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BILL NUMBER: AB 1470 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 12, 2007
INTRODUCED BY Assembly Member Huffman
(Principal coauthor: Assembly Member Smyth)
( Coauthors: Assembly Mem.bers
Carter, Laird, Maze, and Wo1k
)
( Coavthors: Senators Kuehl
and Romero )
FEBRUARY 23, 2007
An act to add the heading of Article 1 (commencing with Section
2851) to, and to add and repeal �^^�:,--°�J�' ��e
Article 2 (commencing with Section 2860) of, Chapter 9 of
Part 2 of Division 1 of, the Public Utilities Code, relating to solar
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energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 1470, as amended, Huffman. Solar energy: Solar Hot Water and
Efficiency Act of 2007.
(1) Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including gas
corporations. The commission is required to implement elements of the
California Solar Initiative, which modifies the self-generation
incentive program for distributed generation resources and provides
incentives to customer-side photovoltaics and solar thermal electric
projects under one megawatt. The commission is required to award
monetary incentives for up to the first megawatt of alternating
current generated by solar energy systems that meet the eligibility
criteria established by the State Energy Resources Conservation and
Development Commission (Energy Commission) . The commission is
required to adopt a performance-based incentive program for solar
energy photovoltaic systems and is authorized to award monetary
incentives for solar thermal and solar water heating devices in a
total amount up to $100, 800, 000.
This bill would establish the Solar Heating and Efficiency Act of
2007. The bill would make findings and declarations of the
Legislature relating to the promotion of solar hot water systems and
other technologies that reduce natural gas demand. The bill would
define several terms for purposes of the act. The bill would require
the commission to create and administer, not later than July 1, 2008,
a program to incentivize the installation of �L14�
200,000 solar �
hot water systems in homes and businesses throughout the state
by 2017 .
The bill would require the commission, in consultation with the
Energy Commission and interested members of the public, to establish
eligibility criteria for the solar �ea�g
hot water systems receiving ratepayer funded incentives not
later than July 1, 2008. The commission would be required to
establish conditions on those incentives. The bill would specify that
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AB 1470 Assembly Bill - AMENDED Page 2 of 7
, except for the Solar Hot Water Pilot Program in San Diego
, only solar heating technologies that displace
electricity are eligible for a portion of California Solar Initiative
funds, as determined by the commission. The commission would be
required to allocate not less than 10$ of the overall funds for
installation of solar '��,.�.�:.� hot water
systems for specified affordable housing projects and specify that
no moneys be diverted from any existing programs for low-income
ratepayers. The bill would specify that the consumer rebates decline
over time and be structured to reduce the cost of solar
`'�'..�.:�:.T hot water technologies. The Energy
Commission, in coordinating efforts with the commission, would be
required to consider when appropriate coupling rebates for
solar �^���_ hot water systems with
'^^, ;^^^^`'r., complementary energy
efficient technologies. The commission would be required to report to
the Legislature, not later than July 1, 2010, on the effectiveness
of the program. The bill would repeal these provisions on August 1,
2018.
(2) Existing law establishes a surcharge on all natural gas
consumed in the state to fund certain low-income assistance programs,
cost-effective energy efficiency and conservation activities, and
public interest research and development. Existing law requires a
public utility gas corporation, as defined, to collect the surcharge
from natural gas consumers, as specified. The —iae�a}
moneys from the surcharge -�c
are deposited in the Gas Consumption Surcharge Fund and
�� are continuously appropriated to
specified entities, including to the commission, or to an entity
designated by the commission, to fund low-income assistance programs,
cost-effective energy efficiency and conservation activities, and
public interest research and development not adequately provided by
the competitive and regulated markets.
This bill would require the commission to fund the program of the
Solar Hot Water and Efficiency Act of 2007 through a surcharge
based upon the amoui�t of natural gas consumed applied to
�^ �s^ ee^�a��s^g �.�}��sa' gas �r� �ne ska�e t�at has �aee�
t~''^�^^''+o,a ''�, ^*o'�`'*� ^� ; ratepayers of a
qas corporation based on the amount of natural gas consumed ,
except those participating in certain existing programs for
low-income ratepayers, not to exceed
�^�= 5250,000,000 over the course of the 10-year
program .
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�T� ' �h'� *^ *'�� ^Oiiliili6Gi0A f�r theT�rgosec et tl� zc�T—i�
ea—:�c��-, ''�:� The bi11 would require the
commission to annually establish a surcharge rate for each class of
customer for each gas corporation. The bill would require that the
proqram be administered by the gas corporations or 3rd party
administrators, as determined by the commission, and subject to the
supervision of the commission.
Vote: �— majority . Appropriation:
-�a� no . Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
S�C T�.�Al l-.
