California's Investor-Owned Utilities Surpass Efficiency Goals, Saving Customers Millions & Cleaning the Air

The California Public Utilities Commission (CPUC) and the state's four large investor-owned utilities, which serve 75 percent of the state, have proved yet again that energy efficiency is a great investment to save customers money and clean the air. The electricity and natural gas savings from efficiency surpassed the utilities' 2010-2012 energy-savings goals and put more than $750 million back into consumers' pockets after accounting for the costs of running the programs.

That's according to the CPUC's new assessment of the customer-funded efficiency programs operated from 2010-2012 by Pacific Gas & Electric, San Diego Gas & Electric, Southern California Edison, and Southern California Gas, with the help of local government and third-party partners. While it naturally takes time after the conclusion of a program to conduct a complete evaluation, it would be helpful for the CPUC to leverage successful evaluation processes across the country to improve the timeliness of the information so program implementers can more quickly use it to improve their programs.

Regardless, the $2.5 billion invested in three years of programs overseen by the commission -- ranging from weatherization to rebates for high-efficiency appliances and equipment -- yielded substantial benefits as opposed to spending the same amount of money on polluting conventional power resources that harm our health and the environment, and provide zero net benefits for customers. In particular, the efficiency programs serving over 28 million Californians:

• Saved enough electricity to power 600,000 households;
• Reduced demand enough to avoid the need for nearly three large power plants (500 megawatts each); and
• Avoided enough carbon pollution from electricity generation to equal the emissions from more than 1 million cars.

According to this week's report, the utilities collectively surpassed all of their goals (147% of electric saving goals, 111% of the reduction in peak demand (the time when energy use is the highest), and 132% of natural gas savings goals for 2010-2012). While this is GREAT news, there is always more that can be done to improve the programs and the policies that guide what utilities, local governments, and third- parties can do to support smarter energy use. The CPUC is currently looking at how to move toward a rolling portfolio approach to program planning, an unprecedented and exciting development, as well as what changes the utilities and their partners can make for 2016 to save customers even more energy and money.

In addition, ramping up efficiency -- and NOW -- is critical to meeting Governor Jerry Brown's call to double the expected energy savings from existing buildings by 2030. The CPUC should therefore focus on the following in the coming year to enhance policies and programs for existing and new buildings:

Continue encouraging extensive building energy codes and appliance standards programs

The most cost-effective way to save energy is by locking in minimum levels of energy usage for products and buildings. Utilities are critical partners to advance codes and standards as they fund numerous studies and work with California Energy Commission staff and other stakeholders to make sure the next level of codes and standards updates get adopted. As noted in the report, energy codes and standards programs cost just 1 percent of utilities' total portfolio budget ($30 million), but accounted for approximately 22 percent of total electricity savings and 20 percent of peak demand savings. This represents impressive energy and cost savings for customers and the utilities should continue to be incentivized to focus on state - as well as federal - codes and standards improvements.

Use market assessments to focus programs on motivating customers to cut energy waste

Assessing "what would happen" without the efficiency program is critical to ensure that customer funds are spent wisely. The state's approach often relies on a customer survey years after the efficiency upgrade action was taken, making it difficult, if not impossible, to get accurate and useful information. It would be far better to conduct an assessment of the market before the program begins, and then again soon after it ends, to get a more accurate and timely accounting of program impacts (that is, what additional savings were achieved due to the program beyond what was originally anticipated).

Design programs to capture savings where and when they are needed the most

While the programs are currently providing enormous energy savings to customers, improving the value of efficiency that is focused on certain locations and/or during particular times of the day (or year) could yield even more benefit. To ensure the efficiency programs are able to be used to offset investment in costly utility infrastructure (like power plants, poles, and wires) and to better support the integration of renewable power into the electricity generation mix, the CPUC should gather better details about where and when efficiency makes the most impact and alter portfolios accordingly.

Expand energy savings from low-income programs

The new CPUC analysis also shows that 2 percent of the energy savings came from efficiency programs aimed at low-income customers. While this is a great start, the Energy Savings Assistance Program, which provides no-cost efficiency upgrades to qualifying customers, could be significantly enhanced to produce even more savings. For example, the CPUC should set an energy-saving goal to accompany the current outreach goal, including criteria to determine which energy-saving measures should be offered to particular customers. These programs should better reach multifamily customers, as well as multifamily building owners, to ensure individual dwellings as well as whole building approaches can be maximized to save energy and lower bills for customers who need relief the most.

There is no doubt that energy efficiency has provided substantial savings to customers and environmental benefits to all Californians. But to get even more benefit from efficiency, the CPUC should take a hard look at current policies to determine whether they are in line with California's climate and energy goals - and to make sure efficiency savings aren't being missed. After all, as this week's report shows, using efficiency to save customers energy is the cleanest, cheapest, and fastest way to lower bills and reduce pollution.