BILL NUMBER: AB 2460 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 14, 2016
AMENDED IN ASSEMBLY MAY 31, 2016
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 maximum funding 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 thermal systems throughout the state, set
the maximum funding for the program between January 1, 2017, and July
31, 2022, at $250,000,000, reserve 50% of the total program budget
for the installation of solar thermal systems in low-income
residential housing or in buildings in disadvantaged communities, and
extend the operation of the program through July 31, 2022. 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, 2022, to adopt,
implement, and finance a solar 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 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
already, at the time of the funding commitment pursuant to this
article, 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.
Code.
(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 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 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 (b) of Section 2863, and that meets or exceeds the
eligibility criteria established pursuant to Section 2864. "Solar
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) The 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 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 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 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 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 thermal systems that directly reduces demand for
natural gas in homes, businesses, schools, industrial and government
buildings, and buildings occupied by nonprofit organizations.
(c) It is the intent of the Legislature that the solar thermal
system incentives created by this article should lead to
cost-effective investments by gas customers. Gas customers will
recoup the cost of 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 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 two hundred fifty million dollars ($250,000,000) over the
course of the period from January 1, 2017, to July 31, 2022,
inclusive.
(3) Fifty percent of the total program budget shall be reserved
for the installation of solar 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 commission
may revise the percentage if the budget for other types of customers
becomes depleted.
(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.
(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.
(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 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 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 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
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 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 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 thermal collectors have a warranty of
not less than 10 years to protect against defects and undue
degradation.
(4) A requirement that solar thermal systems are in buildings or
facilities connected to a natural gas utility's distribution system
within the state.
(5) (A) A requirement that solar 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.
(B) The commission shall exempt from this requirement system types
for which the cost of monitoring a system is likely to exceed 2
percent of the system cost. After a public stakeholder process, the
commission may adjust this percentage to ensure reasonable balance
between customer cost and value received, taking into account factors
including, but not limited to, customer class, system type, system
size, or changes in the market.
(6) A requirement that solar thermal systems are installed in
conformity with the manufacturer's specifications and all applicable
codes and standards.
(7) A requirement that, when the property is not owner-occupied,
the tenant shall not contract for the installation of a solar thermal
system. The tenant may request that the owner participate in such a
program.
(b) Gas customer funded incentives shall not be made for a solar
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
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 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 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,
2022, 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 and paragraph (3) of subdivision (b) of Section
2863 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 thermal system receiving
incentives pursuant to subdivision (a) benefit from the installation
of the solar 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 thermal
systems that ensure properties on which solar 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 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
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 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 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 thermal
system incentive program that does all the following:
(a) Ensures that any solar 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
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, 2022,
and, as of January 1, 2023, is repealed, unless a later enacted
statute, that becomes operative on or before January 1, 2023, 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.