society of the
reliable energy services that are provided by natural gas and
electricity, and to improve the environment and to encourage
the diversity of energy sources through improvements in energy
efficiency and development of renewable energy resources, such
as wind, solar, biomass, and geothermal energy , and widespread
transportation electrification.
(b) The Legislature further finds and declares that, in
addition to any appropriate investments in energy production,
electrical and natural gas utilities should seek to exploit
all practicable and cost-effective conservation and
improvements in the efficiency of energy use and distribution
that offer equivalent or better system reliability, and which
are not being exploited by any other entity.
(c) Nothing in this section expands the authority of the
commission beyond existing law.
3)RPS: Enforcement Provisions affecting Publicly Owned
Utilities: SB 350 modifies the enforcement provisions in the
existing RPS statute to allow the CEC to assess enforcement
penalties on POUs, rather than the CARB. POUs are already
subject to CARB requirements with respect to emissions. The
change in enforcement greatly expands the scope of the CEC's
authority over POUs.
The author may wish to consider amending the bill to return
the language to its current enforcement regime:
399.30. (n) (1) Upon a determination by the Energy Commission
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that a local publicly owned electric utility has failed to
comply with this article, the Energy Commission shall refer
the failure to comply with this article to the State Air
Resources Board, which may impose penalties to enforce this
article consistent with Part 6 (commencing with Section 38580)
of Division 25.5 of the Health and Safety Code. Any penalties
imposed shall be comparable to those adopted by the commission
for noncompliance by retail sellers. shall refer the failure
to comply with this article to the State Air Resources Board,
which may impose penalties to enforce this article consistent
with Part 6 (commencing with Section 38580) of Division 25.5
of the Health and Safety Code. Any penalties imposed shall be
comparable to those adopted by the commission for
noncompliance by retail sellers. impose penalties comparable
to those adopted by the commission for noncompliance by retail
sellers. Any penalties collected under this article shall be
deposited into the Electric Program Investment Charge Fund and
used for the purposes described in Chapter 8.1 (commencing
with Section 25710) of Division 15 of the Public Resources
Code.
(2) If Division 25.5 (commencing with Section 38500) of the
Health and Safety Code is suspended or repealed, the State Air
Resources Board may take action to enforce this article on
local publicly owned electric utilities consistent with
Section 41513 of the Health and Safety Code, and impose
penalties on a local publicly owned electric utility
consistent with Article 3 (commencing with Section 42400) of
Chapter 4 of Part 4 of, and Chapter 1.5 (commencing with
Section 43025) of Part 5 of, Division 26 of the Health and
Safety Code.
(3) For the purpose of this subdivision, this section is an
emissions reduction measure pursuant to Section 38580 of the
Health and Safety Code.
(4) If the State Air Resources Board has imposed a penalty
upon a local publicly owned electric utility for the utility's
failure to comply with this article, the State Air Resources
Board shall not impose an additional penalty for the same
infraction, or the same failure to comply, with any renewables
procurement requirement imposed upon the utility pursuant to
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the California Global Warming Solutions Act of 2006 (Division
25.5 (commencing with Section 38500) of the Health and Safety
Code).
Any penalties collected by the State Air Resources Board
pursuant to this article shall be deposited in the Air
Pollution Control Fund and, upon appropriation by the
Legislature, shall be expended for reducing emissions of air
pollution or greenhouse gases within the same geographic area
as the local publicly owned electric utility.
(o) The commission has no authority or jurisdiction to enforce
any of the requirements of this article on a local publicly
owned electric utility.
4)Energy Efficiency: SB 350 adopts the Governor's goal
regarding doubling the efficiency of existing buildings. A
variety of evaluation reports commissioned by the CPUC over
the past several years have evaluated programs designed to
improve energy efficiency in existing buildings. They have
found that energy estimation tools overstate energy use
estimates, that health and safety problems result from poor
workmanship and faulty installation of insulation and heating
and air conditioning systems, and overstated savings claims.
These reports illustrate that more work is needed to ensure
that energy efficiency goals are actually achieved and that
ratepayer funds spent on these programs are justified.
