1. California Energy Efficiency Programs
Energy Efficiency Section
CPUC Energy Division
April 23, 2008

2. Energy Efficiency - Definition
A subset of Demand Side Management
Typically refers to the permanent installation of energy efficient technologies or the elimination of energy losses in existing energy using systems, but there are gray areas and overlaps
Energy efficiency aims at maintaining a comparable level of service while reducing energy consumption
Broad categories of energy efficiency programs:
Residential
Commercial/Industrial/Agricultural
New Construction
Excludes: conservation, load management, renewables

3. Why Energy Efficiency?
A cost-effective resource option in meeting growing energy needs of consumers
Significant Environmental benefits from avoiding generation
Paves the way for sustainable growth

4. Cost Effectiveness of 2006-2008 Energy Efficiency Programs
The authorized $2 billion funding will:
Cut energy costs for homes & businesses by more than $5 billion
Avoid building 3 large (500 MW) power plants over the next three years
Reduce global warming pollution by an estimated 3.4 million tons of carbon dioxide by 2008, which is equivalent to taking about 650,000 cars off the road
Increase funding for the Governor’s Green Building Initiative (Executive Order S-20-04) to $230 million/year, which is a 36 increase in annual funding for climate change efforts
Provide net resource benefits (value of savings benefits minus program and customer out-of-pocket costs) of estimated $2.7 billion, representing a benefit cost ratio (using Total Resource Costs or TRC test) of 2 to 1 return on the efficiency investment

5. California Global Warming Protection Act
Signed into law by Governor Schwarzenegger on September 27, 2006
Requires reduction in greenhouse gas emissions to 1990 levels by 2020
Emissions covered
Carbon dioxide
Methane
Nitrous oxide
Hydrofluorocarbons
Perfluorocarbons
Sulfur hexafluoride

6. GHG Emission Reductions From EE & DR Programs – 23%+ of California Climate Action Goals for 2020
California Programs
GHG Savings
(Million Tons CO2)
IOU Energy Efficiency Programs through 2013 4
8.8
Additional IOU EE/Demand Response Programs ( ) NA
6.3
Municipal Utility EE Programs 1
5.9
Current Building & Appliance EE Standards 7
New Building & Appliance EE Standards
TBD
Green Buildings Initiative
0.5
1.8
Combined Heat and Power Initiative
1.1
4.4
Total:
10.6
34.2
Source: Climate Action Team Report to Governor Schwarzenegger and the Legislature, March 2006.

7. Electricity and Natural Gas Program Savings Goals
CPUC Energy Savings Goals would cut growth in energy use by more than half by 2013.
Electricity and Natural Gas Program Savings Goals
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Annual Electricity Savings (GWH/yr)
1,838
2,032
2,275
2,505
2,538
2,465
2,513
2,547
2,631
Cumulative Savings (GWH/yr)
3,677
5,709
7,984
10,489
13,027
15,492
18,005
20,552
23,183
Peak Savings (MW)
379
757
1,199
1,677
2,205
2,740
3,259
3,789
4,328
4,885
Annual Natural Gas Savings (MMTh/yr) 21 30 37 44 52 54 57 61 67
Cumulative Natural Gas Savings (MMTh/yr) 42 72
110
154
206
260
316
377
444

8. California Compared to US Energy Efficiency

9. Annual Energy Savings from Energy Efficiency Programs and Standards
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
GWh/year
Appliance Standards
Building Standards
Utility Efficiency
Programs at a cost of
~1% of electric bill
~15% of Annual Electricity Use in California in 2003

12. Funding for CA Energy Efficiency Programs
Two Sources:
Public Goods Charge
California’s energy efficiency programs are funded by electric Public Goods Charge and natural gas Public Purpose Program charge applied to each customer’s bill
Surcharges approximately 1% (electric) and 0.7% (gas) of each customer’s bill and provide approximately $270 million annually to fund energy efficiency programs
Procurement
Energy efficiency is treated as a resource
Utilities “purchase” energy efficiency as they purchase electric supply
The procurement portfolio includes energy efficiency along with traditional supply
What is the role of energy efficiency in energy planning and investment or procurement policies?
What are the approaches to utility cost recovery, incentives, and related regulatory practices?

