(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 841

Author:(Ting)

As Amended Ver:August 28, 2020

Majority vote

SUMMARY:

This bill contains two distinct provisions: 1) proposes several changes to deployment of electric utility ratepayer-funded electric vehicle (EV) charging infrastructure investments within the jurisdiction of the California Public Utilities Commission (CPUC), and 2) establishes a new program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to schools using electric ratepayer-funded energy efficiency incentives.

Specifically this measure:

1. Requires the CPUC to approve specified transportation electrification vehicle charging applications by electric investor-owned utilities (IOUs), and make changes to allow electric IOUs to more easily recover costs from electric ratepayers for the deployment of transportation electrification vehicle charging infrastructure. Requires specified training certification for any state funded or authorized funding for electric vehicle (EV) charging infrastructure.
2. Establishes new programs at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to local education agencies (LEAs) using ratepayer-funded energy efficiency incentives.

The Senate Amendments:

Delete the Assembly version of this bill and instead add the following:

Provisions Pertaining to Ratepayer-Funded Electric Vehicle Charging:

1. Mandates the CPUC to issue decisions by March 1, 2021, on two pending investor-owned utility transportation electrification infrastructure applications and requires the commission to extend its prior approvals of transportation electrification programs and investments, as specified.
2. Requires that no less than 35% of EV charging infrastructure investments are located in underserved communities, as defined.
3. Mandates that the infrastructure located on the utility side of the customer meter needed to charge electric vehicles is treated the same as other distribution infrastructure authorized on an ongoing basis in the electrical corporation's general rate case. Requires each electrical corporation to provide an accurate and full accounting of all expenses related to electrical distribution infrastructure as it relates to this section.
4. Mandates each electrical corporation to file an advice letter with the CPUC by specific dates. Requires the CPUC to approve a new tariff or rule that authorizes each electrical corporation to deploy all electrical distribution infrastructure on the utility side of the customer's meter for all customers installing separately metered infrastructure to support charging stations, other than those in single-family residences.
5. Mandates the CPUC to allow residential service facility upgrade costs incurred as a result of the adoption of home-based electric vehicle charging for basic charging arrangements that exceed the utility's tariff allowances to be recovered from all residential ratepayers.
6. Requires that all electric vehicle charging infrastructure and equipment located on the customer side of the electrical meter that is funded or authorized by state entities shall be installed by a contractor with the appropriate license and at least one electrician on each crew, at any given time, who holds an Electric Vehicle Infrastructure Training Program (EVITP) certification. This provision does not apply in the following: EV installation by employees of the electrical corporation or charging infrastructure funded by money derived from the Low Carbon Fuel Standard Program.
7. The CEC shall by May 1, 2021, and periodically thereafter, conduct joint public workshops to determine if the EVITP curriculum and testing should be modified to ensure safe installations of charging infrastructure. The EVITP shall incorporate supplemental curriculum and testing within six months, as specified, of final action by the CEC. No later than March 1, 2021, the EVITP shall offer courses in an online format and the format shall remain available through December 31, 2024.

Provisions Pertaining to Ratepayer-Funded Programs for Local Educational Agencies:

1. Mandates the utilities to file a joint advice letter by February 1, 2021, to fund a joint School Energy Efficiency Stimulus Program as part of each of their energy efficiency portfolios. This is a joint program among all the participating utilities that shall be consistent across the utility territories and the CEC will serve as the program administrator. The CPUC is mandated to approve the advice letter by March 1, 2021.
2. The School Energy Efficiency Stimulus Program shall consist of both of the following programs: 1) The School Reopening Ventilation and Energy Efficiency Verification and Repair Program (SRVEVR), and 2) The School Noncompliant Plumbing Fixture and Appliance Program. Not less than 25% of projects funded by these programs shall be in underserved communities, as specified. Requires the CEC to adopt regulations or guidelines by May 1, 2021, and to promptly begin approving applications upon their adoption.
3. The CEC may amend the technical and reporting requirements for SRVEVR other than the workforce requirements.
4. The CPUC 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) the cap for energy efficiency program portfolio and the amount authorized, and b) Any carryover amount from unspent and uncommitted energy efficiency funds for program year 2020, 2021 or 2022. Any funds unallocated towards the School Energy Efficiency Stimulus Program that remains unspent by the end of each program year may be carried over and contribute to the next year's budget until the end of the 2023 energy efficiency program year.
5. The CEC may use no more than 5% not to exceed five million dollars ($5,000,000) of the funds for administrating the programs, including providing technical support to program participants.
6. Expenditures on the School Energy Efficiency Stimulus Program shall be found to be cost-effective and shall not be considered by the CPUC when calculating the overall cost-effectiveness of energy efficiency portfolios or the electrical or gas corporations.
7. The CEC shall develop and administer the School Reopening Ventilation and Energy Efficiency Verification and Repair Program to award grants to local educational agencies to reopen schools with functional ventilation systems, as specified. Local educational agencies may apply for a grant pursuant to the program and the CEC shall award a grant, as specified. Provisions of this measure establish detailed standards and conditions associated with the award of a grant. Qualified testing personnel or a skilled and trained workforce must verify that the standards established in the measure are complied with as mandated.
8. The CEC, in collaboration with each utility, shall develop and administer the School Noncompliant Plumbing Fixture and Appliance Program to provide grants to state agencies and local educational agencies to replace noncompliant plumbing fixtures and appliances that fail to meet water efficiency standards and waste potable water and the energy used to convey water, with water-conserving plumbing fixtures and appliances.
9. Sunsets the provisions of the chapter on January 1, 2027.

COMMENTS:

Transportation Electrification (TE) In Underserved Communities: This measure adds the requirement to the SB 350 (de Leon, 2015) established electric IOU transportation electrification (TE) infrastructure statute that 35% of TE infrastructure investments must be in "underserved communities,"  as defined pursuant to Public Utilities Code. The term "underserved communities," as defined, is a broader term than just disadvantaged communities (DACs) and likely alleviates some of the pressures the CPUC has to approve TE infrastructure investments in specific communities like DACs. The addition of this section could be helpful in identifying TE infrastructure deployment locations that are more strategic and effective in driving electric vehicle (EV) adoption than prioritizing these investments toward locations based on socio-economic factors.

CPUC Authority: This measure mandates the CPUC to issue decisions by March 1, 2021, on two pending investor-owned utility transportation electrification infrastructure applications and requires the commission to extend its prior approvals of transportation electrification programs and investments, as specified. One of those decisions was approved on August 27, 2020. The CPUC approved Southern California Edison's application that authorizes a modified and expanded SCE Charge Ready 2 light-duty infrastructure program. That decision approved the largest single-utility electric vehicle (EV) charging infrastructure program in the United States, which aims to deploy 40,600 EV charging ports with a $442 million ratepayer-funded budget.

It is important to highlight that the CPUC has already authorized the electric IOUs to spend more than $1 billion in ratepayer funds to support the state's TE goals.

Out of ~$1.03 billion in authorized IOU funding to date, $265 million has been fully spent, with about 7,000 ports installed. Another $763 million (~70% of authorized funds) is still available for medium- and heavy-duty vehicles under the IOU programs.

Need for additional training certification? This bill requires that most EV charging installations, conducted after January 1, 2021, funded or authorized by the state, with exceptions, must include at least one crew member (or a quarter depending on the installation project) with an EVITP certification. The EVITP certification is an 18-hour in-person training available in two locations in California – San Francisco and Commerce. The training includes topics such as customer interactions, electrical code requirements, and EV supply equipment. The CPUC has included a discussion of EVITP in its recently released draft Transportation Electrification Framework, noting that if electric IOUs determine any training beyond existing state requirements for practicing electricians are needed that the electric IOUs should ensure it is available to all qualified installers. Additionally, the CPUC noted that qualified bidders should be allowed to obtain this training before they start work and not disqualify them from bidding.

Ratepayer-Funded Energy Efficiency Projects. Electric IOUs' energy efficiency incentives are administered under the "rolling portfolio" guidelines established by the CPUC. The CPUC established the rolling portfolio to facilitate more long-term planning for multi-year energy efficiency efforts. This bill requires utilities to budget energy efficiency incentives for the School Energy Efficiency Stimulus Program on an annual basis and requires IOUs to allocate all unspent incentive funds for the program; thereby, limiting the extent to which the utilities can use the rolling portfolio framework. This bill would require the utilities to provide these funds as grants instead of reimbursements or rebates, and the bill authorizes the CEC to provide funds for the entire cost of a project up-front. The provisions of the measure do not permit rate increases on ratepayers, but rather, they reallocate existing authorized funding from the energy efficiency program portfolio, overseen by the CPUC, to the established School Energy Efficiency Stimulus Program. As such, the School Energy Efficiency Stimulus Program is funded exclusively through the reallocation of existing authorized funding from the energy efficiency program portfolio, as specified in Public Utilities Code Section 1615. The bill would require all allocated funds to be spent or returned to the electrical corporation or gas corporation by December 1, 2026.

School Ventilation Program. This measure provides the CEC with the authority to administer the School Energy Efficiency Stimulus Program and requires the CEC to establish and administer balancing accounts to fund this bill. The amendments authorize local publicly-owned electric utilities and other smaller electric utilities to participate in the program and also provides the CEC with greater flexibility to approve the expenditure of ratepayer funds outside the electric utility service territories in which they were collected and allocate funds to the CEC for program administration. This measure further mandates the criteria for the workforce that is authorized to perform the work as provided in this measure.

HVAC Upgrades. This bill establishes a ratepayer-funded grant program to make HVAC upgrades that align with certain recommendations made by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) for reopening schools during the pandemic. However, insufficient public health information exists at this time to conclude that upgrading HVAC systems in schools will prevent transmission of the novel coronavirus within a classroom. Additionally, upgrades may not be completed until after the pandemic concludes and many schools have facilities that cannot accommodate the upgrades necessary to install more advanced filters without significant new construction. While the grant program established by this bill may not facilitate school reopening during the pandemic, upgraded HVAC systems can provide other health-related non-energy benefits by improving air quality within the school.

Without Demand Management, HVAC Upgrades May Increase Energy Bills. HVAC systems can be significant sources of energy consumption without including demand management efforts to align systems' energy consumption with utility rates and demand for electricity. This bill contains provisions that require technicians to disable demand management system for an HVAC system for the duration of the pandemic if the demand management system's setting would lead to airflow that reduces ventilation to certain levels. Unless HVAC systems are optimized to respond to electric utility rate signals, it is possible that an educational institution may not experience savings on its bill.

According to the Author:

AB 841 ensures our ratepayer dollars are used to put people back to work by investing in clean and efficient technologies that improve public health and help the environment. It has strong equity provisions to ensure funds for our underserved communities. This bill temporarily redirects unspent energy efficiency funds to create a grant program for schools to modernize their HVAC systems and water fixtures using skilled technicians. Increasing airflow reduces the spread of COVID 19, while upgraded plumbing prevents lead from seeping into drinking water. These initiatives lower utility bills too, saving districts money. The proposal also expedites the CPUC review of electric vehicle charging stations, creating installation jobs faster and encouraging greater adoption of clean cars.

Arguments in Support:

The Coalition of California Utility Employees, California State Pipe Trades Council, California State Association of Electrical Workers and the Western States Council of Sheet Metal Workers: write, "AB 841 addresses three critically pressing issues: the pandemic, the climate crisis and jobs. It would take significant steps in all three areas without any money from the general fund and without increasing electric rates for struggling residents. The California Teachers Association supports requiring each electrical corporation and gas corporation to establish the School Energy Efficiency Stimulus Program within each of its energy efficiency portfolios that consist of: 1) the School Reopening Ventilation and Energy Efficiency Verification and Repair Program to provide grants to local educational agencies to reopen schools with functional ventilation systems, and 2) the School Noncompliant Plumbing Fixture and Appliance Program to provide grants to local educational agencies to replace noncompliant plumbing fixtures and appliances that fail to meet water efficiency standards. The American Lung Association, "This bill supports air quality improvements in California schools and advances zero-emission transportation infrastructure needed to achieve clean air for all Californians."

Arguments in Opposition:

The Department of Finance (DOF) is opposed to AB 841 for a number of reasons, including the potential ratepayer impacts of the proposed tariffs for electric vehicle distribution infrastructure and the proposed school ventilation program. Specific to the school ventilation program, DOF notes the potential impact to PG&E bundled residential ratepayers would be an additional $11 per year, and for the average SCE bundled residential ratepayer, about $19 per year. TURN and others share concerns regarding impacts to ratepayers. These entities are concerned that the use of ratepayer funds for new programs may not achieve the intended goals of helping schools open in the fall or align with state policies to reduce GHG emissions or provide energy savings. Some of the parties in opposition note that funds would be taken from residential customers, including those in disadvantaged communities, and high-energy use customers to fund investments in government buildings. These parties argue for reforms of the existing programs.

FISCAL COMMENTS:

According to the Senate Appropriations Committee: The CEC noted that the bill did not provide sufficient information to determine the fiscal impact to administer both new school programs, and provided a rough estimate of over $20 million over 5 years (special fund) based on the implementation of the California Clean Energy Jobs Act K-12 Program (Prop 39) and other related CEC programs. The California Air Resources Board (CARB) estimates costs of $343,000 one-time and $192,000 ongoing (special fund) to verify and enforce the new labor requirements on EV charging infrastructure. The CPUC estimates costs of $287,000 ongoing (special fund) to approve specified transportation electrification vehicle charging applications, require specific certifications for contractors to be eligible to install utility infrastructure, establish a new framework for authorizing IOUs to build electrical distribution infrastructure needed to charge electric vehicles and implement other requirements of this bill.  

VOTES:

ASM ENVIRONMENTAL SAFETY AND TOXIC MATERIALS: 8-0-1

YES: Quirk, Melendez, Bloom, Bauer-Kahan, Cristina Garcia, Holden, Mathis, Muratsuchi

ABS, ABST OR NV: Dahle

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

ASSEMBLY FLOOR: 76-0-4

YES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Obernolte, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

ABS, ABST OR NV: Cooley, Gallagher, Eduardo Garcia, Patterson

UPDATED:

VERSION: August 28, 2020

CONSULTANT: Mary McDonald / U. & E. / (916) 319-2083 FN: 0003631

 THIRD READING  

Bill No: AB 841

Author: Ting (D)

Amended: 8/28/20 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 9-4, 8/3/20

AYES: Hueso, Bradford, Dodd, Hertzberg, McGuire, Rubio, Skinner, Stern, Wiener

NOES: Moorlach, Chang, Dahle, Hill

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/20/20

AYES: Portantino, Bradford, Hill, Leyva, Wieckowski

NOES: Bates, Jones

ASSEMBLY FLOOR: 76-0, 5/22/19 - See last page for vote

SUBJECT: Energy: transportation electrification: energy efficiency programs: School Energy Efficiency Stimulus Program

SOURCE: California State Association of Electrical Workers

California State Pipe Trades Council

Coalition of California Utility Employees

Western States Council of Sheet Metal Workers

DIGEST:

This bill contains two main provisions: (1) proposes several changes to deployment of electric utility ratepayer-funded electric vehicle (EV) charging infrastructure investments, and (2) establishes a stimulus program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to schools using electric ratepayer-funded energy efficiency incentives.

Senate Floor Amendments of 8/28/20 (1) restates the California Public Utilities Commission (CPUC) continued authority to ensure any expenses associated with the EV charging infrastructure must be determined to be just and reasonable before allowing recovery from ratepayers, (2) remove provisions requiring the CEC to establish and administer balancing accounts for the School Energy Efficiency Stimulus program, (3) cap the CEC’s annual administrative allocation for the program at $5 million per year, (4) remove provisions allowing publicly-owned local electric utilities to participate in the program, (5) require energy efficiency stimulus funds to be spent within utility service territories, and 65) clarifies that any monies within the School Energy Efficiency Stimulus Program unspent within a year can be carried over into the next year’s budget.

Senate Floor Amendments of 8/25/20 relevant to EV charging infrastructure require no less than 35 percent of EV infrastructure investments are located in underserved communities, as defined; add additional process requirements regarding the recovery of costs from ratepayers for EV charging investments; and make several changes to the proposed requirement for EV training certification. Relevant to school ventilation program, the amendments give the CEC greater authority to administer the School Energy Efficiency Stimulus Program and require the CEC to establish and administer balancing accounts to fund this bill. The amendments authorize local publicly-owned electric utilities and other smaller electric utilities to participate in the program, and also give the CEC greater flexibility to approve the expenditure of ratepayer funds outside the electric utility service territories in which they were collected and allocate funds to the CEC for program administration.

ANALYSIS:

Existing law:

1. Authorizes the California Public Utilities Commission (CPUC) to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. (Public Utilities Code §451)
2. Requires the CPUC, in consultation with the CEC and State Air Resource Board (ARB), as part of the Clean Energy and Pollution Reduction Act of 2015, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification, as defined, to achieve specified results. (Public Utilities Code §740.12)
3. Creates a charge on electricity and natural gas consumption to fund cost-effective energy efficiency and conservation efforts. (Public Utilities Code §381 and §890)
4. Requires the CPUC to identify all potentially achievable, cost-effective electricity and natural gas efficiency savings and establish energy efficiency targets and ratepayer-funded programs for investor-owned utilities (IOUs). (Public Utilities Code §454.55 and §454.56)
5. Establishes the Clean Energy Job Creation Program to and allocates Proposition 39 revenues to fund energy efficient retrofits and clean energy installations as well as related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits, including improved health and safety conditions in public schools. The program also allocated funds to the State Energy Conservation Assistance Account Education Subaccount (ECAA-Ed) to provide local education agencies with no-interest revolving loans to fund energy efficiency and renewable energy projects. (Public Resources Code §26200 et seq.)

This bill:

Relevant to EV charging infrastructure:

1. Requires no less than 35 percent of the investments by electric IOUs for widespread transportation electrification, pursuant to existing law, are located in underserved communities, as defined.
2. Requires the CPUC, on or before March 1, 2021, to issue decisions concerning two specific pending transportation electrification infrastructure applications.
3. Requires each electrical corporation, by February 28, 2021, to file an advice letter and would require the CPUC to approve, by June 30, 2021, a new tariff or rule that authorizes each electrical corporation to design and deploy all electrical distribution infrastructure on the utility side of the customer meter for all customers installing a separately metered infrastructure to support charging stations, and provide for cost recovery procedures, as specified.
4. Requires the CPUC, in supervising the alternative-fueled vehicle program, or vehicle electrification program, of an electrical corporation, to apply the interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electrical corporation, to be recovered from all residential ratepayers and would declare the intent of the Legislature that the interim policy be the policy applied by the CPUC, but would authorize the CPUC to revise the policy after the completion of the electrical corporation’s general rate case cycle in effect on January 1, 2021, if a determination is made that a change in the policy is necessary to ensure just and reasonable rates for ratepayers.
5. Requires, except as provided, the CPUC, the CEC, and the ARB for work performed on or after January 1, 2022, pursuant to a decision made by those state entities, to require all EV charging infrastructure and equipment located on the customer side of the electric meter that is funded or authorized, in whole or in part, by those state entities to be installed by a contractor with the appropriate license classification, as determined by the Contractors’ State License Board, and specified portion of each crew, at any given time, to hold an Electric Vehicle Infrastructure Training Program (EVITP) certification.
6. Requires, no later than May 1, 2021, and periodically thereafter, the CEC in consultation with the CPUC, to conduct joint public workshops to determine if the EVITP curriculum and testing should be supplemented to include updated or additional topics necessary to ensure safe installation of charging infrastructure, as provided. This bill would require the EVITP to offer EVITP courses in an online format that would remain available through December 31, 2024.