Addressing workmanship and overstated claims will help to
encourage greater customer confidence in energy efficiency
products and services.
In addition, the current language in the bill is ambiguous
about whether a doubling of energy efficiency is to be
achieved in each building or overall. Some building owners
have already invested in reducing energy consumption so it may
not be possible to double the energy efficiency of an
individual building. If the goal were clarified such that the
doubling of energy efficiency is an overall goal, it would
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allow flexibility in program design to target those buildings
where energy efficiency can be cost-effectively achieved. In
addition, there are various interpretations of the meaning of
energy efficiency which can lead to confusion about the
objective. A definition of energy efficiency would provide
greater clarity to the purpose of this statute.
The author may wish to consider the following amendments:
25943. (a) (3) As used in this section, energy efficiency means
delivering equal or more services with less energy input from
an energy source.
25943. (a) (4) The commission shall adopt, implement, and
enforce a policy to hold sellers of energy efficiency
improvements financially responsible for sales claims of
energy savings from energy efficiency improvements that are
not met.
25943. (a) (5). The commission shall adopt, implement, and
enforce a responsible contractor policy for use across all
ratepayer-funded energy efficiency programs that involve
installation and/or maintenance by building contractors to
ensure that retrofits meet high-quality performance standards
and reduce energy savings lost or foregone due to poor-quality
workmanship.
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25943. (f)(2) (2) On or before January 1, 2017, and at least
once every three years thereafter, the commission shall adopt
an update to the program in furtherance of achieving a an
overall doubling of the energy efficiency of buildings by
January 1, 2030.
5)Petroleum fuel reduction: SB 350 establishes CARB authority
to reduce petroleum use in the transportation sector by 50% by
2030. The petroleum use reduction goal articulated by the
Governor was: "Reduce today's petroleum use in cars and trucks
by up to 50 percent." The Governor's goal state that his
petroleum use reduction is up to 50% and SB 350 states that
CARB is to adopt and implement motor vehicle emission
standards, in-use performance standards, and motor vehicle
fuel specifications for the control of air contaminants and
sources of air pollution which the state board has found to be
necessary, cost effective, and technologically feasible, to
carry out the purposes of this division and in furtherance of
achieving a reduction in petroleum use in motor vehicles by 50
percent by January 1, 2030, unless preempted by federal law.
As written, SB 350 does not specify the means by which CARB
will pursue reducing petroleum fuel use. It provides the CARB
with broad authority to enact rules to implement the
requirement.
The author may wish to consider an amendment to provide an
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opportunity for Legislative oversight on the CARB's strategy
and implementation plan toward achieving the petroleum
reduction goal.
No later than January 1, 2017, the state board, after one or
more public workshops, shall prepare a strategy and
implementation plan to achieve a reduction in petroleum use in
motor vehicles by 50% by January 1, 2030, and provide a copy
of the strategy and plan to the appropriate policy committees
of the Senate and Assembly. Beginning January 1, 2020, and
every three years thereafter the state board shall provide an
update to the strategy and plan which reflects any changes
made to the strategy and plan.
The RPS is an electricity procurement requirement and as such,
the transportation electrification issues are related to
integration of renewables into the electric generation
resource mix in a manner that ensures a safe, reliable, and
affordable electricity system. However, with respect to
petroleum fuel reductions, there are also opportunities
available to provide petroleum reduction through natural gas
vehicles, particularly heavy duty vehicles or fuel cell
vehicles. These other forms of transportation fuels should
also be considered, particularly with respect to the use of
heavy duty vehicles used to move freight from port areas.
Heavy duty freight movement tends to focus in areas occupied
by low-income and disadvantaged communities - resulting in
concentration of pollution from petroleum-fueled heavy duty
vehicles.
Fuel cell vehicles, which are just now coming to market, have
shorter refueling times and (currently) equal or better
driving range than their all-electric counterpart. Recent
innovations to provide ride sharing services and shared
vehicle programs are also potential ways to reduce petroleum
use.
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Ensuring that the all options for reducing petroleum use are
considered, the author may wish to consider an amendment to
include that the CPUC prioritize natural gas, fuel cell
technologies, or other innovations, as well as transportation
electrification.
