Last week, NRDC released our assessment of California’s publicly owned utilities’ progress towards achieving all cost-effective energy efficiency, evaluating both their achievements over the past five years as well as their targets through 2020.
We performed this analysis to see how well public power is meeting the state’s law to use all available cost-effective energy efficiency before delivering dirty power to California customers. Energy efficiency has played a key role in helping California’s electricity per capita usage to remain relatively flat since the 1970s while the rest of the country’s electricity per capita rose significantly. (See my colleague Sierra Martinez’s blog for more information)
The good news: Several of California’s publicly owned utilities have improved their energy efficiency performance over the past few years and a handful of others are on track to achieve aggressive levels of energy efficiency through 2020. These improvements reduce energy costs for customers and help California achieve our aggressive emission reduction goals.
The bad news: Half of the public utilities reduced their targets compared to their previous targets set in 2007, and most utilities are not close to approaching aggressive levels of energy efficiency. Of particular note is LADWP, the largest California public utility, which has yet to adopt energy efficiency targets as mandated by law. Utilities that are not prioritizing energy efficiency as their first energy resource (such as LADWP) are missing out on enormous energy and bill saving opportunities for their customers. (See my colleague Noah Long’s blog for more on LADWP’s energy efficiency efforts).
Back to the successes: Public utilities have made great strides over the past five years saving energy through efficiency programs. In particular, since 2006, public utility energy efficiency programs have:
- Saved customers more than $1 billion;
- Increased reported annual energy savings more than three-fold;
- Cut demand by about 400 MW, avoiding the need to build a medium-sized power plant; and
- Are cutting annual pollution equivalent to the emissions from more than 200,000 cars.
In addition, over the next 10 years, the public utilities targets will:
- Cut customers’ utility bills by more than an estimated $2 billion;
- Avoid the need to build two large power plants; and
- Reduce pollution equivalent to the emissions from about 570,000 cars.
Publicly owned utilities are critical players in helping California achieve aggressive climate goals, as the 40 POUs provide about 25% of the state’s electricity and serve over 3 million customers -- a level that equals the consumption of electricity in the state of Colorado. (FYI - if you do not get your electricity from the largest private utilities -- PG&E, SCE, and SDG&E - you likely get your power from a public utility).
As our report reflects, there is no doubt that the POUs have made significant progress, but they still have a lot of untapped savings to capture. Public utilities that are not striving for high levels of efficiency and who are not relying on efficiency as their first source of energy are missing out on an opportunity to reduce the need for more expensive fossil fuel power and to provide tangible bill savings for Californians.
NRDC’s report also expands on the following recommendations to ensure that the public utilities capture all cost-effective energy efficiency as required by law:
- Most public utilities should set higher targets and all utilities should continue to expand energy saving programs to capture all cost-effective energy efficiency;
- Each utility should have independent evaluation of its energy savings;
- All utilities should treat efficiency as their top priority energy resource;
- Public utilities should increase transparency through more detailed reporting; and
- Each utility that has not yet completed a potential study or set targets should do so immediately.
Setting aggressive targets and achieving cost-effective energy efficiency are essential to ensure utility bills remain affordable, good local jobs are created, air quality is improved, and the state’s emissions reduction targets are met. We look forward to working with all the key players to make sure every utility succeeds at these goals.