Relevant to the ratepayer funded program for local educational agencies:

1. Requires the large electric and natural gas IOUs must deposit specified percentages of their energy efficiency funding into these balancing portfolios to fund certain HVAC and plumbing upgrades at local education agencies (LEAs). Upgrades and maintenance under this bill must be performed by a skilled and trained workforce.
2. Requires the large electrical and natural gas utilities to file a joint advice letter by February 1, 2021, to establish the School Energy Efficiency Stimulus Program and require the CPUC to approve the advice letter by March 1, 2021. This bill would designate the CEC as the program administrator. This bill requires large electrical corporations and gas corporations to allocate a specific portion of their energy efficiency budget for program years 2021, 2022, and 2023 to fund the School Energy Efficiency Stimulus Program. It also requires any unspent carryovers from the 2020 energy efficiency program years to be allocated to the School Energy Efficiency Stimulus Program.
3. Allocates specific funding amounts to the School Energy Efficiency Stimulus Program, including allocating up to 5 percent – not to exceed $5,000,0000 per year – to the CEC to fund the CEC’s fiscal costs for administering the program. The bill also authorizes the CEC to establish various requirements for the program through guidelines, including the establishment of application and encumbrance deadlines that ensure the program sunsets on December 1, 2026.

Background

1. Relevant to EV charging infrastructure:
   1. EV infrastructure investments in underserved communities. This bill requires no less than 35 percent of the investments by electric IOUs for widespread transportation electrification as required by SB 350 (de León, Chapter 547, Statutes of 2016) to be located in underserved communities, as defined. This bill proposes an expansive list of criteria to identify underserved communities, including the definition of disadvantaged communities used in relation to water service, the definition identified through use of the CalEnviroScreen, communities whose school districts or charter schools serve a student population with over 75 percent of students eligible for free- or reduced-priced school meals, and others. As such, it is very likely that the 35 percent requirement could be met, perhaps too easily to provide a clear prioritization, within the service territory of the large electric IOUs – Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), Southern California Edison (SCE). However, it is less clear whether this requirement is achievable within the service territories of the state’s three smaller electric IOUs – Bear Valley Electric Service, Liberty Utilities, and PacificCorp.
   2. Issuance of decisions of electric IOU transportation electrification applications. This bill would require the CPUC to issue decisions of two pending electric IOU transportation electrification applications, including one by Southern California Edison (SCE) Application 18-06-015 (filed June 26, 2018) and another by San Diego Gas & Electric (SDG&E) Application 19-10-012 (filed October 28, 2019). Both these applications are currently under review by the CPUC. In the case of the SCE application, the CPUC recently released a proposed decision to approve, with modifications, the largest single-utility EV charging infrastructure program in the United States with a $442 million budget for deployment of 40,600 EV charging ports. These are in addition to the over one billion dollars in transportation electrification investments already approved to be recovered from ratepayers by the CPUC. Additionally, the SDG&E application is under review with parties submitting comments and working towards a resolution. This bill would provide additional certainty for the issuance of decisions for the two specified applications.
   3. Need for transportation electrification tariff? This bill also proposes to require each electric IOU to file an advice letter and require the CPUC to approve a new tariff or rule that authorizes each electric IOU to design and deploy all electrical distribution infrastructure on the utility-side of the customer’s meter. Currently, the CPUC has issued various decisions adopting an interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electric IOU, thereby recoverable from all ratepayers. As proposed in this bill, the interim policy treatment would be extended to all charging infrastructure. These proposed changes could make it more difficult to accurately track all costs/expenses associated with these infrastructure projects. However, amendments taken in policy committee would require the electric IOUs to track and account for all expenses and restates the CPUC’s existing authority to apply penalties in cases where electric IOUs do not provide accurate information. Nonetheless, the risk that electric IOUs may not fully account for all expenses remains a challenge to ensure ratepayers are not shouldering unjust and unreasonable expenses. Therefore, this bill also allows the CPUC to adjust the tariff policy, after the completion of the next general rate case cycles for each of the electric IOUs, if the CPUC determines it is in the interest of ratepayers. Recent author amendments attempt to clarify the procedures for recovering costs from ratepayers. Recent floor amendments (8/28) clarify that the CPUC continues to retain the authority to apply reasonableness review in order to determine whether the expenses from these projcts should be recovered from ratepayers. Nonetheless, the Department of Finance and other entities representing ratepayer interests believe the proposed EV tariff provisions would result in significant increased costs to ratepayers.
   4. Need for additional training certification? The EVITP certification is an 18-hour in-person training available in two locations in California – San Francisco and the City of Commerce. The training includes topics such as customer interactions, electrical code requirements, and EV supply equipment. The CEC, earlier this month, held a workshop to discuss training certifications, including the merits of requiring EVITP and is currently in the midst of soliciting public comments to make a final determination. The CPUC has included a discussion of EVITP in the its recently released draft Transportation Electrification Framework, noting that if electric IOUs determine additional training beyond existing state requirements for practicing electricians, such as the EVITP, are needed, then the electric IOUs should ensure it is available to all qualified installers and should not disqualify any bidders for projects. This bill proposes to require that most EV charging installations, conducted after January 1, 2022, funded or authorized by the state, with some exceptions, must include at least one crew member (or a quarter of a crew, depending on the installation project) with an EVITP certification. The bill also expands access to the EVITP training by requiring it to be available online and allow the training to be administered by certified instructors at any state approved electrician apprenticeship program or continuing education program. Additionally, the bill authorizes the CEC to require the EVITP training and testing to be supplemented with additional topics. The proponents of this bill argue that the certification is a national standard and necessary for installing charging infrastructure. A number of EV industry stakeholders opposed previous versions of the bill expressing concerns that the addition of this requirement will likely hamper efforts to deploy charging infrastructure by limiting the available workforce. Recent amendments have removed most of the opposition from the stakeholders representing electric vehicle charging industry, including: Electric Vehicle California Association, Chargepoint, and Electrify America. However, it is unclear if the Department of Finance continues to oppose the EVITP provisions of the bill.
2. Relevant to ratepayer funded programs for local educational agencies:
   1. HVAC upgrades can improve air quality and employ skilled and trained labor, but they may not prevent viral transmission in school settings. This bill establishes a ratepayer-funded grant program to make HVAC upgrades that align with certain recommendations made by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) for reopening schools during the pandemic. However, insufficient public health information exists at this time to conclude that upgrading HVAC systems in schools will prevent transmission of the novel coronavirus within a classroom. Additionally, upgrades may not be completed until after the pandemic concludes and many schools have facilities that cannot accommodate the upgrades necessary to install more advanced filters without significant new construction. While the grant program established by this bill may not facilitate school reopening during the pandemic, upgraded HVAC systems can provide other health-related non-energy benefits by improving air quality within the school.
   2. Without demand management, HVAC upgrades may increase LEAs’ energy bills. HVAC systems can be significant sources of energy consumption without including demand management efforts to align systems’ energy consumption with utility rates and demand for electricity. This bill contains provisions that require technicians to disable demand management system for an HVAC system for the duration of the pandemic if the demand management system’s setting would lead to airflow that reduces ventilation to certain levels. Unless HVAC systems are optimized to respond to electric utility rate signals, it is possible that an LEA will not experience savings on its bill.
   3. This bill would require utilities to change how they administer ratepayer funds for efficiency projects. Electric IOUs’ energy efficiency incentives are administered under the “rolling portfolio” guidelines established by the CPUC. The CPUC established the rolling portfolio to facilitate more long-term planning for multi-year energy efficiency efforts. Prior to the establishment of the rolling portfolio, projects completed over several years could face start and stop uncertainty at the end of three-year investment cycles. Since this bill requires utilities to budget energy efficiency incentives for the School Energy Efficiency Stimulus Program on an annual basis and requires IOUs to allocate all unspent incentive funds for the program, it will limit the extent to which the utilities can use the rolling portfolio framework. Generally, energy efficiency incentives are provided as reimbursement after the completion of a project. This bill would require the utilities to provide these funds as grants instead of reimbursements or rebates, and the bill authorizes the CEC to provide funds for the entire cost of a project up-front. This bill specifies that it does not authorize the collection of additional energy efficiency funding through rates; however, it is unclear how utilities will fund efficiency projects if they have to reserve all unspent funds in the rolling portfolio for these projects.
   4. This bill’s use of ratepayer funds differs from similar programs established in other states. This bill uses ratepayer funds to support economic stimulus efforts and largely removes CPUC oversight for expenditures of funds allocated to the School Energy Efficiency Stimulus Program. This bill also requires the CEC to approve potentially unlimited amounts of funding for repairs and additional upgrades as long as they are verified in a contractor’s estimate. This use of ratepayer funds in this bill differs from other states’ HVAC upgrade stimulus programs. In July 2020, the Vermont Legislature allocated federal coronavirus relief funds for a six-month program make HVAC upgrades in K-12 facilities through the School Indoor Air Quality Grant Program. Under the program, schools must complete upgrades by December 31, 2020. The degree of economic stimulus provided by this bill will depend upon the extent to which LEAs apply for and use grant funds.
   5. The CEC already operates programs providing funding for energy efficiency upgrades at LEAs. This bill requires the CEC to establish a new program to administer grants provided to LEAs for HVAC and plumbing upgrades. The CEC already administers several programs that provide grants and low-cost loans for energy efficiency upgrades, including the Clean Energy Job Creation Program, which provided grants to LEAs using Proposition 39 revenues to fund energy efficient retrofits and clean energy installations. The program also allocated funds to ECAA-Ed to provide LEAs with no-interest revolving loans to fund energy efficiency and renewable energy projects. While no new monies have been appropriated to the Proposition 39 program, the CEC continues to issue funding opportunities through the ECAA-Ed competitive loan program.

Related/Prior Legislation

SB 524 (Stern, 2019) establishes skilled and trained workforce requirements for projects receiving at least $50,000 or more in ratepayer-funded incentives for energy efficiency projects within the same building, facility, or building complex. The bill is currently located in the Assembly.

SB 49 (Skinner, Chapter 697, Statutes of 2019) expanded the CEC’s appliance energy efficiency regulatory authority to allow the CEC to establish appliance efficiency standards that facilitate the deployment of flexible demand technologies.

SB 1131 (Hertzberg, Chapter 562, Statutes of 2018) required the CPUC to authorize IOUs incentives for customized industrial, agricultural, commercial, residential, and public sector energy efficiency projects based on nationally recognized measurement and verification standards. The bill established new requirements and timelines for the CPUC’s review of these projects.

SB 110 (Committee on Budget and Fiscal Review, Chapter 55, Statutes of 2017) re-established the Clean Energy Job Creation Program at the CEC to reallocate unspent Proposition 39 funds to finance energy efficiency and renewable energy upgrades at LEAs. The bill also established a program replace and retrofit diesel school buses to reduce emissions from these vehicles.

SB 350 (De León, Chapter 547, Statutes of 2016) among its provisions, requires the CPUC, in consultation with the ARB and CEC, to direct electric IOUs to propose multiyear programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• The CEC noted that the bill did not provide sufficient information to determine the fiscal impact to administer both new school programs, and provided a rough estimate of over $20 million over 5 years (special fund) based on the implementation of the California Clean Energy Jobs Act K-12 Program (Prop 39) and other related CEC programs.
• The California Air Resources Board (CARB) estimates costs of $343,000 one-time and $192,000 ongoing (special fund) to verify and enforce the new labor requirements on EV charging infrastructure.
• The CPUC estimates costs of $287,000 ongoing (special fund) to approve specified transportation electrification vehicle charging applications, require specific certifications for contractors to be eligible to install utility infrastructure, establish a new framework for authorizing IOUs to build electrical distribution infrastructure needed to charge electric vehicles, and implement other requirements of this bill.

SUPPORT: (Verified 8/29/20)

California State Association of Electrical Workers (co-source)

California State Pipe Trades Council (co-source)

Coalition of California Utility Employees (co-source)

Western States Council of Sheet Metal Workers (co-source)

Tony Thurmond, California Superintendent of Public Instruction

350 Bay Area Action

Acterra

Advanced Energy Economy

Agricultural Council of California

Air Conditioning Sheet Metal Association

Alliance for Automotive Innovation

Alliance of Nurses for Healthy Environments

American Lung Association

Association of California School Administrators

Audio Associates

Baker Electric

BlueGreen Alliance

Breathe California of LA County

Brightline Defense

California Business Alliance for a Clean Economy

California Business Alliance for a Clean Economy

California Charter Schools Association

California Federation of Teachers

California Interfaith Power & Light

California Labor Federation

California League of Conservation Voters

California Legislative Conference of the Plumbing, Heating and Piping Industry

California Public Interest Research Group

California Public Interest Research Group Students

California Sheet Metal and Air Conditioning Contractors’ National Association

California Teachers Association

California Teamsters

Center for Biological Diversity

Center for Climate Change and Health Public Health Institute

Center on Policy Initiatives

Central California Asthma Collaborative

Central Coast Alliance United for a Clean Economy

Ceres

Coalition for Adequate School Housing

Coalition for Clean Air

Community Action to Fight Asthma

Dignity Health

Earthjustice

Energy and Efficiency Institute of the University of California at Davis

Environment California

Environmental Defense Fund

Environmental Entrepreneurs

Greenlots

Greenpeace

GreenWealth Energy Solutions

Health Care Without Harm

International Association of Sheet Metal, Air, Rail and Transportation Workers,

International Brotherhood of Electrical Workers Local 100

International Brotherhood of Electrical Workers Local 11

International Brotherhood of Electrical Workers Local 18

International Brotherhood of Electrical Workers Local 180

International Brotherhood of Electrical Workers Local 234

International Brotherhood of Electrical Workers Local 302

International Brotherhood of Electrical Workers Local 332

International Brotherhood of Electrical Workers Local 340

International Brotherhood of Electrical Workers Local 40

International Brotherhood of Electrical Workers Local 413

International Brotherhood of Electrical Workers Local 428

International Brotherhood of Electrical Workers Local 440

International Brotherhood of Electrical Workers Local 441

International Brotherhood of Electrical Workers Local 45

International Brotherhood of Electrical Workers Local 47

International Brotherhood of Electrical Workers Local 477

International Brotherhood of Electrical Workers Local 595

International Brotherhood of Electrical Workers Local 617

International Brotherhood of Electrical Workers Local 639

International Brotherhood of Electrical Workers Local 952

International Brotherhood of Electrical Workers, Local 1245

International Brotherhood of Electrical Workers, Local 465

International Brotherhood of Electrical Workers, Local 569

International Brotherhood of Electrical Workers, Local 6

Lion

Los Angeles Alliance for a New Economy

Morrow-Meadows Corporation

National Electrical Contractors Association

Natural Resources Defense Council

NextGen California

Orange County Communities Organized for Responsible Development

Partnership for Working Families

Pro-Cal Lightning Inc.

Proterra

Regional Asthma Management and Prevention

Revalue.io

San Diego Green Building Council

School Energy Coalition

Sheet Metal Workers’ Local Union 104

Sierra Business Council

Sierra Club California

Silicon Valley Youth Climate Action

Southland Electric Inc.

sPower

The Climate Center

The Lion Electric Co.

U.S. Green Building Council Los Angeles

UC Berkeley’s Center for Cities + Schools

Union of Concerned Scientists

Warehouse Worker Resource Center

Working Partnerships USA

9 Individuals

OPPOSITION: (Verified 8/29/20)

AARP California

African American Farmers of California

Agricultural Council of California

Agricultural Energy Consumers Association

California Apple Commission

California Blueberry Association

California Blueberry Commission

California Business Properties Association

California Citrus Mutual

California Cotton Ginners and Growers Association

California Department of Finance

California Efficiency + Demand Management Council

California Farm Bureau Federation

California Food Producers

California Large Energy Consumers Association

Far West Equipment Dealers Association

Nisei Farmers League

Olive Growers Council of California

Silicon Valley Leadership Group

The Utility Reform Network

Western Agricultural Processors Association

Western Electrical Contractors Association

Western Plant Health Association

ARGUMENTS IN SUPPORT: According to the author:

AB 841 will put Californians back to work while helping us continue the green energy transition.

California is far behind the pace needed to build out sufficient electric vehicle (EV) charging infrastructure to meet our environmental goals. The California Energy Commission estimates we will be short 80,000 chargers, or roughly 1/3^rd of our 250,000 public EV charging station goal by 2025. Failing to meet our charging goals will deter consumers from purchasing electric vehicles, especially since 52% of Californians do not have access to charging at home. Given that transportation is California’s largest source of emissions at 41% and our total emissions from transportation have been rising year after year, California must meet these goals in order to meet our 2030 greenhouse gas reduction targets. Meanwhile, the CPUC has delayed weighing in on pending charging infrastructure applications for years. This bill would approve those pending applications. In addition, the CPUC has to date required the distribution infrastructure needed to support EV charging to be approved on a case-by-case basis. This has the effect of discouraging the IOUs from building the needed utility-side infrastructure and delaying private investment. There is no good reason to treat serving EV charging load differently from any other customer load. This bill would end this unfair practice.

Public schools throughout California contain outdated, inefficient HVAC systems and plumbing fixtures that waste energy and water. Poorly functioning HVAC systems also impair student performance and increase the risk of COVID-19 transmission. The bill creates two new energy efficiency programs that address these issues by improving energy efficiency and lowering energy and water bills. These programs will temporarily redirect unspent and unallocated investor owned utility energy efficiency funds for schools to repair and replace inefficient HVAC systems and water fixtures as well as replace water fixtures.

