Bill Text: CA SB37 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Energy efficiency and renewable energy upgrades: on-bill repayment program.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2013-05-01 - Returned to Secretary of Senate pursuant to Joint Rule 62(a). [SB37 Detail]

Download: California-2013-SB37-Amended.html

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BILL NUMBER: SB 37	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 19, 2013

INTRODUCED BY   Senator De León
    (   Principal coauthor:   Assembly Member
  Eggman   ) 
    (   Coauthor:   Assembly Member  
Muratsuchi   ) 

                        DECEMBER 5, 2012

    An act relating to energy.   An act to add
Sections 1940.10 and 2079.10b to the Civil Code, to amend Section
25402.9 of the Public Resources Code, and to add Chapter 7.6
(commencing with Section 2833) to Part 2 of Division 1 of the Public
Utilities Code, relating to electricity. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 37, as amended, De León. Energy efficiency and renewable energy
upgrades: on-bill repayment program. 
   Under 
    (1)     Under  existing law the Public
Utilities Commission has regulatory authority over public utilities,
including electrical corporations and gas corporations, as defined.
Existing law authorizes the commission to fix the rates and charges
for every public utility and requires that those rates and charges be
just and reasonable.
   This bill would  state the intent of the Legislature to
 enact  the California Clean Energy Consumer Access Act
of 2013 and would authorize the commission to require an electrical
or gas corporation with 250,000 or more service connections to
develop and implement  an on-bill repayment program 
that will provide Californians greater access to  
providing financial assistance for  energy efficiency 
and clean technology upgrades   , renewable energy,
distributed generation, or demand response improvements by allowing
for the repayment of the financial assistance to be included in the
utility customer's utility bill (on-bill repayment). The bill would
provide that the on-bill repayment   obligation would run
with the meter, as defined. Because a violation of any part of any
order, decision, rule, direction, demand, or requirement of the
commission is   a crime, this bill would impose a
state-mandated local program  . 
   (2) Existing law requires sellers of property or landlords to
provide specified disclosure, to prospective buyers or prospective or
existing tenants, regarding the property.  
   This bill would additionally require sellers of property or
landlords to provide to prospective buyers or prospective or existing
tenants a disclosure indicating that a portion of the utility bill
is subject to an on-bill repayment obligation.  
   (3) Existing law requires the State Energy Resources Conservation
and Development Commission (Energy Commission) to develop, adopt, and
publish an informational booklet to educate and inform homeowners,
rental property owners, renters, seller, brokers, and the general
public about the statewide home energy rating program. Existing law
requires the Energy Commission to charge a fee for the booklet. 

   This bill would require the Energy Commission to update the
booklet to include information about home energy conservation and
on-bill repayment program developed pursuant to (1) above. This bill
would instead authorize the Energy Commission to charge a fee for the
booklet.  
   (4) 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:  no
  yes  . State-mandated local program:  no
  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 Clean Energy Consumer Access Act of 2013.

   SEC. 2.   (a) The Legislature finds and declares all
of the following:  
   (1) Currently, many Californians lack access to affordable
financing for onsite energy efficiency and clean energy projects.
 
   (2) Existing clean energy programs and incentives are important
but limited in that they are funded by insufficient amounts of
ratepayer or taxpayer moneys, and in that existing programs reach
only a small number of Californians due to restrictions in income
level, credit score, project size, or property and technology
specific eligibility criteria.  
   (3) California's current economic condition necessitates that the
Legislature engineer pioneering ways to create sustainable, green
collar jobs.  
   (4) Since the recession began in late 2007, California has lost
nearly 1.4 million jobs, including 400,000 in the construction
industry alone. Investing in clean energy projects will maximize job
creation and will help the state regain a sense of economic security
and sustainability at a time when unemployment remains high. The
state can further stimulate its economy by putting the industry
segment back to work that is most in need, the construction trades.
 
   (5) Allowing the financing of clean energy projects through the
utility bill has the cobenefit of allowing for a more affordable
interest rate than would be otherwise available due to the security
of utility bill payments and allowing for ratepayers to see the
benefits and costs of clean energy projects on the same document.
 
   (6) By tying repayment to the utility bill, ratepayers will make
payments for their upgrades on the same bill where savings are
realized from the investment, resulting in a new bill that can be
equal to or even less than their utility bill prior to energy
upgrades.  
   (7) On-bill repayment is a unique clean energy incentive program
because it does not rely on public funding and expands access to
energy efficiency and clean technology upgrades.  
   (8) On-bill repayment will incentivize private investors to invest
in clean energy improvements in California, will stimulate the state'
s economy by creating jobs for contractors and other persons who
complete new energy improvements, and will reinforce the leadership
role of the state in the new energy economy, thereby attracting clean
energy manufacturing facilities and related jobs to the state. 

