1. California Policy Perspectives on Efficiency and Climate
Session: Taking Energy Efficiency to the Next Level
New England Restructuring Roundtable
Boston, MA October 30, 2009
Jeanne Clinton
Climate Strategies Branch Manager
California Public Utilities Commission
or (415)

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3. CPUC EE Goals Through 2020
Goals set for CPUC-regulated utilities from 2004 through 2020, in accordance with best available data on energy efficiency potential.
Does not take into account potential within Publicly-Owned Utility Service Areas
Based primarily on existing technologies and rates of adoption

4. California Targets for GHG Reduction

5. Aggressive EE/GHG Goals
California Air Resources Board Scoping Plan
EE Target (Nov, 2008):
32,000 GWh and 800 MMTherms/year
19.5 MMT CO2E in 2020
Utility programs, codes & standards, voluntary action
EE and solar water heating 15% of AB32 Plan
(Cap and trade target is 20% of Plan)
CPUC 2020 interim “Total Market Gross” EE goals (July, 2008):
16,000 GWh and 620 MMTherms/year
Equal to nine or ten power plants avoided

6. The California Long Term Energy Efficiency Strategic Plan
A Strategic Plan is Necessary:
Longterm and visionary – with real market-transforming market transformation (non-energy) goals:
-Zero Net Energy Buildings (2020/2030);
reduce existing homes energy demand 40% by 2020;
make 50% of existing commercial buildings ZNE by 2030;
enroll all eligible households into LIEE programs (30% of Californian’s qualify)
Make energy efficiency a way of life in California by transitioning ratepayer funded programs into the marketplace without subsidies, or into building codes and standards.
2. Ensure energy efficiency programs are highly cost-effective while producing long-term, sustained energy savings in the built environment.
Achieve California’s AB 32 Goals. Energy Efficiency delivering some 15% of California statewide emission reductions.

7. Identifying Strategies to Fill in the “White Space”

8. 2010-12 IOU EE Portfolio Highlights
12 Uniform Statewide Programs (by sector and segment)
Cal SPREE (Statewide Program for Residential Energy Efficiency): 20 percent savings for up to 130,000 homes
Commercial: Benchmarking all facilities touched by programs
Industrial: Continuous Energy Improvement
Zero Net Energy New Construction: $175 million launch
HVAC: Focus on state code compliance
Lighting: Phases down $ for basic Compact Fluorescent Lamps (CFLs); shifts emphasis to advanced lighting
Communities: $260 million for 64 local governments for own facilities and/or innovative approaches
Statewide Marketing, Education & Outreach: coordinated brand and implementation across 4 utilities

9. Definitional Challenges for Inter-Agency Collaboration – CAISO, CARB, CEC, CPUC
Baselines, electric & gas load forecasts, moving target of generation fuel mix/GHG profiles
Defining “additional”
Defining EE “embedded” in energy forecasts, versus a DSM “resource”
Modeling and assumptions for future resource quantitative potential, costs to acquire EE
Assigning payments; e.g. electric infrastructure, tariffs, subsidies for EVs to replace gasoline

10. Climate/EE Policy Issues Ahead for California and the U.S.
Demand-side strategies not part of Cap and Trade; no mechanism to sell GHG benefits from DSM.
Cap and trade places limits on sources of GHGs; demand-side strategies not directly integrated.
GHG emission price will make more DSM “cost-effective”
But “offsets” typically allowed outside the cap jurisdiction only
Local Governments can influence building and transportation, but how pay for increased governance?
Allowance auctions may provide EE funds to expand programs &/or creative allowance “retirement”
EE Institutional challenge: Need broad vision, strong leadership, over sustained period – to overcome ”friction” of diffuse markets and action venues

11. DSM Financing – Needs Focus, Attractive Terms, Exponential Growth
California needs $8 - $25 billion in financing for EE hardware installation
Statewide Utility On-bill financing (OBF):
For commercial and institutional customers, w/ common caps and terms
Initial $41.5 million new funds for OBF loan pool
Municipal property-based financing (or “Property-Assessed Clean Energy Bonds “– PACE)
The “salvation” for residential and rented/leased properties?
California links to stimulus funded retrofit programs
CPUC/State Treasurer’s office exploring collaboration to fund EE for state facilities
Broader financing solutions report due 2010
Commercial loan cap is $100,000; 5 year or EUL loan term
Institutional loan cap is $250,000 except in special circumstances, where up to $1 million may be available; 10 year or EUL loan term
ARRA funding estimate is: $351.5 million for Energy Efficiency and Conservation Block Grant (EECBG) Program for local governments RE and EE programs; $226 million for State Energy Program (SEP), administered by CEC; $35 million possible for Energy Star Appliance Program (CEC); $185.8 million for Weatherization Assistance Program (WAP), administered by state Community Services and Development Department
August 2009 California unemployment rate estimated at 12.2%, the highest rate since 1940.

12. Extra Slides

13. 2008 Spending for Select Public Purpose Ratepayer-Supported DSM-type Activities (programs in $000s)

14. 2010 Authorized Ratepayer Spending for Energy Efficiency

15. CA’s 2010-2012 Investor-Owned Utility EE Portfolio Metrics
Savings Impacts Anticipated:
6,965 GWH (3rd yr cum)
1,537 MW
150.3 MM Therms
3.07 million tons of CO2e emissions avoided (3rd yr cum)
Equivalent of 3 large power plants
$3.1 billion cost-effective efficiency portfolios
$ 41 per capita per year (combined gas and electric)
Supports 15, ,000 new jobs
Performance metrics to track market transformation and programmatic progress, beyond energy savings
Cumulative 2012 GWh savings goals estimated at 15,910 GWh;
Cumulative Peak (MW) savings goals estimated at 3,459 MW;
Cumulative MMTherms savings goals estimated at MMTherms;

16. EE Market-Place Challenges
Market strategies need to extend beyond utility programs, leverage private resources, capture economic value
Promote the business potential, capital investment opportunities
Mobilize bold action and create a "movement" for EE and other demand-side actions, behavior, investment:
Achieve deeper action – 20%, 40 %, 70% efficiency gains            
Pull consumer and business demand; call on comparative benchmarks
Marketing to reflect understanding of market segments, motivations,...
Expand knowledgeable and trained providers who can successfully sell and deliver results
Innovate effective financing mechanisms – long amortization terms and transferable to successive owners/occupants (OBF, PACE, ...)