BILL ANALYSIS
AB 29 X1
Page 1
Date of Hearing: March 6, 2001
ASSEMBLY COMMITTEE ON ENERGY COSTS AND AVAILABILITY
Roderick D. Wright, Chair
AB 29 X1 (Kehoe) - As Amended: March 5, 2001
SUBJECT : Energy Conservation.
SUMMARY : The bill, as amended, provides for the California
Energy Commission (CEC) to augment existing energy efficiency
programs and to oversee new programs. Specifically, the bill :
1)Requires CEC to pay the costs of installation of an interval
meter to a small business that voluntarily reduces electricity
consumption by not less than 10% for one year following the
date of installation of the meter.
2)Requires CEC to administer a grant program for replacement of
energy inefficient appliances.
3)Authorizes CEC to adopt emergency regulations.
4)Requires CEC to administer a grant and loan program for
eligible construction retrofits, as prescribed.
5)Requires CEC to administer a small business energy efficient
refrigeration loan program.
6)Contains an urgency statute.
EXISTING LAW : Requires CEC to perform specified duties relating
to the conservation and development of energy resources under
the Warren-Alquist State Energy Resources Conservation and
Development Act.
FISCAL EFFECT : Appropriates $375,000,000 from the General Fund
to CEC.
COMMENTS:
Interval Meters, Who Should Pay? The Business Conservation
Incentive Plan outlined in
ABX1 29, includes a component to compel CEC to reimburse small
businesses for the cost of installation, up to $800 of an
interval meter, up to a cap of $25 million. Cost recovery is
AB 29 X1
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contingent upon the customer voluntarily reducing electricity
usage by 10% for one year following the date of installation of
the meter, subject to verification by CEC.
Interval meters allow businesses to determine how much
electricity they are consuming, at fifteen-minute intervals.
Currently large retail businesses, such as Target Stores,
Federated Department Stores, etc. have installed interval meters
in their retail outlets, with no compensation incentives
directing them to do so. The meters allow the businesses to
control consumption. SBX1 5 also contains provisions relating
to funding of interval meters in its $70 million total
allocation for demand responsive programs.
Interval meters are both a demand control measure which benefits
overall electricity supply (estimated 40 megawatts (MW)
reduction in total), and a cost control measure for businesses,
large and small, to reduce costs by reducing consumption.
Especially where there is a prospect of tiered rate structuring,
interval meters allow electricity customers to identify their
usage during peak periods and to quantify their usage with
regard to baseline levels.
Grant Program/ Energy Efficient Appliances: ABX1 29 also
proposes opening a $200 million grant program administered by
CEC to cover 50% of the cost of purchase (up to specified
limits) of an energy efficient appliance (room air conditioners,
central air conditioners, refrigerators, etc.) for qualified low
income persons. The measure also requires CEC to work in
cooperation with state agencies and community-based
organizations to open exchange centers. Staff at the exchange
centers are to assist in the pick up of old appliances and
certify to CEC that the energy inefficient model was or will be
destroyed in an environmentally sounds manner.
These provisions are paralleled in SBX1 5 as well, which would
appropriate $240 million for the California Public Utilities
Commission (CPUC) to perform these functions, or for publicly
owned utilities to perform them for low-income customers. The
purpose of the ABX1 29 grant program is to provide funding to
get low-income users to purchase more energy efficient
appliances and reduce overall demand. However, many low-income
customers live in apartments. The likelihood that
refrigerators, heating and cooling systems, etc, are owned by a
property owner and not the low-income renter is very high.
AB 29 X1
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The author has quantified the estimated electricity savings this
program at 300 MW per year, but has not demonstrated how many
low-income customers have been determined to be owners of the
appliances covered by ABX1 29. This is a well-intentioned grant
program, which could allow a low income individual to purchase a
number of energy saving appliances at 50% of what it would
otherwise cost. However, even a purchase price of $400 for a
refrigerator may pose a significant barrier to purchase for a
low-income customer. The author may wish to amend the bill to
allow residential property owners, including non-profits and
housing authorities, to participate in this grant program to
better ensure that the appliances get into the buildings and the
energy savings actually accrue.
Loans to Small Businesses: The measure also provides $100
million for low interest loans to small businesses, including
residential property owners for construction or retrofitting for
added energy efficiency. There is a similar grant program for
low-income households for such retrofitting. SBX1 5 provides
for a similar program funded at $186 million. This provision of
ABX1 29 works well in conjunction with grants to property owners
to build on demand reduction.
Renewable Buy Down Program: This bill sets aside another $50
million for a consumer-based program to foster development of
emerging renewable technologies in distributed generation
applications. The measure allocates $25 million for
photovoltaic technologies and the remainder for solar thermal
electric and fuel cell technologies. These could represent good
investment in consumer based expansion of technologies which
relieve demand on the electricity grid.
Suggested author's amendments . The author may wish to delete
language in Article 3, at pages 3 and 4 referring to low-income
customers and replace this with eligible residential property
owners, including non-profits, housing authorities and other
property owners with housing provided to low-income residents.
Net energy savings are more likely to accrue through this means
as owners are more likely to be in a financial position to
actually afford to replace existing appliances with energy
efficient ones.
REGISTERED SUPPORT / OPPOSITION :
AB 29 X1
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Support
Building Owners and Managers Association of CA (if amended)
Planning and Conservation League
UCAN
Opposition
None on file.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916)
319-2083