   (b) It is the intent of the Legislature, in enacting this act, to
allow greater access to onsite clean energy projects by allowing
consumers to finance clean energy projects through their utility
bills in a financing mechanism called "on-bill repayment." 
   SEC. 3.    Section 1940.10 is added to the  
Civil Code   , to read:  
   1940.10.  (a) A property owner that authorizes a project financed
by the OBR program pursuant to Chapter 7.6 (commencing with Section
2833) of Part 2 of Division 1 of the Public Utilities Code shall
provide to an existing tenant who is responsible, directly or
indirectly through the provisions of the applicable lease, for paying
all or a portion of the cost of utility service that is subject to
an OBR obligation, the disclosure made available to the property
owner pursuant to Section 2833.3 of the Public Utilities Code.
   (b) Prior to the signing of a lease or rental agreement, an owner,
or the agent of an owner of any premises with respect to which
utility service is subject to an OBR obligation that will be paid by
the tenant, whether directly or indirectly through the provisions of
the applicable lease, shall provide a prospective tenant with the
disclosure that was provided to the owner pursuant to Section 2833.3
of the Public Utilities Code.
   (c) A lease shall not be invalidated solely because of the failure
to comply with this section.
   (d) For the purposes of this section, the following terms have the
following meanings:
   (1) "OBR program" has the same meaning as that set forth in
Section 2833 of the Public Utilities Code.
   (2) "OBR obligation" has the same meaning as that set forth in
Section 2833 of the Public Utilities Code. 
   SEC. 4.    Section 2079.10b is added to the 
 Civil Code   , to read:  
   2079.10b.  (a) Every seller of real property subject to an OBR
obligation that runs with the meter, pursuant to Chapter 7.6
(commencing with Section 2833) of Part 2 of Division 1 of the Public
Utilities Code, shall deliver to the buyer of the property the
disclosure that was provided to the seller Section 2833.3 of the
Public Utilities Code.
   (b) Upon delivery of the disclosure form to the buyer of real
property, the seller or agent is not required to provide additional
information relative to the OBR obligation and the information in the
disclosure form is deemed adequate to inform the buyer about the
existence of the OBR obligation and the OBR repayment charge that
will run with the meter pursuant to Section 2833.3 of the Public
Utilities Code.
   (c) For the purposes of this section, the following terms have the
following meanings:
   (1) "OBR obligation" has the same meaning as that set forth in
Section 2833 of the Public Utilities Code.
   (2) "OBR repayment charge" has the same meaning as that set forth
in Section 2833 of the Public Utilities Code.
   (3) "Runs with meter" has the same meaning as that set forth in
Section 2833 of the Public Utilities Code. 
   SEC. 5.    Section 25402.9 of the   Public
Resources Code   is amended to read: 
   25402.9.  (a) On or before July 1, 1996, the commission shall
develop, adopt, and publish an informational booklet to educate and
inform homeowners, rental property owners, renters, sellers, brokers,
and the general public about the statewide home energy rating
program adopted pursuant to Section 25942.
   (b) In the development of the booklet, the commission shall
consult with representatives of the Department of Real Estate, the
Department of Housing and Community Development, the Public Utilities
Commission, investor-owned and municipal utilities, cities and
counties, real estate licensees, home builders, mortgage lenders,
home appraisers and inspectors, home energy rating organizations,
contractors who provide home energy services, consumer groups, and
environmental groups. 
   (c) The commission shall update the booklet developed pursuant to
subdivision (a) to include information about home energy conservation
and on-bill repayment programs developed and implemented pursuant to
Chapter 7.6 (commencing with Section 2833) of Part 2 of Division 1
of the Public Utilities Code. 
   (c) 
    (d)  The commission  shall   may
 charge a fee for the informational booklet to recover its costs
under subdivision (a).
   SEC. 6.    Chapter 7.6 (commencing with Section 2833)
is added to Part 2 of Division 1 of the   Public Utilities
Code   , to read:  
      CHAPTER 7.6.  CALIFORNIA CLEAN ENERGY CONSUMERS ACCESS ACT OF
2013


