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

NOTE: There are more recent revisions of this legislation. Read Latest Draft
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
BILL NUMBER: SB 37	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 9, 2013
	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 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.
   (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   Public Utilities
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 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
providing financial assistance for energy efficiency, 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   Public Utilities 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
  sellers , brokers, and the general public about
the statewide home energy rating program. Existing law requires the
 State  Energy  Resources Conservation and Development
 Commission to charge a fee for the booklet.
   This bill would require the  State  Energy  Resources
Conservation and Development  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  State  Energy  Resources
Conservation and Development  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: yes.
State-mandated 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 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  repayment of  financing  of
  obligations for  clean energy projects through
the  use of  utility  bill   bills
 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   using third
  -party capital to repay their obligations through their
utility bill using a tool  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  pursuant to 
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) The notice shall further state that unless fully satisfied
prior to the sale or transfer of the property, the OBR obligation
survives changes in ownership, tenancy, or meter account
responsibility and, until fully satisfied, constitutes an obligation
of the person responsible for the meter account pursuant to Section
2833.8 of the Public Utilities Code.  
   (c) 
    (d)  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.
   (d) The commission 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  by an OBR partner  pursuant
to an on-bill repayment program  approved by the commission 
.
   (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   financing of eligible energy
improvements to be repaid through charges to be associated with the
same utility account or accounts where savings are anticipated to be
realized as a result of 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,  energy storage,  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. 
   (D) The commission may include changes in the expected operating
and maintenance costs in calculating bill neutrality. 
   (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)  (A)    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. 
   (B) The commission may include changes in the expected operating
and maintenance costs in calculating bill neutrality. 
   (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. 
   (d) The commission shall consider, before the next energy
efficiency program cycle, opportunities to coordinate OBR with
ongoing efforts with participants in existing programs to support
careers in energy efficiency, particularly for minorities, women, and
other disadvantaged communities. This includes coordination with
efforts to improve workforce diversity, job quality, and the
collection of data on workforce outcomes. 
   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  by the OBR
partners or its agent  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  by the OBR partners
or its agent  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   periods  .
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  an  arrearage  exist  
exists  , including  an  arrearage with respect to OBR
repayment charges, the commission  may   shall
 adopt rules providing that after a  reasonable  period
of time to be determined by the commission, the share of total
arrearage that is attributable to the OBR obligation  may
  shall  be deemed, as of a date certain  that
is no later than 90 days after the closing of the account  , 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  Information  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
  "Notice of On-Bill Repayment Obligation" with a
prominent header on the document that reads "On-Bill Repayment
Obligation" in 14-point type and contains the assessor's parcel
number, owners of record of the affected property, the legal
description of the affected property, the street address of the
affected property,  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   recorded  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   does  not
constitute a  mortgage or deed of trust and shall not create
any security interest or lien   title defect, lien, or
encumbrance  on the property.  Upon 
    (b)     Upon  satisfaction of the OBR
obligation, the OBR partner or its agent shall  promptly
 record a  notice of repayment or a termination of
notice   "Termination of Notice of On-Bill Repayment
Obligation   " within 10 days of receipt of full payment
 . 
   (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  , with public notice and an
opportunity for public comment,  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  or modification of part or all of the
program  shall not affect the OBR obligations that exist at the
time of the suspension  or modification  .
   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) In lieu of waiving disconnect protections for
third-party financing as provided in Section 2833.11, the commission
shall develop, to the extent feasible and cost effective, a loan-loss
reserve program or loan guarantee program as part of the on-bill
repayment program for providing energy efficiency programs to
residential customers. The program shall be directed to residential
customers who experience disproportionate bill impacts from summer
cooling and other demands on the electrical system that cause
excessive usage and potentially significant bill impacts.
   (b) Notwithstanding subdivision (a), but consistent with paragraph
(3) of subdivision (c) of Section 2833.2, the commission may
determine that Section 2833.11 applies in either of the following
circumstances:
   (1) A customer or project is not covered by a loan-loss reserve
program or a loan guarantee program established in subdivision (a).
   (2) A customer elects to waive the provisions of subdivision (a).

    2833.12.   2833.13.   (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.
                                               
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