BILL NUMBER: SB 769 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 11, 2005
INTRODUCED BY Senator Simitian
FEBRUARY 22, 2005
An act to add Chapter 10.8 (commencing with Section 25940) to
Division 15 of the Public Resources Code, and to add Section
383.7 to the Public Utilities Code, relating to energy
resources , and making an appropriation therefor .
LEGISLATIVE COUNSEL'S DIGEST
SB 769, as amended, Simitian. Energy Reliability and
Affordability Act.
Existing
(1) Existing law requires the
State Energy Resources Conservation and Development Commission to
implement and administer various energy generation and conservation
programs in the state.
This bill would enact establish the
Energy Reliability and Affordability Act, to increase energy
reliability and affordability by reducing the demand for energy by
residential customers. The bill would create the Energy Reliability
and Affordability Fund in the State Treasury , and would
authorize expenditures from the fund, upon appropriation by the
Legislature, for specified purposes related to the implementation and
administration of the act. The bill would require the commission to
establish the Energy Reliability and Affordability Program to, among
other things, provide incentives to owners of limited-
income rental residential units with energy inefficient refrigerators
to replace those refrigerators with more energy efficient models
. The bill would require the commission to adopt
guidelines and r egulations to implement the
act. The bill would authorize the commission to contract with an
appropriate entity to replace refrigerators pursuant to the act
.
The bill would require the commission to annually prepare and
submit to the Legislature, the Department of Finance, and the
Legislative Analyst's Office, a report containing specified
information about the effectiveness of the program, as specified.
(2) Under the Public Utilities Act, the Public Utilities
Commission (PUC) requires electrical corporations to identify a
separate rate component to fund programs that enhance system
reliability and provide in-state benefits. This rate component is a
nonbypassable element of local distribution and collected on the
basis of usage. The funds are collected to support cost-effective
energy efficiency and conservation activities, public interest
research and development not adequately provided by competitive and
regulated markets, and renewable energy resources (renewable energy
public goods charge).
This bill would require that the PUC, at the earliest
possible time, initiate ratemaking proceedings to increase the
nonbypassable usage provisions in an amount not less than .006 cents
per kilowatthour, or in an amount necessary to generate $10,000,000
per year to be used for the purposes of the act, whichever is
greater. The bill would require that a portion of the moneys
collected from that renewable energy public goods charge in an amount
equal to $10,000,000 per year be transferred to the Energy
Reliability and Affordability Fund to be held until further action by
the Legislature for the purposes of the act. The bill
would provide that the moneys in the fund shall be continuously
appropriated to the commission, without regard to fiscal year; and,
would authorize the expenditure of moneys in the fund by the
commission, for the purposes of the act, as provided. The bill would
provide that the act shall be implemented by the commission to the
extent that funds are available to the commission for the purposes of
the bill.
Vote: majority. Appropriation: yes no
. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 10.8 (commencing with Section 25940) is added
to Division 15 of the Public Resources Code, to read:
CHAPTER 10.8. Energy Reliability and Affordability Act
25940. This chapter shall be known, and may be cited, as the
Energy Reliability and Affordability Act. The purpose of the act is
to increase energy reliability and affordability by reducing the
demand for energy by residential customers in
limited-income residential rental units .
25940.1 The Legislature finds and declares all of the following:
25940.1 The Legislature finds and declares all of the
following:
(a) In California, refrigerators consume more energy than any
other household appliance and consume more energy than any other
residential use besides lighting.
(b) Replacing energy inefficient refrigerators in limited-income
residential rental units will greatly benefit all energy consumers by
reducing peak and overall energy demand.
(c) Replacing energy inefficient refrigerators in limited-income
residential rental units will further benefit those renters by
reducing their energy bills.
(d) Reducing energy consumption will reduce air pollution, thus
reducing public health risks, health care costs, and environmental
degradation. Decreasing air pollution will increase the quality of
life for all Californians.
(e) The average first use lifespan of a refrigerator is 19 years,
and the average age of the refrigerator fleet in California is 11
years.
(f) Federal energy efficiency standards for refrigerators were set
in 1993 and 2001, with each standard requiring an additional 30
percent reduction in the appliance's energy consumption. Most
refrigerators in California do not meet current minimum federal
efficiency standards.
