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AB-3121 Public utilities: incentive programs.(2023-2024)



Current Version: 08/28/24 - Amended Senate

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AB3121:v97#DOCUMENT

Amended  IN  Senate  August 28, 2024
Amended  IN  Senate  June 12, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 3121

Introduced by Assembly Member Hart Petrie-Norris

February 16, 2024

An act to amend Sections 10609.26 and 10609.30 of the Water Code, relating to water. An act to amend Sections 379.6, 1615, and 2870 of the Public Utilities Code, relating to public utilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 3121, as amended, Hart Petrie-Norris. Urban retail water suppliers: informational order: written notice: conservation order: water use efficiency standards and water use reporting: dates. Public utilities: incentive programs.
Existing law establishes the Multifamily Affordable Housing Solar Roofs Program. Existing law requires the Public Utilities Commission (PUC), as part of the program, to authorize the award of monetary incentives for qualifying solar energy systems, as defined, that are installed on multifamily residential properties of at least 5 rental housing units that are operated to provide deed-restricted low-income residential housing, as defined, and that meet one or more specified requirements, as provided. Existing law requires the PUC to annually authorize the allocation of $100,000,000 or 66.67% of available funds, whichever is less, beginning with the fiscal year commencing July 1, 2016, and ending with the fiscal year ending June 30, 2020, to the program from certain greenhouse gas allowance revenues received by electrical corporations and set aside for clean energy and energy efficiency projects, as provided. Existing law requires the PUC to continue authorizing the allocation of these funds through June 30, 2026, if the PUC determines that revenues are available after 2020 and that there is adequate interest and participation in the program. Existing law requires the PUC to evaluate the program every 3 years and requires the PUC to make necessary adjustments to the program to ensure that the goals of the program are being met, as specified. Existing law authorizes the PUC to credit uncommitted funds back to ratepayers if the PUC, upon review, finds that there is insufficient participation in the program.
This bill would require the PUC to credit no more than 1/2 of the program funds that are unencumbered as of January 1, 2025, back to the residential retail customers of electrical corporations, as specified.
Existing law states the intent of the Legislature that the self-generation incentive program increase the deployment of distributed generation and energy storage systems to facilitate, among other things, the integration of those resources into the electrical grid. Existing law authorizes the PUC, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and until December 31, 2024, to authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in 2008. Existing law requires the PUC to administer the self-generation incentive program until January 1, 2026. Existing law requires the PUC, on January 1, 2026, to provide repayment of all unallocated funds collected to reduce ratepayer costs.
This bill would additionally require the PUC, on January 1, 2025, to initiate a process to provide repayment to residential customers of all unreserved funds as of January 1, 2025, that were collected to reduce ratepayer costs.
Existing law requires the PUC to require those electrical corporations with 250,000 or more customer accounts in the state, and those gas corporations with 400,000 or more customer accounts in the state, to establish the joint School Energy Efficiency Stimulus Program within each of their energy efficiency portfolios and to file a joint advice letter by February 1, 2021, to fund the program as part of each of their energy efficiency portfolios. Existing law requires that the School Energy Efficiency Stimulus Program be a joint program among all the participating utilities, be consistent across the utility territories, and be designed, administered, and implemented by the Energy Commission as the program administrator. Existing law requires all allocated funds to be spent or returned to the electrical corporation or gas corporation by December 1, 2026. Existing law authorizes the Energy Commission to set application and encumbrance deadlines to ensure that the reversion of funds occurs by December 1, 2026.
This bill instead would set the application deadline for program funds as July 1, 2024, and would require any funds remaining as of that date to be returned to the electrical corporation or gas corporation and distributed to residential customers as a bill credit, as determined by the PUC. The bill would require all allocated funds that are not spent by December 1, 2026, to be returned to the electrical corporation or gas corporation and distributed to residential customers as a bill credit, as determined by the PUC.
Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because certain of the above-described provisions would be part of the act and a violation of a PUC action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program.
This bill would incorporate additional changes to Section 2870 of the Public Utilities Code proposed by SB 1118 to be operative only if this bill and SB 1118 are enacted and this bill is enacted last.
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.

