California Energy Efficiency Coalition Offers First Set of Recommendations for New Program Planning Model

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Nearly twenty diverse groups interested in energy efficiency—including consumer and social justice advocates, utilities, local governments, environmental groups, and efficiency program implementers—have been working over the past year to develop recommendations for how the California Public Utilities Commission should transition to an innovative approach for program planning. This week, the coalition made the first in a series of suggestions to the commission.

The “rolling portfolio” approach is an innovative program planning concept that would facilitate a move away from a start/stop nature of short funding cycles for the state’s $1 billion in efficiency programs to an ongoing planning process that allows program administrators to respond quickly to changes in the market and better help their customers optimize their energy use. This new model will increase confidence in program funding and build on California’s strong efficiency foundation. Plus, it’s anticipated to help launch energy efficiency to the next level to save customers even more money, reduce harmful pollution contributing to climate change, and stimulate the economy.

Timing is ripe as the commission indicated they will consider transitioning to this unprecedented approach as it reviews efficiency policies and its guidance to program administrators in 2015. To build on this momentum, the coalition of stakeholder groups this week sent a joint letter to Commissioner Carla Peterman (who leads on efficiency issues at the CPUC) and Administrative Law Judge Todd Edmister outlining what we believe should be considered as part of the shift to a rolling portfolio approach.

Why is change needed?

Over the past few years, the program planning process has been delayed, contentious, and frustrating to say the least. Parties’ main opportunity to propose efficiency program ideas or discuss differences was only through a formal public participation process where dozens of parties would submit lengthy comments. This rarely produced resolution of key policy and guidance questions, and commission staff would be inundated by comments and requests by stakeholders.

In addition, planning for the current three-year funding cycles made long-term investment in efficiency challenging and often required companies and non-profits to lay off or delay extending employee contracts as they weren’t sure how much funding would be approved and when. While possible, the process to substantially modify an approach or add new programs has often been challenging and devoid of stakeholder involvement.

However, since beginning this informal collaborative process over a year ago, stakeholders have been able to come closer on a number of issues, simply by having a forum for discussion. This letter is the most recent indication of an effective ongoing collaborative process.

What’s in the letter?

This coalition letter will be one in a series of recommendations over the next year to the commission on how to transition to this new model. In this letter, we focused our recommendations on what should be allowed in the discussion (note: if the commission doesn’t explicitly include items within the “scope” of what is considered, then stakeholders would not be able to offer recommendations on that matter):

  1. Framework for efficiency rolling portfolios: This covers the logistics of how program administrators would provide the needed information to the commission for review of their efficiency portfolio plans and budgets.
  2. Long-term funding: In October, the Commission took the important step of approving $1 billion for energy-saving programs each year until 2025 or until another commission decision supersedes it. However, a number of details still need to be worked out—like how funding is continued over that period, what happens if program administrators need more money, how would funding be allocated to newly approved program administrators, and what review is needed to ensure proper oversight.
  3. Portfolio review and oversight process: This discussion would cover the crux of the changes and include items like: How would updates to programs occur? When would programs be added or sunset? What information and how often is it needed to allow for commission review and oversight of rolling portfolio activities?
  4. Stakeholder engagement process: To enable more meaningful discussions on program plans and implementation, the coalition believes the rolling portfolio model would need to include a process that promotes collaboration and consensus-building among all stakeholders that also streamlines the demands upon commission staff.
  5. Technical components of program planning: This covers the technical elements that support ongoing program planning (e.g., evaluations that offer improvement recommendations, updated energy-saving estimates, market research to make sure programs meet the needs of customers, etc.). There also needs to be an easy and routine way to understand how efficiency programs change over time.

The commission will consider whether to include these priorities—which we hope it will—in the New Year.

What next?   

Now is the time for the commission and stakeholders to work together to define and implement the new model, building upon work done to develop these and previous recommendations. While stakeholders won’t always agree, we need to keep working toward consensus to enable a strong transition to a system that allows for wide scale-up of efficiency that would save customers money, continue to support a strong efficiency industry, and help us reach our state’s climate goals of reducing pollution while giving first priority to efficiency as our cleanest and cheapest way to meet California’s energy needs.

The Coalition includes: BKi, The Bay Area Regional Energy Network, Building Performance Institute, Efficiency First, The California Energy Efficiency Industry Council, The California Housing Partnership, Center for Sustainable Energy, Joint Committee on Energy and Environmental Policy, Local Government Sustainable Energy Coalition, Marin Clean Energy, National Association of Energy Services Companies, Natural Resources Defense Council, Office of Ratepayer Advocates, San Diego Gas & Electric, Southern California Edison, Southern California Gas Company, Southern California Regional Energy Network, and The Utility Reform Network.