SB1 Redux With Hot Water; Leg Update

By Published On: October 19, 2007

The governor signed a significant solar hot water bill and vetoed another that would have furthered California Air Resources Board greenhouse gas reduction policies. AB 1470 is the solar hot water equivalent of the Million Solar Roofs bill. The photovoltaic counterpart of that bill is being put into action by the California Public Utilities Commission, although its efficacy has been called into question as subsidies are less than in pre-SB 1 days, according to some data (Circuit, October 12, 2007). The new legislation providing rebates launches the nation’s largest solar water heating program. It promises to bring a number of benefits to the state, including reduced global warming emissions, stabilized energy prices, and lower utility bills, according to Bernadette Del Chiaro, clean energy advocate for Environment California. The bill allows the CPUC to start a pilot program. If that is successful, the measure would subsidize at least 200,000 solar water heating systems in homes and businesses throughout the state by 2017. The program would be funded by a surcharge on natural gas utility bills. The initial budget is $250 million. Other new laws include: -AB 118–by Assemblymember Fabian Núñez’ (D-Los Angeles), is called the Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007. It authorizes the California Air Resources Board to adopt, by July 1, 2009, guidelines for a statewide enhanced fleet modernization program. The program is designed to compensate vehicle owners that voluntarily retire or replace vehicles that are high polluters. It also provides subsidies for alternative fuel projects. To help fund these programs, the law raises fees paid by motorists. -AB 233–Assemblymember Dave Jones (D-Sacramento), requires the California Air Resources Board to review enforcement of diesel emission control regulations and develop a strategic plan for enforcement. -AB 532–Assemblymember Lois Wolk (D-Davis), extends from January 1, 2007, to January 1, 2009, the requirement that the Department of General Services, installs solar energy equipment on all state buildings, state parking facilities, and state owned swimming pools, where feasible. -AB 609–Assemblymember Mike Eng (D-Monterey Park), allows energy conservation measures and energy service contracts for existing state buildings to be approved by the State Public Works Board if cost savings are shown to be expected through a life-cycle cost analysis over the life of the equipment installed or the term of the contract. -AB 662–Assemblymember Ira Ruskin (D-Redwood City), expands the authority of the California Energy Commission to set water efficiency standards for appliances and new buildings. It prohibits the standards from resulting in added costs to consumers. -AB 809–Assemblymember Sam Blakeslee (R-San Luis Obispo), changes the definition of eligible small hydroelectric projects for compliance with California’s renewable portfolio standard. It allows increases in hydro facilities to count toward the standard. -AB 1103–Assemblymember Lori Saldaña (D-San Diego), requires electric utilities to maintain records of energy consumption data for all nonresidential buildings to which they provide service and requires building owners or operators to provide benchmarking data to prospective buyers, lessees or lenders beginning January 1, 2010. -AB 1109–Assemblymember Jared Huffman (D-San Rafael), enacts the California Lighting Efficiency and Toxics Reduction Act. It prohibits manufacturing for sale or the sale of certain general purpose lights that contain hazardous substances. It requires the CEC to adopt energy efficiency standards for all general purpose lights. -AB 1560–Also by Huffman, requires the CEC to incorporate standards for water efficiency and conservation into the existing building standards governing energy efficiency. -AB 1613–Also by Blakeslee, establishes the Waste Heat and Carbon Emissions Reduction Act, allowing the CPUC to require utilities to purchase excess combined heat and power (cogeneration). It requires regulators to start a pilot program providing financing. -SB 428–Senator Bob Dutton (R-Rancho Cucamonga), requires the CPUC to have utilities run air conditioning demand-response programs with price incentives. -SB 1017–Senator Don Perata (D-Oakland), requires Pacific Gas & Electric to offer optional interruptible or curtailable service to the East Bay Municipal Utility District from the muni’s own hydro facilities. -SB 1036–Also by Perata, makes amendments to the renewable portfolio standard. It authorizes the CPUC to allow investor-owned utilities to recover costs for renewable energy in excess of the market price for electricity set by the commission, deleting the California Energy Commission authority to pay out the funds, known as Supplement Energy Payments. Vetoed legislation: -AB 785–Assemblymember Loni Hancock (D-Berkeley), would have had the Air Board report on heat island effects in urban areas and fine contractors for not using building permits. The governor noted that the urban heat island technical evaluation and reflective coating development provisions of this bill are duplicative of regulatory efforts already in progress at state agencies. -AB 1058–Assemblymember John Laird (D-Santa Cruz), would have had state building agencies adopt best practices and building standards for green building in new residential construction. The governor stated that the legislation would “put the health and safety of Californians at risk by being in conflict with current safety standards.” He added that it’s “imperative to expedite the greening of California’s building standards. As such, I am directing the California Building Standards Commission to work with specified state agencies on the adoption of green building standards for residential, commercial, and public building construction for the 2010 code adoption process.” -SB 70–Senator Dean Florez (D-Shafter), would have required munis and mass transit to use a 20 percent biodiesel blend. In his veto message, the governor stated the legislation would be “a piecemeal approach to transportation fuels standards.” He added, “This bill only encourages the use of biodiesel blend fuels in school and transit buses, excluding renewable diesel fuels, which are potentially higher quality than biodiesel and which could greatly expand the supply of attractive diesel fuels.” -SB 210–Also by Kehoe, would have had the Air Board adopt a low-carbon fuel standard. In the governor’s veto message he stated that his Executive Order S-1-07, made in January already calls for a low carbon fuel standard and that the Air Board adopted such standards in its “early action” measures. He added the legislation “could seriously hinder the development, distribution and adoption of low-carbon fuels. Specifically, the failure to incorporate all of the provisions outlined in the Executive Order and in particular the authority for CARB to utilize market-based mechanisms in its implementation of the LCFS creates uncertainty about whether California is committed to a market-driven LCFS. That uncertainty could curtail the interest of entrepreneurs in bringing low-carbon fuels to market, reduce the availability of capital required to produce and distribute low-carbon fuels in a consumer-convenient fashion, and raise low-carbon fuel prices. When combined with regulatory performance standards and in the context of a properly structured regulatory framework, market-based mechanisms are essential to the cost-effective production and development of low-carbon fuels and the infrastructures for widespread distribution of those fuels. Market mechanisms are indispensable to the implementation of the LCFS and accordingly the failure to include them in this bill is unacceptable.” -SB 451–Senator Christine Kehoe (D-San Diego), would have allowed small-scale renewable energy providers to sell power to utilities at a rate set by the CPUC. In his veto message, the governor stated the bill “would have the effect of allocating the entirety of the Renewable Energy Credits created by a renewable electricity generator to the Investor-Owned Utility that buys their electricity. As a result, environmental attributes such as air quality and greenhouse gas reductions would accrue solely to the utility, even if a renewable generator exports only a small part of their total generation to the utility. Because of past and present efforts to improve air quality and reduce greenhouse gas emissions, markets for toxic air contaminant and carbon emission reduction credits are currently being developed. The value and availability of these credits plays an important role in the analysis undertaken by a renewable energy developer to determine whether, and at what size, a project is financially viable. The provisions of this bill would automatically transfer ownership of these credits once a renewable generator sells any amount of electricity to the Investor-Owned Utility. A proportional share, if correctly implemented, could be justified. But as written, this bill removes a significant financial incentive for renewable generators and would force them to downsize or abandon their projects.”

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