ARGUMENTS IN OPPOSITION: The Department of Finance opposes this bill “because it overrides agency discretion, makes policy changes through inappropriate mechanisms, and potentially results in significant costs passed through to ratepayers.” DOF also expresses concerns with the potential ratepayer impacts of the proposed tariffs for electric vehicle distribution infrastructure and the proposed school ventilation program. Specific to the school ventilation program, DOF notes the potential impact to PG&E bundled residential ratepayers would be an additional about $11 per year, and for the average SCE bundled residential ratepayer, about $19 per year. TURN and others share DOF’s concerns regarding impacts to ratepayers. These entities are concerned that use of ratepayer funds for the proposed programs may not achieve the intended goals of helping schools open in the fall, or align with state policies to reduce GHG emissions, or provide energy savings. Some of the parties in opposition note that funds would be collected from residential customers, including those in disadvantaged communities, and commercial and industrial customers who require high amounts of electricity to operate their businesses, in order to fund investments in government buildings. These parties argue for reforms of the existing programs, not those proposed in this bill. DOF also opposes the EVITP training certification requirement as proposed in the bill, prior to the recent amendments, as it undermines existing agency efforts to determine whether EVITP is necessary and could reduce the available workforce to install EV charging infrastructure. It is unclear whether recent amendments remove DOF’s opposition to these provisions, as it has for other parties’ who had previously opposed.

ASSEMBLY FLOOR: 76-0, 5/22/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Cooley, Gallagher, Eduardo Garcia, Patterson

Prepared by: Sarah Smith & Nidia Bautista / E., U., & C. / (916) 651-4107

8/30/20 16:42:37

**** END ****

 THIRD READING  

Bill No: AB 841

Author: Ting (D)

Amended: 8/25/20 in Senate

Vote: 21

PRIOR VOTES NOT RELEVANT

SENATE ENERGY, U. & C. COMMITTEE: 9-4, 8/3/20

AYES: Hueso, Bradford, Dodd, Hertzberg, McGuire, Rubio, Skinner, Stern, Wiener

NOES: Moorlach, Chang, Dahle, Hill

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/20/20

AYES: Portantino, Bradford, Hill, Leyva, Wieckowski

NOES: Bates, Jones

SUBJECT: Energy: transportation electrification: energy efficiency programs: School Energy Efficiency Stimulus Program

SOURCE: California State Association of Electrical Workers

California State Pipe Trades Council

Coalition of California Utility Employees

Western States Council of Sheet Metal Workers

DIGEST:

This bill contains two main provisions: (1) proposes several changes to deployment of electric utility ratepayer-funded electric vehicle (EV) charging infrastructure investments and (2) establishes a stimulus program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to schools using electric ratepayer-funded energy efficiency incentives.

Senate Floor Amendments of 8/25/20 relevant to EV charging infrastructure require no less than 35 percent of EV infrastructure investments are located in underserved communities, as defined; add additional process requirements regarding the recovery of costs from ratepayers for EV charging investments; and make several changes to the proposed requirement for EV training certification. Relevant to school ventilation program, the amendments give the CEC greater authority to administer the School Energy Efficiency Stimulus Program and require the CEC to establish and administer balancing accounts to fund this bill. The amendments authorize local publicly-owned electric utilities and other smaller electric utilities to participate in the program, and also give the CEC greater flexibility to approve the expenditure of ratepayer funds outside the electric utility service territories in which they were collected and allocate funds to the CEC for program administration.

ANALYSIS:

Existing law:

1. Authorizes the California Public Utilities Commission (CPUC) to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. (Public Utilities Code §451)
2. Requires the CPUC, in consultation with the CEC and State Air Resource Board (ARB), as part of the Clean Energy and Pollution Reduction Act of 2015, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification, as defined, to achieve specified results. (Public Utilities Code §740.12)
3. Creates a charge on electricity and natural gas consumption to fund cost-effective energy efficiency and conservation efforts. (Public Utilities Code §381 and §890)
4. Requires the CPUC to identify all potentially achievable, cost-effective electricity and natural gas efficiency savings and establish energy efficiency targets and ratepayer-funded programs for investor-owned utilities (IOUs). (Public Utilities Code §454.55 and §454.56)
5. Establishes the Clean Energy Job Creation Program to and allocates Proposition 39 revenues to fund energy efficient retrofits and clean energy installations as well as related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits, including improved health and safety conditions in public schools. The program also allocated funds to the State Energy Conservation Assistance Account Education Subaccount (ECAA-Ed) to provide local education agencies with no-interest revolving loans to fund energy efficiency and renewable energy projects. (Public Resources Code §26200 et seq.)

This bill:

Relevant to EV charging infrastructure:

1. Requires no less than 35 percent of the investments by electric IOUs for widespread transportation electrification, pursuant to existing law, are located in underserved communities, as defined.
2. Requires the CPUC, on or before March 1, 2021, to issue decisions concerning two specific pending transportation electrification infrastructure applications.
3. Requires each electrical corporation, by February 28, 2021, to file an advice letter and would require the CPUC to approve, by June 30, 2021, a new tariff or rule that authorizes each electrical corporation to design and deploy all electrical distribution infrastructure on the utility side of the customer meter for all customers installing a separately metered infrastructure to support charging stations, and provide for cost recovery procedures, as specified.
4. Requires the CPUC, in supervising the alternative-fueled vehicle program, or vehicle electrification program, of an electrical corporation, to apply the interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electrical corporation, to be recovered from all residential ratepayers and would declare the intent of the Legislature that the interim policy be the policy applied by the CPUC, but would authorize the CPUC to revise the policy after the completion of the electrical corporation’s general rate case cycle in effect on January 1, 2021, if a determination is made that a change in the policy is necessary to ensure just and reasonable rates for ratepayers.
5. Requires, except as provided, the CPUC, the CEC, and the ARB for work performed on or after January 1, 2022, pursuant to a decision made by those state entities, to require all EV charging infrastructure and equipment located on the customer side of the electric meter that is funded or authorized, in whole or in part, by those state entities to be installed by a contractor with the appropriate license classification, as determined by the Contractors’ State License Board, and specified portion of each crew, at any given time, to hold an Electric Vehicle Infrastructure Training Program (EVITP) certification.
6. Requires, no later than May 1, 2021, and periodically thereafter, the CEC in consultation with the CPUC, to conduct joint public workshops to determine if the EVITP curriculum and testing should be supplemented to include updated or additional topics necessary to ensure safe installation of charging infrastructure, as provided. This bill would require the EVITP to offer EVITP courses in an online format that would remain available through December 31, 2024.

Relevant to the ratepayer funded program for local educational agencies:

1. Requires the CEC to establish and administer two balancing accounts: one for funding specified HVAC upgrades, and one for plumbing fixture upgrades. Large electric and natural gas IOUs must deposit specified percentages of their energy efficiency funding into these balancing portfolios to fund certain HVAC and plumbing upgrades at local education agencies (LEAs). Upgrades and maintenance under this bill must be performed by a skilled and trained workforce.
2. Requires the large electrical and natural gas utilities to file a joint advice letter by February 1, 2021, to establish the School Energy Efficiency Stimulus Program and require the CPUC to approve the advice letter by March 1, 2021. This bill would designate the CEC as the program administrator. This requires large electrical corporations and gas corporations to allocate a specific portion of their energy efficiency budget for program years 2021, 2022, and 2023 to fund the School Energy Efficiency Stimulus Program. It also requires any unspent carryovers from the 2020 energy efficiency program years to be allocated to the School Energy Efficiency Stimulus Program.
3. Allocates specific funding amounts to the School Energy Efficiency Stimulus Program, including allocating up to 5 percent of $60 million of program funding – whichever is greater – to the CEC to fund the CEC’s fiscal costs for administering the program. The bill also authorizes the CEC to establish various requirements for the program through guidelines, including the establishment of application and encumbrance deadlines that ensure the program sunsets on December 1, 2026.

Background

1. Relevant to EV charging infrastructure:
   1. EV infrastructure investments in underserved communities. This bill requires no less than 35 percent of the investments by electric IOUs for widespread transportation electrification as required by SB 350 (de León, Chapter 547, Statutes of 2016) to be located in underserved communities, as defined. This bill proposes a very expansive list of criteria to identify underserved communities, including the definition of disadvantaged communities used in relation to water service, the definition identified through use of the CalEnviroScreen, communities whose school districts or charter schools serve a student population with over 75 percent of students eligible for free- or reduced-priced school meals, and others. As such, it is very likely that the 35 percent requirement would be largely met for each of the large electric IOUs. Although it is less clear whether this requirement could be met by the state’s smaller electric IOUs.
   2. Issuance of decisions of electric IOU transportation electrification applications. This bill would require the CPUC to issue decisions of two pending electric IOU transportation electrification applications, including one by Southern California Edison (SCE) Application 18-06-015 (filed June 26, 2018) and another by San Diego Gas & Electric (SDG&E) Application 19-10-012 (filed October 28, 2019). Both these applications are currently under review by the CPUC. In the case of the SCE application, the CPUC recently released a proposed decision to approve, with modifications, the largest single-utility EV charging infrastructure program in the United States with a $442 million budget for deployment of 40,600 EV charging ports. These are in addition to the over one billion dollars in transportation electrification investments already approved to be recovered from ratepayers by the CPUC. Additionally, the SDG&E application is under review with parties submitting comments and working towards a resolution. This bill would provide additional certainty for the issuance of decisions for the two specified applications.
   3. Need for transportation electrification tariff? This bill also proposes to require each electric IOU to file an advice letter and require the CPUC to approve a new tariff or rule that authorizes each electric IOU to design and deploy all electrical distribution infrastructure on the utility-side of the customer’s meter. Currently, the CPUC has issued various decisions adopting an interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electric IOU, thereby recoverable from all ratepayers. As proposed in this bill, the interim policy treatment would be extended to all charging infrastructure. These proposed changes could make it more difficult to accurately track all costs/expenses associated with these infrastructure projects. However, amendments taken in policy committee would require the electric IOUs to track and account for all expenses and restates the CPUC’s existing authority to apply penalties in cases where electric IOUs do not provide accurate information. Nonetheless, the risk that electric IOUs may not fully account for all expenses remains a challenge to ensuring ratepayers are not shouldering unjust and unreasonable expenses. Therefore, this bill also allows the CPUC to adjust the policy, after the current general rate case cycles for each electric IOUs, if the CPUC determines it is in the interest of ratepayers. However, the Department of Finance and other entities representing ratepayer interests believe these provisions would result in increased costs to ratepayers. Recent author amendments attempt to clarify the procedures for recovering costs from ratepayers, although some of the language may make less clear the need to ensure the CPUC retains its authority to ensure costs recovered from ratepayers are subject to review and must be found to be just and reasonable.
   4. Need for additional training certification? This bill proposes to require that most EV charging installations, conducted after January 1, 2021, funded or authorized by the state, with several exceptions, must include at least one crew member (or a quarter depending on the installation project) with an EVITP certification. The EVITP certification is an 18-hour in-person training available in two locations in California – San Francisco and Commerce. The training includes topics such as customer interactions, electrical code requirements, and EV supply equipment. The CEC, earlier this month, held a workshop to discuss training certifications, including the merits of requiring EVITP. The agency is currently in the midst of soliciting public comments. The CPUC has included a discussion of EVITP in the its recently released draft Transportation Electrification Framework, noting that if electric IOUs determine any training beyond existing state requirements for practicing electricians are needed that the electric IOUs should ensure it is available to all qualified installers. Additionally, the CPUC noted that qualified bidders should be allowed to obtain this training before they start work and not disqualify them from bidding. The proponents of this bill argue that the certification is a national standard and necessary for installing charging infrastructure. A number of the stakeholders opposed to this bill express concerns about this proposed requirement in statute stating that the training is not necessary and is limited in the type of installation, as it may not include DC fast charging installations. They express concerns that the addition of this requirement will likely hamper efforts to deploy charging infrastructure by limiting the available workforce. Recent amendments amendments attempt to remove current opposition from the stakeholders representing electric vehicle charging industry, including: Electric Vehicle California Association, Chargepoint, and Electrify America. The amendments delay the EVITP requirement until January 1, 2022, exempts the Volkswagen Electrify American consent decree settlement, and exempts most installations in single-family homes. The amendments also expand access to the training by requiring it to be available online, allows the training to be executed by certified instructors at any state approved electrician apprenticeship program or continuing education program. Additionally, amendments authorize the CEC to require the EVITP training and testing to be supplemented with additional topics.
2. Relevant to ratepayer funded programs for local educational agencies:
   1. HVAC upgrades can improve air quality and employ skilled and trained labor, but they may not prevent viral transmission in school settings. This bill establishes a ratepayer-funded grant program to make HVAC upgrades that align with certain recommendations made by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) for reopening schools during the pandemic. However, insufficient public health information exists at this time to conclude that upgrading HVAC systems in schools will prevent transmission of the novel coronavirus within a classroom. Additionally, upgrades may not be completed until after the pandemic concludes and many schools have facilities that cannot accommodate the upgrades necessary to install more advanced filters without significant new construction. While the grant program established by this bill may not facilitate school reopening during the pandemic, upgraded HVAC systems can provide other health-related non-energy benefits by improving air quality within the school.
   2. Without demand management, HVAC upgrades may increase LEAs’ energy bills. HVAC systems can be significant sources of energy consumption without including demand management efforts to align systems’ energy consumption with utility rates and demand for electricity. This bill contains provisions that require technicians to disable demand management system for an HVAC system for the duration of the pandemic if the demand management system’s setting would lead to airflow that reduces ventilation to certain levels. Unless HVAC systems are optimized to respond to electric utility rate signals, it is possible that an LEA will not experience savings on its bill.
   3. This bill would require utilities to change how they administer ratepayer funds for efficiency projects. Electric IOUs’ energy efficiency incentives are administered under the “rolling portfolio” guidelines established by the CPUC. The CPUC established the rolling portfolio to facilitate more long-term planning for multi-year energy efficiency efforts. Prior to the establishment of the rolling portfolio, projects completed over several years could face start and stop uncertainty at the end of three-year investment cycles. Since this bill requires utilities to budget energy efficiency incentives for the School Energy Efficiency Stimulus Program on an annual basis and requires IOUs to allocate all unspent incentive funds for the program, it will limit the extent to which the utilities can use the rolling portfolio framework. Incentives also take many forms, including rebates. Generally, incentives are provided as reimbursement after the completion of a project. This bill would require the utilities to provide these funds as grants instead of reimbursements or rebates, and the bill authorizes the CEC to provide funds for the entire cost of a project up-front. While this bill does not permit rate increases to collect additional energy efficiency funding, it is unclear how utilities will fund efficiency projects if they have to reserve all unspent funds in the rolling portfolio for these projects.
   4. This bill’s use of ratepayer funds differs from similar programs established in other states. This bill uses ratepayer funds to support economic stimulus efforts and largely removes CPUC oversight for expenditures of funds allocated to the School Energy Efficiency Stimulus Program. This bill also requires the CEC to approve potentially unlimited amounts of funding for repairs and additional upgrades as long as they are verified in a contractor’s estimate. While streamlining grant approvals can be beneficial for providing economic stimulus, the use of ratepayer funds in this bill differs from other states’ HVAC upgrade stimulus programs. Additionally, the degree of economic stimulus provided by this bill will depend upon the extent to which LEAs apply for and use grant funds. In July 2020, the Vermont Legislature allocated federal coronavirus relief funds for a six-month program make HVAC upgrades in K-12 facilities through the School Indoor Air Quality Grant Program. Under the program, schools must complete upgrades by December 31, 2020.
   5. Balancing account provisions may limit accountability and oversight for ratepayer funds. This bill would require the CEC to establish and administer two balancing accounts: one account for monies funding HVAC upgrades and one for funding plumbing upgrades under the bill. All electric utilities and natural gas utilities would deposit the program’s funding into these two accounts on an annual and monthly basis. However, requiring all large investor-owned utilities to deposit monies into these two accounts would like lead to the co-mingling of ratepayer funds, including the co-mingling of electric utility and natural gas utility funds. For example, the bill may lead to gas ratepayers in Southern California paying for energy efficient upgrades at a Northern California LEA. This co-mingling may limit the ability to track expenditures and program outcomes by utility and limit the degree to which the CEC can ensure that grants are provided to LEAs in geographically diverse areas.
   6. It is unclear if the CEC has sufficient regulatory authority over utilities to administer IOU accounts. This bill would require the CEC to create and administer accounts that are generally established and overseen at the CPUC. While the CEC has sufficient authority to administer programs under its jurisdiction, the CEC does not have regulatory powers, including ratemaking authority, over electric and natural gas IOUs. The CEC has acted as a third-party administrator of IOU-funded programs; however, these programs and their funding have been established through CPUC decisions that leverage the CPUC’s regulatory and ratemaking authority. Ratemaking authority is inherently related to effective balancing account review processes because the primary purpose of balancing accounts is to track authorized expenditures against revenue from rates and ensure that ratepayers do not pay more than they should.
   7. The CEC’s funding allocation may exceed actual fiscal needs. This bill would authorize the CEC to use up to 5 percent or $60 million – whichever is greater – of the School Energy Efficiency Stimulus Program funds to cover its administrative costs for the program. However, $60 million is significantly higher than the Department of Finance’s (DOF) estimated fiscal costs to the CEC for administering the program. DOF estimates that the CEC will need approximately $30 million for 2021-2026 for the program’s administration. While the actual annual funding amount for the School Energy Efficiency Stimulus Program is unclear, 5 percent of the total funding could exceed $60 million.
   8. Would any unspent funds in the School Energy Efficiency Stimulus Program carryover into future years? This bill makes it clear that any unexpended IOU energy efficiency monies in 2020, 2021, and 2022 would be allocated to the School Energy Efficiency Stimulus Program. However, it is unclear if any monies deposited into the School Energy Efficiency Stimulus Program in 2021 would carryover into the program’s budget for 2022 or subsequent years. Generally, in rolling portfolio, monies unexpended in one year carry over and are counted towards the following year’s budget. This carry over limits unnecessary ratepayer costs.
   9. The CEC already operates programs providing funding for energy efficiency upgrades at LEAs. This bill requires the CEC to establish a new program to administer grants provided to LEAs for HVAC and plumbing upgrades. The CEC already administers several programs that provide grants and low-cost loans for energy efficiency upgrades, including the Clean Energy Job Creation Program, which provided grants to LEAs using Proposition 39 revenues to fund energy efficient retrofits and clean energy installations. The program also allocated funds to ECAA-Ed to provide LEAs with no-interest revolving loans to fund energy efficiency and renewable energy projects. While no new monies have been appropriated to the Proposition 39 program, the CEC continues to issue funding opportunities through the ECAA-Ed competitive loan program.

Related/Prior Legislation

SB 524 (Stern, 2019) establishes skilled and trained workforce requirements for projects receiving at least $50,000 or more in ratepayer-funded incentives for energy efficiency projects within the same building, facility, or building complex. The bill is currently located in the Assembly.

