New Environment-Business Collaborative Report Outlines Basis for State's Conservation Success

Report debunks myth that high-tech industry is strain on California's energy resources

SAN FRANCISCO (August 23, 2001) - The Silicon Valley Manufacturing Group (SVMG) and the Natural Resources Defense Council (NRDC) released today the first independent assessment of California's surprisingly effective energy conservation efforts. The report, "Energy Efficiency Leadership in a Crisis: How California is Winning," analyzes the state's conservation program and the role of California's high-tech industry as a force for innovative industry-wide conservation efforts. The result has been the most successful statewide energy conservation campaign in history.

Incorporating the very latest statewide energy use data, the NRDC and SVMG study highlights California's overall conservation results as well as what role the high-tech industry has had in relieving stress on the energy grid. More specifically, the report addresses how California, an already efficient energy consumer, has further reduced energy demand by 12 percent from June 2000 through a host of coordinated policies and incentives.

Contrary to the myth, California's high-tech economy is not the energy behemoth it has been painted to be. In fact, the annual rate of increase during 1990-1999 was about 1 percent, matching California's population growth and lagging far behind the 2.8 percent average growth of the state's economy. Over the same period, electricity use for the nation as a whole increased by 2.2 percent per year, more than twice the 1 percent annual growth in population.

"Conservation does not occur on the basis of happenstance or luck; it requires a plan," said Ralph Cavanagh, author of the study, and Energy Director for the NRDC. "Both the State of California and the high technology industry have proven that they have a plan that works to achieve rather dramatic energy conservation results to date." The NRDC has been an effective advocate for strengthening and coordinating the state's many energy efficiency incentives and standards.

By June 2001, reductions had reached almost 4,800 megawatts, a drop of more than 12 percent in peak electricity use from June 2000, or the equivalent of 10 large power plants. For the seven months ending on August 1, total electricity consumption was down by about 6 percent, compared to the same period a year earlier and adjusted for weather abnormalities. In a state that had started out the year as arguably the nation's most efficient in its use of electricity, this remarkable achievement is the main reason why prospects for electricity reliability and prices now look much better than expected. Experts had feared in May that more than 250 hours of rolling blackouts would disrupt California throughout the summer, shutting down the equivalent of more than two million households per blackout.

"Energy efficiency is a bottom-line issue for our industry," said Justin Bradley, Energy Programs Director for SVMG. "The California energy crisis has been a driver of innovation not only within companies, but across the industry."

Today's report also debunks a popular myth regarding the insatiable appetites of electricity-intensive data centers. In fact, these buildings, which house computer equipment to support information and communications systems, use less than one-eighth of one percent on the nation's electricity supply. Even in the San Francisco Bay area counties, which house fully ten percent of the nation's server farm capacity, such applications account for only about 1.2 percent of regional electricity consumption.

California's high technology leadership is a crucial part of the solution to an overstressed electricity grid. For example, Hewlett-Packard has reduced year-over-year electrical consumption in its California facilities by as much as 21 percent. And, as the report explains, information technologies are becoming steadily more efficient, even as they allow users to reduce overall energy use in ways that swamp the technologies' relatively modest electricity consumption.

The "Energy Efficiency Leadership in a Crisis" report is an important example of the type of work the Hewlett Foundation will be sponsoring through its energy initiative launched earlier this month.

"This report demonstrates how business, nonprofit organizations, government and utilities can come together to promote effective conservation solutions -- and how it is essential that they do so in times of crisis," said Paul Brest, President of the Hewlett Foundation. To learn more about the Hewlett Foundation's energy initiative, please visit

The report will be featured at the Energy Efficiency Conference on Friday, August 24 from 8:00 a.m. to 12 noon, at the City of Cupertino's Quinlan Center. The event is co-sponsored by the SVMG, NRDC, and the City of Cupertino, and will focus on locking in our energy efficiency gains for the long term. Silicon Valley energy leaders from the public and private sector will be present at this conference and available for comment. More information on the Energy Efficiency Conference can be found at

The Natural Resources Defense Council is a national, non-profit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has more than 500,000 members nationwide, served from offices in New York, Washington, Los Angeles and San Francisco.

The Silicon Valley Manufacturing Group (SVMG) was founded by David Packard of Hewlett-Packard, in 1978. The Silicon Valley Manufacturing Group is organized to involve principal officers and senior managers of member companies in a cooperative effort with local, regional, state and federal government officials to address major public policy issues affecting the economic health and quality of life in Silicon Valley. Today, SVMG represents 190 of the Valley's most respected private sector employers, who collectively provide 275,000 local jobs -- or nearly one of every four jobs in all of Silicon Valley. The trade policy organization has five priority issues, which include transportation, housing, energy, environment, and education. For more information on SVMG, please visit