13. Funding for 2004-2005 Energy Efficiency Programs Increased to $823 Million Using Procurement Funds
Funding Sources for Programs
Funding Sources
Millions
Electric Public Goods Charge (PGC)
$460 m
Procurement Funds
$245 m
AB 1002 Gas Surcharge
$91 m
Unspent/uncommitted PGC& Gas Funds (
$24 m
Interest for PGC & Gas Funds
$3 m
Total
$823 m

14. 2006-2008 Energy Efficiency Budget & Projected Savings per D.05-04-043

15. Total Annual California IOU EE Actual Spending
(all IOUs rolled up)
source:  Utility Annual Reports for 2004 and 2005, Table 1.1 and 2006, Table 3.  Utility 2007 Monthly Reports, Table 1.1 posted to

16. Energy Efficiency: 2006-2008 Statewide Programs Residential
Commercial/Industrial/Agricultural
On/Off-Bill Financing
New Construction
Codes & Standards
Emerging Technologies
Statewide Marketing and Outreach
Third Party (EE Contractors) Programs
Government Agencies Partnership Programs
Information on CA utility EE programs:
Energy Efficiency

17. Types of Energy Efficiency Programs
Rebate – Customer purchases energy efficiency measure at lower cost with the difference paid for by the program
Audit – Inspection of a home or business to identify energy efficiency opportunities
Direct Install – Installation of energy efficiency measures at no cost to the customer
Appliance Turn-In – Takes inefficient appliances out of circulation with free or rebated recycling services
Education – Training for the general public as well as trade allies such as builders or building operators
Performance Contracting – Typically nonresidential programs; provides rebate for equipment and building retrofit per unit of energy saved rather than per measure purchased or installed
Energy Management Services – Typically Nonresidential programs. A combination of audit services, rebates and/or direct install, as well as load management and self-generation.
What are the most common and successful utility energy efficiency programs and technologies? What types of consumers are targeted by different energy efficiency program designs?

18. Building Energy Efficiency Programs
Codes and Standards Program
Promotes energy savings through the identification, quantification, and substantiation of changes to building and appliance codes and standards that represent the best practices in energy efficiency.
UC/CSU Schools Program
Provides University of California and California State University schools incentives for building retrofit projects and monitoring based commissioning, and education and training for campus energy managers using the UC/CSU systems of communication and outreach channels to achieve board penetration of local campuses.
Governmental Agency Partnerships
Partners with governmental agencies to seek opportunities to bridge the activities of the agency with the energy efficiency resources of the utilities to deliver cost-effective long-term energy savings at agency buildings and facilities.

19. Building Energy Efficiency Programs (continued)
Building Retro-Commissioning Program
Applies a systematic process for improving and optimizing larger sized building operations. The process is intended to optimize how equipment operates as a system in large buildings to save energy.
Building Operator Certification Program
Provides training to building operators on how to run a building properly, and to identify opportunities that can save energy and reduce peak demand.
Savings By Design Program
Moves customers and design industry professionals to design their new or remodel buildings/facilities to integrate energy use and environmental considerations into their standard process of design to achieve cost-effective levels of energy and resource efficiency.

20. Evaluation Planning
The Commission approved over $162 million of funding for EM&V and related projects
Developed a methodology to
(1) assess risks associated with the utilities’ programs,
(2) determine impact evaluation priorities and rigor level requirements, and
(3) Allocate funding to specific projects
Currently preparing evaluation research plans and competitive bid documents

21. Can we go further…?

22. CPUC Sets Aggressive Energy Savings Goals through 2013
Goals adopted in D consistent with Energy Action Plan
Goals reflect importance of reducing energy use per capita in CA
Electric goals expected to capture 70% of the economic
potential & 90% of the maximum achievable potential savings
Goals represent 116% increase in expected savings over the next decade
Three-year cycle updating savings goals in concert with a three-year program planning & funding cycle for energy efficiency
How much confidence is there in the energy savings and cost effectiveness of energy efficiency programs?