(1)Existing law authorizes the State Water Resources Control Board, on and after January 1, 2024, to issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2025, to issue a written notice to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2026, to issue a conservation order to an urban retail water supplier that does not meet its urban water use objective.

This bill would instead provide that the date the board is authorized to issue informational orders is on or after January 1, 2026, the date to issue a written notice is on or after January 1, 2027, and the date to issue a conservation order is on or after January 1, 2028, respectively.

(2)Existing law requires, on or before January 10, 2024, the Legislative Analyst to provide a report to the appropriate policy committees of both houses of the Legislature and the public evaluating the implementation of the water use efficiency standards and water use reporting.

This bill would require the Legislative Analyst to provide a report as described above on or before January 10, 2028.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 1.

 Section 379.6 of the Public Utilities Code is amended to read:

379.6.
 (a) (1) It is the intent of the Legislature that the self-generation incentive program increase deployment of distributed generation and energy storage systems to facilitate the integration of those resources into the electrical grid, improve efficiency and reliability of the distribution and transmission system, and reduce emissions of greenhouse gases, peak demand, and ratepayer costs. It is the further intent of the Legislature that the commission, in future proceedings, provide for an equitable distribution of the costs and benefits of the program.
(2) The commission, in consultation with the Energy Commission, may authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024. The commission shall require the administration of the program for distributed energy resources originally established pursuant to Chapter 329 of the Statutes of 2000 until January 1, 2026. On January 1, 2025, the commission shall initiate a process to provide repayment only to residential customers of all unreserved funds as of January 1, 2025, that were collected pursuant to this section to reduce ratepayer costs. On January 1, 2026, the commission shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs.
(b) (1) Eligibility for incentives under the self-generation incentive program that are funded through the annual collection authorized pursuant to paragraph (2) of subdivision (a) shall be limited to distributed energy resources that the commission, in consultation with the State Air Resources Board, determines will achieve reductions in emissions of greenhouse gases pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).
(2) On or before July 1, 2015, the commission shall update the factor for avoided greenhouse gas emissions based on both the most recent data available to the State Air Resources Board for greenhouse gas emissions from electricity sales in the self-generation incentive program administrators’ service areas and current estimates of greenhouse gas emissions over the useful life of the distributed energy resource, including consideration of the effects of the California Renewables Portfolio Standard.
(3) The commission shall adopt requirements for energy storage systems to ensure that eligible energy storage systems reduce the emissions of greenhouse gases.
(c) Eligibility for the funding of any combustion-operated distributed generation projects using fossil fuel is subject to all of the following conditions:
(1) An oxides of nitrogen (NOx) emissions rate standard of 0.07 pounds per megawatthour and a minimum efficiency of 60 percent, or any other NOx emissions rate and minimum efficiency standard adopted by the State Air Resources Board. A minimum efficiency of 60 percent shall be measured as useful energy output divided by fuel input. The efficiency determination shall be based on 100-percent load.
(2) Combined heat and power units that meet the 60-percent efficiency standard may take a credit to meet the applicable NOx emissions standard of 0.07 pounds per megawatthour. Credit shall be at the rate of one megawatthour for each 3,400,000 British thermal units (Btus) of heat recovered.
(3) The customer receiving incentives shall adequately maintain and service the combined heat and power units so that during operation the system continues to meet or exceed the efficiency and emissions standards established pursuant to paragraphs (1) and (2).
(4) Notwithstanding paragraph (1), a project that does not meet the applicable NOx emissions standard is eligible if it meets both of the following requirements:
(A) The project operates solely on waste gas. The commission shall require a customer that applies for an incentive pursuant to this paragraph to provide an affidavit or other form of proof that specifies that the project shall be operated solely on waste gas. Incentives awarded pursuant to this paragraph shall be subject to refund and shall be refunded by the recipient to the extent the project does not operate on waste gas. As used in this paragraph, “waste gas” means natural gas that is generated as a byproduct of petroleum production operations and is not eligible for delivery to the utility pipeline system.
(B) The air quality management district or air pollution control district, in issuing a permit to operate the project, determines that operation of the project will produce an onsite net air emissions benefit compared to permitted onsite emissions if the project does not operate. The commission shall require the customer to secure the permit before receiving incentives.
(d) In determining the eligibility for the self-generation incentive program, minimum system efficiency shall be determined either by calculating electrical and process heat efficiency as set forth in Section 216.6, or by calculating overall electrical efficiency.
(e) Eligibility for incentives under the self-generation incentive program shall be limited to distributed energy resource technologies that the commission determines meet all of the following requirements:
(1) The distributed energy resource technology shifts onsite energy use to off-peak time periods or reduces demand from the grid by offsetting some or all of the customer’s onsite energy load, including, but not limited to, net peak electric load.
(2) The distributed energy resource technology is commercially available.
(3) The distributed energy resource technology safely uses the existing transmission and distribution system.
(4) The distributed energy resource technology improves air quality by reducing criteria air pollutants.
(f) Recipients of the self-generation incentive program funds shall provide relevant data to the commission and the State Air Resources Board, upon request, and shall be subject to onsite inspection to verify equipment operation and performance, including capacity, thermal output, and usage to verify criteria air pollutant and greenhouse gas emissions performance.
(g) In administering the self-generation incentive program, the commission shall determine a capacity factor for each distributed generation system energy resource technology in the program.
(h) (1) In administering the self-generation incentive program, the commission may adjust the amount of incentives and evaluate other public policy interests, including, but not limited to, ratepayers, energy efficiency, peak load reduction, load management, and environmental interests.
(2) The commission shall consider the relative amount and the cost of greenhouse gas emissions reductions, peak demand reductions, system reliability benefits, and other measurable factors when allocating program funds between eligible technologies.
(i) The commission shall ensure that distributed generation resources are made available in the self-generation incentive program for all ratepayers.
(j) In administering the self-generation incentive program, the commission shall provide an additional incentive of 20 percent from existing program funds for the installation of eligible distributed generation resources manufactured in California.
(k) The costs of the self-generation incentive program shall not be recovered from customers participating in the California Alternate Rates for Energy (CARE) program.
(l) The commission shall evaluate the overall success and impact of the self-generation incentive program based on the following performance measures:
(1) The amount of reductions of emissions of greenhouse gases.
(2) The amount of reductions of emissions of criteria air pollutants measured in terms of avoided emissions and reductions of criteria air pollutants represented by emissions credits secured for project approval.
(3) The amount of energy reductions measured in energy value.
(4) The amount of reductions of customer peak demand.
(5) The ratio of the electricity generated by distributed energy resource generation projects receiving incentives from the self-generation incentive program to the electricity capable of being produced by those projects, commonly known as a capacity factor.
(6) The value to the electrical transmission and distribution system measured in avoided costs of transmission and distribution upgrades and replacement.
(7) The ability to improve onsite electricity reliability as compared to onsite electricity reliability before the self-generation incentive program technology was placed in service.
(m) On and after January 1, 2020, generation technologies using nonrenewable fuels shall not be eligible for incentives under the self-generation incentive program.

SEC. 2.

 Section 1615 of the Public Utilities Code is amended to read:

