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SB-31 Building decarbonization.(2021-2022)

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Date Published: 04/27/2021 09:00 PM
SB31:v97#DOCUMENT

Amended  IN  Senate  April 27, 2021
Amended  IN  Senate  March 05, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 31

Introduced by Senator Cortese

December 07, 2020

An act to amend Section 25711.5 of, and to add Sections 25233 and 25465 to, the Public Resources Code, and to amend Section 701.1 of, and to add Sections 384.6 and 385.6 to, to the Public Utilities Code, relating to energy.


LEGISLATIVE COUNSEL'S DIGEST


SB 31, as amended, Cortese. Building decarbonization.
Existing law establishes the State Energy Resources Conservation and Development Commission (Energy Commission) and requires the commission Energy Commission to implement various energy efficiency programs. Existing law, except as provided, requires the commission Energy Commission to administer federal funds allocated to, and received by, the state for energy-related projects under certain federal laws. Existing law requires the commission Energy Commission to develop and implement the Electric Program Investment Charge (EPIC) program to award funds for projects that will benefit electricity ratepayers and lead to technological advancement and breakthroughs to overcome the barriers that prevent the achievement of the state’s statutory energy goals and that result in a portfolio of projects that is strategically focused and sufficiently narrow to make advancement on the most significant technological challenges.
This bill would require the commission Energy Commission to identify and implement programs to promote existing and new building decarbonization. decarbonization, as defined. The bill would, to the extent clean energy or energy efficiency funds are made available from the federal government to address economic recovery and development due to the COVID-19 pandemic, authorize the commission Energy Commission to expend federal moneys, to the extent authorized by federal law, for projects for existing and new building decarbonization. The bill would additionally expressly require the commission, Energy Commission, under the EPIC program, to award funds for projects that will benefit electricity ratepayers and lead to for the development and deployment of commercial and residential building decarbonization technologies and investments that reduce or eliminate greenhouse gas generation in those buildings. buildings, as specified.

Existing

Under existing law, the Public Utilities Commission (PUC) has regulatory authority over public utilities, including electrical corporations, while local publicly owned electric utilities are under the direction of their governing boards. Existing law requires the Public Utilities Commission PUC to require each electrical corporation to identify a separate rate component to collect revenues to fund various programs, including, programs for cost-effective energy efficiency and conservation activities and programs to provide low-income electricity customers targeted energy-efficiency services. Existing law requires each local publicly owned electric utility to establish a nonbypassable, usage-based charge on distribution service, as specified, to fund various programs, including programs for cost-effective, demand-side management services and programs to provide energy efficiency services to low-income electricity customers.
This bill would authorize the expenditure of those revenues for existing and new building decarbonization. To receive this funding, the bill would require the entity implementing the decarbonization project and its subcontractors at every tier to pay prevailing wage.

Existing law makes a legislative finding and declaration regarding the principal goals of electric and natural gas utilities’ resource planning and investment.

This bill would additionally state as a principal goal of electric and natural gas utilities’ resource planning and investment the decarbonization of existing and new buildings.

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because the above certain provisions of this bill would be a part of the Public Utilities Act, a violation of which would be a crime, and because a violation of a PUC action implementing the bill’s requirements would be a crime, this bill would impose a state-mandated local program by creating a new crime. 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 a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 This act shall be known and may be cited as the California Building Decarbonization Act of 2021.

SEC. 2.

 Section 25233 is added to the Public Resources Code, to read:

25233.
 (a) The commission shall, subject to appropriation by the Legislature, identify and implement programs to promote existing and new building decarbonization.
(b) A building decarbonization project funded by programs identified and implemented pursuant to this section shall be undertaken in a manner that includes an enforceable commitment that the entity implementing the project, and its subcontractors at every tier, will pay prevailing wage.
(c) For purposes of this section, “building decarbonization” means efforts to reduce emissions of greenhouse gases from building-related applications.

SEC. 3.

 Section 25465 is added to the Public Resources Code, to read:

25465.
 (a) To the extent clean energy or energy efficiency funds are made available from the federal government to address economic recovery and development due to the COVID-19 pandemic, and to the extent authorized by federal law, those funds may be expended by the commission, upon appropriation by the Legislature, for projects for existing and new building decarbonization.
(b) For purposes of this section, “building decarbonization” means efforts to reduce emissions of greenhouse gases from building-related applications.

SEC. 4.