23. Commission Adoption of Decision On October 18, 2007 Established a New Framework for EE Program Planning:
Direct the utilities to prepare a single, comprehensive statewide long-term energy efficiency plan;
Adopt three programmatic initiatives:
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; and
Heating, Ventilation, and Air Conditioning (HVAC) industry will be reshaped to ensure optimal equipment performance;
Develop the “next generation” of California utility energy efficiency programs for ;
Commit in the near term to adopting utility energy efficiency goals through 2020 and reaffirm our previously adopted goals; and
Establish new, collaborative processes with key business, consumer groups, and governmental organizations in California, throughout the West, nationally and internationally.

24. Additional Direction From D.07-10-032
In this decision the Commission required the utilities to:
Engage in long-term strategic planning;
Collaborate with others who engage in planning and delivery of energy efficiency related goods and services, or who receive such services; and
Integrate customer demand-side programs, such as energy efficiency, self-generation, advanced metering, and demand response, in a coherent and efficient manner.

25. Why integrate? (coordinate)
Avoid lost opportunities
Achieve market transformation
Big Bold Programmatic Initiatives
Access efficiencies in delivery systems
Access additional EE (& other DSM energy savings)

26. New Participants Alliance to Save Energy
American Council for an Energy Efficient Economy
Better Buildings Incorporated
California Apartment Coalition
California Building Performance Contractors Association
California Natural Gas Vehicle Coalition
Conservation Services Group
Ecology Action
Energy Coalition
EP Investments Incorporated
Global Energy Partners LLC
Heller Manus Architects
ICE Energy, Inc.
Inland Empire Utilities Agency
Northwest Energy Efficiency Alliance
Quantum Energy Services & Technologies, Inc.
Robert Mowris and Associates
Sacramento Municipal Utility District
Schweitzer and Associates
Small Business California
University of California, Davis Energy Efficiency Center
Western Cooling Efficiency Center
Here is a sample of just some of the new participants in the PUC process via this decision.
Ultimately, it is going to take the type of Public-Private-Institutional effort represented here on a vast scale.
We want to transform the way we do energy efficiency
--to advance from programs that distribute free light bulbs to systematic efforts that make energy efficiency “business as usual” in California. Saving energy will be a lifestyle in California and not a program.

27. What to integrate (coordinate) in Calif. EE Strategic Plan:
Full range of consumer demand side options
Present systems approach for all measures, programs & activities
Collaboratively engage market professionals and stakeholders

28. What level of complexity?
Marketing, packaging & delivery (eg., outreach)
Operational improvements (eg., audits)
Optimization (eg., equipment recommendations)
RD&D
Market Transformation
New partnerships, players & approaches

29. Areas for Integtration
Integration requirements (D )
Similar DR-EE program application filing schedules
Describe programs, activities, and funding requests for combined or coordinated DR/EE activities
Include specific proposals for implementing coordinated approaches to M & O
Leveraging funds for joint marketing of DR/EE/DSM
Consistent information in EE program
Include iDSM pilot projects
(ALJ Ruling, D )

30. Defining Success: kW, kWh Saving $ Avoiding lost opportunities
Reducing GHGs
Water
Sustainability

31. Big Bold Energy Efficiency Strategies
Commercial New Construction
All new commercial construction in California will be zero net energy by 2030.
Residential / Small Commercial HVAC
Heating, Ventilation, and Air Conditioning (HVAC) industry will be reshaped
Residential New Construction
All new residential construction in California will be zero net energy by 2020.
Low-Income Energy Efficiency
All eligible homes energy-efficient by 2020.

32. For Additional Questions Contact:
Lisa Paulo
Regulatory Analyst, Energy Efficiency
California Public Utilities Commission
505 Van Ness Ave. SF 94102