1. April 17, 2010 California: A Leader in Energy Efficiency Robert Marcial, PG&E Pacific Energy Center BioForum – Adapting to Climate Change April 17, 2010

2. World and Energy Statistics Which countries have highest percentage of population? China (20%) India (18%) United States (5%) Indonesia (3%) Brazil (3%)

3. World and Energy Statistics Which countries have highest primary fuel consumption? United States (22%) China (14%) Russia (7%) Japan (5%) India (4%)

4. World and Energy Statistics Which are the leading energy sources by type consumed in U.S. for all end uses? Petroleum (39%) Natural Gas (24%) Coal (23%) Nuclear (8%) Biofuels (4%) Hydroelectric (2%)

5. World and Energy Statistics Which are the top end uses for primary fuel energy in U.S. buildings (Comm & Res)? Space Heating (25%) Lighting (14%) Water Heating (12%) Space Cooling (11%) Refrigeration (6%) Electronics (5%)

6. World and Energy Statistics How is energy used in the U.S. by sectors? Industry Transportation Residential Commercial (35%) (27%) (21%) (17%)

7. Buildings and People 35% 17% 21% 27% 48% 25% 27%

8. Buildings and People

9. California Energy Leadership Legacy of energy innovation Decoupling Loading order Energy efficiency Demand response Progressive state energy policy California Long Term Strategic Plan Go Solar California Renewable Portfolio Standard (RPS)

10. California Energy Leadership Arthur Rosenfeld

11. California Energy Leadership An 18 cubic foot refrigerator consumed approximately 2,000 kWh/yr in 1970. How much does a high-quality refrigerator of similar size consume today? ~1,000 kWh/yr ~ 500 kWh/yr ~ 400 kWh/yr ~ 250 kWh/yr

12. California Energy Leadership 197019932001 2009 2,000 kWh 700 kWh 490 kWh 390 kWh Energy Usage per year 18 ft 3 (0.51 m 3 ) frost-free refrigerator

13. Courtesy Art Rosenfeld, California Energy Commission Note: 2005 – 2008 are forecast data. 30+ Years of Energy Efficiency Success - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 196019651970197519801985 1990 1995 2000 KWh USCAWestern Europe

14. Energy Efficiency First resource in our energy mix

15. About PG&E and Our Business What we do: Deliver safe, reliable, and environmentally responsible gas and electricity to approximately 15 million Californians Electric and gas distribution customers 5.1 MM electric 4.3 MM gas Electric transmission and distribution lines 159,863 circuit miles Natural gas transmission and distribution pipelines 48,580 circuit miles Electric generation capacity 6,800 MW

16. PG&E’s 2008 Electric Power Mix

17. U.S. Average (1) 1,329 California’s Average 724 2008 641 2007 636 2006 456 2005 489 2004 566 2003 620 PG&E (2) Greenhouse Gas Emissions (pounds of CO 2 per MWh) (1) Source: U.S. EPA eGRID 2007 Version 1.1 (updated Dec. 2008 and based on 2005 data). (2) PG&E’s emissions rates for delivered electricity were independently verified and registered with the California Climate Action Registry. Given that a portion of the electricity that PG&E delivers comes from unspecified generation sources, the company’s total emissions, and associated emissions rates, may vary from registered figures.

18. Energy Efficiency First to reduce CO 2 emissions CO 2 in electricity: 1.32 lb/kWh (USA) 0.88 lb/kWh (Cal) Consumption: 12.7 MWh/cap. (USA) 7.7 MWh/cap. (Cal) Source: EPA, Inventory of U.S. Green House Gas Emissions and Sinks 1990-2006 February, 2008 CARB, Climate Change Proposed Scoping Plan, a framework for change October, 2008

19. McKinsey Potential Study U.S. can reduce energy demand by 23% by 2020 U.S. can save $1.2 Trillion $520 Million investment 1.1 GTons CO2 reduction per year Re-think how we legislate Re-think how we do business

20. McKinsey Potential Study

23. Decoupling in CA Gas in 1978, electric in 1982 Revenues and earnings are independent of sales. California’s IOUs collect the revenues authorized to run the business and provide a return to investors. If sales rise above forecast levels, extra revenues go back to customers. If sales fall below forecast levels, utilities are assured they can recover the shortfall. Decoupling offers the benefits of more consistent revenues, and it helps promote broad, long-term environmental goals.

