BILL ANALYSIS
AB 29 X1
Page 1
GOVERNOR'S VETO
AB 29 X1 (Kehoe)
As Amended April 5, 2001
2/3 vote
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|ASSEMBLY: |69-8 |(March 22, |SENATE: |29-9 |(April 5, |
| | |2001) | | |2001) |
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|ASSEMBLY: |55-14|(April 5, 2001) | | | |
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Original Committee Reference: REV. & TAX.
SUMMARY : Creates various energy efficiency programs through
existing delivery mechanisms at the California Energy Commission
(CEC) and California Public Utilities Commission (CPUC) and
provides some new programs through the California Conservation
Corps (CCC).
The Senate amendments merge provisions of this bill and numerous
other Assembly bills (AB 40 X1 (Alquist), AB 42 X1 (Cedillo), AB
43 X1 (Correa), AB 66 X1 (Keeley), AB 83 X1 (Keeley) into a
package of energy efficiency measures with a reduced total
required appropriation of $408.65 million. Makes provisions for
net metering and waiver of standby charges for solar or wind
customer-generators until January 1, 2003, unless extended by
statute.
1)The merged programs have appropriations of:
a) $50 million grant/loan program for low-income
individuals and small businesses to construct/retrofit
buildings to be more energy efficient;
b) $35 million time-of-use metering program for large
customers (200 kilowatts or more) and a $15 million pilot
AB 29 X1
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project at CPUC of real time metering for nonresidential
customers;
c) $50 million Small Business Energy Efficient
Refrigeration Loan Program;
d) $50 million augmentation to the existing State Energy
Conservation Assistance Account to provide loans and grants
to local governments for energy efficiency;
e) $15 million from the General Fund and $15 million from
Renewable Resource Trust Fund to augment Emerging Renewable
Resources Account to promote distributed generation; and,
f) $4.5 million to complete Southeast Geysers Power Plant.
2)Other appropriations totaling $199.15 million outside these
agencies are:
a) $40 million for Energy Renewable Loan Loss Reserve Fund
to guarantee loans for renewable projects;
b) $40 million for CCC) and $20 million to Department of
Community Services and Development (DCSD) to purchase,
distribute and install subcompact fluorescent lights and
other energy saving devices;
c) $25 million to California Alternative Energy and
Advanced Transportation Financing Authority for financial
assistance to public power entities, independent generators
and others to develop clean distributed generation;
d) $24 million to Department of Corrections (DOC) to
retrofit generation units to improve environmental
performance; and,
e) $25.15 million for the Proposition 98 Reversion Account
to community college districts for energy projects and a
one time grant for Community College League to establish a
statewide database of utility usage and conservation
planning.
AB 29 X1
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AS PASSED BY THE ASSEMBLY , this bill:
1)Established new energy conservation programs and augmented an
existing program under the direction of CEC, and provides a
$200 million appropriation for these purposes.
2)Required CEC to:
a) 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;
b) Administer a grant program for replacement of energy
inefficient appliances;
c) Administer a grant and loan program for eligible
construction retrofits, as prescribed; and,
d) Administer a small business energy efficient
refrigeration loan program.
3)Authorized CEC to adopt emergency regulations.
FISCAL EFFECT : $408.65 million appropriation from the General
Fund and Proposition 98 Reversion Fund.
COMMENTS : The Business Conservation Incentive Plan outlined in
this bill, 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
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, and Federated Department
Stores, 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. SB 5 X1
(Sher) also contains provisions relating to funding of interval
meters in its $70 million total allocation for demand responsive
AB 29 X1
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programs.
Interval meters are both a demand control measure which benefits
overall electricity supply (estimated 40 megawatts 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. This bill directs CEC to establish a
low-interest loan program for small businesses to install energy
efficient refrigerator equipment.
This bill proposes opening a $50 million grant program
administered by CEC to cover 50% of the cost of purchase (up to
specified limits) of an energy efficient appliance (i.e., room
air conditioners, central air conditioners, refrigerators) for
qualified low-income persons. Under this bill, CEC would be
required 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.
This bill directs CEC to establish a grant and low-interest loan
program for low-income persons and residential property owners
and small businesses to retrofit existing buildings with
energy-savings improvements.
This bill provides for CPUC to establish a reasonable level of
baseline quantity for gas and electric service allowing for
variance for customers who are using both gas and electricity
and those who are primarily served by electricity in their
homes. The measure also allows for additional accommodation
with baseline usage for customers with medical or other
specified additional energy needs. The utilities must establish
baseline rates.
Finally, this bill expands the existing definition of
customer-generators eligible for access to the electricity grid
on a standby basis and waives standby charges for eligible
customer-generators using solar or wind generation. This bill
AB 29 X1
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provides for terms under which net metering may be provided to
distributed generation customers and specifies obligations of
utilities to provide meters for customers under certain
conditions.
GOVERNOR'S VETO MESSAGE :
I have signed Assembly Bill 29X with the following
line item vetoes and reductions to more closely align
the bill with my expenditure plan and to prioritize
conservation measures for this summer.
I am eliminating the following:
$25.15 million re-appropriation from the
Proposition 98 Reversion Account to the Chancellor
of the California Community Colleges for energy
efficient projects and a statewide utility usage
database. These funds are already budgeted for
other purposes and are required by law to be used by
community colleges for educational purposes.
$20 million to the Department of Community
Services and Development to supplement the
Low-Income Housing Energy Assistance Program
(LIHEAP). $120 million has been provided for this
program in SB 5X.
$50 million to the California Energy Commission
(CEC) for loans and grants for construction and
retrofit projects and $50 million to the CEC for the
Small Business Energy Efficiency Refrigeration Loan
Program. These new programs require the
establishment of administrative procedures and will
not deliver peak reduction savings for this summer.
$24 million to the Department of Corrections to
install systems to retrofit generating units. These
funds would not increase electricity supply or
reduce demand.
AB 29 X1
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$15 million to the Public Utilities Commission
to fund a study of real-time meters. This bill
appropriates funds for the purpose and installation
of these meters.
In addition, I am reducing the following allocations:
From the funds allocated to the California
Conservation Corps, reduce the allocation from $40
million to $20 million for the Mobile Efficiency
Brigade. In order to achieve the most effective
energy savings by this summer, I am directing the
Conservation Corps to use these funds to purchase
materials and mobilize crews to deliver high
efficiency lighting to low-income residences.
While I am signing this bill, it is my understanding
that the Legislature will enact subsequent legislation
to remove the mandate created by the Statewide Energy
Management Program. I am also requesting subsequent
legislation to continuously appropriate the Renewable
Energy Loan Guarantee Program. It is standard for
loan guarantee programs to be continuously
appropriated and not contingent upon the annual
budget. As drafted, this bill removes the incentive
for banks to participate in this worthy program.
Analysis Prepared by : Kelly Boyd / E. C. & A. / (916)
319-2083
FN: 0000376