BILL NUMBER: SB 488AMENDED BILL TEXT AMENDED IN SENATE APRIL 14, 2009 INTRODUCED BY Senator Pavley FEBRUARY 26, 2009 An act toamend Section 2079.10 of the Civil Code, and toadd Chapter 10.9 (commencing with Section 25945) to Division 15 of the Public Resources Code, and to amend Section 739 of, and to add Section 9505 to, the Public Utilities Code, relating to energy. LEGISLATIVE COUNSEL'S DIGEST SB 488, as amended, Pavley. Energy:energy efficiency financing.energy usage information. (1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical corporations and gas corporations, as defined. The existing Public Utilities Act requires each electrical corporation and each gas corporation to disclose on the residential customer's billing statement specified information on usage and cost, and contact information for the commission's Consumer Affairs Branch, and to make available online to residential customers specified information on usage and energy conservation measures. The act authorizes the commission to modify, adjust, or add to these requirements as the individual circumstances of each electrical corporation or gas corporation merit, or for master-meter customers, as individual circumstances merit. The act requires the commission, as part of the general rate case of an electrical corporation or gas corporation, to assess opportunities to improve the quality of information contained in the utility's periodic billings. This bill would require the commission, on or before July 1, 2010, to require each electrical corporation and each gas corporation to periodically disclose on the billing statement of a residential subscriber, information documenting the amount of energy used by the metered residence compared to similar residences in the subscriber's geographical area. The bill would require the commission to require each electrical corporation and each gas corporation to identify those residences that used significantly more energy during the period than was used by similar residences in the subscriber's geographical area and to ensure that information is provided to those subscribers on energy saving strategies and programs available to assist in financing energy efficiency improvements. Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime. Because the provisions of this bill are within the act and require action by the commission to implement its requirements, a violation of these provisions would impose a state-mandated local program by creating a new crime. (2) Existing law defines weatherization and requires each publicly owned electric and gas utility that provides the energy for space heating for low-income customers to provide home weatherization services for those customers if a significant need for those services exists in the utility's service territory, taking into consideration both the cost-effectiveness of the services and the public policy of reducing financial hardships facing low-income households. Existing law requires each publicly owned electric and gas utility to submit a biennial report to the State Energy Resources Conservation and Development Commission (Energy Commission) describing the status of their low-income weatherization programs. This bill would require each local publicly owned electric utility and each local publicly owned gas utility, on or before July 1, 2010, to adopt a program to periodically disclose, on the billing statement of a residential subscriber, information documenting the amount of energy used by the metered residence compared to similar residences in the subscriber's geographical area. The bill would require each local publicly owned electric utility and each local publicly owned gas utility to identify those residences that used significantly more energy during the period than was used by similar residences in the subscriber's geographical area and ensure that information is provided to those subscribers on energy saving strategies and programs available to assist in financing energy efficiency improvements. The bill would require each local publicly owned electric utility and each local publicly owned gas utility, on or before July 1, 2011, and by July 1 each year thereafter, to report to the Energy Commission on the energy savings resulting from the program adopted by the utility pursuant to these requirements. By placing additional requirements upon local publicly owned electric and gas utilities, the bill would impose a state-mandated local program. (3) 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 specified reasons.(1) Existing law requires the State Energy Resources Conservation and Development Commission to establish criteria for adopting a statewide home energy rating program for residential dwellings. Existing law establishes the Renewable Energy Resources Program that is administered by the commission to address global warming and climate change by increasing the amount of electricity generated from eligible renewable resources. Existing law establishes various grant, loan, and loan guarantee programs to assist specified entities in implementing energy conservation and efficiency measures.This bill would require the commission, by July 1, 2010, in consultation with specified entities, to establish an ongoing procedure to develop an energy efficiency financing program to allow residential, commercial, industrial, and municipal participants to finance energy efficiency improvements funded through cost avoidance of the energy saved by the implemented measure. The commission would be required, beginning July 1, 2011, and annually thereafter, to submit to the Legislature a report on the progress of the program.