How California Stepped Up its Energy Efficiency Efforts in 2015 and What's Ahead

Part of NRDC's Year-End Series Reviewing 2015 Energy Developments

As 2015 draws to a close, it's a good time to take a look at the incredible progress California has made toward scaling up energy efficiency - in part spurred by Governor Jerry Brown's inaugural address at the start of the year that called for a doubling of energy efficiency by 2030. This ambitious target builds on California's long history of success but will also require the state agencies, utilities, and other stakeholders to work together to update current policies, think creatively to push the status quo, and expand what is working to make sure California meets this goal.

Since the energy agencies, utilities, local governments, efficiency companies, and non-profits began helping us cut energy waste in the 1970s through programs, codes, and standards, customers have saved nearly $90 billion on their energy bills and cut electricity demand enough to avoid 30 large power plants (with 11 more expected to be avoided over the next decade). That's all while helping to lower our annual household electricity bills - which are $240 less than the national average - and making our economy more productive. (See NRDC and E2's California's Golden Energy Efficiency Opportunity: Ramping Up Success to Save Billions and Meet Climate Goals for more info)

What energy efficiency progress did the state make this year? Here's a high-level look:

1. The legislature passed two critical bills that will push the state closer to reaching our energy and climate goals:

  • The Clean Energy and Pollution Reduction Act of 2015 (Senate Bill 350), authored by Senate Pro Tem Kevin de León and Senator Mark Leno, includes numerous provisions to ensure California has the cleanest mix of energy possible by 2030, such as doubling energy efficiency achievements across the economy, reaching 50 percent renewable energy resources, and ramping up the number of vehicles on the road that drive on clean electricity rather than gasoline.
  • Second, Assembly Bill 802, authored by Assembly Member Das Williams enables efficiency programs to bring existing buildings up to the current California efficiency standards and beyond, reduce energy use through operational and behavioral improvements, provide access to energy bill data to commercial and multifamily building owners, and creates a clear benchmarking program for owners of large buildings to compare their facilities' energy use to similar buildings and more easily identify opportunities for cutting energy waste.

2. The California Public Utilities Commission also advanced energy efficiency with its decision this fall to approve the rolling portfolio approach to program planning, which continues ten years of funding and gives the market a signal that efficiency is here for the long-term. The new direction pulls from a proposal by over a dozen stakeholders, establishes a more regular review process to better balance workload and update efficiency programs as needed, relies on a collaborative stakeholder engagement process, moves toward a more predictable way to update the technical values implementers use to design programs, and directs efficiency program administrators to design their offerings in a more streamlined manner, using the California Long Term Energy Efficiency Strategic Plan as the guide.

In addition to these great achievements, the CPUC set forth how utilities and other stakeholders should invest in smaller clean energy resources to help reduce energy costs for customers and help improve the grid. The commission also approved a host of research, development, and demonstration projects to ensure the state continually pushes forward to rely on the most innovative approaches to cutting energy waste.

3. The California Energy Commission similarly played an important role in pushing efficiency to the next level by approving California's Existing Buildings Energy Efficiency Action Plan, which details how the state can cut energy waste in existing buildings. According to the Action Plan, residential and commercial buildings account for nearly 70 percent of statewide electricity use and 55 percent of natural gas use (or one-fifth of all greenhouse gas emissions in California).

The Action Plan focuses on five main goals, including greater government leadership, enabling more access to data to inform decisions, improving performance of efficiency installations, increasing the value of efficiency in the real estate market, and ensuring sufficient financing to fund upgrades and even better energy saving offerings for underserved communities. The Action Plan will be coupled with forthcoming implementation strategies to help ensure success.

The CEC also pushed forward projects to support upgrading the efficiency of schools, advanced codes and standards, and sent a clear message to violators of the state's efficiency standards by requiring rebates to be given to customers that purchased the non-compliant products and imposing a fine of $1 million for violations, to be used for ongoing enforcement efforts.

Can we really double our efficiency by 2030?

Yes. But it will be a challenge. Lucky for us, California is no stranger to working hard to achieve ambitious targets touted to be impossible to meet (like how we are on track to meet our landmark 2006 legislation to reach our climate goals while also supporting a growing economy). We have a rich history of cutting energy waste that we can build upon and the state is already looking at ways to meet the 2030 goals while continuing to grow jobs that support the manufacture, distribution, and installation of energy efficient equipment and building products.

We have a lot of work to do in 2016, but we are already on our way. In the New Year, energy agencies and stakeholders should:

  1. Work collaboratively to prioritize key tasks and solve some of the tougher problems (such as how do we make sure we're valuing efficiency correctly and getting the savings we expect);
  2. Ask for help from national experts who have also grappled with these issues (like the Regulatory Assistance Project, the Consortium for Energy Efficiency, and the American Council for an Energy Efficiency Economy);
  3. Use the existing California Technical Forum to work out technical issues related to efficiency programs; and
  4. Launch the stakeholder engagement process to discuss and advise on energy efficiency programs described by the CPUC in the October rolling portfolio decision and establish the energy efficiency collaborative described in the CEC's existing building action plan.

By prioritizing the challenges the state needs to address, resolving outstanding barriers to scaling up efficiency, trying new ways to cut energy waste, and ensuring that energy savings are reliable, California can achieve our climate and clean energy goals and provide enormous bill savings to customers, cut pollution, and support a healthy and growing economy.

About the Authors

Lara Ettenson

Director, California Energy Efficiency Policy, Energy & Transportation program

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