The Golden State Breaks Bad on Gas

A slew of legislative updates has come out of California.

The big headliner out of California is the passage of a law committing to exclusively carbon-free electricity sources by 2045. This makes California the second state after Hawaii to commit to carbon-free energy. The bill calls for all utility companies must get 60% of their energy from renewable sources by 2030 and 100% must come from carbon-free or renewable energy by 2045.  As of June 2018, the state was at 32% renewable energy.

While many are in favor of the legislation, “Pacific Gas & Electric spokesperson Lynsey Paulo reportedly said prices could rise for customers thanks to the new law”.  As the state’s utilities map out the transition to clean energy, it makes sense that they would be facing cost uncertainty. However, this is a transition that all states should be considering, if not instigating, now.

On the Water Front

In late September, SB 966 was approved by the Governor. It states that on or before December 1, 2022, the State Water Resources Control Board would be required, in consultation with the California Building Standards Commission and the Department of Housing and Community Development, to adopt regulations for risk-based water quality standards for the onsite treatment and reuse of non-potable water. According to the legislation:

“The bill would authorize the state board to contract with public or private
entities regarding the content of the standards. The bill would require a local
jurisdiction, as defined, that elects to establish a program for onsite treated
non-potable water systems to, among other things, adopt, through ordinance, a
local program that includes the risk-based water quality standards established
by the state board. The bill would, on or before December 1, 2023, require the
department, in consultation with the state board, to develop and propose for
adoption any necessary corresponding building standards to support the riskbased
water quality standards established by the state board. The bill would
prohibit an onsite treated non-potable water system from being installed except
under a program established by a local jurisdiction in compliance with the bill’s
provisions.”

Homeowners’ Insurance Update

Legislation regarding homeowners’ insurance was signed into law over the summer. AB
1799 “requires insurance companies to let homeowners know whether their policies are sufficient to rebuild or replace their homes after a disaster,” This is especially applicable for all the areas affected by
wildfires.

AB 1797 will require insurers writing residential property insurance “to conduct a replacement cost estimate” every other year. The bill’s intent is to “ensure policy holders are covered with current and timely estimates that accurately reflect their property’s value.”  This bill goes into effect on July 1, 2019. For complete details, click here to view the bill.

Adopting Energy and Water Conservation Standards

In mid-September, AB 3232 was signed into law. It requires the State Energy Resources Conservation and Development Commission to adopt building design and construction standards and energy and water conservation standards for new residential and nonresidential buildings to reduce the wasteful, uneconomic, inefficient, or unnecessary consumption of energy, including energy associated with the use of water.

The act requires those standards to be cost effective when taken in their entirety and when amortized over the economic life of the structure compared with historic practice. This bill would require the commission, by January 1, 2021, to assess the potential for the state to reduce the emissions of greenhouse gases from the state’s residential and commercial building stock by at least 40% below 1990 levels by January 1, 2030. The bill would require the commission to include in the 2021 edition of the integrated energy policy report and all subsequent integrated energy policy reports a report on the emissions of greenhouse gases associated with the supply of energy to residential and commercial buildings.

Gas Companies In the Spotlight

On the same day AB 3232 was approved by the Governor, he also approved SB 1477. This bill calls for the California Public Utility Commission to spend $50 million a year (from cap-and-trade revenue) for four consecutive years to support the TECH Initiative and the BUILD Program. The Technology and Equipment for Clean Heating (TECH) Initiative is a statewide market development initiative that requires gas corporations to advance the state’s market for low-emission space and water heating equipment for new and existing residential buildings. The Building Initiative for Low-Emissions Development (BUILD) Program to require gas corporations to provide incentives to eligible applicants for the deployment of near-zero-emission building technologies to significantly reduce the emissions of greenhouse gases from buildings. In other words, provide incentives, as well as customer outreach and contractor training, for low-emissions space and water heating equipment such as heat pumps.