Add section 740.1.5 to the Public Utilities Code as follows:
740.1.5 (a) Transportation electrification, natural gas
vehicles, fuel cell vehicles, and transportation innovations
are needed to reduce petroleum use, to meet air quality
standards, improve public health and to achieve greenhouse gas
emission reduction goals.
(b) Widespread transportation electrification is needed to
achieve the goals included in Section 44258 of the Health and
Safety Code (the Charge Ahead California Initiative).
(c) Reducing emissions of greenhouse gases to 40 percent below
1990 levels by 2030, and to 80 percent below 1990 levels by
2050 will require widespread transportation electrification.
(d) Widespread transportation electrification requires
electrical corporations to increase access to the use of
electricity as a transportation fuel.
(e) Deploying electric vehicles should assist in integrating
generation from eligible renewable energy resources and reduce
fuel costs for vehicle drivers who charge in a manner
consistent with electric grid conditions.
(f) Deploying electric vehicle charging infrastructure should
facilitate increased sales of electric vehicles by making
charging easily accessible and should provide the opportunity
to access electricity as a fuel that is cleaner than gasoline
or other fossil fuels.
(g) Deploying natural gas and fuel cell fueling infrastructure
should facilitate increased sales of natural gas or fuel cell
vehicles by making refueling easily accessible and should
provide the opportunity to access fuels that are cleaner than
gasoline.
(h) It is the policy of this state and the intent of the
Legislature to encourage transportation electrification, heavy
duty natural gas vehicles, fuel cell vehicles, and
transportation innovation as a means to achieve ambient air
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quality standards and the state's climate goals. (i) Light,
medium and heavy duty vehicle electrification results in
approximately 70% less greenhouse gases emitted, over 85% less
ozone forming air pollutants emitted and 100% less petroleum
used according the State Alternative Fuels Plan analysis by
the Energy Commission and the Air Resources Board. These
reductions will get larger as renewable generation increases.
(j) Agencies designing and implementing regulations,
guidelines, plans and funding programs to reduce greenhouse
gas emissions should take these findings into account.
6)CPUC and CEC authority to address clean energy and pollution
reduction: SB 350 provides direction to both the CPUC and CEC
with respect to the goals and providing economic and
environmental benefits, particularly to disadvantaged
communities. It also provides guidance that the CPUC and CEC
take into account other tools that provide a means to address
increasing the use of clean energy and reducing pollution,
such as on-site renewable generation, demand response, energy
efficiency, and energy storage.
The author may wish to consider amendments to clarify the
roles of the CPUC and CEC in working toward the goals in SB
350.
Add section 400 to the Public Utilities Code as follows:
Article 17. Clean Energy and Pollution Reduction
400. The commission and the California Energy Commission
shall do all of the following in furtherance of meeting the
state's clean energy and pollution reduction objectives:
(a) Take into account the use of distributed generation to the
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extent that it provides economic and environmental benefits in
disadvantaged communities as identified pursuant to Section
39711 of the Health and Safety Code.
(b) Take into account opportunities to decrease costs and
increase benefits, including pollution reduction, of grid
integration using technologies with zero on-site greenhouse
gas emissions in proceedings associated with meeting the
objectives.
(c) Where feasible, authorize procurement of resources to
provide grid reliability services that minimize reliance on
system power and fossil fuel resources and, where feasible,
cost-effective, and consistent with other state policy
objectives, increase the use of large and small scale energy
storage with a variety of technologies, targeted energy
efficiency, demand response, eligible renewable energy
resources, and other or other technologies with zero on-site
greenhouse gas emissions to protect system reliability.
(d) Review technology incentive, research, development, and
deployment, and market facilitation programs overseen by the
commission and the California Energy Commission and make
recommendations to advance state clean energy and pollution
reduction objectives, and that provide benefits to
disadvantaged communities as identified pursuant to Section
39711 of the Health and Safety Code.
(e) To the extent feasible, give first priority to the
manufacture and deployment of clean energy and pollution
reduction technologies that create employment opportunities,
including high wage, highly skilled employment opportunities,
and increased investment in the state.