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AB 1470 Assembly Bill - AMENDED Page 3 of 7
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keshnel���es �ha� re�uee r�a�u�a�--r�as �ensumi+ ^a ,^�,, .,�m
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ir6 ii el C 6 er� s'
��'�.�� SECTION 1 . The heading of
Article 1 (commencing with Section 2851) is added to Chapter 9 of
Part 2 of Division 1 of the Public Utilities Code, to read:
Article 1. Solar Photovoltaic Systems
-:�'�— SEC. 2. Article 2
(commencing with Section 2860) is added to Chapter 9 of Part 2 of
Division 1 of the Public Utilities Code, to read:
Article 2 . Solar m�� Hot Water
Systems
2860. (a) This article shall be known, and
may be cited, as the Solar !-�ot Water and Efficiency Act of 2007 .
(b) The comrr�ission shall fund the program established by this
article through the use of a surcharge applied to ratepayers of a qas
corporation based upon the amount of natural qas consumed. The
commission shall annually establish a surcharge rate for each class
of customer for each gas corporation. The surcharge sha11 be in
addition to any other charges for natural gas sold or transported for
consumption in this state.
(c) Fundinq for the proqram established by this article sha11 not
exceed two hundred and fifty million dollars ($250,000,000) . Funds
shall be allocated for the benefit of ratepayers to promote
utilization of solar hot water systems.
2861. As used in this article, the following terms have the
following meanings:
(a) "Energy Commission" means the State Energy Resources
Conservation and Development Commission.
(b) "kWth" means the kilowatt thermal capacity of a solar
`'^,*'^^ ^^"^^~^~ hot water system, measured
consistent with the standard established by the
Lnt.orn�t_�.�.n.�.i—�n- r;-r-7lgonc.��'r Sc}lar �-3oatin� andl"oc�' ;:��:�.:.r
SRCC.
(c) "1.Wht'�'.� "kWh th "
means kilowatthours thermal as measured by the number of kilowatts
thermal generated in an hour.
(d) "New Solar Homes Partnership" means the 10-year program ,
administered by the Enerqy Commission, encouraging solar
energy systems in new home construction.
(e) "Solar heating collector" means the device that is used to
collect or capture heat from the sun and that is generally, bvt need
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not be, located on a roof.
{o� "S�l�r k�o�tin�
(f) "Solar hot water system"
means a solar energy device that has the primary purpose of reducing
demand for natural gas through water heating, space heating, or other
methods of r^���^�:� captUring energy from
the sun to reduce natural gas consumption in a home,
businesses, or any building receiving natural gas that is subject to
the surcharqe established pursuant to Section —SdA2
2860 , or exempt from the surcharge pursuant to
subdivision (c) of Section 2863, and that meets or exceeds the
eligibility criteria established pursuant to Section 2864 .
"Solar hot water systems" do not include solar pool heating systems.
(g) "SRCC" means the Solar Rate and Certification Corporation.
2862. The Legislature finds and declares all of the following:
(a) California is heavily dependent on natural gas, importing more
than 80 percent of the natural gas it consumes.
(b) Rising worldwide demand for natural gas and a shrinking supply
create rising and unstable prices that can harm California consumers
and the economy.
(c) Natural gas is a fossil fuel and a major source of global
warming pollution and the pollutants that cause air pollution,
including smog.
(d) 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.
(e) 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.
(f) Solar ,+-^� �^,*; ^ hot water
systems represent the largest untapped natural gas saving potential
remaining in California.
(g) In addition to financial and energy savings, solar
'�^��� hot water systems can help protect
against future gas and electricity shortages and reduce our
dependence on foreiqn sources of energy.
(h) Solar �^,�i:.T hot water 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.
(i) 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.
(j� It is in the interest of the State of California to promote
solar hot water systems and other technologies that directly reduce
demand for natural gas in homes and businesses.
(k) It is the intent of the Legislature to build a mainstream
market for solar �^�� ��..^T hot water
systems that directly reduces demand for natural gas in homes,
businesses, and government buildings. Toward that end, it is the goal
of the Solar Hot Water and Efficiency Act of 2007 to install at
least 200,000 solar hot
water systems on homes, businesses, and government buildings
throughout the state by 2017, thereby lowering prices and creating a
self-sufficient market that will sustain itself beyond the life of
this program.
(1) It is the intent of the Legislature that the solar
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"'�'�-:.^T hot water system incentives created by
the act should be a cost-effective investment by �ausuu�s
�t na�u�a�gas 1'�nsume�s e€ n��ura' gas natural gas
ratepayers. Natural qas ratepayers will recoup the cost of
their investment through lower prices as a result of avoiding
purchases of natural gas, and benefit from additional system
stability and pollution reduction benefits.
2863. (a) In order to achieve the goals of the Legislature, the
commission shall, not later than July 1, 2008, create a program to
promote the installation of SBGL, GLoO se' as khe-ma�.
200,000 solar hot water systems in homes and
�is�ass businesses throughout the state by 2017.