SB 49 (Skinner, Chapter 697, Statutes of 2019) expanded the CEC’s appliance energy efficiency regulatory authority to allow the CEC to establish appliance efficiency standards that facilitate the deployment of flexible demand technologies.

SB 1131 (Hertzberg, Chapter 562, Statutes of 2018) required the CPUC to authorize IOUs incentives for customized industrial, agricultural, commercial, residential, and public sector energy efficiency projects based on nationally recognized measurement and verification standards. The bill established new requirements and timelines for the CPUC’s review of these projects.

SB 110 (Committee on Budget and Fiscal Review, Chapter 55, Statutes of 2017) re-established the Clean Energy Job Creation Program at the CEC to reallocate unspent Proposition 39 funds to finance energy efficiency and renewable energy upgrades at LEAs. The bill also established a program replace and retrofit diesel school buses to reduce emissions from these vehicles.

SB 350 (De León, Chapter 547, Statutes of 2016) among its provisions, required the CPUC, in consultation with the ARB and CEC, to direct electric IOUs to propose multiyear programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• The CEC noted that the bill did not provide sufficient information to determine the fiscal impact to administer both new school programs, and provided a rough estimate of over $20 million over 5 years (special fund) based on the implementation of the California Clean Energy Jobs Act K-12 Program (Prop 39) and other related CEC programs.
• The California Air Resources Board (CARB) estimates costs of $343,000 one-time and $192,000 ongoing (special fund) to verify and enforce the new labor requirements on EV charging infrastructure.
• The CPUC estimates costs of $287,000 ongoing (special fund) to approve specified transportation electrification vehicle charging applications, require specific certifications for contractors to be eligible to install utility infrastructure, establish a new framework for authorizing IOUs to build electrical distribution infrastructure needed to charge electric vehicles, and implement other requirements of this bill.

SUPPORT: (Verified 8/27/20)

California State Association of Electrical Workers (co-source)

California State Pipe Trades Council (co-source)

Coalition of California Utility Employees (co-source)

Western States Council of Sheet Metal Workers (co-source)

350 Bay Area Action

Acterra

Air Conditioning Sheet Metal Association

Alliance of Nurses for Healthy Environments

American Lung Association

BlueGreen Alliance

Brightline Defense

California Charter Schools Association

California Federation of Teachers

California Interfaith Power & Light

California Labor Federation

California Legislative Conference of the Plumbing, Heating and Piping Industry

California Public Interest Research Group

California Sheet Metal and Air Conditioning Contractors’ National Association

California Teachers Association

California Teamsters

Center for Biological Diversity

Center for Climate Change and Health Public Health Institute

Central California Asthma Collaborative

Coalition for Adequate School Housing

Coalition for Clean Air

Earthjustice

Energy and Efficiency Institute of the University of California at Davis

Environment California

Environmental Defense Fund

Environmental Entrepreneurs

Greenlots

Greenpeace

International Association of Sheet Metal, Air, Rail and Transportation Workers,

International Brotherhood of Electrical Workers, Local Union 1245

International Brotherhood of Electrical Workers, Local Union 465

International Brotherhood of Electrical Workers, Local Union 569

National Electrical Contractors Association

Natural Resources Defense Council

NextGen California

Proterra

Regional Asthma Management and Prevention

School Energy Coalition

Sheet Metal Workers’ Local Union 104

Sierra Club California

Silicon Valley Youth Climate Action

UC Berkeley’s Center for Cities + Schools

Union of Concerned Scientists

8 Individuals

OPPOSITION: (Verified 8/27/20)

AARP California

African American Farmers of California

Agricultural Council of California

Agricultural Energy Consumers Association

California Apple Commission

California Blueberry Association

California Blueberry Commission

California Building Industry Association

California Business Properties Association

California Citrus Mutual

California Cotton Ginners and Growers Association

California Department of Finance

California Efficiency + Demand Management Council

California Farm Bureau Federation

California Food Producers

California Large Energy Consumers Association

Far West Equipment Dealers Association

Nisei Farmers League

Olive Growers Council of California

Silicon Valley Leadership Group

The Utility Reform Network

Western Agricultural Processors Association

Western Electrical Contractors Association

Western Plant Health Association

ARGUMENTS IN SUPPORT: According to the author:

AB 841 will put Californians back to work while helping us continue the green energy transition.

California is far behind the pace needed to build out sufficient electric vehicle (EV) charging infrastructure to meet our environmental goals. The California Energy Commission estimates we will be short 80,000 chargers, or roughly 1/3^rd of our 250,000 public EV charging station goal by 2025. Failing to meet our charging goals will deter consumers from purchasing electric vehicles, especially since 52% of Californians do not have access to charging at home. Given that transportation is California’s largest source of emissions at 41% and our total emissions from transportation have been rising year after year, California must meet these goals in order to meet our 2030 greenhouse gas reduction targets. Meanwhile, the CPUC has delayed weighing in on pending charging infrastructure applications for years. This bill would approve those pending applications. In addition, the CPUC has to date required the distribution infrastructure needed to support EV charging to be approved on a case-by-case basis. This has the effect of discouraging the IOUs from building the needed utility-side infrastructure and delaying private investment. There is no good reason to treat serving EV charging load differently from any other customer load. This bill would end this unfair practice.

Public schools throughout California contain outdated, inefficient HVAC systems and plumbing fixtures that waste energy and water. Poorly functioning HVAC systems also impair student performance and increase the risk of COVID-19 transmission. The bill creates two new energy efficiency programs that address these issues by improving energy efficiency and lowering energy and water bills. These programs will temporarily redirect unspent and unallocated investor owned utility energy efficiency funds for schools to repair and replace inefficient HVAC systems and water fixtures as well as replace water fixtures.

ARGUMENTS IN OPPOSITION: The Department of Finance is opposed to this bill “because it overrides agency discretion, makes policy changes through inappropriate mechanisms, and potentially results in significant costs passed through to ratepayers.” DOF specifically opposes the EVITP training certification requirement as proposed in the bill, prior to the recent amendments, as it undermines existing agency efforts to determine whether EVITP is necessary and could reduce the available workforce to install EV charging infrastructure. These concerns are shared by other parties. It is unclear whether recent amendments remove DOF’s or other parties’ opposition. DOF also expresses concerns with the potential ratepayer impacts of the proposed tariffs for electric vehicle distribution infrastructure and the proposed school ventilation program. Specific to the school ventilation program, DOF notes the potential impact to PG&E bundled residential ratepayers would be an additional about $11 per year, and for the average SCE bundled residential ratepayer, about $19 per year. TURN and others share concerns regarding impacts to ratepayers. These entities are concerned that use of ratepayer funds for new programs may not achieve the intended goals of helping schools open in the fall or align with state policies to reduce GHG emissions or provide energy savings. Some of the parties in opposition note that funds would be taken from residential customers, including those in disadvantaged communities, and

high-energy use customers to fund investments in government buildings. These parties argue for reforms of the existing programs.

Prepared by: Sarah Smith & Nidia Bautista / E., U., & C. / (916) 651-4107

8/28/20 15:55:38

**** END ****

 THIRD READING  

Bill No: AB 841

Author: Ting (D)

Amended: 8/20/20 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 9-4, 8/3/20

AYES: Hueso, Bradford, Dodd, Hertzberg, McGuire, Rubio, Skinner, Stern, Wiener

NOES: Moorlach, Chang, Dahle, Hill

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/20/20

AYES: Portantino, Bradford, Hill, Leyva, Wieckowski

NOES: Bates, Jones

ASSEMBLY FLOOR: 76-0, 5/22/19 - See last page for vote

SUBJECT: Energy: transportation electrification: energy efficiency programs: School Energy Efficiency Stimulus Program

SOURCE: California State Association of Electrical Workers

California State Pipe Trades Council

Coalition of California Utility Employees

Western States Council of Sheet Metal Workers

DIGEST:

This bill (1) requires the California Public Utilities Commission (CPUC) to issue decisions concerning two specified pending transportation electrification vehicle charging infrastructure applications by electric investor-owned utilities (IOUs); (2) makes changes to allow electric IOUs to more easily recover costs from electric ratepayers for the deployment of transportation electrification vehicle charging infrastructure and require specified training certification for any state funded or authorized funding for electric vehicle (EV) charging infrastructure; and (3) establishes a stimulus program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to local education agencies (LEAs) using ratepayer funded energy efficiency incentives.

ANALYSIS:

Existing law:

1. Authorizes the CPUC to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. (Public Utilities Code §451)
2. Requires the CPUC, in consultation with the CEC and State Air Resource Board (ARB), as part of the Clean Energy and Pollution Reduction Act of 2015, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification, as defined, to achieve specified results. (Public Utilities Code §740.12)
3. Creates a charge on electricity and natural gas consumption to fund cost-effective energy efficiency and conservation efforts. (Public Utilities Code §381 and §890)
4. Requires the CPUC to identify all potentially achievable, cost-effective electricity and natural gas efficiency savings and establish energy efficiency targets and ratepayer-funded programs for IOUs. (Public Utilities Code §454.55 and §454.56)
5. Establishes the Clean Energy Job Creation Program to and allocates Proposition 39 revenues to fund energy efficient retrofits and clean energy installations as well as related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits, including improved health and safety conditions in public schools. The program also allocated funds to the State Energy Conservation Assistance Account Education Subaccount (ECAA-Ed) to provide local education agencies with no-interest revolving loans to fund energy efficiency and renewable energy projects. (Public Resources Code §26200 et seq.)

This bill:

Relevant to EV charging infrastructure:

1. Requires the CPUC, on or before March 1, 2021, to issue decisions concerning two specific pending transportation electrification infrastructure applications.
2. Requires each electrical corporation, by February 28, 2021, to file an advice letter and would require the CPUC to approve, by June 30, 2021, a new tariff or rule that authorizes each electrical corporation to design and deploy all electrical distribution infrastructure on the utility side of the customer meter for all customers installing a separately metered infrastructure to support charging stations.
3. Requires the CPUC, in supervising the alternative-fueled vehicle program, or vehicle electrification program, of an electrical corporation, to apply the interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electrical corporation, to be recovered from all residential ratepayers and would declare the intent of the Legislature that the interim policy be the policy applied by the CPUC, but would authorize the CPUC to revise the policy after the completion of the electrical corporation’s general rate case cycle in effect on January 1, 2021, if a determination is made that a change in the policy is necessary to ensure just and reasonable rates for ratepayers.
4. Requires the CPUC, the CEC, and ARB, to require all EV charging infrastructure and equipment located on the customer side of the electric meter that is funded or authorized, in whole or in part, by those state entities to be installed by a contractor holding a valid electrician license and at least one electrician on each crew hold an Electric Vehicle Infrastructure Training Program (EVITP) certification.

Relevant to the ratepayer funded program for local educational agencies:

1. Requires the CPUC to require each electrical corporation and gas corporation to establish the School Energy Efficiency Stimulus Program within each of its energy efficiency portfolios that consist of: (1) the School Reopening Ventilation and Energy Efficiency Verification and Repair Program (SRVEEVRP) to provide grants to LEAs to reopen schools with functional ventilation systems that are tested, adjusted, and, if necessary or cost effective, repaired, upgraded or replaced to increase efficiency and performance, and (2) the School Noncompliant Plumbing Fixture and Appliance Program to provide grants to LEAs to replace noncompliant plumbing fixtures and appliances that fail to meet water efficiency standards and waste potable water and the energy used to convey that water, with water-conserving plumbing fixtures and appliances.
2. Requires each electrical and gas corporation to file an advice letter by February 1, 2021, to establish the School Energy Efficiency Stimulus Program and require the CPUC to approve the advice letter by March 1, 2021. This bill would require each electrical and gas corporation to contract with the CEC for the administration of these programs. This bill requires the CPUC to require electrical corporations and gas corporations to allocate a specific portion of their energy efficiency budget for program years 2021, 2022, and 2023 to fund the School Energy Efficiency Stimulus Program. This bill requires the CEC, in collaboration with electrical and gas corporations, to develop and administer the SRVEEVRP and the School Noncompliant Plumbing Fixture and Appliance Program as components of the School Energy Efficiency Stimulus Program. This bill requires that not less than 25 percent of projects funded by those programs be in underserved communities, as defined, and require that those programs prioritize underserved communities by ensuring that all schools that are in an underserved community are offered the opportunity to apply for and receive grants before those schools that are not in an underserved community. This bill requires the CEC to ensure that monies from each utility for the School Energy Efficiency Stimulus Program are used for grants for projects located in the service territory of that utility from which the moneys are received.

Background

1. Relevant to EV charging infrastructure:
   1. AB 841 transportation electrification components. This bill proposes three key changes to existing transportation electrification-related efforts: (1) requires the CPUC to issue decisions, by March 1, 2021, of two pending transportation electrification applications currently under review; (2) requires the CPUC to adopt new tariffs for electric IOU transportation electrification investments that allow for cost recovery from ratepayers of all distribution infrastructure on the utility side of the customer’s meter through the general rate case, instead of the current review by the CPUC of each proposed project; and (3) requires a specified training certification for any equipment and infrastructure installed on the customer side of the meter that is funded or authorized by the CPUC, CEC, and ARB.
   2. Issuance of decisions of electric IOU transportation electrification applications. This bill would require the CPUC to issue decisions of two pending electric IOU transportation electrification applications, including one by Southern California Edison (SCE) Application 18-06-015 (filed June 26, 2018) and another by San Diego Gas & Electric (SDG&E) Application 19-10-012 (filed October 28, 2019). Both these applications are currently under review by the CPUC. In the case of the SCE application, the CPUC recently released a proposed decision to approve, with modifications, the largest single-utility EV charging infrastructure program in the United States with a $442 million budget for deployment of 40,600 EV charging ports. These are in addition to the over one billion dollars in transportation electrification investments already approved to be recovered from ratepayers by the CPUC. Additionally, the SDG&E application is under review with parties submitting comments and working towards a resolution. This bill would provide additional certainty for the issuance of decisions for the two specified applications.
   3. Need for transportation electrification tariff? This bill also proposes to require each electric IOU to file an advice letter and require the CPUC to approve a new tariff or rule that authorizes each electric IOU to design and deploy all electrical distribution infrastructure on the utility-side of the customer’s meter. Currently, the CPUC has issued various decisions adopting an interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electric IOU, thereby recoverable from all ratepayers. As proposed in this bill, the interim policy treatment would be extended to all charging infrastructure. These proposed changes could make it more difficult to accurately track all costs/expenses associated with these infrastructure projects. However, amendments taken in policy committee would require the electric IOUs to track and account for all expenses and restates the CPUC’s existing authority to apply penalties in cases where electric IOUs do not account for all expenses. Nonetheless, the risk that electric IOUs may not fully account for all expenses remains a challenge to ensuring ratepayers are not shouldering unjust and unreasonable expenses. Therefore, this bill also allows the CPUC to adjust the policy, after the current general rate case cycles for each electric IOUs, if the CPUC determines it is in the interest of ratepayers. However, the Department of Finance and other entities representing ratepayer interests believe these provisions in this bill would result in increased costs to ratepayers.
   4. Need for additional training certification? This bill proposes to require any EV charging installation not conducted by the utility, but funded or authorized by the state, to include at least one crew member with an EVITP certification. The EVITP certification is an 18-hour in-person training available in two locations in California – San Francisco and Commerce. The training includes topics such as customer interactions, electrical code requirements, and EV supply equipment. The CEC, earlier this month, held a workshop to discuss training certifications, including the merits of requiring EVITP. The agency is currently in the midst of soliciting public comments. The CPUC has included a discussion of EVITP in the its recently released draft Transportation Electrification Framework, noting that if electric IOUs determine any training beyond existing state requirements for practicing electricians are needed that the electric IOUs should ensure it is available to all qualified installers. Additionally, the CPUC noted that qualified bidders should be allowed to obtain this training before they start work and not disqualify them from bidding. The proponents of this bill argue that the certification is a national standard and necessary for installing charging infrastructure. A number of the stakeholders opposed to this bill express concerns about this proposed requirement in statute stating that the training is not necessary and is limited in the type of installation, as it may not include DC fast charging installations. They express concerns that the addition of this requirement will likely hamper efforts to deploy charging infrastructure by limiting the available workforce. Electrify America who is deploying charging infrastructure as required by a consent decree approved by the federal government in response to the Volkswagen settlement, suggests the language should not apply to them as the consent decree is governed by the federal government. At a minimum, parties opposed to this provision of this bill raise valid questions as to whether the training should be required.
2. Relevant to ratepayer funded programs for local educational agencies:
   1. HVAC upgrades can improve air quality, save energy, and employ skilled and trained labor, but they may not prevent viral transmission in school settings. This bill establishes a ratepayer-funded grant program to make HVAC upgrades that align with certain recommendations made by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) for reopening schools during the pandemic. However, insufficient public health information exists at this time to conclude that upgrading HVAC systems in schools will prevent transmission of the novel coronavirus within a classroom. Additionally, upgrades may not be completed until after the pandemic concludes and many schools have facilities that cannot accommodate the upgrades necessary to install more advanced filters without significant new construction. While the grant program established by this bill may not facilitate school reopening during the pandemic, upgraded HVAC systems can provide other health-related non-energy benefits by improving air quality within the school.
   2. Without demand management, HVAC upgrades may increase LEAs’ energy bills. HVAC systems can be significant sources of energy consumption without including demand management efforts to align systems’ energy consumption with utility rates and demand for electricity. This bill contains provisions that require technicians to disable demand management system for an HVAC system for the duration of the pandemic if the demand management system’s setting would lead to airflow that reduces ventilation to certain levels. Unless HVAC systems are optimized to respond to electric utility rate signals, it is possible that an LEA will not experience savings on its bill. To the extent that the HVAC systems required by this bill lead to increased energy consumption, some LEAs may experience higher electric bills following installation.
   3. This bill would require utilities to change how they administer ratepayer funds for efficiency projects. Electric IOUs’ energy efficiency incentives are administered under the “rolling portfolio” guidelines established by the CPUC. The CPUC established the rolling portfolio to facilitate more long-term planning for multi-year energy efficiency efforts. Prior to the establishment of the rolling portfolio, projects completed over several years could face start and stop uncertainty at the end of three-year investment cycles. Since this bill requires utilities to budget energy efficiency incentives for the School Energy Efficiency Stimulus Program on an annual basis and requires IOUs to allocate all unspent incentive funds for the program, it will limit the extent to which the utilities can use the rolling portfolio framework. Incentives also take many forms, including rebates. Generally, incentives are provided as reimbursement after the completion of a project. This bill would require the utilities to provide these funds as grants instead of reimbursements or rebates. While this bill does not permit rate increases to collect additional energy efficiency funding, it is unclear how utilities will fund efficiency projects if they have to reserve all unspent funds in the rolling portfolio for these projects.
   4. This bill’s use of ratepayer funds differs from similar programs established in other states. This bill uses ratepayer funds to support economic stimulus efforts and largely removes CPUC oversight for expenditures of funds allocated to the School Energy Efficiency Stimulus Program. This bill also requires the CEC to approve potentially unlimited amounts of funding for repairs and additional upgrades as long as they are verified in a contractor’s estimate. While streamlining grant approvals can be beneficial for providing economic stimulus, the use of ratepayer funds in this bill differs from other states’ HVAC upgrade stimulus programs. Additionally, the degree of economic stimulus provided by this bill will depend upon the extent to which LEAs apply for and use grant funds. In July 2020, the Vermont Legislature allocated federal coronavirus relief funds for a six-month program make HVAC upgrades in K-12 facilities through the School Indoor Air Quality Grant Program. Under the program, schools must complete upgrades by December 31, 2020.
   5. The CEC already operates programs providing funding for energy efficiency upgrades at LEAs. This bill requires the CEC to establish a new program to administer grants provided to LEAs for HVAC and plumbing upgrades. The CEC already administers several programs that provide grants and low-cost loans for energy efficiency upgrades, including the Clean Energy Job Creation Program. The Clean Energy Job Creation Program provides grants to LEAs using Proposition 39 revenues to fund energy efficient retrofits and clean energy installations. This program also funded related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits. The program also allocated funds to the ECAA-Ed to provide LEAs with no-interest revolving loans to fund energy efficiency and renewable energy projects. While no new monies have been appropriated to the Proposition 39 program, the CEC continues to issue funding opportunities through the ECAA-Ed competitive loan program. ECAA-Ed also includes metrics to measure both job creation associated with projects and energy savings.

