CPUC Approves Aggressive Energy Efficiency Goals and Expands Programs to Save Customers Money, Reduce Pollution

Have you ever wondered how you could save money on your energy bill or how you could get help to buy those new efficient appliances to replace your energy guzzling old ones? Well, over the next few weeks the California utilities will be designing a host of programs to help you do just that. Earlier this month, the California Public Utilities Commission unanimously approved energy savings goals for the state’s largest utilities over the next two years. Meeting these goals would reduce carbon pollution equivalent to the emissions from nearly 400,000 cars and avoid the need for nearly two large power plants.[i] The Commission’s decision directs the utilities to create a suite of programs to help customers with all types of energy saving opportunities, from replacing individual inefficient appliances to upgrading entire buildings, and continues the Commission’s commitment to providing affordable and environmentally friendly energy services for consumers.

California has an excellent foundation of energy efficiency programs to help customers save energy, and the Commission directed the utilities to expand and add a number of important programs. For example, the utilities will need to figure out how to better reach middle-income customers and apartment dwellers. In addition, the programs will increase their focus on “whole building” approaches and improve the way customers can learn about and access program information. Building on the current successful financing program for commercial and local government customers, the Commission also directed the utilities to fund additional financing opportunities that can leverage private investments and other state activities to ensure that all customers will be able to access low-cost financing to help with their energy upgrade needs.

In addition, the Commission decision supports building a strong energy efficiency industry by including:

• expanded opportunities for local governments to work together to use their unique skills to help reach customers that haven’t traditionally participated in efficiency programs
• an expanded commitment to enable non-utility entities (e.g., non-profits, companies, and community-based organizations ) to design and implement programs as part of the utilities’ overall efforts, and
• a robust suite of programs to enable energy efficiency service companies (e.g., energy auditors, designers, installers, etc.) to thrive.

While there are a number of exciting developments as a result of this recent ruling, there continues to be substantial ongoing policy challenges that the Commission must address immediately to ensure the utility programs are truly able to capture the state mandated “all cost-effective energy efficiency.” As noted in our previous blog, the Commission has adopted good goals and objectives for the efficiency programs, yet a number of conflicting rules will prevent the utilities from fully realizing those objectives. As a result, the utilities’ efficiency programs will continue to provide savings to customers, but these programs will be much smaller than needed to capture all available savings and to meet the state’s ambitious plan to reduce greenhouse gas emissions.

Going forward, the Commission should fix its rules to enable the state to meet its efficiency objectives.  For example, the Commission should properly value the benefits of efficiency and stop under-counting the savings from efficiency. The Commission must also fix how it measures success and encourage a productive collaborative process among stakeholders to resolve challenges. These and other issues have been raised by numerous parties from consumer advocates, efficiency industry companies, and environmental groups, as well as by the Commission itself.  

In its final ruling, the Commission gave the utilities an opportunity to propose an expanded set of efficiency programs and improvements to the Commission’s rules.  Despite being faced with an incredibly short timeline to submit the efficiency program plans (6 weeks instead of the usual 3 months), now is the time for the utilities, implementers, and stakeholders to rise to the challenge and propose a path forward for the state to meet the Commission’s aggressive goals for energy efficiency.  As noted by my colleague Sierra Martinez, an aggressive efficiency effort can flatten California’s absolute electricity demand for the first time in history. The Commission must prioritize improving its efficiency policies so California can continue on this incredible path of avoiding dirty power, and ensure that customers and our environment don’t miss out.

[i] CO2 emissions are estimated based on the avoided emission rate for electric savings of 4.37x10-7 million metric tons of CO2 equivalent per MWh from the California Air Resources Board, Climate Change Scoping Plan Appendices, Vol 2: Analysis and Documentation, December 2008, p. I-23, www.arb.ca.gov/cc/scopingplan/document/appendices_volume2.pdf.  216,000 passenger cars driven for one year produce 1 MMTCO2e.  CARB, Conversion of 1MMTCO2 to Familiar Equivalents (October 2007).  Available at: www.arb.ca.gov/cc/factsheets/1mmtconversion.pdf