   2833.  For the purposes of this chapter, the following the terms
have the following meanings:
   (a) "Bill neutrality" means a utility customer's annual payments
of OBR repayment charges set at an amount that is less than or equal
to the projected annual electric and gas energy savings arising from
the OBR improvements in a methodology to be determined by the
commission pursuant to Section 2833.1.
   (b) "Incurring customer" means the utility customer of record
during the billing period during which any OBR repayment charge
becomes due and payable.
   (c) "OBR agreement" means a written agreement executed by, and
among, a utility customer, an OBR partner or its agent, and a utility
or its agent, governing the terms of an OBR obligation.
   (d) "OBR improvement" means an eligible energy improvement
financed through an OBR obligation.
   (e) "OBR obligation" means an obligation to repay a financing
provided to a utility customer pursuant to an on-bill repayment
program.
   (f) "OBR partner" means a person or entity providing financing for
eligible energy improvements pursuant to an on-bill repayment
program. OBR partners include, but are not limited to, banks, savings
and loan institutions, credit unions, project developers, or
independent solar energy producers, as defined in Section 2868.
Financing may be provided in the form of a loan, lease, power
purchase agreement, energy service agreement, or other financing
structure approved by the commission.
   (g) "On-bill repayment program" or "OBR program" means a program,
which may include one or more pilot test programs, approved by the
commission that enables building owners or occupants to arrange, by
an OBR agreement, for the financing of eligible energy improvements
that is repaid through charges to be included as a portion of utility
bills for utility service to the premises served by the
improvements.
   (h) "OBR repayment charge" means a charge, constituting repayment
of all or a portion of any OBR obligation, that is included on a
utility bill in accordance with a commission-approved utility tariff.