 Section 25711.5 of the Public Resources Code is amended to read:

25711.5.
 In administering moneys in the fund for research, development, and demonstration programs under this chapter, the commission shall develop and implement the Electric Program Investment Charge (EPIC) program to do all of the following:
(a) (1) Award funds for projects that will benefit electricity ratepayers and lead to technological advancement and breakthroughs to overcome the barriers that prevent the achievement of the state’s statutory energy goals and that result in a portfolio of projects that is strategically focused and sufficiently narrow to make advancement on the most significant technological challenges that shall include, but not be limited to, energy storage, renewable energy and its integration into the electrical grid, energy efficiency, integration of electric vehicles into the electrical grid, and accurately forecasting the availability of renewable energy for integration into the grid.
(2)Award funds for projects that will benefit electricity ratepayers and lead to grid, and the development and deployment of commercial and residential building decarbonization technologies and investments that reduce or eliminate greenhouse gas generation in those buildings. A
(2) A building decarbonization project awarded funds pursuant to this section shall be undertaken in a manner that includes an enforceable commitment that the entity implementing the project, and its subcontractors at every tier, will pay prevailing wage.For purposes of this section, “building decarbonization” means efforts to reduce emissions of greenhouse gases from building-related applications.
(b) In consultation with the Treasurer, establish terms that shall be imposed as a condition to receipt of funding for the state to accrue any intellectual property interest or royalties that may derive from projects funded by the EPIC program. The commission, when determining if imposition of the proposed terms is appropriate, shall balance the potential benefit to the state from those terms and the effect those terms may have on the state achieving its statutory energy goals. The commission shall require each reward recipient, as a condition of receiving moneys pursuant to this chapter, to agree to any terms the commission determines are appropriate for the state to accrue any intellectual property interest or royalties that may derive from projects funded by the EPIC program.
(c) Require each applicant to report how the proposed project may lead to technological advancement and potential breakthroughs to overcome barriers to achieving the state’s statutory energy goals.
(d) Take into account, when applicable, the adverse localized health impacts of proposed projects to the greatest extent possible.
(e) Establish a process for tracking the progress and outcomes of each funded project, including an accounting of the amount of funds spent by program administrators and individual grant recipients on administrative and overhead costs and whether the project resulted in any technological advancement or breakthrough to overcome barriers to achieving the state’s statutory energy goals.
(f) Notwithstanding Section 10231.5 of the Government Code, prepare and submit to the Legislature no later than April 30 of each year an annual report in compliance with Section 9795 of the Government Code that shall include all of the following:
(1) A brief description of each project for which funding was awarded in the immediately prior calendar year, including the name of the recipient and the amount of the award, a description of how the project is thought to lead to technological advancement or breakthroughs to overcome barriers to achieving the state’s statutory energy goals, and a description of why the project was selected.
(2) A brief description of each project funded by the EPIC program that was completed in the immediately prior calendar year, including the name of the recipient, the amount of the award, and the outcomes of the funded project.
(3) A brief description of each project funded by the EPIC program for which an award was made in the previous years but that is not completed, including the name of the recipient and the amount of the award, and a description of how the project will lead to technological advancement or breakthroughs to overcome barriers to achieving the state’s statutory energy goals.
(4) Identification of the award recipients that are California-based entities, small businesses, or businesses owned by women, minorities, or disabled veterans.
(5) Identification of which awards were made through a competitive bid, interagency agreement, or sole source method, and the action of the Joint Legislative Budget Committee pursuant to paragraph (2) of subdivision (g) (h) for each award made through an interagency agreement or sole source method.
(6) Identification of the total amount of administrative and overhead costs incurred for each project.
(7) A brief description of the impact on program administration from the allocations required to be made pursuant to Section 25711.6, including any information that would help the Legislature determine whether to reauthorize those allocations beyond June 30, 2023.
(g) Establish requirements to minimize program administration and overhead costs, including costs incurred by program administrators and individual grant recipients. Each program administrator and grant recipient, including a public entity, shall be required to justify actual administration and overhead costs incurred, even if the total costs incurred do not exceed a cap on those costs that the commission may adopt.
(h) (1) Use a sealed competitive bid as the preferred method to solicit project applications and award funds pursuant to the EPIC program.
(2) (A) The commission may use a sole source or interagency agreement method if the project cannot be described with sufficient specificity so that bids can be evaluated against specifications and criteria set forth in a solicitation for bid and if both of the following conditions are met:
(i) The commission, at least 60 days prior to before making an award pursuant to this subdivision, notifies the Joint Legislative Budget Committee and the relevant policy committees in both houses of the Legislature, in writing, of its intent to take the proposed action.
(ii) The Joint Legislative Budget Committee either approves or does not disapprove the proposed action within 60 days from the date of notification required by clause (i).
(B) It is the intent of the Legislature to enact this paragraph to ensure legislative oversight for awards made on a sole source basis, or through an interagency agreement.
(3) Notwithstanding any other law, standard terms and conditions that generally apply to contracts between the commission and any entities, including state entities, do not automatically preclude the award of moneys from the fund through the sealed competitive bid method.

SEC. 5.

 Section 384.6 is added to the Public Utilities Code, to read:

384.6.
 (a) Funds allocated pursuant to this article may be expended for existing and new building decarbonization if the entity implementing the decarbonization project and its subcontractors at every tier will pay prevailing wage. wage and the decarbonization project is consistent with any otherwise applicable requirements.
(b) For purposes of this section, “building decarbonization” means efforts to reduce emissions of greenhouse gases from building-related applications.

SEC. 6.