Related/Prior Legislation

SB 524 (Stern, 2019) establishes skilled and trained workforce requirements for projects receiving at least $50,000 or more in ratepayer-funded incentives for energy efficiency projects within the same building, facility, or building complex. The bill is currently located in the Assembly.

SB 49 (Skinner, Chapter 697, Statutes of 2019) expanded the CEC’s appliance energy efficiency regulatory authority to allow the CEC to establish appliance efficiency standards that facilitate the deployment of flexible demand technologies.

SB 1131 (Hertzberg, Chapter 562, Statutes of 2018) required the CPUC to authorize IOUs incentives for customized industrial, agricultural, commercial, residential, and public sector energy efficiency projects based on nationally recognized measurement and verification standards. The bill established new requirements and timelines for the CPUC’s review of these projects.

SB 110 (Committee on Budget and Fiscal Review, Chapter 55, Statutes of 2017) re-established the Clean Energy Job Creation Program at the CEC to reallocate unspent Proposition 39 funds to finance energy efficiency and renewable energy upgrades at LEAs. The bill also established a program replace and retrofit diesel school buses to reduce emissions from these vehicles.

SB 350 (De León, Chapter 547, Statutes of 2016) among its provisions, required the CPUC, in consultation with the ARB and CEC, to direct electric IOUs to propose multiyear programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases, as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• The CEC noted that the bill did not provide sufficient information to determine the fiscal impact to administer both new school programs, and provided a rough estimate of over $20 million over 5 years (special fund) based on the implementation of the California Clean Energy Jobs Act K-12 Program (Prop 39) and other related CEC programs.
• The California Air Resources Board (CARB) estimates costs of $343,000 one-time and $192,000 ongoing (special fund) to verify and enforce the new labor requirements on EV charging infrastructure.
• The CPUC estimates costs of $287,000 ongoing (special fund) to approve specified transportation electrification vehicle charging applications, require specific certifications for contractors to be eligible to install utility infrastructure, establish a new framework for authorizing IOUs to build electrical distribution infrastructure needed to charge electric vehicles, and implement other requirements of this bill.

SUPPORT: (Verified 8/20/20)

California State Association of Electrical Workers (co-source)

California State Pipe Trades Council (co-source)

Coalition of California Utility Employees (co-source)

Western States Council of Sheet Metal Workers (co-source)

350 Bay Area Action

Acterra

Air Conditioning Sheet Metal Association

Alliance of Nurses for Healthy Environments

American Lung Association

BlueGreen Alliance

Brightline Defense

California Charter Schools Association

California Federation of Teachers

California Interfaith Power & Light

California Labor Federation

California Legislative Conference of the Plumbing, Heating and Piping Industry

California Public Interest Research Group

California Sheet Metal and Air Conditioning Contractors’ National Association

California Teachers Association

California Teamsters

Center for Biological Diversity

Center for Climate Change and Health Public Health Institute

Central California Asthma Collaborative

Coalition for Adequate School Housing

Coalition for Clean Air

Earthjustice

Energy and Efficiency Institute of the University of California at Davis

Environment California

Environmental Defense Fund

Environmental Entrepreneurs

Greenlots

Greenpeace

International Association of Sheet Metal, Air, Rail and Transportation Workers,

International Brotherhood of Electrical Workers, Local Union 1245

International Brotherhood of Electrical Workers, Local Union 465

International Brotherhood of Electrical Workers, Local Union 569

National Electrical Contractors Association

Natural Resources Defense Council

NextGen California

Proterra

Regional Asthma Management and Prevention

School Energy Coalition

Sheet Metal Workers’ Local Union 104

Sierra Club California

Silicon Valley Youth Climate Action

UC Berkeley’s Center for Cities + Schools

Union of Concerned Scientists

8 Individuals

OPPOSITION: (Verified 8/20/20)

AARP California

Agricultural Council of California

Agricultural Energy Consumers Association

California Department of Finance

California Efficiency + Demand Management Council

California Food Producers

California Large Energy Consumers Association

ChargePoint

Electric Vehicle Charging Association

Electrify America, LLC

Enel X North America, Inc.

Silicon Valley Leadership Group

The Utility Reform Network

Western Electrical Contractors Association

ARGUMENTS IN SUPPORT: According to the author:

AB 841 will put Californians back to work while helping us continue the green energy transition.

California is far behind the pace needed to build out sufficient electric vehicle (EV) charging infrastructure to meet our environmental goals. The California Energy Commission estimates we will be short 80,000 chargers, or roughly 1/3^rd of our 250,000 public EV charging station goal by 2025. Failing to meet our charging goals will deter consumers from purchasing electric vehicles, especially since 52% of Californians do not have access to charging at home. Given that transportation is California’s largest source of emissions at 41% and our total emissions from transportation have been rising year after year, California must meet these goals in order to meet our 2030 greenhouse gas reduction targets. Meanwhile, the CPUC has delayed weighing in on pending charging infrastructure applications for years. This bill would approve those pending applications. In addition, the CPUC has to date required the distribution infrastructure needed to support EV charging to be approved on a case-by-case basis. This has the effect of discouraging the IOUs from building the needed utility-side infrastructure and delaying private investment. There is no good reason to treat serving EV charging load differently from any other customer load. This bill would end this unfair practice.

Public schools throughout California contain outdated, inefficient HVAC systems and plumbing fixtures that waste energy and water. Poorly functioning HVAC systems also impair student performance and increase the risk of COVID-19 transmission. The bill creates two new energy efficiency programs that address these issues by improving energy efficiency and lowering energy and water bills. These programs will temporarily redirect unspent and unallocated investor owned utility energy efficiency funds for schools to repair and replace inefficient HVAC systems and water fixtures as well as replace water fixtures.

ARGUMENTS IN OPPOSITION: The Department of Finance is opposed to this bill “because it overrides agency discretion, makes policy changes through inappropriate mechanisms, and potentially results in significant costs passed through to ratepayers.” DOF specifically opposes the EVITP training certification requirement as proposed in the bill as it undermines existing agency efforts to determine whether EVITP is necessary and could reduce the available workforce to install EV charging infrastructure. These concerns are shared by other parties, including the Electric Vehicle Charging Association. DOF also expresses concerns with the potential ratepayer impacts of the proposed tariffs for electric vehicle distribution infrastructure and the proposed school ventilation program. Specific to the school ventilation program, DOF notes the potential impact to PG&E bundled residential ratepayers would be an additional about $11 per year, and for the average SCE bundled residential ratepayer, about $19 per year. TURN and others share concerns regarding impacts to ratepayers. These entities are concerned that use of ratepayer funds for new programs may not achieve the intended goals of helping schools open in the fall or align with state policies to reduce GHG emissions or provide energy savings. Some of the parties in opposition note that funds would be taken from residential customers, including those in disadvantaged communities, and high-energy use customers to fund investments in government buildings. These parties argue for reforms of the existing programs.

ASSEMBLY FLOOR: 76-0, 5/22/19

AYES: Aguiar-Curry, Arambula, Bauer-Kahan, Berman, Bigelow, Bloom, Boerner Horvath, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chen, Chiu, Choi, Chu, Cooper, Cunningham, Dahle, Daly, Diep, Eggman, Flora, Fong, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Voepel, Waldron, Weber, Wicks, Wood, Rendon

NO VOTE RECORDED: Cooley, Gallagher, Eduardo Garcia, Patterson

Prepared by: Sarah Smith / E., U., & C. / (916) 651-4107, Nidia Bautista / E., U., & C. / (916) 651-4107

8/25/20 14:25:26

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 841 (Ting) - Energy: transportation electrification: energy efficiency programs: School Energy Efficiency Stimulus Program

Bill Summary:

This bill would require the California Public Utilities Commission (CPUC) to approve specified transportation electrification vehicle charging applications by electric investor-owned utilities (IOUs), and make changes to allow electric IOUs to more easily recover costs from electric ratepayers for the deployment of transportation electrification vehicle charging infrastructure as well as require specified training certification for any state funded or authorized funding for electric vehicle (EV) charging infrastructure. This bill would also establish a stimulus program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to local education agencies (LEAs) using ratepayer funded energy efficiency incentives.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 20, 2020

Fiscal Impact:

• The CEC noted that the bill did not provide sufficient information to determine the fiscal impact to administer both new school programs, and provided a rough estimate of over $20 million over 5 years (special fund) based on the implementation of the California Clean Energy Jobs Act K-12 Program (Prop 39) and other related CEC programs.
• The California Air Resources Board (CARB) estimates costs of $343,000 one-time and $192,000 ongoing (special fund) to verify and enforce the new labor requirements on EV charging infrastructure.
• The CPUC estimates costs of $287,000 ongoing (special fund) to approve specified transportation electrification vehicle charging applications, require specific certifications for contractors to be eligible to install utility infrastructure, establish a new framework for authorizing IOUs to build electrical distribution infrastructure needed to charge electric vehicles, and implement other requirements of this bill.

Committee Amendments:

The committee amendments would prioritize schools that meet specified criteria for the SRVEVR program.

-- END --

SENATE COMMITTEE ON

Senator Anthony Portantino, Chair

2019 - 2020 Regular Session

AB 841 (Ting) - Energy: transportation electrification: energy efficiency programs: School Energy Efficiency Stimulus Program

Bill Summary:

This bill would require the California Public Utilities Commission (CPUC) to approve specified transportation electrification vehicle charging applications by electric investor-owned utilities (IOUs), and make changes to allow electric IOUs to more easily recover costs from electric ratepayers for the deployment of transportation electrification vehicle charging infrastructure as well as require specified training certification for any state funded or authorized funding for electric vehicle (EV) charging infrastructure. This bill would also establish a stimulus program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to local education agencies (LEAs) using ratepayer funded energy efficiency incentives.

Fiscal Impact:

• The CEC noted that the bill did not provide sufficient information to determine the fiscal impact to administer both new school programs, and provided a rough estimate of over $20 million over 5 years (special fund) based on the implementation of the California Clean Energy Jobs Act K-12 Program (Prop 39) and other related CEC programs.
• The California Air Resources Board (CARB) estimates costs of $343,000 one-time and $192,000 ongoing (special fund) to verify and enforce the new labor requirements on EV charging infrastructure.
• The CPUC estimates costs of $287,000 ongoing (special fund) to approve specified transportation electrification vehicle charging applications, require specific certifications for contractors to be eligible to install utility infrastructure, establish a new framework for authorizing IOUs to build electrical distribution infrastructure needed to charge electric vehicles, and implement other requirements of this bill.

Background:

California has adopted ambitious climate and air quality goals, including policies to reduce emissions from the transportation sector, the state’s largest source of GHG emissions. Through a combination of regulations of vehicle emissions standards, incentives for the purchase of cleaner vehicles, as well as, state incentives for deployment of charging infrastructure. California has adopted policies for the widespread deployment of zero-emissions and near-zero emissions vehicles, including adopting a goal to ensure a million vehicles by 2023. In relation to electric utilities, SB 350, (De León, Chapter 547, Statutes of 2016) requires electric IOUs support the widespread adoption of transportation electrification with specified requirements. Specifically, Public Utilities Code §740.12 requires electric IOUs to file applications with the CPUC for programs and investments to accelerate widespread transportation electrification to achieve the state’s specified emissions goals. The statute further requires the CPUC in reviewing the electric IOU applications to ensure the programs proposed in the applications: minimize overall costs and maximize overall benefits, ensure a reasonable cost recover mechanism, do not unfairly compete with nonutility enterprises as required by Public Utilities Code §740.3, include performance accountability measures, and are in the interests of ratepayers. To date, the CPUC has authorized over one billion dollars ($1,000,000,000), in the aggregate, among all the electric IOUs for EV charging infrastructure – the largest state authorized funding of any other EV charging infrastructure programs, including state grants/subsidies. These programs include pilots for EV charging at multi-unit dwellings and workplaces; pilots for medium- and heavy-duty vehicles; pubic charging at schools, parks, and beaches; rebates for residential installations; charging infrastructure for municipal transit bus fleets, and others.

The CEC administers the Clean Energy Job Creation Program, which provides grants to LEAs using Proposition 39 revenues to fund energy efficient retrofits and clean energy installations. This program also funded related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits. The program also allocated funds to the ECAA-Ed to provide local education agencies with no-interest revolving loans to fund energy efficiency and renewable energy projects. While no new monies have been appropriated to the Proposition 39 program, the CEC continues to issue funding opportunities through the ECAA-Ed competitive loan program. ECAA-Ed also includes metrics to measure both job creation associated with projects and energy savings.

Proposed Law:

1. This bill would:
2. Require the CPUC, on or before March 1, 2021, to approve two specific pending transportation electrification infrastructure applications and to issue a decision reauthorizing and extending programs and investments previously approved in a specific decision.
3. Require each electrical corporation, by February 28, 2021, to file an advice letter and would require the CPUC to approve, by June 30, 2021, a new tariff or rule that authorizes each electrical corporation to design and deploy all electrical distribution infrastructure on the utility side of the customer meter for all customers installing a separately metered infrastructure to support charging stations.
4. Require the CPUC, the CEC, and ARB, to require all EV charging infrastructure and equipment located on the customer side of the electric meter that is funded or authorized, in whole or in part, by those state entities to be installed by a contractor holding a valid electrician license and at least one electrician on each crew hold an Electric Vehicle Infrastructure Training Program (EVITP) certification.
5. Establish the School Energy Efficiency Stimulus Program to fund appliance, plumbing fixture and heating, ventilation and air conditioning (HVAC) upgrades to local education agency (LEA) facilities.
6. Require IOUs to file advice letters with the CPUC by February 1, 2021, to allocate ratepayer-funded energy efficiency incentives to the School Energy Efficiency Stimulus Program.
7. Designate the CEC as the third-party administrator of the School Energy Efficiency Stimulus Program.

Related Legislation:

SB 350 (De León, Chapter 547, Statutes of 2016) among its provisions, required the CPUC, in consultation with the ARB and CEC, to direct electric IOUs to propose multiyear programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases, as specified.

SB 524 (Stern, 2019) would establish skilled and trained workforce requirements for projects receiving at least $50,000 or more in ratepayer-funded incentives for energy efficiency projects within the same building, facility, or building complex. The bill is currently located in the Assembly.

SB 49 (Skinner, Chapter 697, Statutes of 2019) expanded the CEC’s appliance energy efficiency regulatory authority to allow the CEC to establish appliance efficiency standards that facilitate the deployment of flexible demand technologies.

SB 1131 (Hertzberg, Chapter 562, Statutes of 2018) required the CPUC to authorize IOUs incentives for customized industrial, agricultural, commercial, residential, and public sector energy efficiency projects based on nationally recognized measurement and verification standards. The bill established new requirements and timelines for the CPUC’s review of these projects.

SB 110 (Committee on Budget and Fiscal Review, Chapter 55, Statutes of 2017) re-established the Clean Energy Job Creation Program at the CEC to reallocate unspent Proposition 39 funds to finance energy efficiency and renewable energy upgrades at LEAs. The bill also established a program replace and retrofit diesel school buses to reduce emissions from these vehicles.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Ben Hueso, Chair

2019 - 2020 Regular

Bill No: AB 841 Hearing Date: 8/3/2020

SUBJECT: Energy: transportation electrification: energy efficiency programs: School Energy Efficiency Stimulus Program

DIGEST: This bill would require the California Public Utilities Commission (CPUC) to approve specified pending transportation electrification vehicle charging applications by electric investor-owned utilities (IOUs), including an application that has yet to be filed. This bill would also make changes to allow electric IOUs to more easily recover costs from electric ratepayers for the deployment of transportation electrification vehicle charging infrastructure and require specified training certification for any state funded or authorized funding for electric vehicle (EV) charging infrastructure. This bill also establishes a stimulus program at the California Energy Commission (CEC) to fund appliance, plumbing and heating, ventilation, and air conditioning (HVAC) upgrades to local education agencies (LEAs) using ratepayer funded energy efficiency incentives.

