BILL NUMBER: AB 2460 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 20, 2016
AMENDED IN ASSEMBLY MARCH 17, 2016
INTRODUCED BY Assembly Member Irwin
FEBRUARY 19, 2016
An act to amend Sections 2861, 2863, 2864, 2865, 2866, 2867, and
2867.3 of, to amend and renumber Section 2862 of, to repeal Sections
2860, 2867.1, and 2867.2 of, and to repeal and add Section 2867.4 of,
the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2460, as amended, Irwin. Solar thermal systems.
The Solar Water Heating and Efficiency Act of 2007, until August
1, 2017, requires the Public Utilities Commission, if it determines
that a solar water heating program is cost effective for ratepayers
and in the public interest, to implement a program to promote the
installation of 200,000 solar water heating systems in homes,
businesses, and buildings or facilities of eligible customer classes
receiving natural gas service throughout the state by 2017. The act
establishes the funding cap for the program, for the collective
service territories of all gas corporations, at $250,000,000. The
act, until August 1, 2017, requires the governing body of each
publicly owned utility providing gas service to retail end-use
customers to adopt, implement, and finance a solar water heating
system incentive program to encourage the installation of 200,000
solar water heating systems by 2017.
This bill would revise the program to, among other things, promote
the installation of solar water thermal
systems throughout the state, set the funding cap for the
program between January 1, 2017, and July 31, 2027, at
$1,000,000,000, reserve 50% of the total program budget for the
installation of solar water heating thermal
systems in low-income residential housing or in buildings in
disadvantaged communities, and extend the operation of the program
through July 31, 2027. Because a violation of any order, decision,
rule, direction, demand, or requirement of the commission
implementing these revisions would be a crime, this bill would impose
a state-mandated local program. The bill would also require the
governing body of each publicly owned utility providing gas service,
until August 1, 2027, to adopt, implement, and finance a solar
water heating thermal system incentive
program. Because the bill would extend the obligations of a publicly
owned electric utility to adopt, implement, and finance the program,
this bill would impose a state-mandated local program.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2860 of the Public Utilities Code is repealed.
SEC. 2. Section 2861 of the Public Utilities Code is amended to
read:
2861. As used in this article, the following terms have the
following meanings:
(a) "Disadvantaged community" means a community identified by the
California Environmental Protection Agency pursuant to Section 39711
of the Health and Safety Code.
(b) "Gas customer" includes both "core" and "noncore" customers,
as those terms are used in Chapter 2.2 (commencing with Section 328)
of Part 1, that receive retail end-use gas service within the service
territory of a gas corporation.
(c) "kWth" or "kilowatts thermal" means the unit of measure of the
equivalent thermal capacity of a solar water heating
thermal system that is calculated by multiplying
the aperture area of the solar collector area of the system,
expressed in square meters, by a conversion factor of 0.7.
(d) "kWhth" means kilowatthours thermal as measured by the number
of kilowatts thermal generated, or displaced, in an hour.
(e) "Low-income residential housing" means either of the
following:
(1) Residential housing financed with low-income housing tax
credits, tax-exempt mortgage revenue bonds, general obligation bonds,
or local, state, or federal loans or grants, and for which the rents
of the occupants who are lower income households, as defined in
Section 50079.5 of the Health and Safety Code, do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
(2) A residential complex in which at least 20 percent of the
total units are sold or rented to lower income households, as defined
in Section 50079.5 of the Health and Safety Code, and the housing
units targeted for lower income households are subject to a deed
restriction or affordability covenant with a public entity that
ensures that the units will be available at an affordable housing
cost meeting the requirements of Section 50052.5 of the Health and
Safety Code, or at an affordable rent meeting the requirements of
Section 50053 of the Health and Safety Code, for a period of not less
than 30 years.
(f) "New Solar Homes Partnership" means the 10-year program,
administered by the Energy Commission, encouraging solar energy
systems in new home construction.
(g) "Solar heating collector" means a device that is used to
collect or capture heat from the sun and that is generally, but need
not be, located on a roof.
