AB 3121: Public utilities: incentive programs.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2024-08-28
Current Status:
Failed
(2024-08-30: In committee: Set, first hearing. Hearing canceled at the request of author.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law establishes the Multifamily Affordable Housing Solar Roofs Program. Existing law requires the Public Utilities Commission (PUC), as part of the program, to authorize the award of monetary incentives for qualifying solar energy systems, as defined, that are installed on multifamily residential properties of at least 5 rental housing units that are operated to provide deed-restricted low-income residential housing, as defined, and that meet one or more specified requirements, as provided. Existing law requires the PUC to annually authorize the allocation of $100,000,000 or 66.67% of available funds, whichever is less, beginning with the fiscal year commencing July 1, 2016, and ending with the fiscal year ending June 30, 2020, to the program from certain greenhouse gas allowance revenues received by electrical corporations and set aside for clean energy and energy efficiency projects, as provided. Existing law requires the PUC to continue authorizing the allocation of these funds through June 30, 2026, if the PUC determines that revenues are available after 2020 and that there is adequate interest and participation in the program. Existing law requires the PUC to evaluate the program every 3 years and requires the PUC to make necessary adjustments to the program to ensure that the goals of the program are being met, as specified. Existing law authorizes the PUC to credit uncommitted funds back to ratepayers if the PUC, upon review, finds that there is insufficient participation in the program.
This bill would require the PUC to credit no more than 1/2 of the program funds that are unencumbered as of January 1, 2025, back to the residential retail customers of electrical corporations, as specified.
Existing law states the intent of the Legislature that the self-generation incentive program increase the deployment of distributed generation and energy storage systems to facilitate, among other things, the integration of those resources into the electrical grid. Existing law authorizes the PUC, in consultation with the State Energy Resources Conservation and Development Commission (Energy Commission) and until December 31, 2024, to authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in 2008. Existing law requires the PUC to administer the self-generation incentive program until January 1, 2026. Existing law requires the PUC, on January 1, 2026, to provide repayment of all unallocated funds collected to reduce ratepayer costs.
This bill would additionally require the PUC, on January 1, 2025, to initiate a process to provide repayment to residential customers of all unreserved funds as of January 1, 2025, that were collected to reduce ratepayer costs.
Existing law requires the PUC to require those electrical corporations with 250,000 or more customer accounts in the state, and those gas corporations with 400,000 or more customer accounts in the state, to establish the joint School Energy Efficiency Stimulus Program within each of their energy efficiency portfolios and to file a joint advice letter by February 1, 2021, to fund the program as part of each of their energy efficiency portfolios. Existing law requires that the School Energy Efficiency Stimulus Program be a joint program among all the participating utilities, be consistent across the utility territories, and be designed, administered, and implemented by the Energy Commission as the program administrator. Existing law requires all allocated funds to be spent or returned to the electrical corporation or gas corporation by December 1, 2026. Existing law authorizes the Energy Commission to set application and encumbrance deadlines to ensure that the reversion of funds occurs by December 1, 2026.
This bill instead would set the application deadline for program funds as July 1, 2024, and would require any funds remaining as of that date to be returned to the electrical corporation or gas corporation and distributed to residential customers as a bill credit, as determined by the PUC. The bill would require all allocated funds that are not spent by December 1, 2026, to be returned to the electrical corporation or gas corporation and distributed to residential customers as a bill credit, as determined by the PUC.
Under existing law, a violation of the Public Utilities Act or an order, decision, rule, direction, demand, or requirement of the PUC is a crime.
Because certain of the above-described provisions would be part of the act and a violation of a PUC action implementing this bills requirements would be a crime, the bill would impose a state-mandated local program.
This bill would incorporate additional changes to Section 2870 of the Public Utilities Code proposed by SB 1118 to be operative only if this bill and SB 1118 are enacted and this bill is enacted last.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
(1)Existing law authorizes the State Water Resources Control Board, on and after January 1, 2024, to issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2025, to issue a written notice to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2026, to issue a conservation order to an urban retail water supplier that does not meet its urban water use objective.This bill would instead provide that the date the board is authorized to issue informational orders is on or after January 1, 2026, the date to issue a written notice is on or after January 1, 2027, and the date to issue a conservation order is on or after January 1, 2028, respectively.(2)Existing law requires, on or before January 10, 2024, the Legislative Analyst to provide a report to the appropriate policy committees of both houses of the Legislature and the public evaluating the implementation of the water use efficiency standards and water use reporting.This bill would require the Legislative Analyst to provide a report as described above on or before January 10, 2028.(1)Existing law authorizes the State Water Resources Control Board, on and after January 1, 2024, to issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2025, to issue a written notice to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2026, to issue a conservation order to an urban retail water supplier that does not meet its urban water use objective.
This bill would instead provide that the date the board is authorized to issue informational orders is on or after January 1, 2026, the date to issue a written notice to is on or after January 1, 2026 2027, and the date to issue a conservation order to is on or after January 1, 2027. 2028, respectively.
(2)Existing law requires, on or before January 10, 2024, the Legislative Analyst to provide a report to the appropriate policy committees of both houses of the Legislature and the public evaluating the implementation of the water use efficiency standards and water use reporting.
This bill would require the Legislative Analyst to provide a report as described above on or before January 10, 2028.
Existing law authorizes the State Water Resources Control Board, on and after January 1, 2025, to issue a written notice to an urban retail water supplier that does not meet its urban water use objective. Existing law authorizes the board, on and after January 1, 2026, to issue a conservation order to an urban retail water supplier that does not meet its urban water use objective.
This bill would instead provide that the date the board is authorized to issue a written notice to January 1, 2026 and a conservation order to January 1, 2027.
(a)(1)It is the intent of the Legislature that the self-generation incentive program increase deployment of distributed generation and energy storage systems to facilitate the integration of those resources into the electrical grid, improve efficiency and reliability of the distribution and transmission system, and reduce emissions of greenhouse gases, peak demand, and ratepayer costs. It is the further intent of the Legislature that the commission, in future proceedings, provide for an equitable distribution of the costs and benefits of the program.
(2)The commission, in consultation with the Energy Commission, may authorize the annual collection of not more than double the amount authorized for the self-generation incentive program in the 2008 calendar year, through December 31, 2024. The commission shall require the administration of the program for distributed energy resources originally established pursuant to Chapter 329 of the Statutes of 2000 until January 1, 2026. On January 1, 2025, the commission shall initiate a process to provide repayment only to residential customers of all unreserved funds as of January 1, 2025, that were collected pursuant to this section to reduce ratepayer costs. On January 1, 2026, the commission shall provide repayment of all unallocated funds collected pursuant to this section to reduce ratepayer costs.
(b)(1)Eligibility for incentives under the self-generation incentive program that are funded through the annual collection authorized pursuant to paragraph (2) of subdivision (a) shall be limited to distributed energy resources that the commission, in consultation with the State Air Resources Board, determines will achieve reductions in emissions of greenhouse gases pursuant to the California Global Warming Solutions Act of 2006 (Division 25.5 (commencing with Section 38500) of the Health and Safety Code).
(2)On or before July 1, 2015, the commission shall update the factor for avoided greenhouse gas emissions based on both the most recent data available to the State Air Resources Board for greenhouse gas emissions from electricity sales in the self-generation incentive program administrators service areas and current estimates of greenhouse gas emissions over the useful life of the distributed energy resource, including consideration of the effects of the California Renewables Portfolio Standard.
(3)The commission shall adopt requirements for energy storage systems to ensure that eligible energy storage systems reduce the emissions of greenhouse gases.
(c)Eligibility for the funding of any combustion-operated distributed generation projects using fossil fuel is subject to all of the following conditions:
(1)An oxides of nitrogen (NOx) emissions rate standard of 0.07 pounds per megawatthour and a minimum efficiency of 60 percent, or any other NOx emissions rate and minimum efficiency standard adopted by the State Air Resources Board. A minimum efficiency of 60 percent shall be measured as useful energy output divided by fuel input. The efficiency determination shall be based on 100-percent load.