(2) Existing law provides that if an informational booklet concerning home energy rating is delivered to a transferee of a real property, the seller or broker is not required to provide information that is additional to that contained in the booklet.This bill would provide that a seller or broker is not required to provide additional information regarding home energy efficiency if the transferee of a real property has received, as an alternative, any other information regarding energy efficiency produced by a utility provider or a public agency.Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program:noyes . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:SECTION 1.Section 2079.10 of the Civil Code is amended to read: 2079.10. (a) If the informational booklet published pursuant to Section 25402.9 of the Public Resources Code, concerning the statewide home energy rating program adopted pursuant to Section 25942 of the Public Resources Code, or any other information regarding energy efficiency produced by a utility provider or public agency, is delivered to a transferee in connection with the transfer of real property, including, but not limited to, property specified in Section 1102, manufactured homes as defined in Section 18007 of the Health and Safety Code, and property subject to Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, the seller or broker is not required to provide additional information concerning home energy efficiency, and the information in the booklet or produced by a utility provider or public agency shall be deemed to be adequate to inform the transferee about home energy efficiency improvement and conservation programs. (b) Notwithstanding subdivision (a),this section does not alter any existing duty of the seller or broker under any other law including, but not limited to, the duties of a seller or broker under this article, Article 1.5 (commencing with Section 1102) of Chapter 2 of Title 4 of Part 4 of Division 2 of the Civil Code, or Chapter 7.5 (commencing with Section 2621) of Division 2 of the Public Resources Code, to disclose information concerning the existence of a home energy rating program affecting the real property. (c) If the informational booklet or materials described in Section 375.5 of the Water Code concerning water conservation and water conservation programs are delivered to a transferee in connection with the transfer of real property, including property described in subdivision (a), the seller or broker is not required to provide information concerning water conservation and water conservation programs that is additional to that contained in the booklet or materials, and the information in the booklet or materials shall be deemed to be adequate to inform the transferee about water conservation and water conservation programs.SEC. 2.SECTION 1. Chapter 10.9 (commencing with Section 25945) is added to Division 15 of the Public Resources Code, to read: CHAPTER 10.9. ENERGY EFFICIENCY FINANCING PROGRAM 25945. The Legislature finds and declares all of the following: (a) The California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code) requires the State Air Resources Board to design emissions reduction measures in a manner that minimizes costs and maximizes benefits for California's economy, maximizes additional environmental and economic cobenefits for California, and complements the state's efforts to improve air quality. (b) To achieve the goals of the California Global Warming Solutions Act of 2006, every sector must explore opportunities to reduce energy consumption and related greenhouse gas emissions. (c) There exist significant opportunities for cost-effective energy efficiency improvements in all types of existing structures, including residential, commercial, industrial, and municipal. (d) California needs a systematic approach to providing every utility-using structure in the state with an energy audit and opportunity to increase energy efficiency by 2020, to meet the goals of the California Global Warming Solutions Act of 2006.(e) Utilities are the most logical industry through which a comprehensive audit and improvement program should be promulgated.(f) Removing market barriers such as upfront costs and allowing utility-administered funding for energy efficiency improvement financing programs will eliminate key barriers that keep building owners, renters, lessees, and municipalities from making the energy efficiency improvements necessary to meet these goals.25945.5. (a) On or before July 1, 2010, the commission shall establish an ongoing procedure to develop an energy efficiency financing program that will allow residential, commercial, industrial, and municipal participants to finance energy efficiency improvements funded through cost avoidance of the energy saved by the implemented measure. The financing shall be fixed to the meter location to ensure that the beneficiary of the improvement repay the cost, regardless of ownership or occupancy. (b) In determining the elements of the energy efficiency financing program, the commission shall consider all of the following: (1) The need for expanding existing energy audit programs to provide appropriate baseline energy information for each meter. Program expansion may include any of the following: (A) Expanding existing public goods charge programs. (B) Utilizing appropriate federal energy efficiency grants and programs. (C) Authorizing other sources of program funding. (2) The appropriate energy efficient measures that provide energy savings