(h) "Solar water heating thermal
system" means a solar energy device that has the primary purpose of
reducing demand for natural gas or electricity through
water heating, space heating, heating or
cooling, or other methods of capturing heat energy
from the sun to reduce natural gas or electricity
consumption in a home, business, or any building or facility
receiving natural gas that is subject to the surcharge established
pursuant to paragraph (2) of subdivision (b) of Section
2863, or exempt from the surcharge pursuant to paragraph (4) of
subdivision (c) (b) of Section
2863, and that meets or exceeds the eligibility criteria established
pursuant to Section 2864. "Solar water heating
thermal systems" include multifamily residential,
industrial, governmental, educational, and nonprofit solar pool
heating systems, but do not include single-family residential solar
pool heating systems.
SEC. 3. Section 2862 of the Public Utilities Code is amended and
renumbered to read:
2860. (a) Legislature finds and declares all of the following:
(1) California is heavily dependent on natural gas.
(2) The storage and delivery of natural gas relies on aging
infrastructure that is prone to leaks that can damage the environment
and imperil public health.
(3) Natural gas is a fossil fuel and a major source of global
warming pollution and the pollutants that cause air pollution,
including smog.
(4) California's growing population and economy will put a strain
on energy supplies and threaten the ability of the state to meet its
global warming goals unless specific steps are taken to reduce demand
and generate energy cleanly and efficiently.
(5) Water heating for domestic and industrial use relies almost
entirely on natural gas and accounts for a significant percentage of
the state's natural gas consumption.
(6) Solar water heating thermal
systems represent the major untapped natural gas saving potential in
California.
(7) In addition to financial and energy savings, solar water
heating systems can help protect against future gas and electricity
shortages and reduce our dependence on foreign sources of energy.
(8) Solar water heating thermal
systems can also help preserve the environment and protect public
health by reducing air pollution, including carbon dioxide, a leading
global warming gas, and nitrogen oxide, a precursor to smog.
(9) Growing demand for these technologies will create jobs in
California as well as promote greater energy independence, protect
consumers from rising energy costs, and result in cleaner air.
(10) Installing solar water heating
thermal systems in disadvantaged communities can provide local
economic benefits while advancing the state's clean energy goals and
policies to reduce the emissions of greenhouse gases.
(11) It is in the interest of the State of California to promote
solar water heating thermal systems and
other technologies that directly reduce demand for natural gas in
homes and businesses.
(b) It is the intent of the Legislature to build a mainstream
market for solar water heating thermal
systems that directly reduces demand for natural gas in homes,
businesses, schools, and nonprofit industrial
and government buildings. buildings,
and buildings occup ied by nonprofit
organizations.
(c) It is the intent of the Legislature that the solar
water heating thermal system incentives created
by this article should be a lead to
cost-effective investment investments
by gas customers. Gas customers will recoup the cost of
their investment these investments through lower
energy bills as a result of avoiding purchases of natural gas.
SEC. 4. Section 2863 of the Public Utilities Code is amended to
read:
2863. (a) By July 31, 2017, the commission shall do all of the
following:
(1) Implement changes to the program as authorized pursuant to
this section as it read on December 31, 2016, applicable
to the service territories of a gas corporation to promote the
installation of solar water heating thermal
systems in homes, businesses, and buildings or facilities of
eligible customer classes receiving natural gas service throughout
the state. Eligible customer classes shall include single-family and
multifamily residential, commercial, industrial, governmental,
nonprofit, and primary, secondary, and postsecondary educational
customers. The commission shall implement program changes in phases,
if necessary, to enable seamless continuation of the availability of
rebates as of January 1, 2017.
(2) The program shall be administered by gas corporations or
third-party administrators, as determined by the commission, and
subject to the supervision of the commission.
(3) The commission shall coordinate the program with the Energy
Commission's programs and initiatives, including, but not limited to,
the New Solar Homes Partnership, to achieve the goal of building
zero-energy homes.
(b) (1) The commission shall fund the program through the use of a
surcharge applied to gas customers based upon the amount of natural
gas consumed. The surcharge shall be in addition to any other charges
for natural gas sold or transported for consumption in this state.
(2) Funding for the program established by this article shall not,
for the collective service territories of all gas corporations,
exceed one billion dollars ($1,000,000,000) over the course of the
period from January 1, 2017, to July 31, 2027, inclusive.
(3) Fifty percent of the total program budget shall be reserved
for the installation of solar water heating
thermal systems in low-income residential housing or in
buildings in disadvantaged communities. The commission may revise the
percentage if the budget for other types of customers becomes
depleted.