(2)Combined heat and power units that meet the 60-percent efficiency standard may take a credit to meet the applicable NOx emissions standard of 0.07 pounds per megawatthour. Credit shall be at the rate of one megawatthour for each 3,400,000 British thermal units (Btus) of heat recovered.
(3)The customer receiving incentives shall adequately maintain and service the combined heat and power units so that during operation the system continues to meet or exceed the efficiency and emissions standards established pursuant to paragraphs (1) and (2).
(4)Notwithstanding paragraph (1), a project that does not meet the applicable NOx emissions standard is eligible if it meets both of the following requirements:
(A)The project operates solely on waste gas. The commission shall require a customer that applies for an incentive pursuant to this paragraph to provide an affidavit or other form of proof that specifies that the project shall be operated solely on waste gas. Incentives awarded pursuant to this paragraph shall be subject to refund and shall be refunded by the recipient to the extent the project does not operate on waste gas. As used in this paragraph, waste gas means natural gas that is generated as a byproduct of petroleum production operations and is not eligible for delivery to the utility pipeline system.
(B)The air quality management district or air pollution control district, in issuing a permit to operate the project, determines that operation of the project will produce an onsite net air emissions benefit compared to permitted onsite emissions if the project does not operate. The commission shall require the customer to secure the permit before receiving incentives.
(d)In determining the eligibility for the self-generation incentive program, minimum system efficiency shall be determined either by calculating electrical and process heat efficiency as set forth in Section 216.6, or by calculating overall electrical efficiency.
(e)Eligibility for incentives under the self-generation incentive program shall be limited to distributed energy resource technologies that the commission determines meet all of the following requirements:
(1)The distributed energy resource technology shifts onsite energy use to off-peak time periods or reduces demand from the grid by offsetting some or all of the customers onsite energy load, including, but not limited to, net peak electric load.
(2)The distributed energy resource technology is commercially available.
(3)The distributed energy resource technology safely uses the existing transmission and distribution system.
(4)The distributed energy resource technology improves air quality by reducing criteria air pollutants.
(f)Recipients of the self-generation incentive program funds shall provide relevant data to the commission and the State Air Resources Board, upon request, and shall be subject to onsite inspection to verify equipment operation and performance, including capacity, thermal output, and usage to verify criteria air pollutant and greenhouse gas emissions performance.
(g)In administering the self-generation incentive program, the commission shall determine a capacity factor for each distributed generation system energy resource technology in the program.
(h)(1)In administering the self-generation incentive program, the commission may adjust the amount of incentives and evaluate other public policy interests, including, but not limited to, ratepayers, energy efficiency, peak load reduction, load management, and environmental interests.
(2)The commission shall consider the relative amount and the cost of greenhouse gas emissions reductions, peak demand reductions, system reliability benefits, and other measurable factors when allocating program funds between eligible technologies.
(i)The commission shall ensure that distributed generation resources are made available in the self-generation incentive program for all ratepayers.
(j)In administering the self-generation incentive program, the commission shall provide an additional incentive of 20 percent from existing program funds for the installation of eligible distributed generation resources manufactured in California.
(k)The costs of the self-generation incentive program shall not be recovered from customers participating in the California Alternate Rates for Energy (CARE) program.
(l)The commission shall evaluate the overall success and impact of the self-generation incentive program based on the following performance measures:
(1)The amount of reductions of emissions of greenhouse gases.
(2)The amount of reductions of emissions of criteria air pollutants measured in terms of avoided emissions and reductions of criteria air pollutants represented by emissions credits secured for project approval.
(3)The amount of energy reductions measured in energy value.
(4)The amount of reductions of customer peak demand.
(5)The ratio of the electricity generated by distributed energy resource generation projects receiving incentives from the self-generation incentive program to the electricity capable of being produced by those projects, commonly known as a capacity factor.
(6)The value to the electrical transmission and distribution system measured in avoided costs of transmission and distribution upgrades and replacement.
(7)The ability to improve onsite electricity reliability as compared to onsite electricity reliability before the self-generation incentive program technology was placed in service.
(m)On and after January 1, 2020, generation technologies using nonrenewable fuels shall not be eligible for incentives under the self-generation incentive program.
SEC. 2.Section 1615 of the Public Utilities Code is amended to read:1615.(a)(1)The commission shall require each utility to fund the School Energy Efficiency Stimulus Program by allocating their energy efficiency budgets for program years 2021, 2022, and 2023, in both of the following amounts:
(A)An amount equal to the applicable percentage of the difference between the budget contained in each utilitys 2020 annual budget advice letter approved as of July 1, 2020, and the annual portfolio funding limitation for program year 2020 as set forth in the 20182025 business plan of each utility as approved and modified in ordering paragraph 45 of the commissions Decision 18-05-041 (May 31, 2019) Decision Addressing Energy Efficiency Business Plans, as modified by Decision 20-02-029 (February 6, 2020) Order Modifying Decision (D.) 18-05-041 and Denying Rehearing of Decision, as Modified. The applicable percentage is 80 percent for program year 2021, 70 percent for program year 2022, and 60 percent for program year 2023.
(B)Any carryover amount from unspent and uncommitted energy efficiency funds for program year 2020, 2021, or 2022 to the School Energy Efficiency Stimulus Program for the following years budget.
(2)Funding allocations required by this subdivision shall only apply to program years 2021, 2022, and 2023.
(3)Any funds allocated towards the School Energy Efficiency Stimulus Program pursuant to this section that remain unspent by the end of each program year may be carried over and contribute to the next years budget for the School Energy Efficiency Stimulus Program until the end of the 2023 energy efficiency program year.
(b)(1)This section does not authorize the levy of a charge or any increase in the amount collected pursuant to an existing charge beyond the amounts authorized by the commission in Decision 18-05-041, or as modified by Decision 20-02-029, nor does it add to, or detract from, any existing authority of the commission to levy or increase charges.
(2)This subdivision does not change the commissions authority to determine revenue allocation and rate design, including its ability to prioritize customers participating in the California Alternative Rates for Energy or Family Electric Rate Assistance programs when considering appropriate revenue allocation for energy efficiency programs.
(c)The Energy Commission shall ensure that moneys from each utility for the School Energy Efficiency Stimulus Program are used for projects located in the service territory of that utility from which the moneys are received.
(d)The Energy Commission may use no more than 5 percent, not to exceed five million dollars ($5,000,000) per year, of the SRVEVR Program and the SNPFA Program funds for administrating the programs, including providing technical support to program participants. The commission shall ensure that funds allocated to the Energy Commission pursuant to this section are transferred to an account specified by the Energy Commission within 60 days after the completion of the prior energy efficiency program year.
(e)(1)The School Energy Efficiency Stimulus Program Fund was administratively established for the Energy Commission to receive funds allocated pursuant to this chapter.
(2)Notwithstanding Section 13340 of the Government Code, the moneys in the School Energy Efficiency Stimulus Program Fund are hereby continuously appropriated to the Energy Commission without regard to fiscal years for the purposes of the School Energy Efficiency Stimulus Program established pursuant to this chapter, including, but not limited to, paying the costs of program administration.
(f)All funds allocated in subdivision (a) shall be spent or returned to each utility by December 1, 2026.(g)The Energy Commission may set application and encumbrance deadlines to ensure that the reversion of funds as required by subdivision (f) occurs by December 1, 2026.(f)The application deadline for program funds shall be July 1, 2024. Any funds remaining as of that date shall be returned to each utility and distributed to residential customers as a bill credit, as determined by the commission.
(g)All funds allocated in subdivision (a) shall be spent by December 1, 2026. Any of this funding that remains on December 1, 2026, shall be returned to each utility and distributed to residential customers as a bill credit, as determined by the commission.
(h)The Energy Commission shall take steps, consistent with Section 25230 of the Public Resources Code, to ensure that a diverse group of contractors are aware of funding opportunities available through the School Energy Efficiency Stimulus Program.
