BILL NUMBER: SB 769 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 2, 2005
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 amend and repeal Section 399.4 of,
and to add Section 382.5 to, the Public Utilities Code,
relating to energy resources.
LEGISLATIVE COUNSEL'S DIGEST
SB 769, as amended, Simitian. Energy Reliability and
Affordability Act : energy-efficient refrigerators .
(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.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical
corporations. Under the Public Utilities Act, the commission requires
electrical corporations to identify a separate rate component to
fund programs that enhance system reliability and provide in-state
benefits. 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.
Existing law requires the commission, in evaluating energy
efficiency investments under its existing statutory authorities, to
ensure that no energy efficiency funds are used to provide incentives
for the purchase of new energy-efficient refrigerators.
This bill would delete that refrigerator purchase restriction
and would, instead, 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 a
refrigerator replacement 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 regulations to
implement the act. Because a violation of those guidelines or
regulations would be a crime under existing law, this bill would
create new crimes. 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.
(2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 382.5 is added to the
Public Utilities Code , to read:
382.5.
(a) This section 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.
(b) The Legislature finds and declares all of the following:
(1) In California, refrigerators consume more energy than any
other household appliance and consume more energy than any other
residential use besides lighting.
(2) Replacing energy inefficient refrigerators in limited-income
residential rental units will greatly benefit all energy consumers by
reducing peak and overall energy demand.
(3) Replacing energy inefficient refrigerators in limited-income
residential rental units will further benefit those renters by
reducing their energy bills.
(4) 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.
(5) The average first use lifespan of a refrigerator is 19 years,
and the average age of the refrigerator fleet in California is 11
years.
(6) 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.
(7) 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.
(8) 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.
(9) The Public Goods Charge (PGC) on electricity purchases
established pursuant to Section 381 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.
(10) Under existing PGC programs, investor owned utilities have
replaced approximately 200,000 energy inefficient refrigerators.
(11) The PGC is statutorily indexed to escalate with increasing
electricity sales or inflation, whichever is less.
(12) 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.
(13) 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.
(c) As used in this section, the following terms have the
following meanings:
(1) "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.
(2) "Energy efficient refrigerators" means those refrigerator
models that meet the 2001 federal energy efficiency standard, and
that have also received the Energy Star certification.
(3) "Energy-inefficient refrigerators" means those models that do
not meet the 2001 federal energy efficiency standard.
(4) "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.
(5) "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.
(6) "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.
(d) (1) The goal of the program established by this section 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 section, in addition to
those refrigerators previously replaced using funds from the public
goods charge established pursuant to Sections 381, 382, and 399.8.
(2) To accomplish this goal, the commission shall establish a
refrigerator replacement program, which shall do all of the
following:
(A) Provide sufficient incentives to owners of limited-income
residential rental units with energy-inefficient refrigerators to
replace those refrigerators with energy-efficient models.
(B) 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.
(C) Require that any replacement refrigerator to be in operating
condition.
(D) 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.
(E) 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.
(F) Prioritize the replacement of the least efficient
refrigerators.
(e) The commission shall adopt guidelines and regulations to
accomplish the purposes of this section.
(f) The commission may contract with an appropriate entity to
replace refrigerators pursuant to this section.
(g) 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.
(h) The commission shall annually prepare and submit to the
Legislature, the Department of Finance, and the Legislative Analyst's
Office a report containing all of the following information:
(1) The number of rental units in the state that have had
refrigerators replaced pursuant to this section.
(2) The remaining number of eligible units in the state that are
in need of refrigerator replacement.
(3) The energy savings per participating household.
(4) The energy savings for the program as a whole.
(5) A map indicating areas where refrigerator replacements have
occurred and other areas where refrigerator replacements have not
occurred.
(6) A description of the administrative and programmatic costs for
each refrigerator replaced.
(7) A description of outreach and education expenditures.
(8) An outreach and education plan for the following fiscal year.
(9) A description of any recommended program modifications for the
following fiscal year.
SEC. 2. Section 399.4 of the Public
Utilities Code , as added by Section 4 of Chapter 1050 of
the Statutes of 2000, is amended to read:
399.4.
(a) (1) In order to ensure that prudent investments in energy
efficiency continue to be made that produce cost-effective energy
savings, reduce customer demand, and contribute to the safe and
reliable operation of the electric distribution grid, it is the
policy of this state and the intent of the Legislature that the
commission shall continue to administer cost-effective energy
efficiency programs authorized pursuant to existing statutory
authority.
(2) As used in this section, the term "energy efficiency"
includes, but is not limited to, cost-effective activities to achieve
peak load reduction that improve end-use efficiency, lower customers'
bills, and reduce system needs.
(b) The commission, in evaluating energy efficiency investments
under its existing statutory authorities, shall also ensure
both of the following:
(1) That
that local and regional interests, multifamily dwellings, and energy
service industry capabilities are incorporated into program portfolio
design and that local governments, community-based organizations,
and energy efficiency service providers are encouraged to participate
in program implementation where appropriate.
(2) That no energy
efficiency funds are used to provide incentives for the purchase of
new energy-efficient refrigerators.
SEC. 3. Section 339.4 of the Public
Utilities Code , as added by Section 4 of Chapter 1050 of
the Statutes of 2000, is repealed.
399.4.
(a) (1)In order to ensure that prudent investments in energy
efficiency continue to be made that produce cost-effective energy
savings, reduce customer demand, and contribute to the safe and
reliable operation of the electric distribution grid, it is the
policy of this state and the intent of the Legislature that the
commission shall continue to administer cost-effective energy
efficiency programs authorized pursuant to existing statutory
authority.
(2) As used in this section, the term "energy efficiency"
includes, but is not limited to, cost-effective activities to achieve
peak load reduction that improve end-use efficiency, lower customers'
bills, and reduce system needs.
(b) The commission, in evaluating energy efficiency investments
under its existing statutory authorities, shall also ensure both of
the following:
(1) That local and regional interests, multifamily dwellings, and
energy service industry capabilities are incorporated into program
portfolio design and that local governments, community-based
organizations, and energy efficiency service providers are encouraged
to participate in program implementation where appropriate.
(2) That no energy efficiency funds are used to provide incentives
for the purchase of new energy-efficient refrigerators.
SEC. 4.
No reimbursement is required by this act pursuant to Section 6 of
Article XIII B of the California Constitution because the only costs
that may be incurred by a local agency or school district will be
incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.
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 in limited-income residential rental units.
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.