7)Oversight and Accountability: One of the issues not currently
addressed in SB 350 is Legislative oversight. In 2015, a
number of disturbing revelations have been made about the CPUC
that have resulted in investigations that are underway by the
State Attorney General and the U.S. Attorney General.
Ensuring that the multiple state agencies involved in
achieving these goals are working effectively, in an open and
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transparent manner, toward reducing greenhouse gas emissions
and increasing the use of clean generation is vital to
California's citizens with respect to climate and economy.
The author may wish to consider amendment to: establish a
publicly available tracking system to track progress toward
the goals and an annual joint progress report to the
Legislature.
Add section 400 to the Public Utilities Code as follows:
400(f). Establish a publicly available tracking system to
provide up to date information on progress toward meeting the
clean energy and pollution reduction goals of the Clean Energy
and Pollution Reduction Act of 2015.
In addition, much has been said about whether clean
technologies and climate change programs are reaching
Disadvantaged Communities when many of the products and
services are beyond the means of those who live in these
communities. For example, most workplace charging is targeted
for parking lots and airports rather than providing workplace
charging for people employed at service industries such as
fast-serve restaurants and shopping areas. A better
understanding of the needs of the disadvantaged communities
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and low-income communities may provide programs that are more
useful and successful.
The author may wish to consider an amendment to create an
Advisory Group to provide feedback to the CARB, CEC, and CPUC
on proposed programs and whether the proposed program would be
effective and useful in disadvantaged communities.
400(f) Establish an Advisory Group made up of representatives
from Disadvantaged Communities. The role of the Advisory
Group is to review and provide advice on programs proposed to
achieve clean energy and pollution reduction and whether those
proposed programs will be effective and useful in
disadvantaged communities.
8)Support and Opposition:
Supporters state that SB 350 would:
a) Help execute Governor Browns inaugural address goals,
and work in parallel with the administration's ongoing
objective of advancing localized renewable resources,
b) Advance a clean energy economy,
c) California's current fossil fuel economy is built on
"shifting sands" and California needs a more sustainable
and stable energy foundation,
d) Californians have already started to experience the
punishing effects of climate change with the current
drought,
e) Encourages large scale solar projects, and provides an
important hedge against the volatility of conventional
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power sources,
f) Would create a substantial amount of jobs, especially in
the construction sector,
g) Continues California's leadership in the fight to
address and adapt to climate change,
h) The scale of climate change justifies the ambitious
nature of SB 350,
i) Climate change is inherently linked to public health, is
the biggest threat to public health,
j) Has been strategically designed to meet its ambitious
goals in a realistic and efficient way,
aa) Enhancing coordination among departments and agencies
could have cost, reliability and clean energy benefits, and
bb) Appropriately counts distributed solar generation
systems as a renewable resource
Opponents state that:
a) This bill reduces the availability of vital
transportation files,
b) The renewable energy standards are not feasible for
businesses or consumers,
c) Biofuels and electric cars are not available on a
consumer scale, and appeal to a very specific and exclusive
demographic of Californians,
d) California already has an overly aggressive climate
policy with AB 32,
e) Disadvantaged communities will suffer the most from
rising transportation costs,
f) SB 350 harms job creation by burdening nearly every
business in California,
g) California already has some of the highest taxes in the
nation, and this bill will drive taxes even higher,
h) Further disadvantages California businesses, especially
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when competing with other states,
i) Most economists believe that a well-designed cap and
trade bill is the best way to reduce carbon emissions,
j) Sector-specific approach to regulation is too costly,
aa) Energy manufacturers already pay nearly 70% above the
national average to operate in California,
bb) Higher renewable energy targets will threaten
affordability and reliability,
cc) SB 350 gives non-elected Air Resources Board too much
power, and
dd) Any regulation that extends beyond the year 2020 should
allow for flexibility, which
SB 350 does not.
1)Related Legislation:
AB 197 (Eduardo Garcia): This bill would revise electricity
procurement requirements under the RPS.
AB 645 (Williams): This bill would increase the RPS from 33%
to 50%.
AB 793 (Quirk): This bill requires that weatherization
programs for low-income customers, administered by electrical
and gas corporations, include home energy management
technology and education programs on how to use advanced
meters
AB 1013 (Quirk): This bill would make various changes in
statutes related to the CEC building energy efficiency
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standards.