(b) The program shall be
administered by the gas corporations or third-party
administrators, as determined by the commission, and subject to the
supervision of the commission. The commission shall coordinate
with the Energy Commission's New Solar Homes Partnership to achieve
the goal of building zero-energy homes.
(c) Not later than July l, 2008, the commission shall establish a
surcharge pursuant to Section
2860, not to exceed two hundred fifty million
dollars
($250,000,000) over the course of the 10-year program . In
establishing the program required by this section, no moneys shall be
diverted from any existing programs for low-income ratepayers
or cost-effective energy efficiency programs . Any surcharge
imposed to fund the program adopted and implemented pursuant to this
section shall be imposed upon all customers not participating in the
California Alternate Rates for Energy (CARE) or family electric rate
assistance {FERA) programs.
2869 . (a) Not later than July 1, 2008, the commission, in
consultation with the Energy Commission, and interested members of
the public, shall establish eligibility criteria for solar
`'^,�� hot water systems receiving ratepayer
funded incentives. 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 solar hot water
system shall, at a minimum, have a SRCC OG-300 Solar Water
Heatinq System Certification.
(2) Require that solar h��—.�.*�.�^� hot water
system components are new and unused, and have not previously
been placed in service in any other location or for any other
application.
(3) Require that solar hot
water collectors have a warranty of not less than 10 years to
protect against defects and undue degradation.
(9) Require that solar �}� hot water
systems are in buildings connected to a natural gas utility's
distribution system within the state.
(5) Require that solar �^�—.,�.}��^� hot water
systems have meters or other '-T^�.::s: kWh
th measuring devices in place to monitor and measure the system'
s performance and the quantity of energy generated or displaced by
the system.
(6) Require that solar �e�g.� hot water
systems are installed in conformity with the manufacturer's
specifications and all applicable codes and standards.
(b) GT}acu�c.Ft:►�.l.i�hmcn� �� eliqi�iilit3� s�i�o ��
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AB 1470 Assembly Bill - AMENDED Page 6 of 7
NO ratePayer funded
incentives shall be made for a solar �aarrj.�c
hot water system that does not meet the eligibility criteria.
(c) In establishinq the incentive structure and criteria, the
commission shall draw upon the experience in San Dieqo with the Solar
Hot Water Pi1ot Program as we11 as other we11-established solar hot
water incentive programs.
2865. (a) .�.ia� No later than July 1, 2008,
the commission shall establish conditions on ratepayer funded
incentives. The conditions shall require both of the following:
(1) Appropriate siting and high-quality installation of the solar
`'^,��T hot water 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 ��,��_ hot water
systems and promote the greatest energy production or displacement
per ratepayer dollar.
(2) Appropriate energy efficiency improvements in the new or
existing home or commercial structure where the solar
h�'••-��- hot water system is installed.
(b) The commission shall set rating standards for equipment,
components, and systems to �� ensure
reasonable performance and shall develop standards that provide
for compliance with the minimum ratings.
2866. The commission shall provide not less than 10 percent of
the overall funds for installation of solar
c�� hot water systems on 1ow-income and
affordable housing projects undertaken pursuant to Section 50052. 5,
50053, or 50199. 14 of the Health and Safety Code. If deemed
appropriate in consultation with the Californza Tax Credit Allocation
Committee, the commission may establish a grant program or a
revolving loan or loan guarantee program for affordable housing
projects consistent with the requirements of Chapter 5.3 (commencing
with Section 25425) of Division 15 of the Public Resources Code.
2867 . (a) The rebates provided through this program shall decline
over time. They shall be structured so as to drive down the cost of
the solar ��,�.T hot water
technologies, and be paid out on a performance-based incentive basis
so that incentives are earned based on the actual energy savings.
(b) The commission shall consider federal tax credits and other
incentives available for this technology when determining the
appropriate rebate amount.
(c) In coordinating with the commission, the Energy Commission
shall consider
when appropriate, consider coupling rebates for solar hot water
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 '��,—.,����^� hot water system.
2867 . 1. Not later than July 1, 2010, the commission shall report
to the Legislature as to the effectiveness of the program and make
recommendations as to any changes that should be made to the program.
This report shall include jvstification for the size of the
rebate program in terms of total available incentive moneys as well
as the anticipated benefits of the program in its entirety. To
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facilitate the understanding of how solar
hot water systems compare with other clean
energy and energy efficiency technologies, all documents related to
and rebates provided by this program shall be measured in both
�l�— kWh th and therms of natural gas
saved.
2867 .2. Except for the
Solar Hot Water Pilot Program in San Diego, solar hot water
technologies shall not be eligible for California Solar Initiative
(CSI) funds, pursuant to Section 2851, unless they also displace
electricity, in which case only the electricity displacing portion of
the technology may be eligible under the CSI program, as determined
by the commission.
2867 .3. This �� article shall
remain in effect only until August 1, 2018, and as of that date is
repealed, unless a later enacted statute, that is enacted before
August 1, 2018, deletes or extends that date.
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