(g) The United States Department of Energy and the United States
Environmental Protection Agency established the Energy Star program
in 1992 to identify and promote energy-efficient products to reduce
greenhouse gas emissions. The Energy Star program qualified
refrigerator models that use at least 15 percent less energy than
required by federal energy efficiency standards, and 40 percent less
energy than the models that meet the 2001 standard. The Energy Star
program-qualified refrigerators require about half as much energy as
models manufactured before 1993.
(h) Owners of limited-income rental housing units have no
incentive to replace older, energy inefficient refrigerators because
renters, rather than the owners, typically are the responsible party
for the payment of energy bills incurred in those rental units.
(i) The Public Goods Charge (PGC) on electricity purchases
established pursuant to Section 385 of the Public Utilities Code was
created in 1996 to support public purpose programs for energy
efficiency, low-income services, renewable energy, and energy-related
research and development.
(j) Under existing PGC programs, investor owned utilities have
replaced approximately 200,000 energy inefficient refrigerators.
(k) The PGC is statutorily limited at levels set in 2000.
(l) Approximately four to five million households in California
have a combined household income equivalent to, or less than, 175
percent of the federal poverty level.
(m) By increasing the PGC by approximately forty cents ($0.40) per
residential household per year, the California Public Utilities
Commission can raise approximately ten million dollars ($10,000,000)
per year to replace 50,000 energy inefficient refrigerators annually
in limited income rental housing.
(n) Replacing 50,000 energy inefficient refrigerators will save
___ kilowatts per year, which is approximately the amount of
kilowatts that would have prevented __ blackouts in ___ year or the
need for ___ powerplants.
25940.2. As used in this chapter, the following terms have the
following meanings:
(a) "Certified appliance recycler" means a person or entity
engaged in the business of removing and properly managing materials
that require special handling from discarded major appliances, and
who is certified pursuant to Section 25211.4 of the Health and Safety
Code. "Certified appliance recycler" does not include a person
described in subdivision (b) of Section 25211.2 of the Health and
Safety Code.
(b) "Energy efficient refrigerators" means those refrigerator
models that meet the 2001 federal energy efficiency standard, and
that have also received the Energy Star certification.
(c) "Energy-inefficient refrigerators" means those models that do
not meet the 2001 federal energy efficiency standard.
(d) "Energy Star" means those models of refrigerators that are
certified through the United States Department of Energy/United
States Environmental Protection Agency Energy Star program.
(e) "Fund" means the Energy Reliability and Affordability Fund
created pursuant to subdivision (a) of Section 25940.4.
(f) "Limited income" means those individuals and households who
qualify for assistance under the California Alternative Rates for
Energy (CARE) program established pursuant to Section 739.1 of the
Public Utilities Code, including those persons whose household income
does not exceed 175 percent of the federal poverty guidelines. For
disabled and senior citizens, the income eligibility guidelines are
set at 200 percent of the federal poverty level.
(g) "Owner of a limited-income residential rental unit" means the
owner of record of any property leased to a limited income individual
or household for residential purposes.
(h) "Program" means the Energy Reliability and Affordability
Program, established pursuant to Section 25940.3.
25940.3. (a) The goal of the program established by this chapter
is to reduce energy consumption by replacing 50,000 energy
inefficient refrigerators in limited-income residential rental units
each year, utilizing revenues collected pursuant to this chapter, in
addition to those refrigerators previously replaced using funds from
the public goods charge established pursuant to Section 385 of the
Public Utilities Code. The base year for determining any additional
program replacements shall be the 2004-05 fiscal year.
(b) To accomplish this goal, the commission shall establish the
Energy Reliability and Affordability Program, which shall do all of
the following:
(1) Provide sufficient incentives to owners of limited-income
residential rental units with energy inefficient refrigerators to
replace those refrigerators with energy efficient models.
(2) Provide rebates or other financial incentives that are made
available to owners of limited-income residential rental units upon
the proof of purchase of the energy-efficient refrigerator and proof
that the inefficient refrigerator is in the control of a certified
appliance recycler.