offsetting the cost of the measure within its useful life, may include all of the following: (A) Lighting, heating, cooling, and other energy efficient equipment. (B) Weatherization. (C) Distributed generation systems. (D) Water-saving features and devices. (3) Utility billing system requirements. (4) Appropriate monthly charges for each specified measure, including consideration of the availability of applicable government run and nongovernmental assistance and loan programs as well as rebates. (5) Appropriate program charges. (6) The expected value of establishing this program, including all of the following: (A) Reductions in greenhouse gas emissions. (B) Reductions in annual and peak energy demands. (C) Reduction in customer utility bills. (7) The appropriate methods for informing and educating the public as to the new program. (8) Appropriate disclosures and notifications. (9) Any other considerations deemed appropriate by the Public Utilities Commission. (c) Prior to adopting an energy efficiency financing program, the commission shall do both of the following: (1) Consult with representatives from the Contractors State Licensing Board, the Department of Real Estate, the Department of Housing and Community Development, the Public Utilities Commission, investor-owned utilities, publicly owned utilities, cities and counties, real estate licensees, home builders, mortgage lenders, home appraisers and inspectors, energy efficient product vendors, home energy rating organizations, consumer groups, environmental and environmental justice groups. (2) Hold at least three public hearings in geographically diverse locations throughout the state. (d) Beginning July 1, 2011, and annually thereafter, the commission shall submit a report to the Legislature detailing the progress of the program, the number of metered users that took advantage of the financing program, the amount of energy savings resulting from the implemented measures, and an estimate of the greenhouse gas reduction resulting from the program. The report may also contain recommendations for expanding or otherwise improving the program.SEC. 2. Section 739 of the Public Utilities Code is amended to read: 739. (a) As used in this section: (1) "Baseline quantity" means a quantity of electricity or gas allocated by the commission for residential customers based on from 50 to 60 percent of average residential consumption of these commodities, except that, for residential gas customers and for all-electric residential customers, the baseline quantity shall be established at from 60 to 70 percent of average residential consumption during the winter heating season. In establishing the baseline quantities, the commission shall take into account climatic and seasonal variations in consumption and the availability of gas service. The commission shall review and revise baseline quantities as average consumption patterns change in order to maintain these ratios. (2) "Residential customer" means those customers receiving electrical or gas service pursuant to a domestic rate schedule and excludes industrial, commercial, and every other category of customer. (b) The commission shall designate a baseline quantity of gas and electricity which is necessary to supply a significant portion of the reasonable energy needs of the average residential customer. In estimating those quantities, the commission shall take into account differentials in energy needs between customers whose residential energy needs are currently supplied by electricity alone or by both electricity and gas. The commission shall develop a separate baseline quantity for all-electric residential customers. For these purposes, "all-electric residential customers" are residential customers having electrical service only or whose space heating is provided by electricity, or both. The commission shall also take into account differentials in energy use by climatic zone and season. (c) (1) The commission shall establish a standard limited allowance which shall be in addition to the baseline quantity of gas and electricity for residential customers dependent on life-support equipment, including, but not limited to, emphysema and pulmonary patients. A residential customer dependent on life-support equipment shall be allocated a higher energy allocation than the average residential customer. (2) "Life-support equipment" means that equipment which utilizes mechanical or artificial means to sustain, restore, or supplant a vital function, or mechanical equipment which is relied upon for mobility both within and outside of buildings. "Life-support equipment," as used in this subdivision, includes all of the following: all types of respirators, iron lungs, hemodialysis machines, suction machines, electric nerve stimulators, pressure pads and pumps, aerosol tents, electrostatic and ultrasonic nebulizers, compressors, IPPB machines, and motorized wheelchairs. (3) The limited allowance specified in this subdivision shall also be made available to paraplegic and quadriplegic persons in consideration of the increased heating and cooling needs of those persons. (4) The limited allowance specified in this subdivision shall also be made available to multiple sclerosis patients in consideration of the increased heating and cooling needs of those persons. (5) The limited allowance specified in this subdivision shall also be made available to scleroderma patients in consideration of the increased heating needs of those persons. (6) The limited allowance specified in this subdivision shall also be made available to persons who are being