AB 1094 (Williams): This bill requires the CEC, in
collaboration with the CPUC, to set greenhouse gas reduction
targets for plug-in equipment based on analysis of plug-in
equipment energy consumption.
AB 1144 (Rendon): This bill provides that unbundled renewable
energy credits produced by newly established wastewater
treatment facilities may be used to meet the first category of
the RPS content requirements.
AB 1150 (Levine): This bill expands the existing Energy
Efficiency Partnership Program between the University of
California and IOUs to include POUs that are willing to
participate in the program.
AB 1330 (Bloom): This bill establishes an annual energy
efficiency resource standard.
AB 590 (Dahle): This bill creates the Biomass State Cost
Share Account within the Greenhouse Gas Reduction Fund (GGRF)
and requires an unspecified amount to be transferred annually
from the GGRF to the Account, to be available for purposes, as
specified.
AB 802 (Williams): This bill requires the CPUC to authorize
electrical corporations to administer a program for improving
existing building energy efficiency.
AB 1132 (Ting): This bill requires the CPUC to submit an
annual report on distributed generation to the Legislature and
to include an evaluation of the current use of green workforce
training programs related to distributed generation.
SB 286 (Hertzberg): This bill authorizes 8,000 gigawatt-hours
of direct electricity transactions between electricity
providers and non-residential customers of electrical
corporations to be made available over a specified period. All
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electricity provided must meet the definition of renewables
within the RPS.
SB 502 (Leno): This bill authorizes the San Francisco Bay
Area Rapid Transit District to purchase electricity generated
by an eligible renewable energy resource eligible under
California's RPS Program.
SB 765 (Wolk): This bill creates an Energy Efficiency Market
Transformation Administrator, requires the CPUC to contract
with the administrator, and allocates funds from ratepayers to
fund Administrator activities.
SB 793 (Wolk): This bill permits a participating customer to
subscribe to a Green Tariff Shared Renewable Program and
receive a reasonably estimated bill credit and bill charge, as
determined by the commission, for a period of up to 20 years.
SR 37 (De León): This bill directs members of the
Legislature, the Governor and executive branch, Congress, and
the President to consider the Papal encyclical on climate
change in relevant legislative action.
2)Prior Legislation:
SB 2 x 1 (Simitian) 2011: Revised the RPS to 20% by 2020.
Chaptered by Secretary of State - Chapter 1, Statutes of 2011.
SB 107 (Simitian) 2006: Accelerated the 20% RPS to 2010.
Chaptered by Secretary of State - Chapter 464, Statutes of
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2006.
SB 1079 (Sher) 2002: Established the 20% by 2017 RPS.
Chaptered by Secretary of State - Chapter 516, Statutes of
2002.
3)Double Referred: This bill is double referred to the Assembly
Committee on Natural Resources.
REGISTERED SUPPORT / OPPOSITION:
Support
350 Bay Area
350 Sacramento
American Academy of Pediatrics-California
American Cancer Society Action Network, California
American Lung Association, California
Asian Pacific Environmental Network
Asthma Coalition of Los Angeles County
Audubon California
Azul
Baz Allergy, Asthma and Sinus Center
Berkshire Hathaway Energy
Blattner Energy
Bonnie J. Adarlo Lung Cancer Foundation
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Breathe CA
BYD Motors, Inc.
California Bicycle Coalition
California Black Health Network
California Conference of Directors of Environmental Health
California Environmental Justice Alliance and CEJA Action
California Energy Efficiency Industry Council
California Hydropower reform Coalition
California League of Conservation Voters
California Municipal Utilities Association (if amended)
California Nurses Association
California Pan Ethnic Health Network
California Public Health Association - North
California Solar Energy Industries Association (if amended)
California State Association of Electrical Workers
California State Pipe Trades Council
California Thoracic Society
California Wind Energy Association
Californians Against Waste
California Voices for Progress
CALSTART
Catholic Charities, Diocese of Stockton
Center for Biological Diversity
Center for Climate Change and Health; Public Health Institute
Center on Race, Poverty and the Environment
Center for Community Action and Environmental Justice
Central Coast Alliance United for a Sustainable Economy
Central California Asthma Collaborative
ChargePoint, Inc.