1615.
 (a) (1) The commission shall require each utility to fund the School Energy Efficiency Stimulus Program by allocating their energy efficiency budgets for program years 2021, 2022, and 2023, in both of the following amounts:
(A) An amount equal to the applicable percentage of the difference between the budget contained in each utility’s 2020 annual budget advice letter approved as of July 1, 2020, and the annual portfolio funding limitation for program year 2020 as set forth in the 2018–2025 business plan of each utility as approved and modified in ordering paragraph 45 of the commission’s Decision 18-05-041 (May 31, 2019) Decision Addressing Energy Efficiency Business Plans, as modified by Decision 20-02-029 (February 6, 2020) Order Modifying Decision (D.) 18-05-041 and Denying Rehearing of Decision, as Modified. The applicable percentage is 80 percent for program year 2021, 70 percent for program year 2022, and 60 percent for program year 2023.
(B) Any carryover amount from unspent and uncommitted energy efficiency funds for program year 2020, 2021, or 2022 to the School Energy Efficiency Stimulus Program for the following year’s budget.
(2) Funding allocations required by this subdivision shall only apply to program years 2021, 2022, and 2023.
(3) Any funds allocated towards the School Energy Efficiency Stimulus Program pursuant to this section that remain unspent by the end of each program year may be carried over and contribute to the next year’s budget for the School Energy Efficiency Stimulus Program until the end of the 2023 energy efficiency program year.
(b) (1) This section does not authorize the levy of a charge or any increase in the amount collected pursuant to an existing charge beyond the amounts authorized by the commission in Decision 18-05-041, or as modified by Decision 20-02-029, nor does it add to, or detract from, any existing authority of the commission to levy or increase charges.
(2) This subdivision does not change the commission’s authority to determine revenue allocation and rate design, including its ability to prioritize customers participating in the California Alternative Rates for Energy or Family Electric Rate Assistance programs when considering appropriate revenue allocation for energy efficiency programs.
(c) The Energy Commission shall ensure that moneys from each utility for the School Energy Efficiency Stimulus Program are used for projects located in the service territory of that utility from which the moneys are received.
(d) The Energy Commission may use no more than 5 percent, not to exceed five million dollars ($5,000,000) per year, of the SRVEVR Program and the SNPFA Program funds for administrating the programs, including providing technical support to program participants. The commission shall ensure that funds allocated to the Energy Commission pursuant to this section are transferred to an account specified by the Energy Commission within 60 days after the completion of the prior energy efficiency program year.
(e) (1) The School Energy Efficiency Stimulus Program Fund was administratively established for the Energy Commission to receive funds allocated pursuant to this chapter.
(2) Notwithstanding Section 13340 of the Government Code, the moneys in the School Energy Efficiency Stimulus Program Fund are hereby continuously appropriated to the Energy Commission without regard to fiscal years for the purposes of the School Energy Efficiency Stimulus Program established pursuant to this chapter, including, but not limited to, paying the costs of program administration.

(f)All funds allocated in subdivision (a) shall be spent or returned to each utility by December 1, 2026.

(g)The Energy Commission may set application and encumbrance deadlines to ensure that the reversion of funds as required by subdivision (f) occurs by December 1, 2026.

(f) The application deadline for program funds shall be July 1, 2024. Any funds remaining as of that date shall be returned to each utility and distributed to residential customers as a bill credit, as determined by the commission.
(g) All funds allocated in subdivision (a) shall be spent by December 1, 2026. Any of this funding that remains on December 1, 2026, shall be returned to each utility and distributed to residential customers as a bill credit, as determined by the commission.
(h) The Energy Commission shall take steps, consistent with Section 25230 of the Public Resources Code, to ensure that a diverse group of contractors are aware of funding opportunities available through the School Energy Efficiency Stimulus Program.

SEC. 3.

 Section 2870 of the Public Utilities Code is amended to read:

2870.
 (a) As used in this section, the following definitions apply:
(1) “CARE program” means the California Alternate Rates for Energy program established pursuant to Section 739.1.
(2) “Program” means the Multifamily Affordable Housing Solar Roofs Program established pursuant to this chapter, which is also known as the Solar on Multifamily Affordable Housing Program.
(3) “Qualified multifamily affordable housing property” means a multifamily residential property of at least five rental housing units that is, or will be, operated to provide deed-restricted low-income residential housing, as defined in clause (i) of subparagraph (A) of paragraph (3) of subdivision (a) of Section 2852, and that meets one or more of the following requirements:
(A) The property is located in a disadvantaged community, as identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code.
(B) At least 66 percent of the households have incomes at or below 80 percent of the area median income, as defined in subdivision (f) of Section 50052.5 of the Health and Safety Code.
(C) The property is owned by a tribe.
(D) The property is rental housing property that is owned by one of the following:
(i) A public housing authority created pursuant to the Housing Authorities Law (Chapter 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code).
(ii) A public housing agency, as defined in Section 1437a of Title 42 of the United States Code.
(4) “Solar energy system” means a solar energy photovoltaic device that meets or exceeds the eligibility criteria established pursuant to Section 25782 of the Public Resources Code.
(5) “Tribe” means a California Native American tribe, as defined in Section 21073 of the Public Resources Code.
(b) (1) Adoption and implementation of the program may count toward the satisfaction of the commission’s obligation to ensure that specific alternatives designed for growth among residential customers in disadvantaged communities are offered as part of the standard contract or tariff authorized pursuant to paragraph (1) of subdivision (b) of Section 2827.1.
(2) This section does not preclude electrical corporations from offering and administering a distributed energy resource program, including solar energy systems, in disadvantaged communities offered under current or proposed programs using funds provided under subdivision (c) of Section 748.5 or programs proposed to comply with paragraph (1) as approved by the commission.
(c) The commission shall annually authorize the allocation of one hundred million dollars ($100,000,000) or 66.67 percent of available funds, whichever is less, from the revenues described in subdivision (c) of Section 748.5 for the program, beginning with the fiscal year commencing July 1, 2016, and ending with the fiscal year ending June 30, 2020. The commission shall continue authorizing the allocation of these funds through June 30, 2026, if the commission determines that revenues are available after 2020 and that there is adequate interest and participation in the program. 2026.
(d) The commission shall consider the most appropriate program administration structure, including administration by a qualified third-party administrator, selected by the commission through a competitive bidding process, or administration by an electrical corporation, in an existing or future proceeding.
(e) Not more than 10 percent of the funds allocated to the program shall be used for administration.
(f) (1) By June 30, 2017, the commission shall authorize the award of monetary incentives for qualifying solar energy systems that are installed on qualified multifamily affordable housing properties through December 31, 2032. The target of the program is to install a combined generating capacity of at least 300 megawatts on qualified properties.
(2) The commission shall require that the electricity generated by qualifying renewable energy systems installed pursuant to the program be primarily used to offset electricity usage by low-income tenants. These requirements may include required covenants and restrictions in deeds.
(3) The commission shall require that qualifying solar energy systems owned by third-party owners are subject to contractual restrictions to ensure that no additional costs for the system be passed on to low-income tenants at the properties receiving incentives pursuant to the program. The commission shall require third-party owners of solar energy systems to provide ongoing operations and maintenance of the system, monitor energy production, and, where necessary, take appropriate action to ensure that the kWh production levels projected for the system are achieved throughout the period of the third-party agreement. Those actions may include, but are not limited to, providing a performance guarantee of annual production levels or taking corrective actions to resolve underproduction problems.
(4) The commission shall ensure that incentive levels for photovoltaic installations receiving incentives through the program are aligned with the installation costs for solar energy systems for affordable housing and take account of federal investment tax credits and contributions from other sources to the extent feasible.
(5) The commission shall require that no individual installation receive incentives at a rate greater than 100 percent of the total system installation costs.
(6) The commission shall establish local hiring requirements for the program to provide economic development benefits to disadvantaged communities.
(7) The commission shall establish energy efficiency requirements that are equal to the energy efficiency requirements established for the program described in Section 2852, including participation in a federal, state, or utility-funded energy efficiency program or documentation of a recent energy efficiency retrofit.
(8) For purposes of the new construction of qualified multifamily affordable housing property, moneys authorized through the program shall not be used to meet the requirements of Part 6 (commencing with Section 100) of Title 24 of the California Code of Regulations.
(g) (1) The commission shall ensure that electrical corporation tariff structures affecting the low-income tenants participating in the program continue to provide a direct economic benefit from the qualifying solar energy system.
(2) If units are separately metered, low-income tenants who participate in the program shall receive credits on utility bills from the program. The commission shall ensure that utility bill reductions are achieved through tariffs that allow for the allocation of credits, such as virtual net metering tariffs designed for program participants, or other tariffs that may be adopted by the commission pursuant to Section 2827.1.
(h) This chapter is not intended to supplant CARE program rates as the primary mechanism for achieving the goals of the CARE program.
(i) The commission shall determine the eligibility of qualified multifamily affordable housing property tenants that are customers of community choice aggregators.
(j) The commission may consider authorizing an advance payment loan to an eligible project if there is reasonable evidence to suggest that an advance payment loan would lead to the delivery of a project that would not occur absent the advance payment loan, so long as appropriate funding guarantee and loss recovery mechanisms are implemented to limit the risk of liability to the program from making the advance payment loan. The commission, in considering an advance payment loan, may prioritize allocating funding to a project where an advance payment loan will have the greatest impact on project delivery.
(k) (1) Every three years, the commission shall evaluate the program’s expenditures, commitments, uncommitted balances, future demands, performance, and outcomes and shall make any necessary adjustments to the program to ensure the goals of the program are being met. If, upon review, the commission finds there is insufficient participation in the program, the commission may credit uncommitted funds back to ratepayers pursuant to Section 748.5.
(2) The commission shall include in the annual workplan required pursuant to Section 910, an annual update of the program that shall include, but not be limited to, the number of projects approved, number of projects completed, number of pending projects awaiting approval, and geographic distribution of the projects.
(l) The commission shall credit no more than one-half of the program funds that are unencumbered as of January 1, 2025, back to the residential retail customers of the electrical corporation pursuant to Section 748.5.