 Section 385.6 is added to the Public Utilities Code, to read:

385.6.
 (a) Funds allocated pursuant to this article may be expended for existing and new building decarbonization if the entity implementing the decarbonization project and its subcontractors at every tier will pay prevailing wage. wage and the project is consistent with any otherwise applicable requirements.
(b) For purposes of this section, “building decarbonization” means efforts to reduce emissions of greenhouse gases from building-related applications.

SEC. 7.Section 701.1 of the Public Utilities Code is amended to read:
701.1.

(a)(1)The Legislature finds and declares that, in addition to other ratepayer protection objectives, a principal goal of electric and natural gas utilities’ resource planning and investment shall be to minimize the cost to society of the reliable energy services that are provided by natural gas and electricity, and to improve the environment and to encourage the diversity of energy sources through improvements in energy efficiency, the development of renewable energy resources, such as wind, solar, biomass, and geothermal energy, widespread transportation electrification, and decarbonization of existing and new buildings provided that an entity implementing a building decarbonization project, and its subcontractors at every tier, will pay workers prevailing wage.

(2)The amendment made to this subdivision by the Clean Energy and Pollution Reduction Act of 2015 (Chapter 547 of the Statutes of 2015) does not expand the authority of the commission beyond that provided by other law.

(b)The Legislature further finds and declares that, in addition to any appropriate investments in energy production, electrical and natural gas utilities should seek to exploit all practicable and cost-effective conservation and improvements in the efficiency of energy use and distribution that offer equivalent or better system reliability and that are not being exploited by any other entity.

(c)In calculating the cost-effectiveness of energy resources, including conservation and load management options, the commission shall include, in addition to other ratepayer protection objectives, a value for any costs and benefits to the environment, including air quality. The commission shall ensure that any values it develops pursuant to this section are consistent with values developed by the Energy Commission pursuant to Section 25000.1 of the Public Resources Code. However, if the commission determines that a value developed pursuant to this subdivision is not consistent with a value developed by the Energy Commission pursuant to subdivision (c) of Section 25000.1 of the Public Resources Code, the commission may nonetheless use this value if, in the appropriate record of its proceedings, it states its reasons for using the value it has selected.

(d)In determining the emission values associated with the current operating capacity of existing electric powerplants pursuant to subdivision (c), the commission shall adhere to the following protocol in determining values for air quality costs and benefits to the environment. If the commission finds that an air pollutant that is subject to regulation is a component of residual emissions from an electric powerplant and that the owner of that powerplant is either of the following:

(1)Using a tradable emission allowance, right, or offset for that pollutant, which (A) has been approved by the air quality district regulating the powerplant, (B) is consistent with federal and state law, and (C) has been obtained, authorized, or acquired in a market-based system.

(2)Paying a tax per measured unit of that pollutant.

The commission shall not assign a value or cost to that residual pollutant for the current operating capacity of that powerplant because the alternative protocol for dealing with the pollutant operates to internalize its cost for the purpose of planning for and acquiring new generating resources.

(e)(1)The values determined pursuant to subdivision (c) to represent costs and benefits to the environment shall not be used by the commission, in and of themselves, to require early decommissioning or retirement of an electric utility powerplant that complies with applicable prevailing environmental regulations.

(2)Further, the environmental values determined pursuant to subdivision (c) shall not be used by the commission in a manner that, when those values are aggregated, will result in advancing an electric utility’s need for new powerplant capacity by more than 15 months.

(f)This subdivision shall apply whenever a powerplant bid solicitation is required by the commission for an electric utility and a portion of the amount of new powerplant capacity, which is the subject of the bid solicitation, is the result of the commission’s use of environmental values to advance that electric utility’s need for new powerplant capacity in the manner authorized by paragraph (2) of subdivision (e). The affected electric utility may propose to the commission any combination of alternatives to that portion of the new powerplant capacity that is the result of the commission’s use of environmental values as authorized by paragraph (2) of subdivision (c). The commission shall approve an alternative in place of the new powerplant capacity if it finds all of the following:

(1)The alternative has been approved by the relevant air quality district.

(2)The alternative is consistent with federal and state law.

(3)The alternative will result in needed system reliability for the electric utility at least equivalent to that which would result from bidding for new powerplant capacity.

(4)The alternative will result in reducing system operating costs for the electric utility over those that would result from the process of bidding for new powerplant capacity.

(5)The alternative will result in equivalent or better environmental improvements at a lower cost than would result from bidding for new powerplant capacity.

(g)This section does not require an electric utility to alter the dispatch of its powerplants for environmental purposes.

(h)This section does not preclude an electric utility from submitting to the commission any combination of alternatives to meet a commission-identified need for new capacity, if the submission is otherwise authorized by the commission.

(i)This section does not change or alter any provision of commission Decision 92-04-045 (April 22, 1992), Application of Pacific Gas and Electric Company for an Ex Parte Order Approving Settlement Agreements Between Pacific Gas and Electric Company and Certain Winning Bidders in Pacific Gas and Electric Company’s Biennial Resource Plan Update Auction.

SEC. 8.SEC. 7.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only 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.