ANALYSIS:

Existing law:

1. Establishes the CPUC has regulatory authority over public utilities, including electrical corporations and gas corporations. (California Constitution Article XII)
2. Authorizes the CPUC to fix the rates and charges for every public utility, and requires that those rates and charges be just and reasonable. (Public Utilities Code §451)
3. Requires the CPUC, in consultation with the CEC, the California State Air Resources Board (ARB), electrical corporations, and the motor vehicle industry, to evaluate policies to develop infrastructure sufficient to overcome any barriers to the widespread deployment and use of plug-in hybrid and EVs and, by July 1, 2011, to adopt rules that address specified issues. (Public Utilities Code §740.2)
4. Requires the CPUC, in cooperation with the CEC, the ARB, air quality management districts and air pollution control districts, electrical and gas corporations, and the motor vehicle industry, to evaluate and implement policies to promote the development of equipment and infrastructure needed to facilitate the use of electric power and natural gas to fuel low-emission vehicles. The CPUC is required to ensure that its policies authorizing utilities to develop equipment and infrastructure needed for electric-powered and natural gas-fueled low-emission vehicles ensure that the costs and expenses of those programs are not passed through to electric or gas ratepayers unless the CPUC finds and determines that those programs are in the ratepayers’ interest, as specified. (Public Utilities Code §740.3)
5. Requires the CPUC, in consultation with the CEC and ARB, as part of the Clean Energy and Pollution Reduction Act of 2015, to direct electrical corporations to file applications for programs and investments to accelerate widespread transportation electrification, as defined, to achieve specified results. The CPUC is required to approve, or modify and approve, programs and investments in transportation electrification, including those that deploy charging infrastructure, through a reasonable cost recovery mechanism, if they meet specified requirements. (Public Utilities Code §740.12)
6. Creates a charge on electricity and natural gas consumption to fund cost-effective energy efficiency and conservation efforts. (Public Utilities Code §381 and §890)
7. Requires the CPUC to authorize IOUs to provide incentives funding energy efficiency programs based on all estimated energy savings, including energy savings from bringing existing buildings into compliance with mandatory energy efficiency codes for existing buildings as established by the CEC. (Public Utilities Code §381.2)
8. Requires the CPUC to identify all potentially achievable, cost-effective electricity and natural gas efficiency savings and establish energy efficiency targets and ratepayer-funded programs for IOUs. (Public Utilities Code §454.55 and §454.56)
9. Requires the CEC to establish building and appliance standards to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, including the energy associated with the use of water and to manage energy loads to help maintain electrical grid reliability. Appliance and building standards must meet certain cost-effectiveness requirements and appliances that do not comply with the CEC’s standards may not be offered for sale in California. (Public Resources Code §25402)
10. Establishes the Clean Energy Job Creation Program to and allocates Proposition 39 revenues to fund energy efficient retrofits and clean energy installations as well as related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits, including improved health and safety conditions in public schools. The program also allocated funds to the State Energy Conservation Assistance Account Education Subaccount (ECAA-Ed) to provide local education agencies with no-interest revolving loans to fund energy efficiency and renewable energy projects. (Public Resources Code §26200 et seq.)
11. Requires public entities entering into certain contracts to ensure that a contractor will use a “skilled and trained workforce” to complete the contract. A skilled and trained workforce is defined as a workforce as one that meets certain requirements, including, but not limited to the following:
12. All the workers performing work in an apprenticeable occupation in the building and construction trades are either skilled journey persons or apprentices registered in an apprenticeship program approved by the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations.
13. For work performed on or after January 1, 2020, at least 60 percent of the skilled journey persons employed are graduates of an apprenticeship program for the applicable occupation, with certain exemptions. (Public Contract Code §2601)

This bill:

Relevant to EV charging infrastructure:

1. Requires the CPUC, in supervising the alternative-fueled vehicle program, or vehicle electrification program, of an electrical corporation, to apply the interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electrical corporation, to be recovered from all residential ratepayers and would declare the intent of the Legislature that the interim policy be the policy applied by the CPUC unless and until revised by the Legislature.
2. This bill would require the CPUC, on or before March 1, 2021, to approve two specific pending transportation electrification infrastructure applications and to issue a decision reauthorizing and extending programs and investments previously approved in a specific decision.
3. Requires each electrical corporation, by February 28, 2021, to file an advice letter and would require the CPUC to approve, by June 30, 2021, a new tariff or rule that authorizes each electrical corporation to design and deploy all electrical distribution infrastructure on the utility side of the customer meter for all customers installing a separately metered infrastructure to support charging stations.
4. Requires the CPUC, the CEC, and ARB, to require all EV charging infrastructure and equipment located on the customer side of the electric meter that is funded or authorized, in whole or in part, by those state entities to be installed by a contractor holding a valid electrician license and at least one electrician on each crew hold an Electric Vehicle Infrastructure Training Program (EVITP) certification.

Relevant to the ratepayer funded program for local educational agencies:

1. Establishes the School Energy Efficiency Stimulus Program to fund appliance, plumbing fixture and heating, ventilation and air conditioning (HVAC) upgrades to local education agency (LEA) facilities.
2. Establishes the following programs within the School Energy Efficiency Stimulus Program:
   1. The School Reopening Ventilation and Energy Efficiency Verification and Repair (SRVEVR) Program.
   2. The School Noncompliant Plumbing Fixture and Appliance (SNPFA) Program.
3. Requires IOUs to file advice letters with the CPUC by February 1, 2021, to allocate ratepayer-funded energy efficiency incentives to the School Energy Efficiency Stimulus Program. This bill requires the CPUC to approve these advice letters by March 1, 2021.
4. Designates the CEC as the third-party administrator of the School Energy Efficiency Stimulus Program, and requires each utility to
5. Requires utilities to work with the CEC to ensure that the School Energy Efficiency Stimulus Program is operational and soliciting applications for grants by April 1, 2021, and approving grants by May 1, 2021.
6. Requires the School Energy Efficiency Stimulus Program to provide 25 percent of its funding to projects underserved communities and prioritize grants in underserved communities before providing grants to schools that are in areas not designated as an underserved community.
7. Requires the CEC to adopt guidelines and regulations for the School Energy Efficiency Stimulus Program and specifies that these guidelines and regulations are exempt from the Administrative Procedures Act (APA).
8. Requires the CEC approve grants by May 1, 2021, without the adoption of guidelines and regulations for the program.
9. Requires the CPUC to direct each utility to fund its School Energy Efficiency Stimulus Program by allocating specified amounts from its budget for its energy efficiency portfolio and unspent funds from prior years. This bill requires the IOUs to fund the program in 2021, 2022, and 2023
10. Requires the CEC to ensure that moneys from each utility for the School Energy Efficiency Stimulus Program are used for grants for projects located in the service territory of that utility from which the monies are received. All funds must be spent or returned to each utility by April 1, 2025.
11. Allocates 75 percent of the School Energy Efficiency Stimulus Program to the SRVEVR Program and allocates 25 percent of the funds to the SNPFA Program.
12. Prohibits the CPUC from applying cost-effectiveness requirements to the School Energy Efficiency Stimulus Program.
13. Specifies that greenhouse gas (GHG) emissions reductions and energy savings attributed to a School Energy Efficiency Stimulus Program shall be attributed to the utility funding the project.
14. Sets various requirements for the SRVEVR Program, including the following:
    1. Authorizes an LEA to apply for a grant by submitting an application for reasonable costs of the HVAC assessment, assessment report, general maintenance, adjustment of ventilation rates, filter replacement, and carbon dioxide monitor installation.
    2. Requires the CEC to award a grant to an LEA if the contractor’s estimate verifies the amount requested by the LEA and the LEA meets other requirements the CEC deems appropriate. Each approved grant must include an additional amount equivalent to 20 percent of the requested grant to fund repairs, upgrades, or replacements to make the HVAC system functional or more energy efficient.
    3. Requires the CEC to award grants retroactively to projects completed after August 1, 2020, if the project and the LEA meet the SRVEVR Program requirements.
    4. Requires each LEA receiving a grant to conduct specified testing on its HVAC systems, which must be conducted by specific types of technicians and requires testing technicians to submit specified assessments to a licensed professional who must review the assessment and identify any additional recommended upgrades or repairs. If the cost of those recommended upgrades or repairs exceeds the 20 percent bonus provided with the initial grant, the LEA and the professional shall apply for additional funds from the SRVEVR Program.
    5. Requires HVAC systems to be serviced by a skilled and trained workforce.
    6. Requires LEAs to install carbon monoxide detectors that meet specified requirements and authorizes the CEC to amend these requirements as needed.
    7. Requires and LEA to complete a specific verification report upon completion of all work for an HVAC project, maintain that report, and make it available to any member of the public or the CEC upon request.
15. Defines certain commercial dishwashers, ice makers, clothes washers, and plumbing fixtures as “noncompliant” and sets various requirements for the SNPFA Program to replace those devices, including the following requirements:
    1. Requires the CEC to issue a notice by April 1, 2021, to notify LEAs regarding the availability of grants under the program and invite applications for the grants.
    2. Requires the CEC to award a grant if an LEA submits documents showing that a facility contains noncompliant appliances or fixtures, which the grant will be used to replace with water-conserving appliances and fixtures. LEAs must include a cost-estimate verified by a contractor and LEAs must meet other requirements established by the CEC as appropriate.
    3. Requires all work performed under a SNPFA Program grant to be completed by a skilled and trained workforce.

Background

Relevant to EV charging infrastructure:

EV charging infrastructure by electric IOUs. California has adopted ambitious climate and air quality goals, including policies to reduce emissions from the transportation sector, the state’s largest source of GHG emissions. Through a combination of regulations of vehicle emissions standards, incentives for the purchase of cleaner vehicles, as well as, state incentives for deployment of charging infrastructure. California has adopted policies for the widespread deployment of zero-emissions and near-zero emissions vehicles, including adopting a goal to ensure a million vehicles by 2023. In relation to electric utilities, SB 350, (De León, Chapter 547, Statutes of 2016) requires electric IOUs support the widespread adoption of transportation electrification with specified requirements. Specifically, Public Utilities Code §740.12 requires electric IOUs to file applications with the CPUC for programs and investments to accelerate widespread transportation electrification to achieve the state’s specified emissions goals. The statute further requires the CPUC in reviewing the electric IOU applications to ensure the programs proposed in the applications: minimize overall costs and maximize overall benefits, ensure a reasonable cost recover mechanism, do not unfairly compete with nonutility enterprises as required by Public Utilities Code §740.3, include performance accountability measures, and are in the interests of ratepayers. To date, the CPUC has authorized over one billion dollars ($1,000,000,000), in the aggregate, among all the electric IOUs for EV charging infrastructure – the largest state authorized funding of any other EV charging infrastructure programs, including state grants/subsidies. These programs include pilots for EV charging at multi-unit dwellings and workplaces; pilots for medium- and heavy-duty vehicles; pubic charging at schools, parks, and beaches; rebates for residential installations; charging infrastructure for municipal transit bus fleets, and others.

Need for CPUC review of electric IOU applications; new framework proposed. Given that electric IOUs are able to recoup a rate of return from their ratepayers on infrastructure investments, a thorough review by the CPUC is in-line with the traditional regulatory compact to ensure electric IOU investments are deemed just and reasonable and authorized to be recovered from electric ratepayers. In accordance with a CPUC required review and the other requirements of the electric IOUs’ applications, the CPUC has at times modified or denied applications to ensure they meet the requirements adopted in SB 350, including that they are in the interests of ratepayers and do not unduly compete with nonutility enterprises, among others. The efforts to review each application does contribute to limiting the speed at which electric IOUs can deploy infrastructure, however, it also affords parties, including those representing ratepayers, private enterprises, environmental organizations, and others, to inform and help shape the applications. The CPUC’s reviews have thus far largely evaluated each application on its own merits and review, case-by-case. However, late last year, the CPUC proposed developing a new framework, and earlier this year released a draft Transportation Electrification Framework (TEF) to “harness the lessons from the past CPUC proceedings” and create a framework for electric IOU roles and priorities. The TEF is intended to establish a new process for reviewing electric IOUs transportation electrification infrastructure investments, including development of a ten-year strategic investment plan to support transportation electrification infrastructure with the highest value for meeting the goals and providing opportunities to streamline review of projects, including proposing advice letter filings for applications under a proposed dollar threshold. The CPUC TEF has been proposed in an active proceeding and solicitation of comments from stakeholders.

AB 841 transportation electrification components. This bill proposes three key changes to existing transportation electrification -related efforts:

(1) requires the Legislature to approve two pending transportation electrification applications currently under review by the CPUC and a future, yet, to be filed transportation electrification application;

(2) requires the CPUC to adopt new tariffs for electric IOU transportation electrification investments that allow for cost recovery from ratepayers of all distribution infrastructure on the utility side of the customer’s meter through the general rate case, instead of the current review by the CPUC of each proposed project; and

(3) requires a specified training certification for any equipment and infrastructure installed on the customer side of the meter that is funded or authorized by the CPUC, CEC, and ARB.

Approval of pending and future electric IOU transportation electrification applications. This bill proposes to require the Legislature to approve two pending electric IOU transportation electrification applications, including one by Southern California Edison (SCE) Application 19-06-015 and another by San Diego Gas & Electric (SDG&E) Application 19-10-012. Both these applications are currently under review by the CPUC. In the case of the SCE application, the CPUC recently released a proposed decision to approve, with modifications, the largest single-utility EV charging infrastructure program in the United States with a $442 million budget for deployment of 40,600 EV charging ports. Additionally, the SDG&E application is under review with parties submitting comments and working towards a resolution. The issues in contention in reviewing the applications include: rebate levels, vehicle forecasting to inform EV charging deployment, how investments are targeted in disadvantaged communities, per port costs in comparison to other project proposals, and others. Such details are best reviewed via the CPUC’s regulatory stakeholder proceedings that afford all parties opportunities to weigh-in on the specific areas of the application of concern. Additionally, this bill would require the Legislature to approve a yet to be filed application by Pacific Gas & Electric (PG&E) for a reauthorization of an existing approved program that has yet to be completed. Proponents of this bill argue that the CPUC process is too slow. While that has been a consistent, and often valid, criticism from parties, particularly those seeking a speedier and predetermined outcome, the CPUC’s demonstrated willingness to approve over one billion dollars in TE projects may also suggest the agency has been aggressive in reviewing applications. Nonetheless, if the need to resolve an application more quickly is a concern, the CPUC’s proposed TEF should help streamline future applications. However, should the author and committee wish to address the speed of resolving the pending applications, the author and committee may wish to amend this bill to require the CPUC to resolve the two pending applications by the date proposed in this bill, March 1, 2021, and afford the CPUC the ability to approve, modify, or deny the applications. Additionally, should the author and committee wish to proceed with caution in preapproving a yet to be filed application, the author and committee may wish to delete the language in this bill referencing this future application.

Need for transportation electrification tariff? This bill also proposes to require each electric IOU to file an advice letter and require the CPUC to approve a new tariff or rule that authorizes each electric IOU to design and deploy all electrical distribution infrastructure on the utility-side of the customer’s meter. Currently, the CPUC has issued various decisions adopting an interim policy that allows certain costs incurred as a result of the adoption of home-based EV charging for basic charging arrangements to be treated as a common facility cost of an electric IOU, thereby recoverable from all ratepayers. As proposed in this bill, the interim policy treatment would be extended to all charging infrastructure and could only be adjusted by the Legislature. However, as noted above, existing statute requires that any applications are in the interests of ratepayers. Therefore, should the author and committee wish to ensure adequate tracking of these costs, the author and committee may wish to amend this section to (1) direct the CPUC to require sufficient tracking and reporting of costs to ensure accurate calculations of the total costs to ratepayers and (2) allow the CPUC to adjust this policy without the need for Legislative action.

Need for additional training certification? This bill proposes to require any EV charging installation not conducted by the utility, but funded or authorized by the state, to include at least one crew member with an EVITP certification. The EVITP certification is an 18-hour in-person training available in two locations in California – San Francisco and Commerce. The training includes topics such as customer interactions, electrical code requirements, and EV supply equipment. The EVITP certification is currently being considered at both the CEC and the CPUC in the TEF. In the case of the CEC, they agency just last week held a workshop to discuss training certifications, including EVITP, and is soliciting comments. The CPUC has included a discussion of EVITP in the TEF, noting that if electric IOUs determine any training beyond existing state requirements for practicing electricians are needed that the electric IOUs should ensure it is available to all qualified installers. Additionally, the CPUC noted that qualified bidders should be allowed to obtain this training before they start work and not disqualify them from bidding. The proponents of this argue that the certification is a national standard and necessary for installing charging infrastructure. A number of the stakeholders opposed to this bill express concerns about this proposed requirement in statute. They argue that the training is not necessary and is limited in the type of installation – may not include DC fast charging. They express concerns that the addition of this requirement will likely hamper efforts to deploy charging infrastructure. Electrify America who is deploying charging infrastructure as required by a consent decree approved by the federal government in response to the Volkswagen settlement, suggests the language should not apply to them as the consent decree is governed by the federal government. At a minimum, parties opposed to this provision of the bill raise valid questions as to whether the training should be required. The CPUC has forgone this requirement in a PG&E residential transportation electrification infrastructure application, deeming the EVITP certification unnecessary. Nonetheless, the decision as to whether to require EVITP would seem better suited to be resolved by the implementing agencies of the given programs. Should the author and committee wish to allow the CPUC and CEC proceed in resolving whether the EVITP certification should be required, the author and committee may wish to delete this provision of this bill.

Relevant to ratepayer funded programs for local educational agencies:

HVAC upgrades can improve air quality, save energy, and employ skilled and trained labor, but they may not prevent viral transmission in school settings. This bill establishes a ratepayer-funded grant program to make HVAC upgrades that align with certain recommendations made by the American Society of Heating, Refrigeration, and Air Conditioning Engineers (ASHRAE) for reopening schools during the pandemic. However, insufficient public health information exists at this time to conclude that upgrading HVAC systems in schools will prevent transmission of the novel coronavirus within a classroom. Additionally, upgrades may not be completed until after the pandemic concludes and many schools have facilities that cannot accommodate the upgrades necessary to install more advanced filters without significant new construction. While the grant program established by this bill may not facilitate school reopening during the pandemic, upgraded HVAC systems can provide other health-related non-energy benefits by improving air quality within the school.

Without demand management, HVAC upgrades may increase LEAs’ energy bills. HVAC systems can be significant sources of energy consumption without including demand management efforts to align systems’ energy consumption with utility rates and demand for electricity. This bill contains provisions that require technicians to disable demand management system for an HVAC system for the duration of the pandemic if the demand management system’s setting would lead to airflow that reduces ventilation to certain levels. Unless HVAC systems are optimized to respond to electric utility rate signals, it is possible that an LEA will not experience savings on its bill. To the extent that the HVAC systems required by this bill lead to increased energy consumption, some LEAs may experience higher electric bills following installation.

This bill would necessarily require utilities to change how they administer ratepayer funds for efficiency projects. Electric IOUs’ energy efficiency incentives are administered under the “rolling portfolio” guidelines established by the CPUC. The CPUC established the rolling portfolio to facilitate more long-term planning for multi-year energy efficiency efforts. Prior to the establishment of the rolling portfolio, projects completed over several years could face start and stop uncertainty at the end of three-year investment cycles. Since this bill requires utilities to budget energy efficiency incentives for the School Energy Efficiency Stimulus Program on an annual basis and requires IOUs to allocate all unspent incentive funds for the program, it will limit the extent to which the utilities can use the rolling portfolio framework. Incentives also take many forms, including rebates. Generally, incentives are provided as reimbursement after the completion of a project. This bill would require the utilities to provide these funds as grants instead of reimbursements or rebates. While this bill does not permit rate increases to collect additional energy efficiency funding, it is unclear how utilities will fund efficiency projects if they have to reserve all unspent funds in the rolling portfolio for these projects.