SEC. 3.5.

 Section 2870 of the Public Utilities Code is amended to read:

2870.
 (a) As used in this section, the following definitions apply:
(1) “CARE program” means the California Alternate Rates for Energy program established pursuant to Section 739.1.
(2) “Program” means the Multifamily Affordable Housing Solar Roofs Program established pursuant to this chapter, which is also known as the Solar on Multifamily Affordable Housing Program.
(3) (A) “Qualified multifamily affordable housing property” means a multifamily residential property of at least five rental housing units that is, or will be, operated to provide deed-restricted low-income residential housing, as defined in clause (i) of subparagraph (A) of paragraph (3) of subdivision (a) of Section 2852, except as specified in subparagraph (B), and that meets one or more of the following requirements:

(A)

(i) The property is located in a disadvantaged community, as identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code.

(B)

(ii) At least 66 percent of the households have incomes at or below 80 percent of the area median income, as defined in subdivision (f) of Section 50052.5 of the Health and Safety Code.

(C)

(iii) The property is owned by a tribe.

(D)

(iv) The property is rental housing property that is owned by one either of the following:

(i)

(I) A public housing authority created pursuant to the Housing Authorities Law (Chapter 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code).

(ii)

(II) A public housing agency, as defined in Section 1437a of Title 42 of the United States Code.
(B) Notwithstanding subparagraph (A), a property owned by a tribe is not required to be deed restricted to be eligible for the program, but is required to meet the income requirements of the program pursuant to clause (ii) of subparagraph (A). To be eligible for the program, a property owned by a tribe that is not deed restricted shall have received public financing to fund affordable housing through any of the following:
(i) The United States Department of Housing and Urban Development Indian Housing Block Grant program.
(ii) The United States Bureau of Indian Affairs.
(iii) The Native American Housing Assistance and Self-Determination Act of 1996 (Public Law 104-330), as amended.
(4) “Solar energy system” means a solar energy photovoltaic device that meets or exceeds the eligibility criteria established pursuant to Section 25782 of the Public Resources Code.
(5) “Tribe” means a California Native American tribe, as defined in Section 21073 of the Public Resources Code.
(b) (1) Adoption and implementation of the program may count toward the satisfaction of the commission’s obligation to ensure that specific alternatives designed for growth among residential customers in disadvantaged communities are offered as part of the standard contract or tariff authorized developed pursuant to paragraph (1) of subdivision (b) of Section 2827.1.
(2) This section does not preclude electrical corporations from offering and administering a distributed energy resource program, including solar energy systems, in disadvantaged communities offered under current or proposed programs using funds provided under subdivision (c) of Section 748.5 or programs proposed to comply with paragraph (1) as approved by the commission.
(c) The commission shall annually authorize the allocation of one hundred million dollars ($100,000,000) or 66.67 percent of available funds, whichever is less, from the revenues described in subdivision (c) of Section 748.5 for the program, beginning with the fiscal year commencing July 1, 2016, and ending with the fiscal year ending June 30, 2020. The commission shall continue authorizing the allocation of these funds through June 30, 2026, if the commission determines that revenues are available after 2020 and that there is adequate interest and participation in the program. 2026.
(d) The commission shall consider the most appropriate program administration structure, including administration by a qualified third-party administrator, selected by the commission through a competitive bidding process, or administration by an electrical corporation, in an existing or future proceeding.
(e) Not more than 10 percent of the funds allocated to the program shall be used for administration.
(f) (1) By June 30, 2017, the commission shall authorize the award of monetary incentives for qualifying solar energy systems that are installed on qualified multifamily affordable housing properties through December 31, 2032. The target of the program is to install a combined generating capacity of at least 300 megawatts on qualified properties.