24. Decoupling in U.S.

25. CA Energy Action Plan Loading Order Energy Efficiency & Conservation Demand Response Renewable Resources Distributed Generation Traditional Generation

26. Why Do Utilities Support Demand-Side Management? California customers want it Helps mitigate the impact of demand growth on infrastructure Less expensive than new generation Allows allocation of capital to other needed infrastructure projects It decreases CO 2 emissions and impact on the environment

27. Energy Efficiency Numbers Since mid 70’s, California’s energy efficiency programs have: Saved customers over $56 billion 30% reduction in per capita CO2 emissions California avoided building 24 power plants What if California had not acted?

28. California Invests in Energy Efficiency California is investing $3.13 billion in energy efficiency programs between 2010-2012: Savings Goals: 6,965 GWh (House: 0.006 GWh/yr) 1,537 MW 150.3 MMTherms (House: 500 Therms/yr) 3.07 MMTons of CO2 CFLs use up to 75% less energy and last up to 10 times longer than traditional incandescent lamps.

29. How it works Funded explicitly from our customers’ bill (Public Goods Charge for Public Purpose Programs) De-coupling in place Share-holder incentive to generate profit from energy efficiency success Goals and budgets are defined for a 3 year period (program cycle)

30. CPUC Long Term Plan All new residential construction in California will be zero net energy by 2020 All new commercial construction in California will be zero net energy by 2030 HVAC will be transformed to ensure that its energy performance is optimal for California’s climate 100% Low income participation Major emphasis on workforce education and training www.californiaenergyefficiency.com

31. Go Solar California 10 year program (2007 – 2016) 3,000 MW, $3.3B California Solar Initiative (940 MW, $2.17B) New Solar Homes Partnership (360 MW, $0.4B) Other (700 MW, $0.78B) Customers must perform energy efficiency audit to be eligible for CSI incentives www.gosolarcalifornia.org

32. 32 MW 2008 System Load (CAISO / PG&E) California’s Electricity Need Electric demand is highly variable, with peaks that require higher capacity during short periods.

33. 33 Source: California Independent System Operator Corporation % Time per Year Last 25% of capacity needed less than 10% of the time California uses 5% of capacity for less than 50 hours per year! California’s Electricity Need System Load Duration Curve MW Capacity used to support peak demand is expensive, inefficient and environmentally unfriendly.

34. Demand Response Benefits Reduces electrical demand during “critical peak” periods Rewards customers contributing to demand reduction Enables: Reduced need for excess generation capacity to serve peak loads: DR is a “virtual peaking plant” Enhanced electric grid reliability Lower average electric procurement costs Lower environmental impact

35. DR for Home Air Conditioning Professionally installed and maintained at zero cost Web-programmable thermostat & switch 15 / 15 minute compressor on/off cycles during power emergencies Opt out any time – owner is in control May 1 – October 31 Benefits: reduced outages, lower utility bills, environmental benefits, sustained comfort

36. California’s Renewable Portfolio Standard (RPS) California’s mandate of 20% renewable energy by 2010 is the most aggressive renewable energy goal in the U.S. California’s Governor recently signed an Executive Order calling for 33% by 2020. Implementers are pursuing a diverse portfolio that includes both traditional and emerging renewable technologies.

