BILL ANALYSIS
AB 653
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Date of Hearing: April 28, 2003
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Hannah-Beth Jackson, Chair
AB 653 (Nunez) - As Amended: March 24, 2003
SUBJECT : Energy efficiency: public buildings.
SUMMARY : This bill extends the sunset date and eligibility
requirements for bonding authority related to the State Public
Works Board (PWB) "Energy Conservation in Public Buildings"
program (Program).
EXISTING LAW :
1)Authorizes the State Public Works Board, until January 1,
2005, to issue revenue bonds, notes, and bond anticipation
notes to finance the cost of cogeneration equipment,
alternative energy equipment, and conservation measures in
public buildings.
2)Provides for the establishment of the Sustainable Building
State Task Force.
3)States that it is the policy of the state to use available
resources at state facilities which can substitute for
traditional energy and waster supplies or produce electricity
or water at its facilities when use or production will reduce
long-term energy or water expenditures.
THIS BILL :
1)Expands the Program's eligibility to include projects that
combine conservation and alternative energy equipment.
2)Requires PWB, in determining whether to issue funding, to
evaluate each proposed project in its entirety and analyze the
costs and financial and energy savings over the life of the
project.
3)Extends the sunset date of the Program's bonding authority by
five years, to January 1, 2010.
FISCAL EFFECT : Unknown
AB 653
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COMMENTS :
1)Background
According to the author's office, this bill is intended to
extend the life of the "Energy Conservation in Public Buildings"
program by expanding its eligibility requirements and adding
another five years to the sunset date. The original program was
created in 1982 and provided bonding authority to PWB for up to
$500 million to finance the cost of conservation or alternative
energy projects in state buildings. The Legislature enacted the
program to assist to assist PWB in developing "energy and water
conservation and cogeneration and alternative energy and water
supply sources at state facilities." The Program was to provide
a mix of financing options (bonds, notes and commercial paper)
for the development of cost saving state energy and water
conservation projects." According to the bill sponsor, the
Program still has approximately $235 million available for
projects. Without an extension of the sunset date, DGS will
stop approving future projects under the Program this year
because of the "significant lead time for development and bond
sales".
2)Looking at Projects over the Life of the Project
Under existing law, when DGS considers funds for an energy
efficiency project under this Program, the total project must
pay for the service of its bond costs and interest-meaning that
all projects must be revenue positive in order to be approved.
Additionally, existing law also requires that any project must
pay for themselves within 10 years, regardless of the life span
or usefulness of the project. By extending the evaluation
period to the full span of the project, longer-term investments
that pay off more slowly but are still revenue positive can be
approved.
3)Energy Resources and Conservation
On August 2, 2000, Executive Order D-16-00 established Governor
Davis' sustainable building goals. In pertinent part, the
stated goals are:
"?to site, design, deconstruct, renovate, operate, and maintain
state buildings that are models of energy, water, and materials
efficiency; while providing healthy, productive and comfortable
AB 653
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indoor environments and long-term benefits to Californians."
According to a recent report by the State and Consumer Services
Agency, the State of California invests over $2.5 billion
annually in the design, construction, and renovation of state
facilities. Sustainable buildings optimize energy, water and
materials efficiency; improve indoor environmental quality and
comfort; and use environmentally preferable products processes.
This program specifically assists in promoting environmentally
sound renewable and energy efficient projects on state
facilities. The changes made by this bill will allow projects
to be considered over the entire life of the project and allow
energy efficient projects to be bundled for consideration for
funding.
REGISTERED SUPPORT / OPPOSITION :
Support
Planning and Conservation League (sponsor)
City of San Diego
Clean Power Campaign
Vote Solar
Opposition
None on file
Analysis Prepared by : Kyra Emanuels Ross / NAT. RES. / (916)
319-2092