CPUC Adopts Major Improvements to Low Income Efficiency Program

The California Public Utilities Commission today adopted major improvements to its longstanding low income energy efficiency program, expanding it to rent-assisted multifamily buildings, in a decision that could become a national model. The vote comes after over 2 years of extensive legal proceedings and stakeholder input.

For the first time in the history of the Energy Savings Assistance program’s (ESA) history, the commission adopted an energy savings goal and allocated $80 million in new funds to residents living in rent-assisted multifamily apartments—all without increasing the budget. These funds will go towards major new energy-saving measures that had previously been left untreated by the program, including central water heaters and common area lighting.

Up to now, the program has largely focused on energy savings in single-family homes, even though residents of multifamily housing account for at least one-third of the eligible population and multifamily housing represents a vast potential for energy and bill savings.

While today’s decision will help those tenants in subsidized housing, it left out new services for low-income residents in multifamily housing that are not subsidized, affecting nearly 1 million households.  

Still, the commission’s decision will go a long way towards easing the energy burden on low-income households in multi-unit apartments and reducing climate-altering pollution. It creatively used a portion of $400 million in previously unspent funds to capture new energy savings and lower residents’ bills, particularly those living in eligible multifamily households.

The unspent funding, first highlighted by Natural Resources Defense Council, California Housing Partnership, National Consumer Law Center, and the GREEN and Energy Efficiency for All coalitions, accrued largely because of the program’s inability to serve certain populations, including multifamily properties, under existing program design.

More on the ESA Program and Development of this Decision

The ESA Program has reduced energy waste, lowered the utility bills and improved the health, safety and comfort of the low income by making available energy-saving measures such as insulation and energy-efficient refrigerators at no cost to customers of the large investor-owned utilities (Pacific Gas & Electric, Southern California Edison, Southern California Gas Co., and San Diego Gas & Electric).

However, these programs have primarily been available for upgrades to single-family residences, and while California has deservedly earned high praise for its leadership on energy efficiency, a number of other states have moved more aggressively to achieve energy savings in multifamily housing—all of which were highlighted in testimony before the Commission.

PUC Commissioner Catherine J.K. Sandoval took note of these high performing programs in other states and drafted a decision to expand the program and allocate previously unspent funds to offer more benefits to low-income residents, including those in multifamily housing.

Program Enhancements

A few of the many changes that this Decision adopts, based in part on NRDC and its partners’ recommendations, include: (1) requiring utilities to meet meaningful energy-savings goals, (2) requiring high-quality whole-building energy audits in multifamily housing, (3) authorizing funding for significant energy-savings measures, such as water heaters and common area lighting, (if proven cost effective based on audit results), and (4) establishing new energy-saving measures for broad adoption, such as making available LED lighting and advanced power strips.

The Decision also establishes a committee of interested parties to aid in the implementation of the program’s new multifamily component and to examine further improvements.

The push to enhance the program follows studies highlighting the economic hardships and health risks faced by low-income households, and a comprehensive state-funded multifamily report that put forth numerous recommendations to vastly increase services to over 1 million residents in multi-unit buildings.

Why It Matters

California’s low-income households spend a disproportionate amount of their income on energy than other households, often because they live in older housing with poor insulation and aging, inefficient appliances and heating and cooling systems. 

In Los Angeles, low-income households pay almost double the percentage of their income on energy relative to all households in the same area.

Poorly heated or cooled homes increase cases of asthma, respiratory problems, heart disease, arthritis, and rheumatism. Families struggling to pay utility bills also may cut back on other necessities, such as food and medicine.

Low-income households also often are more likely than other households to live near pollution sources. Five of California’s smoggiest metropolitan areas—Bakersfield, Fresno, Los Angeles, Modesto, and San Francisco-San Jose-Oakland—have the highest densities of low-income residents.

Expanding the assistance program—especially to multi-family housing—remains a critical step to helping California meet its climate goals (because cutting energy waste means utilities do not have to build as many power plants that emit dangerous pollution), providing health and economic benefits to residents.

It also will ensure that low-income households receive the services they deserve. We thank the Commission for choosing to do more for these residents, and encourage California policy makers to do even more for this underserved sector moving forward.  

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