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AB-1967 Zero net energy project budget requests.(2017-2018)

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Date Published: 04/05/2018 09:00 PM
AB1967:v98#DOCUMENT

Amended  IN  Assembly  April 05, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill
No. 1967


Introduced by Assembly Member Patterson

January 31, 2018


An act to add Section 13327 to the Government Code, relating to state finance.


LEGISLATIVE COUNSEL'S DIGEST


AB 1967, as amended, Patterson. Zero net energy project budget requests.
The California Constitution requires the Governor to submit a budget for the ensuing fiscal year to the Legislature within the first 10 days of each regular session. Existing law requires that budget to contain a complete plan and itemized statement of all proposed expenditures of the state provided by existing law or recommended by the Governor, and of all estimated revenues, as specified. Existing law requires the budget to be prepared in a specified manner. Existing law requires every state agency and court, for which an appropriation has been made, to submit to the Department of Finance for approval a complete and detailed budget, as specified, at the time and in the form as may be prescribed by the department, setting forth all proposed expenditures and estimated revenues for the ensuing fiscal year. Existing law requires the department to submit to the committee in each house of the Legislature that considers appropriations and to the Joint Legislative Budget Committee copies of the specified budget material submitted to the department by state agencies.
Existing Executive Order B-18-12 directs state agencies to take various steps to achieve certain environmental and climate change goals, including to increase the number of state-owned buildings that are zero net energy.
This bill would require each state entity, as defined, that makes a budget request for the construction or retrofit of a state-owned building, or campus of buildings, to make that building or campus zero net energy, including a project to meet the state’s goals for zero net energy buildings in Executive Order B-18-12, to include a cost–benefit analysis that includes certain information with the request when presenting its budget to the department. The bill would require the department to submit copies of the cost–benefit analysis to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, and the Joint Legislative Budget Committee with each zero net energy budget request. The bill would provide that only those projects where a cost–benefit analysis demonstrates that the benefits outweigh the costs are authorized to be approved.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 13327 is added to the Government Code, to read:

13327.
 (a) For purposes of this section, the following terms have the following meanings:
(1) “State entity” means every department, agency, office, division, bureau, commission, board, or other organizational unit of the executive branch of state government, the courts and each agency in the judicial branch of government, and the University of California.
(2) “ZNE project request” means a budget request by a state entity for the construction or retrofit of a state-owned building, or campus of buildings, to make that building or campus zero net energy (ZNE), including a project to meet the state’s goals for ZNE buildings in Executive Order B-18-12.
(b) A state entity making a ZNE project request shall include a cost–benefit analysis with the request when presenting its budget to the department. The cost–benefit analysis shall include the following:
(1) Evaluation of life-cycle costs that takes into account not only up‑front costs and benefits, but also those that occur over time, including estimated future energy savings and operating costs associated with the various building components, such as maintaining solar photovoltaic systems.

(2)Evaluation of the time value of money that applies a reasonable discount rate that takes into account that future dollars are generally worth less than present-day dollars.

(3)

(2) Analysis of reasonable alternatives, recognizing that it is not feasible to look at every possible mix of alternative energy efficiency and renewable energy measures. Alternatives that should be evaluated include: (A) the cost and savings of the proposed energy efficiency measures compared to the cost and savings for a facility with energy efficiency components consistent with Title 24 of the California Administrative Code, and (B) the cost and savings of renewable energy generation options. With regard to renewable energy generation options, the analysis should compare solar photovoltaics, both state owned and third-party owned, with options for purchasing utility-provided electricity from eligible renewable energy resources and electricity generated from a conventional power source, as defined in Section 2805 of the Public Utilities Code.

(4)

(3) Identification of major assumptions, including the assumed inflation rate of energy prices and discount rates, to enable the Legislature to evaluate whether those assumptions are reasonable.

(5)Sensitivity calculations where there may be significant uncertainty based on a reasonable range of key assumptions, such as future energy costs.

(6)Identification of cobenefits that are not reflected in the economic costs and benefits of a project, including where the proposed ZNE project is a demonstration project designed to evaluate whether a new technology works effectively or is intended to provide valuable information to the building industry on the feasibility of implementing the technology.

(c) The department shall submit to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, and the Joint Legislative Budget Committee copies of the cost–benefit analysis with each ZNE budget request.

(d)Only those projects where a cost–benefit analysis demonstrates that the benefits outweigh the costs may be approved.