SEC. 3.Section 2870 of the Public Utilities Code is amended to read:2870.(a)As used in this section, the following definitions apply:
(1)CARE program means the California Alternate Rates for Energy program established pursuant to Section 739.1.
(2)Program means the Multifamily Affordable Housing Solar Roofs Program established pursuant to this chapter, which is also known as the Solar on Multifamily Affordable Housing Program.
(3)Qualified multifamily affordable housing property means a multifamily residential property of at least five rental housing units that is, or will be, operated to provide deed-restricted low-income residential housing, as defined in clause (i) of subparagraph (A) of paragraph (3) of subdivision (a) of Section 2852, and that meets one or more of the following requirements:
(A)The property is located in a disadvantaged community, as identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code.
(B)At least 66 percent of the households have incomes at or below 80 percent of the area median income, as defined in subdivision (f) of Section 50052.5 of the Health and Safety Code.
(C)The property is owned by a tribe.
(D)The property is rental housing property that is owned by one of the following:
(i)A public housing authority created pursuant to the Housing Authorities Law (Chapter 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code).
(ii)A public housing agency, as defined in Section 1437a of Title 42 of the United States Code.
(4)Solar energy system means a solar energy photovoltaic device that meets or exceeds the eligibility criteria established pursuant to Section 25782 of the Public Resources Code.
(5)Tribe means a California Native American tribe, as defined in Section 21073 of the Public Resources Code.
(b)(1)Adoption and implementation of the program may count toward the satisfaction of the commissions obligation to ensure that specific alternatives designed for growth among residential customers in disadvantaged communities are offered as part of the standard contract or tariff authorized pursuant to paragraph (1) of subdivision (b) of Section 2827.1.
(2)This section does not preclude electrical corporations from offering and administering a distributed energy resource program, including solar energy systems, in disadvantaged communities offered under current or proposed programs using funds provided under subdivision (c) of Section 748.5 or programs proposed to comply with paragraph (1) as approved by the commission.
(c)The commission shall annually authorize the allocation of one hundred million dollars ($100,000,000) or 66.67 percent of available funds, whichever is less, from the revenues described in subdivision (c) of Section 748.5 for the program, beginning with the fiscal year commencing July 1, 2016, and ending with the fiscal year ending June 30, 2020. The commission shall continue authorizing the allocation of these funds through June 30, 2026, if the commission determines that revenues are available after 2020 and that there is adequate interest and participation in the program. 2026.
(d)The commission shall consider the most appropriate program administration structure, including administration by a qualified third-party administrator, selected by the commission through a competitive bidding process, or administration by an electrical corporation, in an existing or future proceeding.
(e)Not more than 10 percent of the funds allocated to the program shall be used for administration.
(f)(1)By June 30, 2017, the commission shall authorize the award of monetary incentives for qualifying solar energy systems that are installed on qualified multifamily affordable housing properties through December 31, 2032. The target of the program is to install a combined generating capacity of at least 300 megawatts on qualified properties.
(2)The commission shall require that the electricity generated by qualifying renewable energy systems installed pursuant to the program be primarily used to offset electricity usage by low-income tenants. These requirements may include required covenants and restrictions in deeds.
(3)The commission shall require that qualifying solar energy systems owned by third-party owners are subject to contractual restrictions to ensure that no additional costs for the system be passed on to low-income tenants at the properties receiving incentives pursuant to the program. The commission shall require third-party owners of solar energy systems to provide ongoing operations and maintenance of the system, monitor energy production, and, where necessary, take appropriate action to ensure that the kWh production levels projected for the system are achieved throughout the period of the third-party agreement. Those actions may include, but are not limited to, providing a performance guarantee of annual production levels or taking corrective actions to resolve underproduction problems.
(4)The commission shall ensure that incentive levels for photovoltaic installations receiving incentives through the program are aligned with the installation costs for solar energy systems for affordable housing and take account of federal investment tax credits and contributions from other sources to the extent feasible.
(5)The commission shall require that no individual installation receive incentives at a rate greater than 100 percent of the total system installation costs.
(6)The commission shall establish local hiring requirements for the program to provide economic development benefits to disadvantaged communities.
(7)The commission shall establish energy efficiency requirements that are equal to the energy efficiency requirements established for the program described in Section 2852, including participation in a federal, state, or utility-funded energy efficiency program or documentation of a recent energy efficiency retrofit.
(8)For purposes of the new construction of qualified multifamily affordable housing property, moneys authorized through the program shall not be used to meet the requirements of Part 6 (commencing with Section 100) of Title 24 of the California Code of Regulations.
(g)(1)The commission shall ensure that electrical corporation tariff structures affecting the low-income tenants participating in the program continue to provide a direct economic benefit from the qualifying solar energy system.
(2)If units are separately metered, low-income tenants who participate in the program shall receive credits on utility bills from the program. The commission shall ensure that utility bill reductions are achieved through tariffs that allow for the allocation of credits, such as virtual net metering tariffs designed for program participants, or other tariffs that may be adopted by the commission pursuant to Section 2827.1.
(h)This chapter is not intended to supplant CARE program rates as the primary mechanism for achieving the goals of the CARE program.
(i)The commission shall determine the eligibility of qualified multifamily affordable housing property tenants that are customers of community choice aggregators.
(j)The commission may consider authorizing an advance payment loan to an eligible project if there is reasonable evidence to suggest that an advance payment loan would lead to the delivery of a project that would not occur absent the advance payment loan, so long as appropriate funding guarantee and loss recovery mechanisms are implemented to limit the risk of liability to the program from making the advance payment loan. The commission, in considering an advance payment loan, may prioritize allocating funding to a project where an advance payment loan will have the greatest impact on project delivery.
(k)(1)Every three years, the commission shall evaluate the programs expenditures, commitments, uncommitted balances, future demands, performance, and outcomes and shall make any necessary adjustments to the program to ensure the goals of the program are being met. If, upon review, the commission finds there is insufficient participation in the program, the commission may credit uncommitted funds back to ratepayers pursuant to Section 748.5.
(2)The commission shall include in the annual workplan required pursuant to Section 910, an annual update of the program that shall include, but not be limited to, the number of projects approved, number of projects completed, number of pending projects awaiting approval, and geographic distribution of the projects.
(l)The commission shall credit no more than one-half of the program funds that are unencumbered as of January 1, 2025, back to the residential retail customers of the electrical corporation pursuant to Section 748.5.
SEC. 3.5.Section 2870 of the Public Utilities Code is amended to read:2870.(a)As used in this section, the following definitions apply:
(1)CARE program means the California Alternate Rates for Energy program established pursuant to Section 739.1.
(2)Program means the Multifamily Affordable Housing Solar Roofs Program established pursuant to this chapter, which is also known as the Solar on Multifamily Affordable Housing Program.
(3)(A)Qualified multifamily affordable housing property means a multifamily residential property of at least five rental housing units that is, or will be, operated to provide deed-restricted low-income residential housing, as defined in clause (i) of subparagraph (A) of paragraph (3) of subdivision (a) of Section 2852, except as specified in subparagraph (B), and that meets one or more of the following requirements:
(A)(i)The property is located in a disadvantaged community, as identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code.
(B)(ii)At least 66 percent of the households have incomes at or below 80 percent of the area median income, as defined in subdivision (f) of Section 50052.5 of the Health and Safety Code.
(C)(iii)The property is owned by a tribe.
(D)(iv)The property is rental housing property that is owned by one either of the following:
(i)(I)A public housing authority created pursuant to the Housing Authorities Law (Chapter 1 (commencing with Section 34200) of Part 2 of Division 24 of the Health and Safety Code).
(ii)(II)A public housing agency, as defined in Section 1437a of Title 42 of the United States Code.
(B)Notwithstanding subparagraph (A), a property owned by a tribe is not required to be deed restricted to be eligible for the program, but is required to meet the income requirements of the program pursuant to clause (ii) of subparagraph (A). To be eligible for the program, a property owned by a tribe that is not deed restricted shall have received public financing to fund affordable housing through any of the following:
(i)The United States Department of Housing and Urban Development Indian Housing Block Grant program.