treated for a life-threatening illness or have a compromised immune system, if a licensed physician and surgeon or a person licensed pursuant to the Osteopathic Initiative Act certifies in writing to the utility that the additional heating or cooling allowance, or both, is medically necessary to sustain the life of the person or prevent deterioration of the person's medical condition. (d) (1) The commission shall require that every electrical and gas corporation file a schedule of rates and charges providing baseline rates. The baseline rates shall apply to the first or lowest block of an increasing block rate structure which shall be the baseline quantity. In establishing these rates, the commission shall avoid excessive rate increases for residential customers, and shall establish an appropriate gradual differential between the rates for the respective blocks of usage. (2) In establishing residential electric and gas rates, including baseline rates, the commission shall assure that the rates are sufficient to enable the electrical corporation or gas corporation to recover a just and reasonable amount of revenue from residential customers as a class, while observing the principle that electricity and gas services are necessities, for which a low affordable rate is desirable and while observing the principle that conservation is desirable in order to maintain an affordable bill. (3) At least until December 31, 2003, the commission shall require that all charges for residential electric customers are volumetric, and shall prohibit any electrical corporation from imposing any charges on residential consumption that are independent of consumption, unless those charges are in place prior to April 12, 2001. (e) (1) Each electrical corporation and each gas corporation shall, in a timeframe consistent with each electrical and gas corporation's next general rate case, disclose on the billing statement of a residential customer all of the following: (A) Cost per kilowatthour or gas therm per tier. (B) Allocation of kilowatthour or gas therm per tier. (C) Visual representation of usage and cost per tier. (D) Usage comparison with prior periods. (E) Itemized cost components in the bill to identify state and local taxes. (F) Identification of delivery, generation, public purpose, and other charges. (G) Contact information for the commission's Consumer Affairs Branch. (2) An electrical corporation and a gas corporation shall make available online to residential customers both of the following: (A) Examples of how conservation measures, including changing thermostat settings and turning off unused lights, could reduce energy usage and costs. (B) Examples of how energy-saving devices and weatherization measures could reduce energy usage and costs. (3) The commission may modify, adjust, or add to the requirements of this subdivision as the individual circumstances of each electrical corporation or gas corporation merits, or for master-meter customers, as individual circumstances merit. (4) The commission shall, as part of the general rate case of an electrical corporation or gas corporation, assess opportunities to improve the quality of information contained in the utility's periodic billings. (f) (1) On or before July 1, 2010, the commission shall require each electrical corporation and each gas corporation to periodically disclose, on the billing statement of a residential subscriber, information documenting the amount of energy used by the metered residence compared to similar residences in the subscriber's geographical area. (2) The commission shall require each electrical corporation and each gas corporation to identify those residences that used significantly more energy during the period than was used by similar residences in the subscriber's geographical area and ensure that information is provided to those subscribers, on energy saving strategies and programs available to assist in financing energy efficiency improvements.(f)(g) Wholesale electrical or gas purchases, and the rates charged therefor, are exempt from this section.(g)(h) Nothing contained in this section shall be construed to prohibit experimentation with alternative gas or electrical rate schedules for the purpose of achieving energy conservation. SEC. 3. Section 9505 is added to the Public Utilities Code , to read: 9505. (a) On or before July 1, 2010, each local publicly owned electric utility and each local publicly owned gas utility shall adopt a program to periodically disclose, on the billing statement of a residential subscriber, information documenting the amount of energy used by the metered residence compared to similar residences in the subscriber's geographical area. (b) Each local publicly owned electric utility and each local publicly owned gas utility shall identify those residences that used significantly more energy during the period than was used by similar residences in the subscriber's geographical area and ensure that information is provided to those subscribers on energy saving strategies and programs available to assist in financing energy efficiency improvements. (c) On or before July 1, 2011, and each July 1 thereafter, each local publicly owned electric utility and each local publicly owned gas utility shall report to the Energy Commission on the energy savings resulting from the program adopted by the utility pursuant to this section. SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, 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. With respect to certain other costs, no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.