Bill Text: CA SB527 | 2023-2024 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Neighborhood Decarbonization Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2024-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB527 Detail]
Download: California-2023-SB527-Amended.html
NOYES
Local Program:
NOYES
(a)The Legislature finds and declares all of the following:
Bill Title: Neighborhood Decarbonization Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2024-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB527 Detail]
Download: California-2023-SB527-Amended.html
|
Amended
IN
Senate
March 22, 2023 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Senate Bill
No. 527
| Introduced by Senator Min |
February 14, 2023 |
An act to add Section 451.6 to, and to add and repeal Chapter 8.8 (commencing with Section 1650) of Part 1 of Division 1 of, the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
SB 527, as amended, Min.
Equitable Zonal Neighborhood Decarbonization Program.
Existing law requires the State Energy Resources Conservation and Development Commission to establish the Equitable Building Decarbonization Program, which includes establishing the direct install program to fund certain projects and remediation and safety measures to facilitate the installation of new technologies and a statewide incentive program for low-carbon building technologies, as specified.
This bill would state the intent of the Legislature to enact future legislation to direct the Public Utilities Commission (PUC) to establish the Equitable Zonal Decarbonization Program, which would establish a small-scale community-targeted decarbonization program, and to require the PUC to fund, administer, and implement the program to ensure rate affordability, dedicated and prioritized funding for disadvantaged and low-income customers, and the
development of high road jobs and workforces.
This bill would require the Public Utilities Commission, in consultation with gas corporations, to develop and supervise the administration of the Neighborhood Decarbonization Program to facilitate the cost-effective decarbonization of targeted natural gas zones with the intent to provide benefits that include, but are not limited to, reduced emissions of greenhouse gases and air pollution, increased safety, and the maintenance of rate affordability for California gas customers, and to decommission gas assets in zones with the highest community burdens and those that would result in the highest projected ratepayer cost savings. The bill would require the commission, in consultation with each gas corporation, to adopt guidelines and regulations for the program, as specified. The bill would require the commission, after 5
years of implementing the program, to review the efficacy of the program in providing benefits to gas customers and in assisting the state in meeting the state’s climate change goals. The bill would require the commission, based on its review, to determine whether or not to continue implementing the program.
This bill would authorize a gas corporation to cease providing service in an area within its service territory if the commission determines that adequate substitute energy service is reasonably available to support the energy end use of affected gas customers as a part of the Neighborhood Decarbonization Program. The bill would require a gas corporation to be authorized to fully recover the undepreciated cost of a gas plant or asset if full cost recovery has not been achieved for the gas plant or asset that is decommissioned. The bill would require the commission, in a new or existing proceeding, to develop the roles, responsibilities, timelines, and processes
for determining whether gas service may be discontinued. The bill would require the commission, in determining what constitutes adequate substitute energy service and when the substitute energy service is reasonably available, to adopt guidelines necessary to ensure that the rates for substitution of service for low-income customers and renters are just, adequate, and reasonable. The bill would authorize the commission, upon the termination of the program, to terminate, modify, or retain a gas corporation’s obligation to provide service in an area within its service territory where adequate substitute energy service is reasonably available.
Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of an order or decision of the commission implementing the requirements of this bill would be a crime, the bill would impose a state-mandated local program by creating a new crime.
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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
(1)Buildings
(a) In California, buildings are responsible
for 25 percent of all emissions and 13 percent of all direct emissions of greenhouse gases, which contribute to indoor and outdoor pollution.
(2)
(b) Building decarbonization should prioritize high road jobs for workers and prioritize benefits to environmental justice disadvantaged and low-income communities.
(3)
(c) There are a range of technologies that can achieve deep emission reductions in buildings, including advanced energy efficiency technologies, clean heating technologies, and demand and load management strategies.
(4)
(d) Research has shown that targeted decarbonization has been shown to can
provide a potential decarbonization strategy that both reduces emissions and provides greater gas rate stability for utility customers.
(5)
(e) Despite the favorable economics of targeted decarbonization, regulatory and financial challenges have impeded California from exploring and scaling targeted decarbonization efforts.
(6)
(f) It is essential to enable cost-effective decarbonization strategies, such as targeted decarbonization, to achieve California’s greenhouse gas emission reduction goals. emissions reduction target.
(g) Closed-loop energy networks consist of pipe loops between multiple buildings and energy sources carrying water at ambient temperature. Building owners can connect to the ambient temperature loops with water source heat pumps installed within the building, which can be used for heating and cooling and hot water services.
(h) Advanced heat-pump technologies can maximize greenhouse gas emissions reduction in cooling and heating systems for buildings that deploy closed-looped or other onsite or district energy networks and provide jobs for a skilled workforce.
(7)
(i) Network geothermal, thermal energy network, and closed-loop energy systems have the potential to decarbonize buildings at the community and utility-scale level and would assist in achieving California’s 2045 carbon neutrality goal.
(b)It is the intent of the Legislature to enact future legislation to do both of the following:
(1)Direct the Public Utilities Commission to establish the Equitable Zonal Decarbonization Program, through a new or existing proceeding, to establish a small-scale community-targeted decarbonization program.
