State Will Double Energy Efficiency Savings Over The Next Decade

SAN FRANCISCO (January 27, 2005) -- The California Public Utilities Commission (CPUC) upped the ante on the state's renowned energy efficiency program today, making it the most aggressive policy in the nation. New enforceable efficiency targets will help insulate utility customers from rising energy prices and reduce air pollution from power plants, according to NRDC (Natural Resources Defense Council). The new policy establishes the structure to design and deliver programs, such as consumer rebates for the purchase of energy-efficient appliances.

"This is welcome news for everyone who uses energy in California," said Devra Bachrach, NRDC staff scientist. "California is advancing its worldwide leadership on energy efficiency. Today's ruling lays the foundation for an accelerated effort over the next decade, building on the state's 25 years of success."

Under the new rules, utilities are required to invest in efficiency whenever it's cheaper than building new power plants. Bachrach said the program will more than double the level of energy efficiency savings over the next decade and provide an estimated $10 billion in net benefits over the same time period.

Unlike utilities in most other states, California's public utilities have no disincentive to encourage energy conservation, since their revenues are not tied to the amount of energy sold. Under state law and regulations, revenues are "decoupled" from total energy use. That is part of why the state's utility-run efficiency programs have been so successful, according to NRDC.

The new program comes during a time of rising prices for energy sources like natural gas. Earlier this month, Pacific Gas & Electric announced a 31 percent increase in natural gas bills due to continuing high prices this winter. According to the U.S. Department of Energy, natural gas prices are about twice as high as normal, and the trend is expected to continue. The CPUC's new policy will help combat the problem by tripling annual natural gas savings by the end of the decade. By 2013, it will save enough gas every year to serve a community the size of Orange County. In the meantime, utilities have expanded their programs to help customers reduce natural gas use and lower their bills this winter.

Bachrach urged consumers to take advantage of rebates to save energy and cut their energy bills. Rebates are available for the purchase of energy-efficient appliances like clothes washers, dishwashers, central furnaces and water heaters. Last year, rebates were so popular that some programs ran out of money. Consumers can see a full list of available rebates by visiting flexyourpower.org or their local utilities' websites.

Energy efficiency is not just good for consumers' pocketbooks. It also cuts air pollution from power plants and reduces the pressure to drill for fossil fuels on pristine public lands. The CPUC's electricity savings goals will avoid the need to build 10 new giant power plants. By 2013, the efficiency program will save more electricity than San Diego Gas & Electric currently supplies every year to its 1.3 million customers. Carbon dioxide emissions -- the major cause of global warming -- will be reduced by 9 million tons per year by the end of the decade. That's equivalent to taking 1.8 million cars off the road, or about 40 percent of Bay Area vehicles.

"NRDC applauds the Public Utilities Commission, and in particular Commissioner Kennedy, for lowering customers' energy bills and protecting the environment through their leadership on energy efficiency," said Sheryl Carter, NRDC's Director of Western Energy Programs.