(ii)The United States Bureau of Indian Affairs.
(iii)The Native American Housing Assistance and Self-Determination Act of 1996 (Public Law 104-330), as amended.
(4)Solar energy system means a solar energy photovoltaic device that meets or exceeds the eligibility criteria established pursuant to Section 25782 of the Public Resources Code.
(5)Tribe means a California Native American tribe, as defined in Section 21073 of the Public Resources Code.
(b)(1)Adoption and implementation of the program may count toward the satisfaction of the commissions obligation to ensure that specific alternatives designed for growth among residential customers in disadvantaged communities are offered as part of the standard contract or tariff authorized developed pursuant to paragraph (1) of subdivision (b) of Section 2827.1.
(2)This section does not preclude electrical corporations from offering and administering a distributed energy resource program, including solar energy systems, in disadvantaged communities offered under current or proposed programs using funds provided under subdivision (c) of Section 748.5 or programs proposed to comply with paragraph (1) as approved by the commission.
(c)The commission shall annually authorize the allocation of one hundred million dollars ($100,000,000) or 66.67 percent of available funds, whichever is less, from the revenues described in subdivision (c) of Section 748.5 for the program, beginning with the fiscal year commencing July 1, 2016, and ending with the fiscal year ending June 30, 2020. The commission shall continue authorizing the allocation of these funds through June 30, 2026, if the commission determines that revenues are available after 2020 and that there is adequate interest and participation in the program. 2026.
(d)The commission shall consider the most appropriate program administration structure, including administration by a qualified third-party administrator, selected by the commission through a competitive bidding process, or administration by an electrical corporation, in an existing or future proceeding.
(e)Not more than 10 percent of the funds allocated to the program shall be used for administration.
(f)(1)By June 30, 2017, the commission shall authorize the award of monetary incentives for qualifying solar energy systems that are installed on qualified multifamily affordable housing properties through December 31, 2032. The target of the program is to install a combined generating capacity of at least 300 megawatts on qualified properties.
(2)The commission shall require that the electricity generated by qualifying renewable energy systems installed pursuant to the program be primarily used to offset electricity usage by low-income tenants. These requirements may include required covenants and restrictions in deeds.
(3)The commission shall require that qualifying solar energy systems owned by third-party owners are subject to contractual restrictions to ensure that no additional costs for the system be passed on to low-income tenants at the properties receiving incentives pursuant to the program. The commission shall require third-party owners of solar energy systems to provide ongoing operations and maintenance of the system, monitor energy production, and, where necessary, take appropriate action to ensure that the kWh kilowatthour production levels projected for the system are achieved throughout the period of the third-party agreement. Those actions may include, but are not limited to, providing a performance guarantee of annual production levels or taking corrective actions to resolve underproduction problems.
(4)The commission shall ensure that incentive levels for photovoltaic installations receiving incentives through the program are aligned with the installation costs for solar energy systems for affordable housing and take account of federal investment tax credits and contributions from other sources to the extent feasible.
(5)The commission shall require that no individual installation receive incentives at a rate greater than 100 percent of the total system installation costs.
(6)The commission shall establish local hiring requirements for the program to provide economic development benefits to disadvantaged communities.
(7)The commission shall establish energy efficiency requirements that are equal to the energy efficiency requirements established for the program described in Section 2852, including participation in a federal, state, or utility-funded energy efficiency program or documentation of a recent energy efficiency retrofit.
(8)For purposes of the new construction of qualified multifamily affordable housing property, moneys authorized through the program shall not be used to meet the requirements of Part 6 (commencing with Section 100) of Title 24 of the California Code of Regulations.
(g)(1)The commission shall ensure that electrical corporation tariff structures affecting the low-income tenants participating in the program continue to provide a direct economic benefit from the qualifying solar energy system.
(2)If units are separately metered, low-income tenants who participate in the program shall receive credits on utility bills from the program. The commission shall ensure that utility bill reductions are achieved through tariffs that allow for the allocation of credits, such as virtual net metering tariffs designed for program participants, or other tariffs that may be adopted by the commission pursuant to Section 2827.1.
(h)This chapter is does not intended to supplant CARE program rates as the primary mechanism for achieving the goals of the CARE program.
(i)The commission shall determine the eligibility of qualified multifamily affordable housing property tenants that are customers of community choice aggregators.
(j)The commission may consider authorizing an advance payment loan to an eligible project if there is reasonable evidence to suggest that an advance payment loan would lead to the delivery of a project that would not occur absent the advance payment loan, so long as if appropriate funding guarantee and loss recovery mechanisms are implemented to limit the risk of liability to the program from making the advance payment loan. The commission, in considering an advance payment loan, may prioritize allocating funding to a project where an advance payment loan will have the greatest impact on project delivery.
(k)(1)Every three years, the commission shall evaluate the programs expenditures, commitments, uncommitted balances, future demands, performance, and outcomes and shall make any necessary adjustments to the program to ensure the goals of the program are being met. If, upon review, the commission finds there is insufficient participation in the program, the commission may credit uncommitted funds back to ratepayers pursuant to Section 748.5.
(2)The commission shall include in the annual workplan required pursuant to Section 910, an annual update of the program that shall include, but not be limited to, the number of projects approved, number of projects completed, number of pending projects awaiting approval, and geographic distribution of the projects.
(l)The commission shall credit no more than one-half of the program funds that are unencumbered as of January 1, 2025, back to the residential retail customers of the electrical corporation pursuant to Section 748.5.
SEC. 4.Section 3.5 of this bill incorporates amendments to Section 2870 of the Public Utilities Code proposed by both this bill and Senate Bill 1118. That section of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2025, (2) each bill amends Section 2870 of the Public Utilities Code, and (3) this bill is enacted after Senate Bill 1118, in which case Section 3 of this bill shall not become operative.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
SECTION 1.Section 10609.26 of the Water Code is amended to read:10609.26.(a)(1)On and after January 1, 2026, the board may issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective required by this chapter. Informational orders are intended to obtain information on supplier activities, water production, and conservation efforts in order to identify technical assistance needs and assist urban water suppliers in meeting their urban water use objectives.(2)In determining whether to issue an informational order, the board shall consider the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet the urban water use objective.(3)The board shall share information received pursuant to this subdivision with the department.(4)An urban water supplier may request technical assistance from the department. The technical assistance may, to the extent available, include guidance documents, tools, and data.(b)On and after January 1, 2027, the board may issue a written notice to an urban retail water supplier that does not meet its urban water use objective required by this chapter. The written notice may warn the urban retail water supplier that it is not meeting its urban water use objective described in Section 10609.20 and is not making adequate progress in meeting the urban water use objective, and may request that the urban retail water supplier address areas of concern in its next annual report required by Section 10609.24. In deciding whether to issue a written notice, the board may consider whether the urban retail water supplier has received an informational order, the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet its urban water use objective.(c)(1)On and after January 1, 2028, the board may issue a conservation order to an urban retail water supplier that does not meet its urban water use objective. A conservation order may consist of, but is not limited to, referral to the department for technical assistance, requirements for education and outreach, requirements for local enforcement, and other efforts to assist urban retail water suppliers in meeting their urban water use objective.(2)In issuing a conservation order, the board shall identify specific deficiencies in an urban retail water suppliers progress towards meeting its urban water use objective, and identify specific actions to address the deficiencies.(3)The board may request that the department provide an urban retail water supplier with technical assistance to support the urban retail water suppliers actions to remedy the deficiencies.(d)A conservation order issued in accordance with this chapter may include requiring actions intended to increase water-use efficiency, but shall not curtail or otherwise limit the exercise of a water right, nor shall it require the imposition of civil liability pursuant to Section 377.SEC. 2.Section 10609.30 of the Water Code is amended to read:10609.30.On or before January 10, 2028, the Legislative Analyst shall provide to the appropriate policy committees of both houses of the Legislature and the public a report evaluating the implementation of the water use efficiency standards and water use reporting pursuant to this chapter. The board and the department shall provide the Legislative Analyst with the available data to complete this report.(a)The report shall describe all of the following:(1)The rate at which urban retail water users are complying with the standards, and factors that might facilitate or impede their compliance.(2)The accuracy of the data and estimates being used to calculate urban water use objectives.(3)Indications of the economic impacts, if any, of the implementation of this chapter on urban water suppliers and urban water users, including CII water users.(4)The frequency of use of the bonus incentive, the volume of water associated with the bonus incentive, value to urban water suppliers of the bonus incentive, and any implications of the use of the bonus incentive on water use efficiency.(5)The early indications of how implementing this chapter might impact the efficiency of statewide urban water use.(6)Recommendations, if any, for improving statewide urban water use efficiency and the standards and practices described in this chapter.(7)Any other issues the Legislative Analyst deems appropriate.(a)(1)On and after January 1, 2024, 2026, the board may issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective required by this chapter. Informational orders are intended to obtain information on supplier activities, water production, and conservation efforts in order to identify technical assistance needs and assist urban water suppliers in meeting their urban water use objectives.
