Utilities to Receive $2B for Conservation

The California Public Utilities Commission authorized investor-owned utilities to spend $2 billion on energy-efficiency measures over the next three years to reduce the need for new power plants and curb global warming. The vote was 4-0 as commissioner Dian Grueneich recused herself. As an attorney, she represented within the last 12 months the Natural Resources Defense Council, which was a party to the proceeding. "This is the single largest funding authorization for energy efficiency in the U.S.," said commissioner Susan Kennedy September 22. "What this plan does is help meet our growing needs with the cleanest, most cost-effective energy of all - - energy efficiency,? she added. The adopted decision by Kennedy is expected to boost regulators? number-one goal of having conservation and efficiency used first to meet power procurement needs. According to Kennedy's decision, doubling conservation and efficiency funding for large and small businesses, schools, and homes is expected to save a net $2.8 billion "over the life of the measures." Power savings resulting from Pacific Gas & Electric, Southern California Edison, SoCal Gas, and San Diego Gas & Electric programs are expected to equal 1,500 negative megawatts. In addition, the utilities are expected to reduce carbon dioxide emissions by 3.4 million tons - - the equivalent of 650,000 cars taken off the road. "Every year the new program will avert the need to build another giant power plant, at half the cost and without the pollution," said Devra Wang, NRDC staff scientist. Because of high natural gas costs this winter, the commission approved tapping into 2006 consumer appliance rebate funding this year, as requested by the utilities (Circuit, Sept. 16, 2005). Fund shifting between different programs was also approved to increase energy savings. PG&E was authorized to spend a total of $867.5 million and Edison $674.8 million over the next three years. SDG&E and SoCal Gas received approval to spend $257.5 million and $168.9 million, respectively. The programs include design assistance, energy audits, programmable thermostats, offering discounts to target markets, including agricultural and food processors, local partnerships, and equipment and appliance rebates. These approved expenditures do not include funding for evaluation, measurement, and verification of the efficiency measures. Close to $725 million of the $2 billion pot will be put out to bid. Third-party solicitations will be sought that target specific improvements in designs and technologies. The Green Buildings Initiative, aimed at slicing energy use in commercial buildings by one-fifth, will receive an additional $230 million a year - - a 36 percent increase. The four utilities were ordered to assess whether their plans remain cost-effective and meet the projected savings goals. The CPUC will next take a look at possible improvements in the model used to calculate cost-effectiveness of investments, including distinguishing between efficiencies that shave peak load and those that result in overall demand reductions.

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Utilities to Receive $2B for Conservation

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