Clean Energy Research, Development, and Demonstration Program Approved

The California Legislature just voted to establish a $162 million annual clean energy research, development, and demonstration program, allowing the newly minted Electric Program Investment Charge (EPIC) program to move forward and provide enormous benefits to California utility customers, the environment, and our economy.

Together with the inclusion of EPIC in the state budget, the legislative direction provided in Senate Bill 96 enables implementation of this critical investment in the future that will help provide affordable and reliable electrical service to California.

California has a long history of RD&D leadership

The California Legislature specifically authorized the Utilities Commission to invest in energy research and development starting in the 1970s.These investments led to decades of key successes in energy efficiency, renewable energy, and other clean energy sectors. But in 1996, as a result of electricity restructuring, continued investment in RD&D was put at risk. Fortunately, the Legislature chose to require a minimum level of investment in clean energy RD&D by imposing a system benefits charge. The Public Interest Energy Research program that was funded with the system benefits charge resulted in a raft of new technologies and billions of dollars in benefits to California utility customers.

As my colleague Noah Long pointed out, in 2012 California’s system benefits charge expired, leaving the future of clean energy research uncertain. In response to a request from Governor Brown, the Public Utilities Commission used its existing regulatory authority to create the EPIC program to ensure ongoing reliable and clean electric service. Together, the Utilities Commission and the Energy Commission developed a program that is responsive to legislative concerns and has been through a rigorous, transparent, public process with active participation from consumer groups, environmental organizations, and utilities. What's more, the program is “budget neutral” and won’t use a single dollar of the state’s general fund because the investments are included in electric rates.

The Legislature agreed with Governor Brown that the EPIC program was an essential part of California’s clean energy strategy and included it in the 2013-14 budget. In addition, the Legislature provided important guidance on EPIC implementation in Senate Bill 96, including

  • Focus: The EPIC program will target the most significant technological challenges impeding achievement of the state’s statutory clean energy and emissions reductions goals in order to achieve breakthroughs that benefit electric utility customers.
  • Transparency and accountability: Clear and comprehensive annual reports are required that detail how funds are spent and how each project contributes to the achievement of EPIC program goals.
  • Effectiveness: Competitive bidding is required in awarding contracts whenever possible to maximize the effectiveness of the limited program funds.
  • Administrative efficiency: Program administrative costs must be minimized as much as possible to maximize the share of program dollars that go toward achieving program goals.
  • Value to utility customers: Annual program funding is capped to limit costs and contracts are written to maximize benefits – including royalties accruing from technologies funded by EPIC – to utility customers

NRDC loudly applauds the foresight and wisdom of the Legislature in choosing to continue California’s proud history of leadership in clean energy RD&D, which provides the breakthrough technologies and insights that form the foundation of the environmentally -sustainable industries of the future.

 Our profound thanks to the governor, the Legislature, Energy Commission, and the Utilities Commission for an “EPIC” win for California’s people and environment!