(2)In determining whether to issue an informational order, the board shall consider the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet the urban water use objective.
(3)The board shall share information received pursuant to this subdivision with the department.
(4)An urban water supplier may request technical assistance from the department. The technical assistance may, to the extent available, include guidance documents, tools, and data.
(b)On and after January 1, 2026, 2027, the board may issue a written notice to an urban retail water supplier that does not meet its urban water use objective required by this chapter. The written notice may warn the urban retail water supplier that it is not meeting its urban water use objective described in Section 10609.20 and is not making adequate progress in meeting the urban water use objective, and may request that the urban retail water supplier address areas of concern in its next annual report required by Section 10609.24. In deciding whether to issue a written notice, the board may consider whether the urban retail water supplier has received an informational order, the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet its urban water use objective.
(c)(1)On and after January 1, 2027, 2028, the board may issue a conservation order to an urban retail water supplier that does not meet its urban water use objective. A conservation order may consist of, but is not limited to, referral to the department for technical assistance, requirements for education and outreach, requirements for local enforcement, and other efforts to assist urban retail water suppliers in meeting their urban water use objective.
(2)In issuing a conservation order, the board shall identify specific deficiencies in an urban retail water suppliers progress towards meeting its urban water use objective, and identify specific actions to address the deficiencies.
(3)The board may request that the department provide an urban retail water supplier with technical assistance to support the urban retail water suppliers actions to remedy the deficiencies.
(d)A conservation order issued in accordance with this chapter may include requiring actions intended to increase water-use efficiency, but shall not curtail or otherwise limit the exercise of a water right, nor shall it require the imposition of civil liability pursuant to Section 377.
SEC. 2.Section 10609.30 of the Water Code is amended to read:10609.30.On or before January 10, 2024, 2028, the Legislative Analyst shall provide to the appropriate policy committees of both houses of the Legislature and the public a report evaluating the implementation of the water use efficiency standards and water use reporting pursuant to this chapter. The board and the department shall provide the Legislative Analyst with the available data to complete this report.
(a)The report shall describe all of the following:
(1)The rate at which urban retail water users are complying with the standards, and factors that might facilitate or impede their compliance.
(2)The accuracy of the data and estimates being used to calculate urban water use objectives.
(3)Indications of the economic impacts, if any, of the implementation of this chapter on urban water suppliers and urban water users, including CII water users.
(4)The frequency of use of the bonus incentive, the volume of water associated with the bonus incentive, value to urban water suppliers of the bonus incentive, and any implications of the use of the bonus incentive on water use efficiency.
(5)The early indications of how implementing this chapter might impact the efficiency of statewide urban water use.
(6)Recommendations, if any, for improving statewide urban water use efficiency and the standards and practices described in this chapter.
(7)Any other issues the Legislative Analyst deems appropriate.
(a)(1)On and after January 1, 2024, the board may issue informational orders pertaining to water production, water use, and water conservation to an urban retail water supplier that does not meet its urban water use objective required by this chapter. Informational orders are intended to obtain information on supplier activities, water production, and conservation efforts in order to identify technical assistance needs and assist urban water suppliers in meeting their urban water use objectives.
(2)In determining whether to issue an informational order, the board shall consider the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet the urban water use objective.
(3)The board shall share information received pursuant to this subdivision with the department.
(4)An urban water supplier may request technical assistance from the department. The technical assistance may, to the extent available, include guidance documents, tools, and data.
(b)On and after January 1, 2025, 2026, the board may issue a written notice to an urban retail water supplier that does not meet its urban water use objective required by this chapter. The written notice may warn the urban retail water supplier that it is not meeting its urban water use objective described in Section 10609.20 and is not making adequate progress in meeting the urban water use objective, and may request that the urban retail water supplier address areas of concern in its next annual report required by Section 10609.24. In deciding whether to issue a written notice, the board may consider whether the urban retail water supplier has received an informational order, the degree to which the urban retail water supplier is not meeting its urban water use objective, information provided in the report required by Section 10609.24, and actions the urban retail water supplier has implemented or will implement in order to help meet its urban water use objective.
(c)(1)On and after January 1, 2026, 2027, the board may issue a conservation order to an urban retail water supplier that does not meet its urban water use objective. A conservation order may consist of, but is not limited to, referral to the department for technical assistance, requirements for education and outreach, requirements for local enforcement, and other efforts to assist urban retail water suppliers in meeting their urban water use objective.
(2)In issuing a conservation order, the board shall identify specific deficiencies in an urban retail water suppliers progress towards meeting its urban water use objective, and identify specific actions to address the deficiencies.
(3)The board may request that the department provide an urban retail water supplier with technical assistance to support the urban retail water suppliers actions to remedy the deficiencies.
(d)A conservation order issued in accordance with this chapter may include requiring actions intended to increase water-use efficiency, but shall not curtail or otherwise limit the exercise of a water right, nor shall it require the imposition of civil liability pursuant to Section 377.
|
Date
|
Status
|
|---|---|
| Aug 30, 2024 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Aug 29, 2024 | Read second time. Ordered to third reading. |
| Aug 29, 2024 | Re-referred to Com. on RLS pursuant to Senate Rule 29.10(c). |
| Aug 29, 2024 | Re-referred to Com. on E., U. & C. |
| Aug 29, 2024 | In committee: Hearing postponed by committee. |
| Aug 28, 2024 | Read third time and amended. Ordered to second reading. |
| Aug 28, 2024 | Joint Rules 61 and 62(a) suspended. (Ayes 31. Noes 8.) |
| Aug 28, 2024 | Joint Rule 61 suspended. (Ayes 30. Noes 9.) |
| Jun 27, 2024 | Ordered to third reading. |
| Jun 27, 2024 | From Consent Calendar. |
| Jun 25, 2024 | Read second time. Ordered to Consent Calendar. |
| Jun 24, 2024 | From committee: Be ordered to second reading file pursuant to Senate Rule 28.8 and ordered to Consent Calendar. |
| Jun 13, 2024 | Re-referred to Com. on APPR pursuant to Joint Rule 10.5. |
| Jun 12, 2024 | Read second time and amended. Ordered to consent calendar. |
| Jun 11, 2024 | From committee: Amend, and do pass as amended. To Consent Calendar. (Ayes 11. Noes 0.) (June 11). |
| May 8, 2024 | Referred to Com. on N.R. & W. |
| Apr 29, 2024 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Apr 29, 2024 | Read third time. Passed. Ordered to the Senate. (Ayes 74. Noes 0. Page 5034.) |
| Apr 24, 2024 | Read second time. Ordered to Consent Calendar. |
| Apr 23, 2024 | From committee: Do pass. To Consent Calendar. (Ayes 14. Noes 0.) (April 23). |
| Mar 11, 2024 | Referred to Com. on W., P., & W. |
| Feb 17, 2024 | From printer. May be heard in committee March 18. |
| Feb 16, 2024 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jun 11, 2024 | Do pass as amended, and be ordered to the Consent Calendar | Senate Standing Committee on Natural Resources and Water |
Passed |
|
| Apr 29, 2024 | AB 3121 Hart Consent Calendar Second Day Regular Session | Assembly Floor |
Passed |
|
| Apr 23, 2024 | Do pass. To Consent Calendar. | Assembly Standing Committee on Water, Parks, and Wildlife |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Junior Philanthropist Foundation | ** Support | |
| League Of California Cities | ** Support |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 3121 |
THIRD READING
Bill No: AB 3121
Author: Hart (D)
Amended: 6/12/24 in Senate
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 11-0, 6/11/24
AYES: Min, Seyarto, Allen, Dahle, Eggman, Grove, Hurtado, Laird, Limón, Padilla, Stern
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 74-0, 4/29/24 (Consent) - See last page for vote
SUBJECT: Urban retail water suppliers: informational order: written notice: conservation order: water use efficiency standards and water use reporting: dates
SOURCE: Author
DIGEST:
This bill delays by two years each the State Water Resources Control Board’s authority to issue an informational order, written notice, or conservation order to an urban retail water supplier to enforce compliance with their individual urban water use objective related to the efficient use of water to January 1, 2026, January 1, 2027, and January 1, 2028, respectively, and requires the Legislative Analyst’s Office to provide a report on or before January 10, 2028, as provided.