(2)Require the commission to fund, administer, and implement the Equitable Zonal Decarbonization Program to ensure rate affordability, dedicated and prioritized funding for disadvantaged and low-income customers, and the development of high road jobs and workforces.
SEC. 2.
Section 451.6 is added to the Public Utilities Code, to read:451.6.
(a) Notwithstanding any other law, a gas corporation may cease providing service in an area within its service territory if the commission determines that adequate substitute energy service is reasonably available to support the energy end use of affected gas corporation customers as a part of the Neighborhood Decarbonization Program (Chapter 8.8 (commencing with Section 1650)).(b) A gas corporation shall be authorized to fully recover the undepreciated costs of any gas plant or asset, including the cost to retire the gas plant or asset, if full cost recovery has not been achieved for the gas plant or asset that is decommissioned.
(c) (1) The commission,
in a new or existing proceeding, shall develop the roles, responsibilities, timelines, and processes for determining whether gas service may be discontinued to one or more gas customers as a part of the Neighborhood Decarbonization Program to promote decarbonization because adequate substitute energy service is reasonably available to support the energy end use of affected gas corporation customers.
(2) In determining what constitutes adequate substitute energy service and when the substitute energy service is reasonably available, the commission shall adopt guidelines necessary to ensure the rates for substitution of energy service for low-income customers and renters are just, adequate, and reasonable.
(d) Upon termination of the Neighborhood Decarbonization Program pursuant to Section 1654, the commission may terminate, modify, or retain a gas corporation’s obligation to
provide service in an area within its service territory where adequate substitute energy service is reasonably available.
SEC. 3.
Chapter 8.8 (commencing with Section 1650) is added to Part 1 of Division 1 of the Public Utilities Code, to read:CHAPTER 8.8. Neighborhood Decarbonization Program
1650.
For purposes of this chapter, the following definitions apply:(a) “Disadvantaged community” means a community identified as a disadvantaged community pursuant to Section 39711 of the Health and Safety Code.
(b) “Neighborhood Decarbonization Program” or “program” means the program developed pursuant to Section 1651.
(c) “Low-income community” means a geographic area in which at least 50 percent of households have an income less than 80 percent of the area median gross income.
(d) “Targeted decarbonization” means geographically targeted decommissioning of a portion of the
gas system with an intent to decarbonize buildings and to reduce gas corporation capital costs, operational costs, or both of those costs, done in coordination with the decarbonization of affected buildings.
1651.
The commission, in consultation with gas corporations, shall develop and supervise the administration of the Neighborhood Decarbonization Program to facilitate the cost-effective decarbonization of targeted natural gas zones, with the intent to provide benefits that include, but are not limited to, reduced emissions of greenhouse gases and air pollution, increased safety, and the maintenance of rate affordability for California gas customers, and to decommission gas assets in zones with the highest community burdens and those that would result in the highest projected ratepayer cost savings.1652.
The commission, in collaboration with each gas corporation, shall adopt guidelines and regulations for the program that include all of the following:(a) A process for gas corporations to determine and submit eligible targeted decarbonization zones and the requirements and standards for determining cost-effectiveness of decarbonization projects as compared to the replacement, repair, or continued operation of the affected gas system.
(b) The process and metrics used for evaluating success of the program.
(c) Eligible program-related costs, including, but not limited to, outreach, design, planning, demonstration, implementation, and
technical assistance.
(d) Preference for projects where the cost of decarbonization is less than avoided gas asset replacement, repair, or operational costs, such that decarbonization represents a cost-effective alternative to continued gas asset use.
(e) Preference for projects that serve a large percentage of low-income individuals or households.
(f) Preference for projects that provide prevailing wage and use high road job programs.
(g) Priority for a minimum of one networked geothermal, thermal energy network, or closed-loop energy network system project in each gas corporation’s service territory.
(h) Preference for projects that consider the deployment of advanced heat-pump
technology in closed-loop systems.
(i) Preference for projects that partner with other state and federal funding programs, including, but not limited to, the California Schools Healthy Air, Plumbing, and Efficiency Program, federal programs administered by the United States Department of Energy, and programs funded by the federal Inflation Reduction Act of 2022 (Public Law 117-169).
1653.
(a) The commission shall coordinate with the Strategic Growth Council, the Governor’s Office of Business and Economic Development, the Energy Commission, gas corporations, and relevant federal agencies to identify third-party funding, such as state and federal funds, that may be used to establish and implement the program, including the use of external funding to execute projects that would be cost effective with supplemental nonratepayer funding.(b) The commission shall seek to reduce the initial costs of the program by maximizing the use of appropriate third-party funding, such as state and federal incentive and financing funding.
1654.
(a) After five years after the commencement of the implementation of the program, the commission, in a new proceeding, shall review the efficacy of the program in providing benefits to gas customers and in assisting the state in meeting the state’s climate change goals. Based on the review, the commission shall determine whether or not to continue implementing the program.(b) If the commission determines to terminate the program, the commission shall notify the Secretary of State of that determination and the effective date of that determination.
