CA PUC HAS TOOL TO BOOST EFFICIENCY

Utilities and utility regulators across the country are developing innovative methods to incentivize energy efficiency. NewEnergyNews has a favorite, a North Carolina market-based concept: Utilities pay for all efficiency upgrades at customers’ premises, then collect costs plus reasonable profits with small but regular supplements to rate bills, keeping payments level to newly efficient consumers but making up for losses from selling less energy.

PUC seeks incentives, penalties for energy efficiency
Elizabeth Douglass, August 10, 2007 (LA Times)

WHO
California Public Utilities Commission (CA PUC)

Savings to CPUC means savings to ratepayers. Savings in public goods charges (PGC) means lower bills. (click to enlarge)

WHAT
A CA PUC proposal would award bonuses or assess penalties to state utilities according to their success at promoting energy efficiency. It would be budgeted at $2.2 billion and paid for by utility customers.

WHEN
Program goals retroactive to 2006 and run through 2008. PUC is taking comments from all comers for 30 days. Vote is scheduled for September 30.

WHERE
California.

WHY
- CA PUC regulates Pacific Gas & Electric Co., Southern California Edison Co., San Diego Gas & Electric Co. and Southern California Gas Co.
- Maximum award for meeting efficency targets: $500 million; Maximum penalty for failing to meet targets: $500 million. Both on sliding scales. Meeting the goals earns ratepayers $2.7 billion in savings and utilities $323 million in rewards.
- Program endorsed by state energy officials and environmentalists. Opponents fear handing over huge amounts of money to utilities but utilities have requested larger amounts.
- The Natural Resources Defense Council report, where the charts on this page come from, promises enormous savings in electricity demand, consumption, utility spending and “public goods charges” (PGC) to rate payers.

Even if consumers don't change their patterns of use, their demand drops because they are using electricity more efficiently. (click to enlarge)

QUOTES
- Commissioner Dian Grueneich, proposal co-author: "We think we've ended up with a sensible approach to energy efficiency…It delivers billions of dollars in savings to the ratepayers, and it avoids an awful lot of greenhouse gas emissions."
- Audrey Chang, scientist, Natural Resources Defense Council: "The utilities will really have to achieve energy savings, and not just spend money on energy efficiency…"
- Marcel Hawiger, staff attorney, Utility Reform Network: "My initial reaction is, 'Thank God they didn't give the utilities everything they wanted,'…I'm disappointed that the commission feels like it's necessary to bribe the utilities to do the right thing."