(3) Require that any replacement refrigerator to be in operating
condition.
(4) Require that any replacement refrigerators meet or exceed 2001
energy efficiency standards and meet or exceed the United States
Department of Energy/United States Environmental Protection Agency
Energy Star standards for refrigerators.
(5) Prohibit any refrigerator exchanged as part of this program
from being refurbished or reused, but permit the recycling of metal
and other parts of the exchanged refrigerator.
(6) Prioritize the replacement of the least efficient
refrigerators.
25940.4. (a) The Energy Reliability and Affordability Fund is
hereby created in the State Treasury. The money in the fund may be
expended by the commission for the implementation and administration
of this chapter, upon appropriation by the Legislature in the annual
Budget Act.
(b) An amount not exceeding 1 percent of the total amount of
moneys annually deposited in the fund may be expended for education
and outreach. An amount not exceeding one-half of 1 percent from the
total amount of moneys annually deposited in the fund may be expended
for administrative costs.
(c) The fund is a trust fund and shall contain money from all
interest, and any other proceeds appropriated, transferred, or
otherwise received for purposes pertaining to this chapter. Any
appropriations that are made from the fund shall have an encumbrance
period of not longer than two years, and a liquidation period of not
longer than four years.
25940.5. The commission shall adopt guidelines and regulations to
accomplish the purposes of this chapter.
25940.6. The commission may contract with an appropriate entity to
replace refrigerators pursuant to this chapter.
25940.7. The commission shall consider cost-effectiveness when
adopting guidelines or regulations for the program, but shall give
higher priority to reducing the energy costs borne by persons who can
least afford high energy prices.
25940.8. The commission shall annually prepare and submit to the
Legislature, the Department of Finance, and the Legislative Analyst's
Office a report containing the following information:
(a) The number of rental units in the state that have had
refrigerators replaced pursuant to this chapter.
(b) The remaining number of eligible units in the state that are
in need of refrigerator replacement.
(c) The energy savings per participating household.
(d) The energy savings for the program as a whole.
(e) A map indicating areas where refrigerator replacements have
occurred and other areas where refrigerator replacements have not
occurred.
(f) A description of the administrative and programmatic costs for
each refrigerator replaced.
(g) A description of outreach and education expenditures.
(h) An outreach and education plan for the following fiscal year.
(i) A description of any recommended program modifications for the
following fiscal year.
SEC. 2. Section 383.7 is added to the Public Utilities Code, to
read:
383.7. (a) The commission shall, at the earliest possible time,
initiate ratemaking proceedings to increase the nonbypassable usage
based charge on local distribution service imposed pursuant to
Section 385 in an amount not less than (.006) cents per kilowatthour,
or in an amount necessary to generate ten million dollars
($10,000,000) per year to be used for the purposes of Chapter 10.8
(commencing with Section 25940) of Division 15 of the Public
Resources Code, whichever is greater.
(b) A portion of the moneys collected pursuant to subdivision (a)
in an amount equal to ten million dollars ($10,000,000) per year
shall be transferred to the Energy Reliability and Affordability Fund
created pursuant to subdivision (a) of Section 25940.3 of the Public
Resources Code, to be held until further action by the Legislature
for the purposes of Chapter 10.8 (commencing with Section 25940) of
Division 15 of the Public Resources Code.
(a) The oldest home appliances, such as refrigerators and small
air-conditioners, are the least efficient. Those appliances consume
unnecessary amounts of energy, and should be replaced with new, much
more efficient appliances. Also, older homes and apartments tend to
have insufficient amounts of insulation, and often have poor
weatherstripping, outdated showerheads and faucets, and inefficient
light bulbs, which waste even more energy.
(b) Owners and renters of older homes and apartments are often
unable to afford energy saving appliances and devices, which would
improve the energy efficiency of those dwellings; and, the
modernization of those housing units would greatly benefit all energy
consumers by reducing peak energy demand and overall energy demand.
(c) The current high cost of energy has made most energy saving
improvements even less affordable; yet, the state's residents are in
greater need of reducing their energy bills as a result.
