BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 769|
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THIRD READING
Bill No: SB 769
Author: Simitian (D)
Amended: 5/2/05
Vote: 21
SENATE ENERGY, UTILITY, & COM. COMMITTEE : 9-0, 4/19/05
AYES: Escutia, Morrow, Alarcon, Battin, Bowen, Cox, Dunn,
Kehoe, Simitian
NO VOTE RECORDED: Campbell, Murray
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Energy Reliability and Affordability Act:
energy-efficient
refrigerators
SOURCE : Author
DIGEST : This bill (1) establishes a refrigerator
replacement program, to be administered by the Public
Utilities Commission, for low-income residential rental
units, (2) eliminates the prohibition on the use of certain
surcharge revenues to provide incentives for new energy
efficient refrigerators, and (3) requires the Public
Utilities Commission to report to the Legislature annually
on the effectiveness of the program in reducing energy
consumption.
ANALYSIS : Under existing law, the investor-owned
utilities administer, subject to the Public Utilities
CONTINUED
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Commission (PUC) approval, a variety of energy efficiency
programs including ones that offer rebates and subsidies
for replacement refrigerators for low-income customers.
For example, San Diego Gas & Electric (SDG&E) administers a
program for low-income renters in which SDG&E pays for
one-half of the cost of an energy efficient refrigerator
and the landlord pays the other half. These program s are
funded with electricity rate revenues.
Current law requires the investor-owned utilities to impose
a surcharge, referred to as the public goods charge (PGC),
on electricity bills to fund energy efficiency and
conservation programs. Each year, the utilities collect
about $200 million in PGC revenues. Existing law also
prohibits the use of such funds for the purchase of
energy-efficient refrigerators, due to a concern that the
old refrigerator would be retained as second refrigerator,
thereby undermining the purpose of the replacement program.
This bill eliminates the prohibition on the use of PGC
funds for replacement refrigerator purposes, and requires
that the old refrigerator be recycled.
This bill also:
1. Requires the PUC to establish a refrigerator replacement
program to replace energy inefficient refrigerators.
2. Provides that program components must include rebates
or other financial incentives for owners of
limited-income residential units.
3. Requires that replacement refrigerators meet certain
criteria.
4. Requires the PUC to consider cost-effectiveness when
adopting program guidelines, but requires that higher
priority be given to reducing energy costs borne by
persons who can least afford high energy prices.
5. Requires the PUC to report annually to the Legislature
on program effectiveness, and such things as outreach and
an education plan for the following year.
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The goal of the refrigerator program established by this
bill is to replace 50,000 energy inefficient refrigerators.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
Increased costs to the PUC for program administration,
education, outreach, and reporting are probably under
$150,000 annually. PURA revenues are derived from an
annual fee imposed on utilities. Therefore, any increased
costs to the PUC should be offset by fee revenues.
This bill is targeted at low-income renters who do not own
their own refrigerators but pay their own electric bills.
These renters have little incentive or means to purchase
their own refrigerators. Their landlords similarly have no
incentive because the electric bill is paid by the renter.
SCE's program covers this situation by paying the entire
cost of a replacement refrigerator. SDG&E's program covers
this situation by paying for half the cost of a replacement
refrigerator. PG& E has a significant refrigerator
replacement program which apparently does not target this
type of customers.
SUPPORT : (Verified 5/24/05)
Californians Against Waste
California Rural Legal Assistance Foundation
Clean Power Campaign
Environment California
Environmental Defense
Planning and Conservation League
Sierra Club California
The Utility Reform Network
Union of Concerned Scientists
Utility Consumers' Action
Western Center on Law and Poverty
San Francisco Public Utilities Commission
Global Green USA
California Housing Council, Inc.
NC:do 5/25/05 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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