Utility Energy Efficiency Programs May Shrink

By Published On: November 27, 2011

Advanced codes and standards for buildings, appliances, and other energy-using devices are crowding out a future role for investor-owned utility energy efficiency programs emerging information shows. In light of the data, California Public Utilities Commission administrative law judge Darwin Farrar Nov. 17 postponed release of the commission staff’s proposed energy saving goals for the utility programs for 2013-14 until the new information can be fully understood. Farrar cited a study by Navigant Consulting showing that the commission’s estimate of program savings potential through 2016 is inflated by as much as 15,000 GWh/year in 2016. Future savings under the utility programs are increasingly constrained by the advance of technology now commonplace in the market under federal and state energy consumption standards for product manufacturers and builders. Consequently, according to Farrar, many of the existing utility programs are yielding less energy savings than planned. For instance, the judge cited less potential savings from behavioral modification programs in which consumers are challenged by information presented on their utility bills to save energy. In addition, refrigerator recycling programs are saving less energy, as are compact fluorescent lighting programs. In a lobbying effort last week with an advisor to commission member Mark Ferron--who heads the commission proceeding on utility energy efficiency programs for 2013-14--Natural Resources Defense Council senior scientist Peter Miller explained that CFL sales have declined with market saturation. The Navigant study pinpoints key codes and standards that reduce potential savings through utility programs. They include: -California’s Title 24 building code and new state enforcement powers; -California’s Title 20 lighting standards to phase out general service incandescent bulbs over the coming years; and -Federal energy efficiency standards for new dryers, dishwashers, air conditioners, heat pumps, and other appliances. As codes and standards promise to reduce energy use by such devices and in new construction, Ferron stated he wants to find ways to incentivize and finance “deep” energy efficiency retrofits in existing homes and businesses. To that end, Division of Ratepayer Advocates attorney Diana Lee earlier this month recommended that the commission use $150 million of utility energy efficiency funds to create a statewide retrofit financing program. It would be administered by the California Advanced Energy & Alternative Transportation Authority. The Authority would leverage the money in a number of ways, including buying down interest rates, guaranteeing loans, and applying for matching grants, for instance, from the federal government. Under the ratepayer advocate’s plan, $100 million would be earmarked for residential and small business utility customers and $50 million set aside for agricultural, industrial, and large business customers. She urged the commission to establish the fund by April 1. Farrar does not expect Ferron’s proceeding on the 2013-14 utility programs to be completed until next fall.

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