ANALYSIS:
Existing law:
- Declares in Article X, Section 2, of the California Constitution “that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented…”
- Requires the state to achieve 20% reduction in urban per capita water use by December 31, 2020, as provided. (Water Code (WAT) §10608.16)
- Requires each urban retail water supplier (urban supplier) to calculate its urban water use objective (objective) no later than January 1, 2024 and every January 1 thereafter based on the urban supplier’s water use conditions for the previous calendar or fiscal year. Requires the objective to be the sum of the following: aggregate estimated efficient indoor residential water use, aggregate estimated efficient outdoor residential water use, aggregate estimated efficient outdoor irrigation of landscape areas with dedicated irrigation meters for commercial, industrial, and institutional (CII) use, aggregate estimated efficient water losses; and aggregate estimated water use in accordance with variances, with a bonus for the use of potable reuse water, as provided. Requires the calculation of the objective to use landscape area and other data provided by the California Department of Water Resources (DWR) or by using alternative data, as specified. (WAT §10609.20)
- Requires each urban supplier to calculate its actual urban water use no later than January 1, 2024 and by January 1 annually thereafter based upon use for the previous calendar year of the sum of aggregate residential water use, aggregate outdoor irrigation of CII landscape areas with dedicated irrigation meters, and aggregate water losses, as provided. (WAT §10609.22)
- Requires an urban supplier to submit a report to DWR by January 1, 2024 and every January 1 thereafter that includes the objective, the actual urban water use, progress made towards meeting the objective, documentation of the performance measures for CII water use, and a validated water loss audit report, as provided. Requires the first report to provide a narrative that describes the demand management measures planned to be implemented to meet the objective by January 1, 2027. (WAT §10609.24, §10609.25)
- Makes legislative findings and declarations related to the objective and through comparing the objective to the previous year’s actual use, local suppliers will be in a better position to help eliminate unnecessary use, as provided. Makes additional legislative findings and declarations related to public input and data transparency, and providing flexibility to local suppliers towards achieving water conservation goals. (WAT §10609)
- Requires the State Water Resources Control Board (SWRCB), in coordination with DWR, to adopt long-term standards for the efficient use of water for outdoor residential water use, outdoor irrigation of landscape areas with dedicated irrigation meters for CII use, and a volume for water loss, as provided. (WAT §10609.2)
- Sets the per capita indoor residential water use at 55 gallons daily until January 1, 2025, 47 gallons daily between January 1, 2025 and January 1, 2030, and then 42 gallons daily thereafter, as provided. (WAT §10609.4)
- Requires the Legislative Analyst’s Office (LAO) to provide a report to the Legislature and public evaluating the implementation of the water use efficiency standards and reporting, as specified. (WAT §10609.30)
- Authorizes the SWRCB as of January 1, 2024 to issue informational orders pertaining to water production, water use, and water conservation to an urban supplier that does not meet its objective, as provided. (WAT §10609.26a)
- Authorizes the SWRCB as of January 1, 2025, to issue a written notice to an urban supplier that does not meet its objective, as provided. (WAT §10609.26b)
- Authorizes the SWRCB, as of January 1, 2026, to issue a conservation order to an urban supplier that does not meet its objective, as provided. Requires the conservation order to identify specific deficiencies in progress to meeting the objective and specific actions to address the deficiencies. (WAT §10609.26c)
This bill:
- Delays by two years each the SWRCB’s authority to issue an informational order, written notice, or conservation order to an urban supplier to enforce compliance with their individual objective related to the efficient use of water to January 1, 2026, January 1, 2027, and January 1, 2028, respectively, as provided.
- Requires, on or by January 10, 2028, the LAO to provide a report to appropriate legislative policy committees and the public that evaluates the implementation of the water use efficiency standards and water use reporting, as specified.
Background
As California faces a hotter and drier future, the need to conserve water by using it efficiently becomes even more important. Governor Newsom’s Water Supply Strategy calls for conserving up to 500,000 acre-feet per year by 2030. Conservation is less expensive (at $600 - $1,800 per acre-foot) than new water supply infrastructure.
The Water Conservation Act of 2009 required a 20% statewide per capita urban water use reduction by 2020. (SBx7 7, Steinberg, Chapter 5, Statutes of 2009/10 7th Extraordinary Session) According to the DWR, the state surpassed the 20% reduction and reduced per capita urban water use by 32%. About 97% (374 of 386) of urban retail water suppliers (urban suppliers) achieved their targeted 2020 water use reduction.
In 2016, then-Governor Brown issued Executive Order B-37-16, which established the goal of “making [water] conservation a California way of life” and directed his administration to develop water use targets as part of a permanent long-term water conservation framework. Including environmental water, urban water use is about 11% of the state’s annual water use. Of that 11%, over half (6%) is residential use, CII use is 3% and 1% is “other.”
In 2018, the Legislature passed and Governor Brown signed SB 606 (Hertzberg, Chapter 14, Statutes of 2018) and AB 1668 (Friedman, Chapter 15, Statutes of 2018) which established the long-term water conservation framework in law.
This framework requires that DWR and the SWRCB work together to develop urban water use conservation or efficiency goals (the objectives) for the roughly 400 urban suppliers that supply water to about 95% of Californians. The urban suppliers must meet their objective, not the individual users that they supply. An objective is the sum of indoor and outdoor residential water use, CII outdoor water use with a dedicated meter, system water losses, any applicable variances (an additional volume of water due to certain unique uses), and any bonus incentives.
In general, DWR was directed to perform studies and investigations and collect data – particularly on outdoor use – and provide recommendations to the SWRCB, who would then promulgate regulations. The SWRCB is required to adopt implementing regulations by June 30, 2022 (these regulations are still pending).
Comments
Regulations are two years behind schedule. The SWRCB’s proposed schedule for the approval of the regulations implementing the objectives is Summer 2024. The first draft regulations were released in August 2023 and the second draft in March 2024. The delay by two years each of the components of the SWRCB’s progressive enforcement actions, as proposed by this bill, are consistent with this schedule and the original framework of the implementing legislation.
Urban suppliers and existing water use efficiency. Information released by the SWRCB in conjunction with the 2nd regulatory draft suggests that just under 40% of the urban suppliers serving about 40% of the state’s population already appear to comply with their estimated objective or are within 5% of it without accounting for any applicable potential variances. In addition, the 2nd draft of the regulations provide for compliance through alternative pathways for those water suppliers who need to make significant reductions.
(NOTE: Additional information may be found in the policy bill analysis written by the Senate Natural Resources and Water Committee.)