(2) The commission shall require that the electricity generated by qualifying renewable energy systems installed pursuant to the program be primarily used to offset electricity usage by low-income tenants. These requirements may include required covenants and restrictions in deeds.
(3) The commission shall require that qualifying solar energy systems owned by third-party owners are subject to contractual restrictions to ensure that no additional costs for the system be passed on to low-income tenants at the properties receiving incentives pursuant to the program. The commission shall require third-party owners of solar energy systems to provide ongoing operations and maintenance of the system, monitor energy production, and, where necessary, take appropriate action to ensure that the kWh kilowatthour production levels projected for the system are achieved throughout the period of the third-party agreement. Those actions may include, but are not limited to, providing a performance guarantee of annual production levels or taking corrective actions to resolve underproduction problems.
(4) The commission shall ensure that incentive levels for photovoltaic installations receiving incentives through the program are aligned with the installation costs for solar energy systems for affordable housing and take account of federal investment tax credits and contributions from other sources to the extent feasible.
(5) The commission shall require that no individual installation receive incentives at a rate greater than 100 percent of the total system installation costs.
(6) The commission shall establish local hiring requirements for the program to provide economic development benefits to disadvantaged communities.
(7) The commission shall establish energy efficiency requirements that are equal to the energy efficiency requirements established for the program described in Section 2852, including participation in a federal, state, or utility-funded energy efficiency program or documentation of a recent energy efficiency retrofit.
(8) For purposes of the new construction of qualified multifamily affordable housing property, moneys authorized through the program shall not be used to meet the requirements of Part 6 (commencing with Section 100) of Title 24 of the California Code of Regulations.
(g) (1) The commission shall ensure that electrical corporation tariff structures affecting the low-income tenants participating in the program continue to provide a direct economic benefit from the qualifying solar energy system.
(2) If units are separately metered, low-income tenants who participate in the program shall receive credits on utility bills from the program. The commission shall ensure that utility bill reductions are achieved through tariffs that allow for the allocation of credits, such as virtual net metering tariffs designed for program participants, or other tariffs that may be adopted by the commission pursuant to Section 2827.1.
(h) This chapter is does not intended to supplant CARE program rates as the primary mechanism for achieving the goals of the CARE program.
(i) The commission shall determine the eligibility of qualified multifamily affordable housing property tenants that are customers of community choice aggregators.
(j) The commission may consider authorizing an advance payment loan to an eligible project if there is reasonable evidence to suggest that an advance payment loan would lead to the delivery of a project that would not occur absent the advance payment loan, so long as if appropriate funding guarantee and loss recovery mechanisms are implemented to limit the risk of liability to the program from making the advance payment loan. The commission, in considering an advance payment loan, may prioritize allocating funding to a project where an advance payment loan will have the greatest impact on project delivery.
(k) (1) Every three years, the commission shall evaluate the program’s expenditures, commitments, uncommitted balances, future demands, performance, and outcomes and shall make any necessary adjustments to the program to ensure the goals of the program are being met. If, upon review, the commission finds there is insufficient participation in the program, the commission may credit uncommitted funds back to ratepayers pursuant to Section 748.5.
(2) The commission shall include in the annual workplan required pursuant to Section 910, an annual update of the program that shall include, but not be limited to, the number of projects approved, number of projects completed, number of pending projects awaiting approval, and geographic distribution of the projects.
(l) The commission shall credit no more than one-half of the program funds that are unencumbered as of January 1, 2025, back to the residential retail customers of the electrical corporation pursuant to Section 748.5.