   (i) "Run with the meter" means all of the following:
   (1) The OBR obligation, for so long as any portion of the OBR
obligation remains outstanding prior to the sale or transfer of the
applicable real property, survives a change in ownership, tenancy, or
meter account responsibility.
   (2) The OBR obligation, for so long as any portion of the OBR
obligation remains outstanding, at all times constitutes an
obligation of the utility customer of record with respect to the
premises served by the OBR improvements to repay.
   (3) Arrears in OBR repayment charges outstanding prior to the sale
or transfer of the applicable real property remain the
responsibility of the incurring customer, unless expressly assumed by
a subsequent customer or third party.
   (4) The exemption from restrictions on a utility's right to
terminate service pursuant to Section 2833.11 applies to the
subsequent utility customer for as long as any portion of the OBR
obligation remains outstanding.
   (j) "Utility" means an electrical corporation or gas corporation
that develops, or is required to develop, an on-bill repayment
program.
   2833.1.  (a) The commission may require an electrical corporation
or gas corporation with 250,000 or more service connections in the
state to develop and implement one or more on-bill repayment programs
for eligible energy efficiency, renewable energy, distributed
generation, or demand response improvements.
   (b) A utility shall not implement the on-bill repayment program
without the express approval of the commission.
   (c) The commission shall supervise on-bill repayment programs to
ensure that the programs are administered in compliance with the
terms approved by the commission.
   2833.2.  (a) The commission shall establish requirements to be met
by each utility in the utility's on-bill repayment programs that are
submitted to the commission for approval, including, but not limited
to, eligibility criteria for types of improvements and projects, the
establishment of energy and cost savings evaluation standards,
requirements that prevent increases in expected disconnection rates,
prepayment options, rules that prohibit the unauthorized removal from
the property of an OBR improvement, a methodology to determine bill
neutrality, and project inspection services or requirements.
   (b) The commission shall limit technologies eligible to be
financed through OBR obligations to those that will achieve
reductions of greenhouse gases as defined in the California Global
Warming Solutions Act of 2006 (Division 25.5 (commencing with Section
38500) of the Health and Safety Code).
   (c) The commission shall ensure the on-bill repayment program
includes all of the following program elements:
   (1) (A) For two years from the initial approval of the program by
the commission, all on-bill repayment programs shall require bill
neutrality.
   (B) Two years after the initial approval, the commission shall
evaluate the success of projects financed through on-bill repayment
to date. If the commission determines that the requirement for bill
neutrality has unnecessarily limited the types of projects that may
be financed through the program, the commission may limit the
application of the bill neutrality requirement.
   (C) Notwithstanding subparagraph (B), the bill neutrality
requirement shall apply, at all times, in cases where a portion of
the OBR repayment charges are expected to be paid by one or more
tenants on the property, whether directly or indirectly.
   (2) A requirement that an OBR obligation shall not be put in place
without authorization by all owners of the fee interest in the
property where the premises served by the OBR improvements is
located.
   (3) Consumer protections for low-income residential customers,
including protections to prevent increases in the expected number of
service terminations, such as targeted use of a commission-approved
loan loss reserve in lieu of service termination, and, including, at
all times, a requirement for bill neutrality for lower income
households.
   (4) A requirement that the OBR partner implement consumer
protections, loan eligibility, and credit determinations.
   (5) A requirement that the OBR partner provide the utility or its
agent with a copy of all financing documents associated with an OBR
obligation.
   (6) A requirement that the OBR repayment charge be listed by the
utility as a separate line item on the customer's bill from the
utility.
   (7) A requirement that the on-bill repayment charge collected by
the utility or its agents be remitted to the OBR partner pursuant to
a timeframe determined by the commission.
   2833.3.  The OBR program shall develop all of the following:
   (a) A description of OBR programs and OBR obligations that would
be included in the informational booklet developed pursuant to
Section 25402.9 of the Public Resources Code.
   (b) A standard disclosure required by Section 2079.10b of the
Civil Code to be available for use by a seller of real property that
is served by OBR improvements that is provided free of charge to the
seller upon request.
   (c) A standard disclosure required by Section 1940.10 of the Civil
Code to be available for use by a lessor of real property that is
served by OBR improvements that is provided free of charge to the
lessor upon request.
   2833.4.  (a) If the amount paid by the utility customer is less
than the amount billed to the customer on the utility bill, for a
utility customer account to which an OBR obligation is in effect, the
commission shall adopt one of the following methods for allocation
of the payment:
   (1) Allocate the payment in the following order of priority:
   (A) Beginning with the earliest billing period in which an
arrearage exists, allocate to the utility in respect of the
outstanding arrearage in all charges other than OBR repayment charges
(such charges, the non-OBR charges) accrued during that billing
period. Upon the satisfaction of that arrearage, allocation to the
OBR partner in respect of the outstanding arrearage in the OBR
repayment charges accrued during that billing period.
   (B) Upon the satisfaction of arrearage pursuant to subparagraph
(A), the remaining amount of the payment, if any, shall be allocated
to the arrearages accrued in subsequent billing periods pursuant to
subparagraph (A), with the arrearage accruing from any earlier
billing period being satisfied before the arrearages accruing from
subsequent billing period. With respect to any billing period,
allocation shall be made first to the utility in respect of all
non-OBR charges, and, after satisfaction of the arrearage in non-OBR
charges accruing in such billing period, to the OBR partner in
respect of the arrearage in OBR repayment charges accruing in such
billing period.
   (C) Upon the satisfaction of all prior arrearages accruing from
prior billing periods, the remaining payment, if any, shall be
allocated first to the utility in respect of the non-OBR charge in
the current billing period. Upon the satisfaction of that charge,
allocation shall be made to the OBR partner in respect of the OBR
repayment charge in the current billing period.
   (2) Allocate the payment to the utility and the OBR partner on a
pro-rata basis, in proportion to the non-OBR charge and OBR repayment
charge due and owing during the applicable billing period, with
arrearages from the earlier billing period being satisfied first,
followed by arrearages from subsequent billing periods, which shall
be addressed in chronological order, followed by charges that are due
and owing during the current billing period.
   (b) Any arrearage in payment for a billing period shall be
included in subsequent billing periods until it is paid in full.
   (c) In the event of an arrearage in payment, the full amount of