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 6/25/24)
Junior Philanthropists Foundation
League of California Cities
OPPOSITION: (Verified 6/25/24)
None received
ARGUMENTS IN SUPPORT: According to the author, “AB 3121 will provide a reasonable timeframe to facilitate smoother transitions for water providers and promote better compliance and understanding of new regulations. Extending the timeline balances the urgency of water conservation with the practicalities of implementation, ensuring a more measured and successful approach to addressing water scarcity challenges in urban areas.”
ASSEMBLY FLOOR: 74-0, 4/29/24
AYES: Addis, Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Rodriguez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
NO VOTE RECORDED: Alvarez, Megan Dahle, Mathis, Rendon, Blanca Rubio, Sanchez
Prepared by: Katharine Moore / N.R. & W. / (916) 651-4116
6/27/24 15:38:57
**** END ****
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 3121 |
CONSENT
Bill No: AB 3121
Author: Hart (D)
Amended: 6/12/24 in Senate
Vote: 21
SENATE NATURAL RES. & WATER COMMITTEE: 11-0, 6/11/24
AYES: Min, Seyarto, Allen, Dahle, Eggman, Grove, Hurtado, Laird, Limón, Padilla, Stern
ASSEMBLY FLOOR: 74-0, 4/29/24 (Consent) - See last page for vote
SUBJECT: Urban retail water suppliers: written notice: conservation order: dates
SOURCE: Author
DIGEST:
This bill delays by two years each the State Water Resources Control Board’s authority to issue an informational order, written notice, or conservation order to an urban retail water supplier to enforce compliance with their individual urban water use objective related to the efficient use of water to January 1, 2026, January 1, 2027, and January 1, 2028, respectively, and requires the Legislative Analyst’s Office to evaluate the implementation of the water use efficiency standards and water use reporting, as provided.
ANALYSIS:
Existing law:
- Declares in Article X, Section 2, of the California Constitution “that because of the conditions prevailing in this State the general welfare requires that the water resources of the State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use or unreasonable method of use of water be prevented…”
- Requires the state to achieve 20% reduction in urban per capita water use by December 31, 2020, as provided. (California Water Code (WAT) §10608.16)
- Requires each urban retail water supplier (urban supplier) to calculate its urban water use objective (objective) no later than January 1, 2024 and every January 1 thereafter based on the urban supplier’s water use conditions for the previous calendar or fiscal year. Requires the objective to be the sum of the following: aggregate estimated efficient indoor residential water use, aggregate estimated efficient outdoor residential water use, aggregate estimated efficient outdoor irrigation of landscape areas with dedicated irrigation meters for commercial, industrial, and institutional (CII) use, aggregate estimated efficient water losses; and aggregate estimated water use in accordance with variances, with a bonus for the use of potable reuse water, as provided. Requires the calculation of the objective to use landscape area and other data provided by the California Department of Water Resources (DWR) or by using alternative data, as specified. (WAT §10609.20)
- Requires each urban supplier to calculate its actual urban water use no later than January 1, 2024 and by January 1 annually thereafter based upon use for the previous calendar year of the sum of aggregate residential water use, aggregate outdoor irrigation of CII landscape areas with dedicated irrigation meters, and aggregate water losses, as provided. (WAT §10609.22)
- Requires an urban supplier to submit a report to DWR by January 1, 2024 and every January 1 thereafter that includes the objective, the actual urban water use, progress made towards meeting the objective, documentation of the performance measures for CII water use, and a validated water loss audit report, as provided. Requires the first report to provide a narrative that describes the demand management measures planned to be implemented to meet the objective by January 1, 2027. (WAT §10609.24, §10609.25)
- Makes legislative findings and declarations related to the objective and through comparing the objective to the previous year’s actual use, local suppliers will be in a better position to help eliminate unnecessary use, as provided. Makes additional legislative findings and declarations related to public input and data transparency, and providing flexibility to local suppliers towards achieving water conservation goals. (WAT §10609)
- Requires the State Water Resources Control Board (SWRCB), in coordination with DWR, to adopt long-term standards for the efficient use of water for outdoor residential water use, outdoor irrigation of landscape areas with dedicated irrigation meters for CII use, and a volume for water loss, as provided. (WAT §10609.2)
- Sets the per capita indoor residential water use at 55 gallons daily until January 1, 2025, 47 gallons daily between January 1, 2025 and January 1, 2030, and then 42 gallons daily thereafter, as provided. (WAT §10609.4)
- Requires the Legislative Analyst’s Office (LAO) to provide a report to the Legislature and public evaluating the implementation of the water use efficiency standards and reporting, as specified. (WAT §10609.30)
- Authorizes the SWRCB as of January 1, 2024 to issue informational orders pertaining to water production, water use, and water conservation to an urban supplier that does not meet its objective, as provided. (WAT §10609.26a)
- Authorizes the SWRCB as of January 1, 2025, to issue a written notice to an urban supplier that does not meet its objective, as provided. (WAT §10609.26b)
- Authorizes the SWRCB, as of January 1, 2026, to issue a conservation order to an urban supplier that does not meet its objective, as provided. Requires the conservation order to identify specific deficiencies in progress to meeting the objective and specific actions to address the deficiencies. (WAT §10609.26c)
This bill:
- Delays until January 1, 2026, the SWRCB’s authority to issue an informational order related to enforcing urban supplier water use efficiency.
- Delays until January 1, 2027, the SWRCB’s authority to issue a written notice related to enforcing urban supplier water use efficiency.
- Delays until January 1, 2028, the SWRCB’s authority to issue a conservation order related to enforcing urban supplier water use efficiency.
- Requires the LAO to evaluate implementation of the water use efficiency standards and water use reporting and submit a legislative report on or by January 10, 2028, as provided.
Background
As California faces a hotter and drier future, the need to conserve water by using it efficiently becomes even more important. Governor Newsom’s Water Supply Strategy calls for conserving up to 500,000 acre-feet per year by 2030. Conservation is less expensive (at $600 - $1,800 per acre-foot) than new water supply infrastructure.
The Water Conservation Act of 2009 required a 20% statewide per capita urban water use reduction by 2020. (SBx7 7, Steinberg, Chapter 5, Statutes of 2009/10 7th Extraordinary Session) According to the DWR, the state surpassed the 20% reduction and reduced per capita urban water use by 32%. About 97% (374 of 386) of urban retail water suppliers (urban suppliers) achieved their targeted 2020 water use reduction.
In 2016, then-Governor Brown issued Executive Order B-37-16, which established the goal of “making [water] conservation a California way of life” and directed his administration to develop water use targets as part of a permanent long-term water conservation framework. Including environmental water, urban water use is about 11% of the state’s annual water use. Of that 11%, over half (6%) is residential use, CII use is 3% and 1% is “other.”
In 2018, the Legislature passed and Governor Brown signed SB 606 (Hertzberg, Chapter 14, Statutes of 2018) and AB 1668 (Friedman, Chapter 15, Statutes of 2018) which established the long-term water conservation framework in law.
This framework requires that DWR and the SWRCB work together to develop urban water use conservation or efficiency goals (the objectives) for the roughly 400 urban suppliers that supply water to about 95% of Californians. The urban suppliers must meet their objective, not the individual users that they supply. An objective is the sum of indoor and outdoor residential water use, CII outdoor water use with a dedicated meter, system water losses, any applicable variances (an additional volume of water due to certain unique uses), and any bonus incentives.
In general, DWR was directed to perform studies and investigations and collect data – particularly on outdoor use – and provide recommendations to the SWRCB, who would then promulgate regulations. The SWRCB is required to adopt implementing regulations by June 30, 2022 (these regulations are still pending).
Comments
Regulations are two years behind schedule. The SWRCB’s proposed schedule for the approval of the regulations implementing the objectives is Summer 2024. The first draft regulations were released in August 2023 and the second draft in March 2024. The delay by two years each of the components of the SWRCB’s progressive enforcement actions, as proposed by this bill, are consistent with this schedule and the original framework of the implementing legislation.
