Update on California's Approach to Energy Efficiency

Dian M. Grueneich and Jody S. London, Grueneich Resource Advocates

Keywords

Abstract

This paper provides an update on delivery mechanisms and financing of California energy-efficiency programs. For several years, uncertainty has surrounded the role of utilities as program administrators and the role of third parties as program implementers in California. This paper will summarize California Public Utilities Commission (CPUC) decisions regarding implementation mechanisms and funding. Interagency cooperation and increased local government involvement, including the emergence of regional energy offices, have become increasingly important in California. Additionally, the CPUC has encouraged local governments and investor-owned utilities (IOUs) to form energy-efficiency partnerships, and for 2004-2005 allocated $44.6 million, nearly 10 percent of available funds, to this effort. This paper examines these developments, and compares and contrasts California’s approach to approaches in other states on third party involvement. Currently, California has a hybrid approach where the CPUC is acting as both an administrator and a policy making body, something that does not occur elsewhere.

In 2002, California enacted a Community Choice Aggregation law that allows cities and counties to aggregate load within their jurisdictions and purchase energy from non-utilities. Community aggregators, rather than IOUs, can also administer energyefficiency funds. This paper provides an overview of what is permitted currently in terms of energy-efficiency for early adopters of community aggregation, and surveys how Energy Service Providers (ESPs) are integrating energy-efficiency into their community aggregation and direct access offerings. Currently, energy-efficiency does not appear to be a high priority for ESPs, nor are customers seeking energy-efficiency services from ESPs.