(d) Air pollution continues to be a major problem in California,
which harms the health of our residents, costs our economy billions
of dollars related to health care costs, reduces agricultural
productivity, and contributes to the deterioration of California's
infrastructure, thereby decreasing the quality of life in our state.
Reducing energy use will reduce air pollution.
25940.2. As used in this chapter, the following terms have the
following meanings:
(a) "Certified local community conservation corps" means public or
private nonprofit agencies that meet the requirements of Section
14406.
(b) "Fund" means the Energy Reliability and Affordability Fund
created pursuant to Section 25940.3.
(c) "Local community based organization" means ____.
(d) "Program" means the Energy Reliability and Affordability Act
Program established pursuant to this chapter.
25940.3. (a) All funds received pursuant to this chapter shall be
deposited in the Energy Reliability and Affordability Fund, which is
hereby created in the State Treasury.
(b) Notwithstanding Section 13340 of the Government Code, the
moneys in the fund shall be continuously appropriated to the
commission, without regard to fiscal year.
25940.4. Any activity proposed to be funded pursuant to this
chapter shall be in compliance with Division 13 (commencing with
Section 21000).
25940.5. The commission may expend the money in the fund for the
following purposes:
(a) To provide sufficient incentives to owners of old and
inefficient home appliances, including, but not limited to,
refrigerators, freezers, and room and other types of
air-conditioners, to exchange these appliances for new appliances, or
retire the old appliances. Appliances to be exchanged or retired
shall be in operating condition. New refrigerators and freezers shall
meet or exceed the United States Department of Energy October 2000
standards. New air-conditioning equipment shall meet or exceed the
commission's applicable standards. In determining which appliances
are eligible for the incentives provided by the program, the
commission shall require that the most efficient appliances be
purchased pursuant to this program, taking into consideration market
availability.
(b) To provide financial incentives for residential property
owners to add insulation, install weatherstripping, replace
inefficient light bulbs, and implement other low-cost, cost-effective
energy conservation improvements.
25940.6. The commission may do all of the following to implement
the program:
(a) Provide for rebates or other financial incentives to implement
this act.
(b) Use the money in the fund to publicize the program, except
that the commission shall not use more than 1 percent of the funds
for this purpose.
(c) Expend money in the fund for administration of the program,
except that the commission shall not spend more than one-half of 1
percent of the funds for that purpose.
(d) Adopt guidelines or regulations to carry out this chapter.
(e) Contract with an appropriate entity to implement and
administer this chapter.
(f) Open exchange centers, or develop other convenient means, for
the owners of appliances to trade them in for more efficient
appliances and to carry out the other provisions of this act.
25940.7. (a) A person or entity implementing subdivision (a) of
Section 25940.5 pursuant to a contract with the commission shall do
all of the following:
(1) Assist in the pick up of an old appliance.
(2) Certify to the commission that the energy inefficient model
was or will be destroyed or dismantled in an environmentally sound
manner. No appliance exchanged as part of this program shall be
refurbished or reused, but metal and other parts may be recycled.
(3) Carry out recycling of major appliances, as defined in Section
42166, in compliance with Article 10.1 (commencing with Section
25211) of Chapter 6.5 of Division 20 of the Health and Safety Code,
and Chapter 3.5 (commencing with Section 42160) of Part 3 of Division
30 of the Public Resources Code.
(b) The commission shall give first and highest priority to
contracting with local community-based organizations, certified local
community conservation corps and the California Conservation Corps
in carrying out this act.
25940.8. (a) The moneys in the fund shall, to the greatest extent
possible, be used to reduce the cost of energy for persons who can
least afford high energy prices. The commission shall give highest
priority to using the funds for improving the energy efficiency of
housing owned or occupied by low-income persons.
(b) The commission shall consider cost effectiveness in reducing
energy demand in adopting guidelines or regulations for the program,
but shall give higher priority to reducing the energy costs borne by
persons who can least afford high energy prices.
SEC. 2. The Energy Reliability and Affordability Act established
pursuant to Chapter 10.8 (commencing with Section 25940) of Division
15 of the Public Resources Code shall be implemented by the State
Energy Resources Conservation and Development Commission, to the
extent that funds are available to the commission for those purposes.
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