(NOTE: Additional information may be found in the policy bill analysis written by the Senate Natural Resources and Water Committee.)
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
SUPPORT: (Verified 6/11/24)
Junior Philanthropists Foundation
League of California Cities
OPPOSITION: (Verified 6/11/24)
None received
ARGUMENTS IN SUPPORT: According to the author, “AB 3121 will provide a reasonable timeframe to facilitate smoother transitions for water providers and promote better compliance and understanding of new regulations. Extending the timeline balances the urgency of water conservation with the practicalities of implementation, ensuring a more measured and successful approach to addressing water scarcity challenges in urban areas.”
ASSEMBLY FLOOR: 74-0, 4/29/24
AYES: Addis, Aguiar-Curry, Alanis, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Rodriguez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
NO VOTE RECORDED: Alvarez, Megan Dahle, Mathis, Rendon, Blanca Rubio, Sanchez
Prepared by: Katharine Moore / N.R. & W. / (916) 651-4116
6/12/24 17:03:52
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Date of Hearing: April 23, 2024
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Diane Papan, Chair
ABPCA Bill Id:AB 3121 (
Author:Hart) – As Introduced Ver:February 16, 2024
SUBJECT: Urban retail water suppliers: written notice: conservation order: dates
SUMMARY: Delays by one year the dates on which the State Water Resources Control Board (State Water Board) may begin issuing orders to enforce the “Making Conservation A Way of Life” statute. Specifically, this bill:
- Delays the date on which the State Water Board may issue a written warning to an urban retail water agency that is not meeting its urban water use objective from January 1, 2025 to January 1, 2026.
- Delays the date on which the State Water Board may issue a conservation order to an urban retail water agency that is not meeting its urban water use objective from January 1, 2026 to January 1, 2027.
EXISTING LAW:
- Requires the State Water Board, in coordination with DWR, to adopt long-term standards for outdoor residential use, outdoor irrigation with dedicated irrigation meters in conjunction with commercial, industrial, and institutional (CII) water use, and a volume for water loss by June 30, 2022 (Water Code § 10609.2).
- Requires each “urban retail water supplier” to calculate its urban water use objective no later than January 1, 2024 and by January 1 every year thereafter. The urban water use objective shall be the sum of the following: (a) aggregate estimated efficient indoor residential water use; (b) aggregate estimated efficient outdoor residential water use; (c) aggregate estimated efficient outdoor CII water use; (d) aggregate estimated efficient water loses; (e) aggregate estimated water use with variances, as appropriate; and (f) bonus incentives for potable reuse (Water Code §10609.20).
- Authorizes the State Water Board to issue informational orders beginning January 1, 2024, written warnings beginning January 1, 2025, or conservation orders beginning January 1, 2026 to urban retail water suppliers that do not meet their urban water use objective to help said urban retail water supplier meet its urban water use objective (Water Code § 10609.26).
- Defines “urban retail water supplier” as either a public or private water supplier that provides potable municipal water to more than 3,000 end users or that supplies more than 3,000 acre-feet annually at retail for municipal purposes (Water Code § 10608.12).
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal.
COMMENTS:
- Purpose of this bill. This bill extends dates on which the State Water Board may begin taking steps to enforce the urban water use objective. The author argues “[this bill] will provide a reasonable timeframe to facilitate smoother transitions for water providers and promote better compliance and understanding of new regulations. Extending the timeline balances the urgency of water conservation with the practicalities of implementation, ensuring a more measured and successful approach to addressing water scarcity challenges in urban areas.”
- Background. Following the 2012-16 drought, California’s worst on record, then-Governor Brown issued the “Making Conservation California Way of Life” Executive Order [(EO) B-37-16] on May 9, 2016. This EO directed DWR to work with the State Water Board “to develop new water use targets as part of a permanent framework for urban water agencies” and to issue a framework for doing so. DWR and the State Water Board released the framework in 2017 (2017 Framework) that outlined a suite of actions that could be implemented under existing authorities and recommended additional actions that could be implemented with new or expanded authorities given by the Legislature.
“Making Conservation a Way of Life” package. Various bills to implement aspects of the 2017 Framework were introduced in the Legislature in 2017. This led to a roughly year-long process that involved the Brown Administration, the Legislature, and numerous stakeholders to negotiate a two-bill package, SB 606 (Hertzberg) and AB 1668 (Friedman), that established a new foundation for long-term improvements in water conservation and drought planning to adapt to climate change. These two bills provided expanded and new authorities and requirements to enable permanent changes and actions to drive more efficient use of water and better prepare the state for future droughts.
Urban water use objective. The upshot of SB 606 and AB 1668 is that urban retail water agencies have to reduce their water use by meeting an “urban water use objective” that they must calculate and report to the State Water Board annually beginning January 2024. The urban water use objective is the sum of: (1) indoor residential water use; (2) outdoor residential water use; (3) outdoor CII use; (4) water losses; (5) variances, if applicable; and (6) bonus incentives for recycled water, if applicable. The objective and the standards that go into setting it apply on an annual aggregate basis and will not apply to individual customers or even on a monthly basis. A given agency may exceed one or more of the standards (e.g., outdoor residential use) so long as in the aggregate, that agency is meeting its overall objective.
To enforce the urban water use objective, the State Water Board can begin issuing informational orders as of January 2024. Subsequently, the State Water Board can issue written warning notices beginning January 2025 and conservation orders beginning January 2026 to any urban water agency that is not meeting its urban water use objective. A written warning can request that that a water agency address “areas of concern” in its next annual report and a conservation order may include a referral to DWR for technical assistance, requirements for education and outreach, requirements for local enforcement, or other efforts to assist the water agency in meeting its urban water use objective. This bill delays the dates on which the State Water Board can begin issuing the written warning and conservation orders by one year each to accommodate the delay in developing the standards.
Draft regulations. The State Water Board issued draft regulations to implement the “Conservation as a Way of Life” legislation in Fall 2023. The draft regulations were widely criticized by urban water agencies and in a report by the Legislative Analysts Office. Subsequently, the State Water Board released an updated draft on March 12, 2024. The updated draft made several changes in response to comments and criticism received on the first draft. The draft regulations require urban retail water agencies to begin reporting on their urban water use objective beginning January 1, 2025. The regulations are expected to be finalized this summer. - Related legislation. SB 1157 (Hertzberg), Chapter 679, Statutes of 2022, lowers the statewide indoor residential water use standard from 55 gallons per capita daily (gpcd) to 47 gpcd beginning January 1, 2025, and from 50 gpcd to 42 gpcd beginning January 1, 2030 and requires DWR, in coordination with the State Water Board, to conduct studies and investigations to assess specified impacts of this standard.
AB 2157 (Blanca Rubio) of 2022 would have made technical changes to indoor residential use standard statute. AB 2157 died in the Assembly Rules Committee.
AB 1434 (Friedman) of 2022 would have established an indoor residential water use standard of 47 gpcd beginning January 1, 2025 and 42 gpcd beginning January 1, 2030. AB 1434 died in the Assembly Appropriations Committee.
AB 1668 (Friedman), Chapter 15, Statutes of 2018, establishes an indoor residential water use standard of 55 gpcd until January 1, 2025, of 52.5 gpcd until January 2, 2030, and of 50 gpcd thereafter and requires DWR to submit a report to the Legislature that may recommend a different indoor residential use standard by January 1, 2021, among other provisions.
SB 606 (Hertzberg), Chapter 14, Statutes of 2018, establishes urban water use objectives and water use reporting requirements so urban water supplier and the State Water Board can track whether or not an urban water supplier is meeting its urban water use objective, among other provisions.
SBx7 7 (Steinberg), Chapter 4, Statutes of 2009-10 Seventh Extraordinary Session, requires a 20% reduction in urban per capita water use by December 30, 2020, among other provisions.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by: Pablo Garza / W., P., & W. / (916) 319-2096
Bill Co-Author(s):