Commission Explores ‘Deep’ Efficiency Financing

By Published On: January 13, 2012

With the shift in energy efficiency policy from utility planned programs like compact fluorescent lighting to what California Public Utilities Commission member Mark Ferron calls “deep” efficiency, a commission judge called for exploring on-bill financing and repayment Jan. 10. “It appears that California may be at a point where a combination of energy policy goals, diminishing utility energy efficiency program economics, the compelling need for greenhouse gas reduction strategies, capital markets looking for new opportunities, saturation of customer segments with access to their own financing resources and renewed federal attention to push for large-scale efficiency investments are all coinciding to point to a market opportunity” for efficiency financing, administrative law judge Julie Fitch, wrote. The idea is to loan consumers funds to enact conservation measures to avoid up-front costs. The loans would be provided by third parties, guaranteed by ratepayers, and paid back through utilities’ monthly bills. In the equation, consumers are expected to realize energy savings equal or greater to the costs on the bills. The ruling notes investments in achieving global warming reductions and efficiency goals is expected to require $4 billion/year in investments. The commission expects both utility investments and private financing. Fitch called for comments on the issue until April.

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