Energy Efficiency Funding Protected in PG&E Bankruptcy Case

Public Purpose Programs Essential to Help Keep the Lights on, Says NRDC

SAN FRANCISCO (May 16, 2001) - A judge in San Francisco federal court today ruled that approximately $260 million that had been tied up in the Pacific Gas and Electric Company (PG&E) bankruptcy proceedings will be released to fund California energy efficiency programs. These funds come from a small surcharge on utility customers' monthly bills and provide desperately needed electricity savings that will help protect the reliability of the state's overstressed power grid, said NRDC (Natural Resources Defense Council).

"This is a victory for California consumers and the environment," said Peter Miller, NRDC senior scientist. "NRDC worked very hard to ensure that the state would make these important energy efficiency investments in the first place."

In a ruling from the bench this morning, Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco ruled in favor of a motion by PG&E for authority to honor its obligations for public purpose programs. NRDC, Environmental Defense and Utility Consumers' Action Network filed a memo with the court in support of the utility's argument that it is merely a conduit for the public purpose funds and that the funds should be off limits to the utility's creditors.

California has aggressively promoted energy efficiency in buildings and equipment since the 1970s, reducing total peak electricity needs by about one-fifth or 10,000 megawatts (MW). Approximately half of those reductions have come from public purpose programs funded by a small surcharge on bills paid by customers of PG&E, Southern California Edison, and San Diego Gas & Light. Since 1998 alone, these programs have delivered about 500 MW of electricity savings.

"At a time when the difference between an intact grid and rolling blackouts is sometimes measured in the tens of megawatts, energy efficiency clearly represents the fastest, cheapest and cleanest solution to California's electricity dilemma," said Miller.

The public purpose programs provide financial incentives to businesses and consumers to design more energy efficient buildings and to buy energy efficient equipment, such as refrigerators, air conditioners, light bulbs and clothes washers. They also provide funding for investments in renewable energy, low-income energy services, and long-term research and development for clean energy technologies.