SEC. 4.

 Section 3.5 of this bill incorporates amendments to Section 2870 of the Public Utilities Code proposed by both this bill and Senate Bill 1118. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2025, (2) each bill amends Section 2870 of the Public Utilities Code, and (3) this bill is enacted after Senate Bill 1118, in which case Section 3 of this bill shall not become operative.

SEC. 5.

 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.
SECTION 1.Section 10609.26 of the Water Code is amended to read:
10609.26.

(a)(1)On and after January 1, 2026, the board may issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective required by this chapter. Informational orders are intended to obtain information on supplier activities, water production, and conservation efforts in order to identify technical assistance needs and assist urban water suppliers in meeting their urban water use objectives.

(2)In determining whether to issue an informational order, the board shall consider the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet the urban water use objective.

(3)The board shall share information received pursuant to this subdivision with the department.

(4)An urban water supplier may request technical assistance from the department. The technical assistance may, to the extent available, include guidance documents, tools, and data.

(b)On and after January 1, 2027, the board may issue a written notice to an urban retail water supplier that does not meet its urban water use objective required by this chapter. The written notice may warn the urban retail water supplier that it is not meeting its urban water use objective described in Section 10609.20 and is not making adequate progress in meeting the urban water use objective, and may request that the urban retail water supplier address areas of concern in its next annual report required by Section 10609.24. In deciding whether to issue a written notice, the board may consider whether the urban retail water supplier has received an informational order, the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet its urban water use objective.

(c)(1)On and after January 1, 2028, the board may issue a conservation order to an urban retail water supplier that does not meet its urban water use objective. A conservation order may consist of, but is not limited to, referral to the department for technical assistance, requirements for education and outreach, requirements for local enforcement, and other efforts to assist urban retail water suppliers in meeting their urban water use objective.

(2)In issuing a conservation order, the board shall identify specific deficiencies in an urban retail water supplier’s progress towards meeting its urban water use objective, and identify specific actions to address the deficiencies.

(3)The board may request that the department provide an urban retail water supplier with technical assistance to support the urban retail water supplier’s actions to remedy the deficiencies.

(d)A conservation order issued in accordance with this chapter may include requiring actions intended to increase water-use efficiency, but shall not curtail or otherwise limit the exercise of a water right, nor shall it require the imposition of civil liability pursuant to Section 377.

SEC. 2.Section 10609.30 of the Water Code is amended to read:
10609.30.

On or before January 10, 2028, the Legislative Analyst shall provide to the appropriate policy committees of both houses of the Legislature and the public a report evaluating the implementation of the water use efficiency standards and water use reporting pursuant to this chapter. The board and the department shall provide the Legislative Analyst with the available data to complete this report.

(a)The report shall describe all of the following:

(1)The rate at which urban retail water users are complying with the standards, and factors that might facilitate or impede their compliance.

(2)The accuracy of the data and estimates being used to calculate urban water use objectives.

(3)Indications of the economic impacts, if any, of the implementation of this chapter on urban water suppliers and urban water users, including CII water users.

(4)The frequency of use of the bonus incentive, the volume of water associated with the bonus incentive, value to urban water suppliers of the bonus incentive, and any implications of the use of the bonus incentive on water use efficiency.

(5)The early indications of how implementing this chapter might impact the efficiency of statewide urban water use.

(6)Recommendations, if any, for improving statewide urban water use efficiency and the standards and practices described in this chapter.

(7)Any other issues the Legislative Analyst deems appropriate.