This bill’s use of ratepayer funds differs from similar programs established in other states. This bill uses ratepayer funds to support economic stimulus efforts and largely removes CPUC oversight for expenditures of funds allocated to the School Energy Efficiency Stimulus Program. Additionally, it requires the CEC to approve grants without adoption of guidelines or rules that ensure effective use of grant monies. This bill also requires the CEC to approve unlimited amounts of funding for repairs and additional upgrades as long as they are verified in a contractor’s estimate. While streamlining grant approvals can be beneficial for providing economic stimulus, the use of ratepayer funds in this bill differs from other states’ HVAC upgrade stimulus programs. In July 2020, the Vermont Legislature allocated federal coronavirus relief funds to make HVAC upgrades in K-12 facilities and established the School Indoor Air Quality Grant Program.

The CEC already operates programs providing funding for energy efficiency upgrades at LEAs. The CEC administers the Clean Energy Job Creation Program, which provides grants to LEAs using Proposition 39 revenues to fund energy efficient retrofits and clean energy installations. This program also funded related improvements and repairs that contribute to reduced operating costs and provide certain non-energy benefits. The program also allocated funds to the ECAA-Ed to provide local education agencies with no-interest revolving loans to fund energy efficiency and renewable energy projects. While no new monies have been appropriated to the Proposition 39 program, the CEC continues to issue funding opportunities through the ECAA-Ed competitive loan program. ECAA-Ed also includes metrics to measure both job creation associated with projects and energy savings.

Need for Amendments. As currently drafted, this bill establishes a new program to fund upgrades in school facilities with the goal of providing economic and energy benefits and making upgrades that would enable schools to reopen safely during the pandemic. However, there is not a sufficient amount of public health data to demonstrate that the adoption of these technologies would enable schools to reopen without risking increased transmission of the novel coronavirus. Additionally, the CEC already administers several programs that provide funding for school facility upgrades with the goal of providing economic, energy, and certain cost-effective non-energy benefits. To the extent that the author and committee wish to provide additional funds for these purposes to increase economic benefits, the author and committee may wish to amend this bill to do the following:

• Recast this bill to authorize the CPUC to allocate a portion of energy efficiency funds for the purpose of providing grants for energy-efficient school facility upgrades within each respective IOU service territory and allow the CPUC to contract with a third-party administrator.
• Make the CEC an eligible third-party administrator of the program and authorize the CEC to use the project criteria from the ECAA-Ed program to identify eligible projects.
• Establish a clear sunset date for the program.

Existing law (Public Resources Code §25230) requires the CEC to take certain steps to ensure that diverse grant applicants and contractors, including women, minority, disabled veteran, and LGBT business enterprises are aware of grant opportunities at the CEC. While this requirement generally applies to all CEC programs, to the extent that the author and the committee wish to ensure that the diverse contractors and technicians are aware of the economic stimulus funding available through this bill, the author and committee may wish to specifically require the CEC to notify diverse businesses of these opportunities and encourage LEAs to contract with diverse businesses that meet this bill’s requirements.

Prior/Related Legislation

SB 350 (De León, Chapter 547, Statutes of 2016) among its provisions, required the CPUC, in consultation with the ARB and CEC, to direct electric IOUs to propose multiyear programs and investments to accelerate widespread transportation electrification to reduce dependence on petroleum, meet air quality standards, achieve the goals set forth in the Charge Ahead California Initiative, and reduce emissions of greenhouse gases, as specified.

SB 524 (Stern, 2019) would establish skilled and trained workforce requirements for projects receiving at least $50,000 or more in ratepayer-funded incentives for energy efficiency projects within the same building, facility, or building complex. The bill is currently located in the Assembly.

SB 49 (Skinner, Chapter 697, Statutes of 2019) expanded the CEC’s appliance energy efficiency regulatory authority to allow the CEC to establish appliance efficiency standards that facilitate the deployment of flexible demand technologies.

SB 1131 (Hertzberg, Chapter 562, Statutes of 2018) required the CPUC to authorize IOUs incentives for customized industrial, agricultural, commercial, residential, and public sector energy efficiency projects based on nationally recognized measurement and verification standards. The bill established new requirements and timelines for the CPUC’s review of these projects.

SB 110 (Committee on Budget and Fiscal Review, Chapter 55, Statutes of 2017) re-established the Clean Energy Job Creation Program at the CEC to reallocate unspent Proposition 39 funds to finance energy efficiency and renewable energy upgrades at LEAs. The bill also established a program replace and retrofit diesel school buses to reduce emissions from these vehicles.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT:

California State Association of Electrical Workers (Co-sponsor)

California State Pipe Trades Council (Co-sponsor)

Coalition of California Utility Employees (Co-sponsor)

Western States Council of Sheet Metal Workers (Co-sponsor)

Air Conditioning Sheet Metal Association

BlueGreen Alliance

California Labor Federation

California Legislative Conference of the Plumbing, Heating and Piping Industry

California Public Interest Research Group

California Sheet Metal and Air Conditioning Contractors’ National Association

Coalition for Adequate School Housing

Coalition for Clean Air

Earthjustice

Energy and Efficiency Institute of the University of California at Davis

Environment California

Environmental Entrepreneurs

Greenlots

International Association of Sheet Metal, Air, Rail and Transportation Workers,

Sheet Metal Workers’ Local Union 104

International Brotherhood of Electrical Workers, Local Union 465

International Brotherhood of Electrical Workers, Local Union 569

International Brotherhood of Electrical Workers, Local Union 1245

National Electrical Contractors Association

Natural Resources Defense Council

NextGen California

School Energy Coalition

UC Berkeley’s Center for Cities + Schools

Union of Concerned Scientists

8 Individuals

OPPOSITION:

The Utility Reform Network

OPPOSE, unless amended:

Agricultural Energy Consumers Association

California Efficiency + Demand Management Council

California Food Producers

California Large Energy Consumers Association

ChargePoint

Electric Vehicle Charging Association

Silicon Valley Leadership Group

Western Electrical Contractors Association

ARGUMENTS IN SUPPORT: According to the author:

AB 841 will put Californians back to work while helping us continue the green energy transition.

California is far behind the pace needed to build out sufficient electric vehicle (EV) charging infrastructure to meet our environmental goals. The California Energy Commission estimates we will be short 80,000 chargers, or roughly 1/3^rd of our 250,000 public EV charging station goal by 2025. Failing to meet our charging goals will deter consumers from purchasing electric vehicles, especially since 52% of Californians do not have access to charging at home. Given that transportation is California’s largest source of emissions at 41% and our total emissions from transportation have been rising year after year, California must meet these goals in order to meet our 2030 greenhouse gas reduction targets. Meanwhile, the CPUC has delayed weighing in on pending charging infrastructure applications for years. This bill would approve those pending applications. In addition, the CPUC has to date required the distribution infrastructure needed to support EV charging to be approved on a case-by-case basis. This has the effect of discouraging the IOUs from building the needed utility-side infrastructure and delaying private investment. There is no good reason to treat serving EV charging load differently from any other customer load. This bill would end this unfair practice.

Public schools throughout California contain outdated, inefficient HVAC systems and plumbing fixtures that waste energy and water. Poorly functioning HVAC systems also impair student performance and increase the risk of COVID-19 transmission. The bill creates two new energy efficiency programs that address these issues by improving energy efficiency and lowering energy and water bills. These programs will temporarily redirect unspent and unallocated investor owned utility energy efficiency funds for schools to repair and replace inefficient HVAC systems and water fixtures as well as replace water fixtures.

ARGUMENTS IN OPPOSITION: In opposition to this bill, The Utility Reform Network (TURN) states that the bill would “require an unprecedented intervention into proceedings at the CPUC through approval of EV charging infrastructure programs, the costs of which could be borne entirely by utility ratepayers.” TURN further states that “legislative intervention requiring CPUC approval of pending and future utility applications without thorough evaluation of the program’s merit is not in the interest of consumers or the environment.” The Electric Vehicle Charging Association shares TURN’s concerns about undermining processes at the CPUC to vet ratepayer-funded utility programs, stating that such “legislative approval of utility applications would eliminate stakeholder input.” Additionally, EVCA opposes provisions of the bill requiring specified training certification requirement for EV infrastructure which they believe will hamper efforts to deploy EV charging infrastructure and require training curriculum that has not been vetted through a public process. Relevant to the ratepayer funded programs for local educational agencies, several of the organizations opposing this bill express concerns with provisions that use ratepayer funds for new programs that may not achieve the intended goals of helping schools open in the fall or align with state policies to reduce GHG emissions or provide energy savings. Some of the parties in opposition note that funds would be taken from residential customers, including those in disadvantaged communities, and high energy use customers to fund investments in government buildings. These parties argue for reforms of the existing programs.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 841

Author:(Ting)

As Amended Ver:March 20, 2019

Majority vote

SUMMARY:

Requires the Office of Environmental Health Hazard Assessment (OEHHA) to assess perfluoroalkyl and polyfluoroalkyl (PFAS) substances in drinking water.

Major Provisions

Requires, on or before January 1, 2021, OEHHA to adopt a work plan to assess which substances in the class of PFAS substances should be identified as a potential risk to human health, taking into account which substances have the potential to be detected in California waters based on the prevalence of manufacturing of, manufacturing products with, or use of a PFAS substance in California, and which substances are technologically feasible to detect based on current detection methodologies.

COMMENTS:

About PFASs: PFASs are a group of human-made chemicals that have been synthesized for heat, water, and lipid resistance. They have been used extensively in consumer products such as carpets, clothing, fabrics for furniture, paper packaging for food, cookware, and other materials designed to be waterproof, stain-resistant, or non-stick. In addition, they have been used in fire-retarding foam and various industrial processes. There are currently no federal regulations on the production, monitoring, or release of the PFAS class of about 4,700 chemicals.

Perfluorooctanesulfonic acid (PFOS) and Perfluorooctanoic acid (PFOA), two PFAS substances, are extremely persistent in soil and water, and are resistant to typical environmental degradation processes due to their low volatility and ionic nature. Short-chain PFASs are widely used as alternatives to long-chain PFASs. The limited but growing data on these newer chemicals indicate that they are of similar structure, are equally persistent in the environment, and behave in similar fashion in the human body, particularly at the cellular level.

State Water Resources Control Board (State Water Board) PFAS investigation: The State Water Board is initiating a PFAS Phased Investigation Plan, under which staff will be doing investigative reporting to identify where toxic hot spots may be in California for PFOS/PFOA contamination. Staff will then conduct groundwater testing to see whether PFAS contamination has impacted drinking water supplies. The State Water Board recognizes the potential for possibly regulating PFASs as a class, and is considering requesting a public health goal from OEHHA, consideration of a maximum contaminant level (MCL), and potential response strategies to PFAS detections.

AB 841: This bill complements the state's currently planned efforts on PFAS by requiring OEHHA to further its understanding of PFAS contamination in our drinking water sources. It requires OEHHA to develop a work plan to assess which PFAS substances should be identified as a potential risk to human health and evaluate whether any other PFAS substance is a candidate for nonregulatory Notification Level established by the State Water Board.

While there is a great deal of scientific literature on PFOS and PFOA, the other chemicals in the PFAS class are not as widely characterized, and some may not be characterized at all. This bill recognizes it is important to address these substances as a group and acknowledges that there may be gaps in information on some, and a need to prioritize understanding on others based on prevalence of usage or potential risk for pollution in California.

According to the Author:

"Perfluoroalkyl or polyfluoroalkyl (PFAS) are synthetic chemicals with a variety of uses, including, but not limited to, nonstick pans, waterproof clothing, and firefighting foam. Due to the many military bases throughout California and the many wildfires that have devastated the state, PFAS chemicals have been found in our water systems because of the widespread use of firefighting foam … This bill requires the Office of Environmental Health Hazard Assessment (OEHHA) to adopt a work plan to determine which substances within the class of PFAS chemicals should be assessed as a risk to human health and whether or not notification levels should be adopted."

Arguments in Support:

The California Association of Professional Scientists (CAPS) state, "Water is California's most precious resource. Water quality is a concern for all bodies of freshwater, both surface water and groundwater, and depends on a variety of chemical and biological factors. CAPS feels it is a good idea to require the OEHHA to adopt a work plan to determine which substances within the class of PFAS chemicals should be assessed as a risk to human health and whether or not notification levels should be adopted."

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

According to the Assembly Appropriations Committee, enactment of this bill could result in annual ongoing costs to OEHHA of $386,000 for staff toxicologists and $175,000 for contracts, testing and equipment (General Fund). The State Water Board costs are absorbable within existing resources.

VOTES:

ASM ENVIRONMENTAL SAFETY AND TOXIC MATERIALS: 8-0-1

YES: Quirk, Melendez, Bloom, Bauer-Kahan, Cristina Garcia, Holden, Mathis, Muratsuchi

ABS, ABST OR NV: Dahle

ASM APPROPRIATIONS: 18-0-0

YES: Gonzalez, Bigelow, Bloom, Bonta, Brough, Calderon, Carrillo, Chau, Diep, Eggman, Fong, Gabriel, Eduardo Garcia, Maienschein, Obernolte, Petrie-Norris, Quirk, Robert Rivas

UPDATED:

VERSION: March 20, 2019

CONSULTANT: Paige Brokaw / E.S. & T.M. / (916) 319-3965 FN: 0000546

Date of Hearing: April 24, 2019

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 841

Author:(Ting) – As Amended Ver:March 20, 2019

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Office of Environmental Health Hazard Assessment (OEHHA) to annually assess perfluoroalkyl and polyfluoroalkyl (PFAS) substances in drinking water.

Specifically, this bill:

1. Requires OEHHA to adopt a work plan, by January 1, 2021, to assess which in the class of PFAS substances should be identified as a potential risk to human health, taking into account which substances have the potential to be detected in California waters, as specified.
2. Requires OEHHA to provide annual updates to the Legislature on its preliminary assessments in the work plan.
3. Requires OEHHA to determine which of the PFAS substances are appropriate candidates for notification levels (NLs) to be adopted by the State Water Resources Control Board (State Water Board) in accordance with current law.
4. Requires OEHHA to coordinate with the State Water Board to collect water monitoring data on PFASs, as provided by the federal Unregulated Contaminant Monitoring Rule (UCMR) or the State Water Board’s investigative authority.

FISCAL EFFECT:

1. Annual ongoing costs to OEHHA of $386,000 (2 PY) for staff toxicologists and $175,000 for contracts, testing and equipment (General Fund).
2. State Water Board costs are absorbable within existing resources.

COMMENTS:

1. Purpose. According to the author:

Perfluoroalkyl or polyfluoroalkyl (PFAS) as synthetic chemicals with a variety of uses, including, but not limited to, nonstick pans, waterproof clothing, and firefighting foam. Due to the many military bases throughout California and the many wildfires that have devastated the state, PFAS chemicals have been found in our water systems because of the widespread use of firefighting foam … This bill requires the Office of Environmental Health Hazard Assessment (OEHHA) to adopt a work plan to determine which substances within the class of PFAS chemicals should be assessed as a risk to human health and whether or not notification levels should be adopted.

1. Background. PFASs are a group of human-made chemicals that have been synthesized for heat, water and lipid resistance. They have been used extensively in consumer products such as carpets, clothing, fabrics for furniture, paper packaging for food and other materials (e.g., cookware) designed to be waterproof, stain-resistant or non-stick. In addition, they have been used in fire-retarding foam and various industrial processes.

Perfluorooctanoic acid (PFOA) and Perfluorooctanesulfonic acid (PFOS) are the most studied PFAS chemicals and have been voluntarily phased out by industry, though they are still persistent in the environment. There are many other PFAS, including GenX chemicals (a mixture of the fluorochemicals) and perfluorobutane (PFBS) in use throughout our economy.

Certain PFAS can accumulate and stay in the human body for long periods of time. There is evidence that exposure to PFAS can lead to adverse health outcomes. If humans, or animals, ingest PFAS (by eating food or drinking water than contains PFAS), the PFAS are absorbed, and can accumulate in the body. PFAS stay in the human body for long periods of time. As a result, as people get exposed to PFAS from different sources over time, the level of PFAS in their bodies may increase to the point where they suffer from adverse health effects.

There are currently no federal regulations on the production, monitoring or pollution of the PFAS class of about 4,700 chemicals manufactured and used in a wide variety of industries and products.

To date, both the US EPA and the State Water Board have looked at collecting detection data on two PFAS substances, but there is a case to be made for addressing the substances as a whole class.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: March 26, 2019

ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS

Bill Quirk, Chair

ABPCA Bill Id:AB 841 (

Author:Ting) – As Amended Ver:March 20, 2019

SUBJECT: Drinking water: contaminants: perfluoroalkyl and polyfluoroalkyl substances

SUMMARY: Requires the Office of Environmental Health Hazard Assessment (OEHHA) to assess perfluoroalkyl and polyfluoroalkyl (PFAS) substances in drinking water. Specifically, this bill:

1. Requires, on or before January 1, 2021, OEHHA to adopt a work plan to assess which substances in the class of PFAS substances should be identified as a potential risk to human health, taking into account which substances have the potential to be detected in California waters based on prevalence of manufacturing of, manufacturing products with, or use of a PFAS substance in California, and which substances are technologically feasible to detect based on current detection methodologies.
2. Requires, on or before January 1, 2022, OEHHA to provide an update to the Legislature on its preliminary assessments included in the work plan.
3. Requires OEHHA to continue to annually assess PFAS substances as information, scientific research, and detection methodologies become available.
4. Requires OEHHA, as part of the assessments, to determine which of the PFAS substances are appropriate candidates for notification levels (NLs) to be adopted by the State Water Resources Control Board (State Water Board) in accordance with current law.
5. Authorizes OEHHA to use scientific data and research from other state or federal agencies and authoritative bodies that have scientific literature on PFAS substances.
6. Requires OEHHA to coordinate with the State Water Board to collect water monitoring data on PFASs, as provided by the federal Unregulated Contaminant Monitoring Rule (UCMR), or the State Water Board’s investigative authority.

EXISTING LAW:

1. Requires, pursuant to the federal Safe Drinking Water Act (SDWA) and California SDWA, drinking water to meet specified standards for contamination (maximum contaminant levels, or MCLs) as set by the United States Environmental Protection Agency (US EPA) or the State Water Board. (Health & Safety Code (HSC) § 116270, et seq.)
2. Requires the US EPA to establish criteria for a program to monitor unregulated contaminants and publish a list of up to 30 contaminants to be monitored every five years, known as the federal Unregulated Contaminant Monitoring Rule (UCMR). (42 United States Code § 300(f))
3. Requires a public water system, within 30-days of detection of a contaminant in exceedance of an MCL, notification level (NL), or a response level, to provide notification to its governing body of the detection. (HSC § 116455)
4. Establishes the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. (Water Code § 106.3)

FISCAL EFFECT: Unknown.