Circulate San Diego
Clean Energy
Clean Power Campaign
Clean Water Action
Cleveland National Forest Foundation
Climate Action Campaign
Climate Resolve
Coalition of California Utility Employees
Coalition for Clean Air
Coastal Environment Rights Foundation
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Communities for a Better Environment
County of Los Angeles Public Health
Covanta (if Amended)
Dignity Health
Doctors for Climate Health
Endangered Habitats League
Environment California
Environmental Action Committee of West Marin
Environmental Defense Fund
Environmental Health Coalition
First Solar
Friends Committee on Legislation of California
Friends of the River
Health Care Without Harm
Large-Scale Solar Association (LSA)
Leadership Counsel for Justice and Accountability
League of Women Voters of California
Lutheran Office of Public Policy, California
McCarthy Building Companies, Inc.
Medical Advocates for Healthy Air
Moms Clean Air Force
National Nurses United
National Parks Conservation Association
Natural Resource Defense Council
NextGen Climate
NEXTracker, Inc.
Office of Ratepayer Advocates
Pacoima Beautiful
People Organizing to Demand Environmental and Economic Rights
Physicians for Social Responsibility - Los Angeles
Planning and Conservation League
Public Health Institute
Recurrent Energy
Regional Asthma Management and Prevention
Sacramento Municipal Utility District (if Amended)
San Diego County Water Authority (if Amended)
San Francisco Asthma Task Force
San Francisco Bay Area Chapter, Physicians for Social
Responsibility
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Santa Clara County Medical Society
School Energy Coalition
Sequoia Riverlands Trust
Sierra Business Council
Sierra Club
Signal Energy, LLC
Sonoma County Asthma Coalition
Southwest Wetlands Interpretive Association
SunEdison
SunPower Corporation
The Utility Reform Network
TransForm
Tree People
Trust for Public Lands
Union of Concerned Scientists
Western State Sheet Metal Workers
Wireless Advanced Vehicle Electrification
Opposition
Agricultural Council of California
Associated Builders and Contractors of California
Associated General Contractors
Building Owners and Managers Association
California Association of Nurseries and Garden Centers
California Cotton Ginners Association
California Cotton Growers Association
California Dairies, Inc.
California Farm Bureau Federation
California Fresh Fruit Association
California Manufacturers & Technology Association
California Metals Coalition
California Retailers Association
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Garden Grove Chamber of Commerce
California Construction Trucking Association
California Independent Oil Marketers Association
California Independent Petroleum Association
California League of Food Processors
California Manufacturer and Technology Association
California Small Business Alliance
California Small Business Association
CalTax
Coalition of Energy Users
Family Business Association
Far West Equipment Dealers Association
Fullerton Association of Concerned Taxpayers
Howard Jarvis Taxpayers Association
Independent Oil Producers Agency
Industrial Association of Contra Costa County
Industrial Environmental Association
International Warehouse Logistics Association
Kern Citizens for Energy
Kern Citizens for Sustainable Government
Kern County Board of Supervisors
Kern County Taxpayers Association
Long Beach Area Chamber of Commerce
NAIOP - Commercial Real Estate Development Association
National Association of Royalty Owners
National Association of Royalty Owners - California
National Federation of Independent Business/California
National Tank Truck Carriers
Placer County Taxpayers Association
Regional Hispanic Chambers of Commerce
San Diego Tax Fighters
Santa Barbara County Taxpayers Association
Santa Barbara Technology and Industry Association
Simi Valley Chamber of Commerce
Southwest California Legislative Council
Small Business Action Committee
Torrance Area Chamber of Commerce
Valley Industry & Commerce Association
West Coast Lumber and Building Material Association
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Western Agricultural Processors Association
Western Aerosol Information Bureau
Western Growers Association
Western Plant Health Association
Western States Petroleum Association
Wilmington Chamber of Commerce
Analysis Prepared by:Sue Kateley / U. & C. / (916)
319-2083