(4) Ten percent of the total program budget shall be reserved for
the installation of solar thermal systems for industrial
applications. The commisison may revise the percentage if the budget
for other types of customers becomes depleted.
(4)
(5) The commission shall annually establish a surcharge
rate for each class of gas customers. Any gas customer participating
in the California Alternate Rates for Energy (CARE) or Family
Electric Rate Assistance (FERA) programs shall be exempt from paying
any surcharge imposed to fund the program designed and implemented
pursuant to this article.
(5)
(6) Any surcharge imposed to fund the program designed
and implemented pursuant to this article shall not be imposed upon
the portion of any gas customer's procurement of natural gas that is
used or employed for a purpose that Section 896 excludes from being
categorized as the consumption of natural gas.
(6)
(7) The gas corporation or other person or entity
providing revenue cycle services, as defined in Section 328.1, shall
be responsible for collecting the surcharge.
(c) Funds shall be allocated in the form of customer rebates to
promote utilization of solar water heating
thermal systems.
(1) On and after January 1, 2017, the rebate amount shall be
consistent with the amount the commission established for the
calendar year 2016 until revised by the commission pursuant to
paragraph (2).
(2) Beginning in 2017, and every two years thereafter, the
commission shall consider revisions to the rebate amount, taking into
account the cost of installing solar water heating
thermal systems and the price of natural gas to
end-use customers.
(3) The commission shall ensure that a cap on the maximum rebate
amount does not unreasonably impair the ability of industrial
customers to participate in the program.
(d) In designing and implementing the program required by this
article, no moneys shall be diverted from any existing programs for
low-income ratepayers or cost-effective energy efficiency programs.
SEC. 5. Section 2864 of the Public Utilities Code is amended to
read:
2864. (a) The commission, in consultation with the Energy
Commission and interested members of the public, shall establish
eligibility criteria for solar water heating
thermal systems receiving gas customer funded incentives
pursuant to this article. The criteria should specify and include all
of the following:
(1) Design, installation, and energy output or displacement
standards. To be eligible for rebate funding, a residential solar
water heating thermal system shall be
certified by an accredited listing agency in accordance with
standards adopted by the commission. Solar collectors used in systems
for multifamily residential, commercial, government, nonprofit,
educational, or industrial water heating
applications shall be certified by an accredited listing agency
in accordance with standards adopted by the commission. Energy
output of collectors and systems shall be determined in accordance
with procedures set forth by the listing agency, and shall be based
on testing results from accredited testing laboratories.
(2) A requirement that solar water heating
thermal system components are new and unused, and have not
previously been placed in service in any other location or for any
other application.
(3) A requirement that solar water heating
thermal collectors have a warranty of not less than 10 years to
protect against defects and undue degradation.
(4) A requirement that solar water heating
thermal systems are in buildings or facilities connected to a
natural gas utility's distribution system within the state.
(5) A requirement that solar water heating
thermal systems have meters or other kWhth measuring devices
in place to monitor and measure the system's performance and the
quantity of energy generated or displaced by the system. The cost of
monitoring the system shall not exceed 2 percent of the system cost.
(6) A requirement that solar water heating
thermal systems are installed in conformity with the
manufacturer's specifications and all applicable codes and standards.
(b) Gas customer funded incentives shall not be made for a solar
water heating thermal system that does
not meet the eligibility criteria.
(c) The commission may adopt consensus solar standards applicable
to products or systems as developed by accredited standards
developers.
SEC. 6. Section 2865 of the Public Utilities Code is amended to
read:
2865. (a) The commission shall establish conditions on gas
customer funded incentives pursuant to this article. The conditions
shall require both of the following:
(1) Appropriate siting and high-quality installation of the solar
water heating thermal system based on
installation guidelines that maximize the performance of the system
and prevent qualified systems from being inefficiently or
inappropriately installed. The conditions shall not impact housing
designs or densities presently authorized by a city, county, or city
and county. The goal of this paragraph is to achieve efficient
installation of solar water heating thermal
systems and promote the greatest energy production or
displacement per gas customer dollar.
(2) Appropriate energy efficiency improvements in the new or
existing home or facility where the solar water heating
thermal system is installed.
(b) The commission shall set rating standards for equipment,
components, and systems to ensure reasonable performance and shall
develop procedures that provide for compliance with the minimum
ratings.