COMMENTS:

Need for the bill: According to the author, "Perfluoroalkyl or polyfluoroalkyl (PFAS) as synthetic chemicals with a variety of uses, including, but not limited to, nonstick pans, waterproof clothing, and firefighting foam. Due to the many military bases throughout California and the many wildfires that have devastated the state, PFAS chemicals have been found in our water systems because of the widespread use of firefighting foam … This bill requires the Office of Environmental Health Hazard Assessment (OEHHA) to adopt a work plan to determine which substances within the class of PFAS chemicals should be assessed as a risk to human health and whether or not notification levels should be adopted."

Regulating water quality: Water is California’s most precious resource. With a growing population of more than 39 million people, a limited supply of fresh water, and a range of impacts on both terrestrial and marine habitats and resources, the protection of water for beneficial uses is of paramount concern for all Californians. Water quality is a concern for all bodies of freshwater, both surface water and groundwater, and depends on a variety of chemical and biological factors regulated by a number of local, state, and federal agencies.

Risks to human health and the environment are managed by federal and state standards for permissible levels of certain contaminants, known as MCLs. The State Water Board adopts MCLs for contaminants, which are health protective drinking water standards to be met by public water systems. MCLs take into account not only a contaminant’s health risks but also factors such as its detectability and treatability, as well as costs of treatment.

A drinking water contaminant's MCL is required to be established at a level as close to its public health goal (PHG) as is technologically and economically feasible, placing primary emphasis on the protection of public health. A PHG, which is established by OEHHA, is the level of a contaminant in drinking water that does not pose a significant risk to health. The process for establishing a PHG for a contaminant in drinking water is very rigorous. OEHHA scientists first compile all relevant scientific information available and perform health risk assessments in which they determine the levels of the contaminant in drinking water that could be associated with various adverse health effects. The State Water Board then goes through a lengthy, public regulatory process to develop the PHG into an MCL.

The State Water Board has an MCL for about 100 chemicals, all of which have a PHG.

In addition, the State Water Board has NLs, which are health-based advisory levels for contaminants in drinking water that do not have an MCL. When chemicals are found at concentrations greater than their NLs, certain requirements and recommendations apply. The level at which the State Water Board's Division of Drinking Water (DDW) recommends removal of a drinking water source from service is called the "response level."

Since the early 1980s, NLs for 93 contaminants have been established. Of those, 40 have gone through the formal regulatory process and now have MCLs.

Currently there are 29 contaminants with NLs. In addition, another 24 contaminants have archived advisory (notification) levels.

There are tens of thousands of additional chemicals and constituents that do not have an MCL or a NL and that we do not have enough information about to determine whether those constituents have a human health or environmental impact.

Perfluoroalkyl and polyfluoroalkyl substances, also known as PFAS chemicals: First, the chemistry: PFASs are a class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom. A chemical is called a polyfluoroalkyl substance if hydrogen atoms on at least one of the carbon atoms have been replaced by fluorine atoms. If all of the hydrogen atoms attached to carbon atoms are replaced by fluorine atoms, the chemical is called a perfluoroalkyl substance.

Now, layperson’s terms: PFASs are a group of man-made chemicals that have been synthesized for heat, water, and lipid resistance. They have been used extensively in consumer products such as carpets, clothing, fabrics for furniture, paper packaging for food, and other materials (e.g., cookware) designed to be waterproof, stain-resistant, or non-stick. In addition, they have been used in fire-retarding foam and various industrial processes.

There are currently no federal regulations on the production, monitoring, or pollution of the PFAS class of about 4,700 chemicals, which are manufactured and used in a wide variety of industries and products.

Perfluorooctanoic acid (PFOA), most commonly known as the chemical used to produce Teflon, and perfluorooctanesulfonic acid (PFOS), formerly used in Scotchgard, are "long-chain" chemicals, meaning they have six (for perfluoroalkyl sulfonic acids) or seven (for perfluoroalkyl carboxylic acids) or more carbon molecules. They are part of the PFASs group of substances, and are well-characterized in scientific literature.

PFOS and PFOA are extremely persistent in soil and water, and are resistant to typical environmental degradation processes due to their low volatility and ionic nature. PFOA and PFOS are bioaccumulative and highly persistent in human and animal tissues. Based on the currently available, peer-reviewed studies on laboratory animals and epidemiological evidence in human populations, the United States Environmental Protection Agency (US EPA) released the following statement:

"These studies indicate that exposure to PFOA and PFOS over certain levels may result in adverse health effects, including developmental effects to fetuses during pregnancy or to breastfed infants (e.g., low birth weight, accelerated puberty, skeletal variations), cancer (e.g., testicular, kidney), liver effects (e.g., tissue damage), immune effects (e.g., antibody production and immunity), thyroid effects and other effects (e.g., cholesterol changes)."

From 2005-2013, a science panel carried out exposure and health studies in the Mid-Ohio Valley communities, which had been potentially affected by the releases of PFOA emitted since the 1950s from the Washington Works plant in Parkersburg, West Virginia. The data, based on a study of 69,000 people living near a West Virginia DuPont plant, indicate exposure is associated with kidney cancer, testicular cancer, thyroid disease, high cholesterol, and ulcerative colitis, among other problems, while animal studies show delays in development.

Between 2000 and 2002, PFOS was voluntarily phased-out of production in the U.S. by its primary manufacturer, 3M. Beginning in 2006 other manufacturers began to voluntarily limit the number of ongoing uses. However, manufacturers are developing replacement technologies in the PFAS family, including reformulating/substituting longer-chain substances with shorter-chain substances. PFOA and PFOS are largely being phased out of many consumer products, and being replaced with other PFASs.

Short-chain PFASs are widely used as alternatives to long-chain PFASs. The limited but growing data on these newer chemicals indicate that they are of similar structure, are equally persistent in the environment, and behave in similar fashion in the human body, particularly at the cellular level.

PFASs accumulate in protein-rich compartments such as blood, liver, and kidney cells. Early studies found that bioaccumulation of PFASs were shown to depend on carbon chain length, and found increases in bioconcentration factors and half-lives with increasing perfluoroalkyl chain length in rainbow trout (Martin et al., 2003).

However, newer science continues to inform our understanding. The Scientific Guidance Panel (Panel), a panel of expert scientists from outside of state government that provide scientific advice to OEHHA on the state’s Biomonitoring program, found that, "Given the wide range of new PFASs, many more replacement chemicals, precursors, or breakdown products might also be detected in human blood or other biological samples." The Panel recommended including the PFAS class as designated chemicals for Biomonitoring California, a state program to test people for chemical exposure.

Polyfluorinated compounds are often referred to as "precursors" to the perfluoroalkyl acids (PFAAs), as they biotransform to PFAAs as dead end environmental products.  Examples can be seen in biological waste water treatment plants, where significantly more PFOA and PFOS are measured at the outflow than the inflow. The increase is explained by the fact that many PFAS compounds enter the sewage treatment plant uncharacterized and are biotransformed to PFAAs of various chain lengths with PFOS and PFOA often being the only analytes assessed.

According to the 2011 paper published in Environmental Toxicology and Chemistry, Strong Associations of Short-Chain Perfluoroalkyl Acids with Serum Albumin and Investigation of Binding Mechniams, Heather Bischel concluded, "Association constants determined for perfluorobutanesulfonate and perfluoropentanoate with bovine serum albumin (BSA) are on the order of those for long-chain PFAAs, suggesting that physiological implications of strong binding to albumin may be important for short-chain PFAAs." In other words, bioaccumulation of short chain PFASs are similar to that of long chain PFASs.

The US National Library of Medicine National Institutes of Health wrote in a paper on short-chain PFASs that short-chain PFASs are as persistent as long-chain PFASs yet have different, but not less alarming properties of concern, and are already widely distributed in the environment. It concluded that "Due to an increasing use of short-chain PFASs, an effective regulation is urgently needed."

State drinking water monitoring and notification levels: In response to a request from the State Water Board's DDW, OEHHA recommended interim NLs for PFOA (based on liver toxicity, as well as cancer risks) and for PFOS (based on immunotoxicity). OEHHA made these recommendations following its review of currently available health-based advisories, standards, and supporting documentation.

On July 13, 2018, under the authority of the Deputy Director of DDW, California issued drinking water NLs of 14 parts per trillion (ppt) for PFOA and 13 ppt for PFOS.

Generally, NLs are established as precautionary measures for contaminants that may be considered candidates for establishment of MCLs, but have not yet undergone or completed the regulatory standard setting process prescribed for the development of MCLs and are not drinking water standards.

The establishment of a NL does not require public water systems to monitor for the contaminant, except when the water systems are subject to the recycled water regulations.

Monitoring for NL is not mandatory. But, response to an exceedance of a NL is only required for those water systems who volunteer to monitor.

Public water systems that monitor for PFOA and PFOS NLs that find an exceedance must comply with the statute's notification requirements. Those notification requirements, per HSC § 116455, require timely notification by drinking water systems when a NL is exceeded in drinking water that is provided to consumers.

The level prompting a recommendation for source removal is the "response level," and depends upon the toxicological endpoint that is the basis for the NL.

The State Water Board uses the data collected from the NLs as more a qualitative review of how many systems, and thus, how many people are impacted by the contaminant. While a NL is not a precursor to an MCL, if the pollution is broad enough and cannot be addressed in other ways, then seeking a regulatory limit via an MCL could be warranted.

The State Water Board’s DDW has some limited authority to order testing for NLs based on a potential threat to the public. Currently, they are working to gather information along this line in order to exercise this authority. Current data show 18 water sources have exceeded the PFOA NL and 25 water sources have exceeded the PFOA NL.

Federal drinking water monitoring and notification: In May 2016, the US EPA issued a lifetime health advisory for PFOS and PFOA for drinking water, advising municipalities that they should notify their customers of the presence of levels greater than 70 ppt in community water supplies. The US EPA recommended that the notification of customers include information on the increased risk to health, especially for sensitive populations.

The US EPA's health advisories are non-enforceable, non-regulatory, and provide technical information to states' agencies and other public health officials on health effects, analytical methodologies, and treatment technologies associated with drinking water contamination.

The US EPA uses the Unregulated Contaminant Monitoring Rule (UCMR) to collect data for contaminants suspected to be present in drinking water, but that do not have health-based standards set under the federal SDWA.

From 2013 to 2015, the US EPA, under the UCMR, required all large water systems (i.e., water systems serving more than 10,000 people) to collect and analyze more than 12,000 drinking water samples for PFOS and PFOA. In addition, some water systems serving fewer than 10,000 people reported approximately 400 drinking water results for PFOS and PFOA. Under the UCMR, the US EPA required laboratories to use EPA Method 537 v1.1 to analyze for six perfluorinated compounds. At that time, the minimum reporting levels for PFOS and PFOA were 0.04 μg/L and 0.02 μg/L, respectively.

The occurrence data that were reported identified 133 UCMR detections in California. Water utilities with the highest concentrations of PFAS chemicals have been publicly identified: 21 are in California, but the names of those systems with detectable PFAS chemical contamination between 10- to 90-ppt (levels less than the US EPA’s reporting thresholds) were not released.

In California, there are data for 47 large public water systems – mostly in southern California – which submitted test results for PFOA.

Environmental Working Group (EWG) findings: EWG contracted with Eurofins Eaton Analytical to analyze a third of the nationwide samples submitted to the US EPA and found that 28% of the water utilities it tested contained PFAS chemicals (includes PFOA and PFOS) at concentrations in exceedance of 5 ppt. Independent scientific assessments found that levels in many water systems are "at least two orders of magnitude" higher than what the US EPA advises is safe, but EWG calculates that up to 110 million Americans could have PFASs in their water.

Looking at PFAS substances as a class: To date, both the US EPA and the State Water Board have looked at collecting detection data on two PFAS substances, but there is a case to be made for addressing the substances as a whole class.

At the joint legislative hearing with this committee and Senate Environmental Quality Committee on February 12, 2019, on California’s Green Chemistry Program, this committee asked DTSC about its efforts to address PFAS chemicals in carpets and rugs as it relates to short chains or long chains.

Dr. Meredith Williams, Acting Director, DTSC, explained that DTSC is looking at all chain lengths as they look at the chemicals in the class of PFAS chemicals. She testified, "There’s a reason for that. We have a shorthand expression that’s 'all roads lead to perfluoroalkyl acids.' That is the subset of the PFAS family that is the most well-characterized and most well understood to have toxic effects. At the same time, if you look at the other sub classes, they either degrade to PFASs or PFASs are used to manufacture them … there are these interconnections between the chemicals in the class. Our concern about the PFASs was enough for us to say we are confident to look at these chemicals as a whole class. The distinction between the long chains and the shorter chains is, in some ways, arbitrary. The long chains are well characterized, and that’s why people know about them. It’s not that the others are safer, necessarily. It’s just that they haven’t been as widely characterized … If you look at the constant exposure, because [PFAS chemicals] are [so ubiquitous], they are going to be in people’s systems at any given time."

In September 2018, a consortium of environmental and public health groups sent a letter to the State Water Board stating that "while there is limited toxicity data on many of the newer "short-chain" PFASs replacing PFOA and PFOS in various applications, evidence is growing quickly that they collectively pose similar threats to human health and the environment. As Scheringer, et.al. warned in 2014, "The levels of some fluorinated alternatives or their degradation products, such as perfluorobutane sulfonic acid (PFBS) or perfluorobutanoic acid (PFBA), have been shown to be rising in recent years in the environment and human tissues in Europe." This, and concerns with the environmental fate and persistence of short-chain alternative PFASs have led to a call from independent scientists from around the globe to address PFAS as a class both in terms of their impacts and in limiting their uses."

The letter continues by suggesting drinking water should be monitored for the class of chemicals, not just the two individual chemicals for which the State Water Board has issued NLs. The State Water Board has, in fact, regulated multiple drinking water contaminants as a class, including trihalomethanes, haloacetic acids, and dioxin.

Lastly, the Panel that provides guidance to OEHHA on biomonitoring recommended that the entire class of PFASs be added to the list of designated chemicals for Biomonitoring California. The Panel recognizes that listing this broad group would give the Biomonitoring Program the flexibility to choose new PFASs of potential health concern that would be appropriate to measure in response to market shifts. OEHHA, heeding that guidance, plans to evaluate new assays for toxicological evaluations of other PFAS substances as they understand whether these substances perturb the function of a cell or cellular components in the same manner as anchor chemicals. OEHHA acknowledges that it is likely that the 5,000 or so PFAS substances have similar or overlapping toxicological profiles.

State Water Board workshop on PFASs: On March 6, 2019, the State Water Board held a public meeting for federal and state agencies and non-governmental organizations to present information to the State Water Board and public on PFAS substances, potential sources, and potential risks to drinking water.

The US EPA started the meeting with a presentation explaining that, after drinking water tests showed dangerously high levels of PFASs in communities around the United States, particularly around military bases and fire stations, the US EPA, under the Obama Administration in 2016, proposed creating a national standard for limiting the levels in drinking water of two of the most prevalent varieties of PFAS chemicals, PFOA and PFOS.

The US EPA has a PFAS Action Plan, under which it is evaluating whether to regulate the broader class of PFAS chemicals. The next UCMR (version 5) proposes to include all PFASs.

The State Water Board announced that it is initiating a PFAS Phased Investigation Plan (Plan), under which staff will be doing investigative reporting to identify where toxic hot spots may be in California for PFOS/PFOA contamination, and then will conduct testing to see whether the contamination has impacted the drinking water supplies. Phase I of the Plan includes sampling at 31 airports, 578 drinking water wells (2-mile radius of each), 252 municipal solid waste landfills, another 353 drinking water wells (1-mile radius of each), and 389 impacted drinking water sources and adjacent small water systems. Testing results from Phase I are expected in September of this year. Phase II of the plan will include source investigation and nearby drinking water well sampling at primary manufacturing facilities, refineries, bulk terminals, and non-airport fire training areas.

Looking ahead to 2020, the State Water Board recognizes the potential for adjusting the existing NLs and/or establishing new NLs for additional contaminants, potentially regulating PFASs as a class, requesting a PHG from OEHHA, consideration of an MCL or MCLs, and, potential response strategies to PFAS detections.

Which brings us to AB 841: This bill complements the state’s currently planned efforts and requires OEHHA to further its understanding of PFAS contamination in our drinking water sources. It requires OEHHA to develop a work plan to assess which PFAS substances should be identified as a potential risk to human health and evaluate whether any other PFAS substance is a candidate for a NL.

While there is a great deal of scientific literature on PFOS and PFOA, the other chemicals in the PFAS class are not as widely characterized, and some may be uncharacterized at all. AB 841 recognizes it is important to address these substances as a group and acknowledges that there may be gaps in information on some, and a need to prioritize understanding on others based on prevalence of usage or potential risk for pollution in California.

This bill requires OEHHA’s work plan to consider the PFASs used in California, which would eliminate a PFAS from the work plan if it is not manufactured in, manufactured with, or used in products or any industrial applications in California. The bill also requires the work plan to consider what is technologically feasible to detect. Lastly, the work plan authorizes OEHHA to use scientific literature from other authoritative institutions, and coordinate with the State Water Board, which is also trying to better understand the prevalence of PFASs using water testing data.

There are some sections of the bill where drafting could be cleaned up. For example, in § 116365.3 (e), the bill could be amended to clarify that OEHHA will not coordinate with the State Water Board to collect water monitoring data, rather that OEHHA could coordinate with the State Water Board to review the water monitoring data that is being collected pursuant to the UCMR and NLs, which could augment and inform OEHHA’s research.

The author may wish to consider working with OEHHA to further refine how OEHHA should accomplish this task. For instance, prioritizing which substances to assess in the work plan will take quite of bit of investigative work for OEHHA, and OEHHA may not have access to information regarding which PFASs are involved in manufacturing or manufacturing products, as this information may be protected as confidential business information. Also, given the workload, the author may wish to work with OEHHA on appropriate deadlines for completing the assessments.

Related legislation:

1. AB 756 (C. Garcia). Would require a public water system to monitor for PFAS substances and require a public water system to provide notification to customers when there is a detected exceedance of the NL for PFOA or PFOS. It will be heard in the Assembly Environmental Safety & Toxic Materials committee on March 26.
2. AB 958 (Ting, 2017). Would have required food packaging and cookware to be labelled if it contains a PFAS substance. It was held in the Senate Environmental Quality Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Educate. Advocate.
Empower Family California

Opposition

None on file.

Analysis Prepared by: Paige Brokaw / E.S. & T.M. /