California Energy Efficiency Policy and Goals Beena Morar Southern California Edison June 14, 2016

Agenda Overview of state policy effected Energy Efficiency EO B California’s Decoupling Policy California Long-Term Energy Efficiency Strategic Plan Title 24: California Building Standards Code SB 350, AB 802 and Beyond 2

EO-B-30-15, Future of GHG Reduction in CA Governor Brown’s Plan SB 350 & AB 802 3

Decoupling Policy Enacted in 1982, it is policy that eliminates the dependency of energy sales to a utility’s revenue and establishes a framework to encourage utilities to conserve energy Utilities submit their revenue requirements for energy consumption to the Commission The Commission sets rates and adjustments to ensure utilities collect no more than what is necessary to provide energy to their customers and provide a fair rate of return to their investors Excess revenue is returned to customers and additional revenue is collected in subsequent rate cases Decoupling is largely responsible for keeping California’s energy consumption relatively flat since the early 1980s; the rest of the nation has increased consumption by nearly 50% 4

Big, bold strategies for energy savings Issued January 2011 to aid California in meeting ambitious energy efficiency and greenhouse gas reduction goals. This plan sets forth a “roadmap for energy efficiency in through the year 2020 and beyond.” The Plan identifies four vertical market sectors (such as residential, low income and ag), and cross-cutting areas (such as HVAC and partnerships) By 2020:  All California residential new construction zero net energy  All eligible low-income customers will be given the opportunity to participate in the low income energy efficiency program By 2030:  All California new commercial construction zero net energy  Reshape HVAC industry to ensure optimal equipment Policy Tools:  Local Government Partnerships Strategic Plan work  Customer Incentives  Education & Information  Technical Assistance 5 Long Term EE Strategic Plan

Partnerships Goals Strategies to Achieve Goals 1.Leverage local government authority 2.Lead by example 3.Community leadership 6 Long Term EE Strategic Plan: Partnerships

7 Technology Adoption Cycle Partners and their communities

8 Advocacy Activities: “The Codes and Standards (C&S) program saves energy on behalf of ratepayers by influencing continuous improvements in energy efficiency regulations, improving compliance with existing codes and standards [through training and education], and working with local governments to develop ordinances that exceed statewide minimum requirements.” Compliance Improvements: Education & Training Workforce Education Outreach Standards & Agencies Title 20 – Plug-in Appliances Title 24 – Building Standards Federal Standards – Commercial and Residential buildings, and Lighting Codes and Standards Activities

9 Title 24 Activities - Commercial

10 Title 24 Activities - Residential

Four Primary Areas o Increase the RPS to 50% by 2030 o Transportation electrification o Double the EE savings in electricity and natural gas by 2030 o Provide for the transformation of the CAISO into a regional organization 50% RPS by 2030 o Current mandate is 33% by 2020 o Sets interim goals of 40% ( ) and 45% ( ) o DG cannot be counted toward achieving the target Transportation Electrification (TE) o Utility charging infrastructure investments and other TE programs to accelerate widespread TE o Broadens the definition to includes all forms of TE such as goods movement and transit o Directs the California Air Resources Boards to remove GHG regulatory disincentives to utilities as TE load grows (e.g. provide free GHG allowances) SB 350 Summary Clean Energy and Pollution Reduction Act of

Three Primary Areas o Expands the types and level of information the CEC can access (below) o Requires the CPUC to authorize IOUs to provide “to code” incentives and count “to-code” savings o Replaces and expands the current “AB 1103 Building Energy Benchmarking” program CEC Information Access o Utilities must provide individual historic billing data to the CEC o CEC must maintain reasonable policies and procedures to protect customer information from unauthorized disclosure. “To-Code” Savings o Provide financial incentives (etc.) based on all estimated energy savings o Consider normalized metered energy consumption as a measure of energy savings o Shall include meeting or exceeding Title 24 o Also include savings from operational, behavioral, and retrocommissioning activities o Count all energy saving in meeting the goals (unless determined otherwise) AB 802 Summary 12

Thank you Questions to 13