SEC. 7. Section 2866 of the Public Utilities Code is amended to
read:
2866. (a) The commission may establish a grant program or a
revolving loan or loan guarantee program for low-income residential
housing consistent with the requirements of Chapter 5.3 (commencing
with Section 25425) of Division 15 of the Public Resources Code.
Notwithstanding Section 2867.4, all loans outstanding as of August 1,
2027, shall continue to be repaid in a manner that is consistent
with the terms and conditions of the program adopted and implemented
by the commission pursuant to this subdivision, until repaid in full.
(b) The commission may extend eligibility for funding pursuant to
this section to include residential housing occupied by ratepayers
participating in a commission approved and supervised gas corporation
Low-Income Energy Efficiency (LIEE) program and who either:
(1) Occupy a single-family home.
(2) Occupy at least 50 percent of all units in a multifamily
dwelling structure.
(c) The commission shall ensure that lower income households, as
defined in Section 50079.5 of the Health and Safety Code, and, if the
commission expands the program pursuant to subdivision (b),
ratepayers participating in a LIEE program, that receive gas service
at residential housing with a solar water heating
thermal system receiving incentives pursuant to
subdivision (a), (a) benefit from the
installation of the solar water heating
thermal systems through reduced or lowered energy costs.
(d) The commission shall do all of the following to implement the
requirements of this section:
(1) Maximize incentives to properties that are committed to
continuously serving the needs of lower income households, as defined
in Section 50079.5 of the Health and Safety Code, and, if the
commission expands the program pursuant to subdivision (b),
ratepayers participating in a LIEE program.
(2) Establish conditions on the installation of solar
water heating thermal systems that ensure
properties on which solar water heating
thermal systems are installed under subdivision (a) remain
low-income residential properties for at least 10 years from the time
of installation, including property ownership restrictions and
income rental protections, and appropriate enforcement of these
conditions.
SEC. 8. Section 2867 of the Public Utilities Code is amended to
read:
2867. (a) Consistent with subdivision (c) of Section 2863, the
commission shall consider reductions over time in rebates provided
through the program. The rebate shall be structured so as to drive
down the cost of the solar water heating
thermal technologies, and be paid out on a performance-based
incentive basis so that incentives are earned based on the actual
energy savings, or on predicted energy savings as established by the
commission.
(b) The commission shall consider federal tax credits and other
incentives available for this technology when determining the
appropriate rebate amount.
(c) The commission shall consider the impact of rebates for solar
water heating thermal systems pursuant
to this article on existing incentive programs for energy efficiency
technology.
(d) In coordination with the commission, the Energy Commission
shall consider, when appropriate, coupling rebates for solar
water heating thermal systems with
complementary energy efficiency technologies, including, but not
limited to, efficient hot water heating tanks and tankless or on
demand hot water systems that can be installed in addition to the
solar water heating thermal system.
SEC. 9. Section 2867.1 of the Public Utilities Code is repealed.
SEC. 10. Section 2867.2 of the Public Utilities Code is repealed.
SEC. 11. Section 2867.3 of the Public Utilities Code is amended to
read:
2867.3. The governing body of each publicly owned utility
providing gas service to retail end-use gas customers shall, after a
public proceeding, adopt, implement, and finance a solar
water heating thermal system incentive program
that does all the following:
(a) Ensures that any solar water heating
thermal system receiving monetary incentives complies with
eligibility criteria adopted by the governing body. The eligibility
criteria shall include those elements contained in paragraphs (1) to
(6), inclusive, of subdivision (a) of Section 2864.
(b) Includes minimum ratings and standards for equipment,
components, and systems to ensure reasonable performance and
compliance with the minimum ratings and standards.
(c) Includes an element that addresses the installation of solar
water heating thermal systems on
low-income residential housing. If deemed appropriate in consultation
with the California Tax Credit Allocation Committee, the governing
board may establish a grant program or a revolving loan or loan
guarantee program for low-income residential housing consistent with
the requirements of Chapter 5.3 (commencing with Section 25425) of
Division 15 of the Public Resources Code.
SEC. 12. Section 2867.4 of the Public Utilities Code is repealed.
SEC. 13. Section 2867.4 is added to the Public Utilities Code, to
read:
2867.4. This article shall become inoperative on August 1, 2027,
and, as of January 1, 2028, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2028, deletes
or extends the dates on which it becomes inoperative and is
repealed.
SEC. 14. 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 or because 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.