the arrearage constitutes a failure to pay for electric or gas
service and shall be treated consistent with the rules established by
the commission for a customer's failure to pay for service.
   2833.5.  With respect to a utility account that has been closed
and in which arrearage exist, including arrearage with respect to OBR
repayment charges, the commission may adopt rules providing that
after a period of time to be determined by the commission, the share
of total arrearage that is attributable to the OBR obligation may be
deemed, as of a date certain, to be an obligation owed directly to
the OBR partner and not to the utility.
   2833.6.  (a) An OBR obligation shall run with the meter unless the
commission has determined that it is not reasonable for the
applicable category of OBR obligation to run with the meter.
   (b)  Acceptance of electric or gas service to premises that are
served by OBR improvements, and to which an OBR obligation is
outstanding, following submission of an application for that service,
operates as an acceptance of the OBR obligation associated with
electric or gas service, as applicable, to the extent that OBR
repayment charges accrue during the period of electric or gas service
and an assumption of the contractual rights and obligations of the
OBR agreement for the duration of receipt of that service.
   (c)  Acceptance of electric or gas service does not operate as an
assumption of any past due OBR repayment charges incurred prior to
the commencement of that service by the person or entity that
subsequently becomes the customer of record.
   2833.7.  (a) The commission shall authorize a utility to recover
all prudently incurred actual costs, net of any fees charged to a
customer, OBR partner, contractor, or other third party, of
establishing and administering the on-bill repayment program.
   (b) The commission shall approve a utility's request for cost
recovery of actual costs for all judgments, settlements, costs, and
expenses, including attorney's fees, and other liabilities paid or
incurred by or imposed upon the utility in carrying out required
activities under an OBR program pursuant to public or private
enforcement of federal laws governing consumer lending, credit, debt
collection, and servicing.
   (c) Utilities, to the extent they are carrying out required
activities pursuant to an on-bill repayment program, shall not be
responsible for lending, underwriting, and credit determinations, and
are not subject to the California Finance Lenders Law (Division 9
(commencing with Section 22000) of the Financial Code), the
California Financial Privacy Act (Division 1.4 (commencing with
Section 4050) of the Financial Code), or the Rosenthal Fair Debt
Collection Practices Act (Title 1.6C (commencing with Section 1788)
of Part 2 of Division 3 of the Civil Code).
   2833.8.  (a) For each OBR obligation, the OBR partner or its agent
shall record in the county recorder's office of a county in which
the property is located, a notice, with respect to the real property
on which the premises served by the OBR improvements are situated, of
the existence of the OBR obligation and stating the total amount of
the OBR obligation, the term of the OBR obligation, and that the OBR
obligation is being repaid through a charge on an electric or gas
service provided to the property. The notice shall further state that
it is being filed pursuant to this section and, unless fully
satisfied prior to the sale or transfer of the property, the OBR
obligation shall survive changes in ownership, tenancy, or meter
account responsibility and, until fully satisfied, shall constitute
the obligation of the person responsible for the meter account. The
notice shall not constitute a mortgage or deed of trust and shall not
create any security interest or lien on the property. Upon
satisfaction of the OBR obligation, the OBR partner or its agent
shall promptly record a notice of repayment or a termination of
notice.
   (b) The county recorder shall record the notices in the same book
in which the deeds are recorded.
   2833.9.  The commission and the utility shall not provide a forum
to adjudicate disputes arising from this chapter. If a dispute arises
between the customer and the OBR partner regarding the customer's
obligation to pay the OBR obligation, the utility shall not be
responsible in any respect relating to the disputes and shall handle
funds collected from the customer in accordance with the program
rules.
   2833.10.  The commission shall periodically evaluate on-bill
repayment programs and may suspend or modify part or all of a program
if it finds that the program does not meet commission requirements
or goals. Suspension shall not affect the OBR obligations that exist
at the time of the suspension.
   2833.11.  Subdivision (e) of Section 777.1 and subdivision (a) of
Section 779.2 do not apply to delinquency in OBR repayment charges.
   2833.12.  (a) This chapter does not require that the on-bill
repayment programs be identical and the commission may vary program
elements for each utility based upon each utility's individual
circumstances.
   (b)  This chapter does not limit the authority of the commission
to approve and supervise separate on-bill repayment programs with
different features for different categories of customers, including
single-family residential, multifamily residential, industrial,
governmental, commercial, and other categories of customers that the
commission determines to be appropriate. Utilities shall not
implement on-bill repayment programs without the express approval of
the commission. 
   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.  
  SECTION 1.    The Legislature finds and declares
all of the following:
   (a) Despite existing programs, large numbers of Californians
currently do not have access to energy efficiency and clean
technology upgrades.
                                                                  (b)
Existing clean energy programs and incentives are important but
limited in that they are underfunded and reach only a small number of
Californians due to restrictions in income level, credit score,
project size, or commercial-only eligibility.
   (c) Energy efficiency and clean technology upgrades currently have
especially low penetration rate due to a split incentive between
renter and landlord over the costs and benefits of such projects.
   (d) California's current economic condition necessitates that the
Legislature develop pioneering ways to create sustainable, green
collar jobs.
   (e) On-bill repayment is an innovative and pioneering concept that
would provide affordable financing of energy efficiency and on-site
clean generation technology upgrades by tying repayment of the loan
obligation to the utility meter.
   (f) By tying repayment to the utility bill, ratepayers would repay
the loan on the same bill where savings are realized from the
investment, creating a potential net bill neutrality or even a
decrease in the ratepayer's bill as a result of the investment.
   (g) On-bill repayment would be a unique clean energy incentive
program because it would not rely on ratepayer or taxpayer funding
and it would expand access to energy efficiency and clean technology
upgrades.
   (h) On-bill repayment would incentivize private investors to
invest in California's clean energy improvements, would stimulate the
state's economy by creating jobs for contractors and other persons
who complete new energy improvements, and would reinforce the
leadership role of the state in the new energy economy, thereby
attracting clean energy manufacturing facilities and related jobs to
the state.
   (i) It is the intent of the Legislature to enact an on-bill
repayment program that will provide Californians greater access to
energy efficiency and clean technology upgrades.