37. California leads the way in RPS policy State renewable portfolio standard State renewable portfolio goal Source: www.dsireusa.org/ September 2009 Solar water heating eligible * † Extra credit for solar or customer-sited renewables Includes non-renewable alternative resources WA: 15% by 2020* CA: 20% by 2010 ☼ NV : 25% by 2025* ☼ AZ: 15% by 2025 ☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) HI: 40% by 2030 ☼ Minimum solar or customer-sited requirement TX: 5,880 MW by 2015 UT: 20% by 2025* ☼ CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis)* MT: 15% by 2015 ND: 10% by 2015 SD: 10% by 2015 IA: 105 MW MN: 25% by 2025 (Xcel: 30% by 2020) ☼ MO: 15 % by 2021 WI : Varies by utility; 10% by 2015 goal MI: 10% + 1,100 MW by 2015* ☼ OH : 25% by 2025 † ME: 30% by 2000 New RE: 10% by 2017 ☼ NH: 23.8% by 2025 ☼ MA: 15% by 2020 + 1% annual increase (Class I Renewables) RI: 16% by 2020 CT: 23% by 2020 ☼ NY: 24% by 2013 ☼ NJ: 22.5% by 2021 ☼ PA: 18% by 2020 † ☼ MD: 20% by 2022 ☼ DE: 20% by 2019* ☼ DC: 20% by 2020 VA: 15% by 2025* ☼ NC : 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017 29 states & DC have an RPS; 6 additional states have goals KS: 20% by 2020 ☼ OR : 25% by 2025 (large utilities )* 5% - 10% by 2025 (smaller utilities) ☼ IL: 25% by 2025 WV: 25% by 2025* † 33% by 2020 proposed

38. Solar Thermal Technologies Under Contract Dish Engine (SCE/SDG&E) Compact Linear Fresnel Reflector Parabolic Trough Power Tower (SCE)Trough/Biomass Hybrid Power Tower

39. Solar PV Technologies Under Contract Tracking Crystalline Silicon Fixed Thin Film (Cd Tel) (SCE) Fixed Thin Film (a-Si) Unspecified CPV (illustrative) Concentrating PV

40. Other Renewable Technologies Under Contract Biomass EnergyWind Energy Small Hydropower (<30MW) Geothermal Energy BioGasOcean Power

41. Humboldt WaveConnect Pilot Ocean wave energy (up to 5MW) pilot study to be conducted off the coast of Humboldt County, Calif. Wave energy converter (WEC) manufacturers can test their devices on a common site and facilitate the development of wave energy technology Power from the WECs for coastal community for the limited time of the pilot license. Most effective WEC technologies will be useed for future projects

42. Power Plants Smart Grid functionality restores the balance Hydro Power Plants Nuclear Power Plants Natural Gas Generators Transmission Lines Distribution Substations Plug-in Electric Vehicles Rooftop Solar Solar Farms / Power Plants Wind Farms Electric GridCustomers Building A Sustainable Electric System Utility-scale Storage Distributed Storage

43. Largest AMI Deployment in North America Automated meter reading for all customers 10 million meter upgrades by mid-2012 A communications network IT systems Frequent meter reads - daily for gas, hourly or 15 minute interval for electric Enhanced customer benefits over time Over 3 million meters deployed to date Installing an average of 13,000 per day

44. A Smart Grid Power Plants Transmission Networks SubstationsDistribution Networks Consumers Overlay with intelligence and automation SenseCommunicateComputeControl

45. Integrated Demand-Side Resources On-site generation and storage Smart charging for electric vehicles Automated management of energy use: Automated demand response Voluntary load control Dynamic pricing

46. ClimateSmart TM

47. ClimateSmart™ How It Works Allows PG&E customers to voluntarily make their electricity and natural gas use “carbon neutral” Around $5 per month for average residential customer Customer payments are tax-deductible and will be invested in a range of innovative greenhouse gas emission reduction projects, such as conserving and restoring California’s forests All projects are new with independently verified emission reductions

48. Climate Smart Projects Photo Courtesy Sempervirens Fund Garcia River Forest The Conservation Fund 200,000 metric tons Photo credit: Douglas Steakley Lompico Headwaters Forest Sempervirens Fund 14,000 metric tons The Conservation Fund 600,000 metric tons Big River and Salmon Creek Forests Arcata Community Forest City of Arcata 40,000 metric tons Methane Capture from Dairy California Bioenergy 75,000 metric tons Recology 90,750 metric tons Methane Capture from Landfills

49. Pacific Energy Center One of three PG&E “centers” (7 in CA) funded by public goods charge offering: Energy efficiency classes Tool Lending Library Technical advice and research assistance More than 500,000 people trained since 1979 by PG&E training centers www.pge.com/pec