Energy Efficiency Programs in California

2009-2011 Energy Efficiency Program Plans
All Californians pay a fee on our utility bills to fund energy efficiency programs. That monthly investment is supposed to provide us with resources to save both energy and money, including consumer education, rebates and direct assistance in reducing our energy usage.  But under the administration of Edison, SDG&E, PG&E and SoCal Gas, the programs have become top-heavy, with the utilities inflating their administrative costs, and not spending enough on actually saving energy.  The energy companies submit three-year plans for using the Public Goods Charge, and the 2009-2011 Energy Efficiency portfolios are currently under review by the CPUC (California Public Utilities Commission).  TURN supports an independent administration of Energy Efficiency Programs because of the obvious conflict of interest: utility companies are charged with reducing use of what they sell.

Shareholder Incentives
To ease the blow on shareholders, the CPUC created an incentive system to reward companies that met energy efficiency goals.  The energy companies designed plans that maximized shareholder rewards without reducing California’s long-term energy use.  In addition to submitting plans that do not actually save energy, last year the utilities collected $82 million in bonuses for achieving CPUC-mandated goals that they did not actually meet.  The energy companies demanded fast payments based on their own self-reporting rather than waiting for independent verification of energy savings.  The CPUC favored expedience over accountability, ruling in January 2009 that the companies could keep the interim payments, even though Edison, SDG&E and PG&E did not meet minimum goals.

Administrative Overhead
Only 40 cents out of every ratepayer dollar for the 2009-2011 Energy Efficiency programs will be used to help ratepayers save energy and money through consumer education, rebates and direct assistance in reducing our energy usage. The majority of the $4.2 billion will be spent on administration, general overhead and marketing materials.

Home Energy Audits
Because utility companies are focused on increasing profit, not reducing energy use and sales, they have not prioritized on-site home energy audits, which help homeowners, renters, and small businesses identify low-cost solutions that yield large energy savings, as a regular part of the Energy Efficiency program.

Home Weatherization
Utility companies have not prioritized weatherization, which helps to retain heat in the winter and cool in the summer—drastically reducing heating and air conditioning bills, as a regular part of the Energy Efficiency program.  On average, weatherization reduces heating bills by 32% and overall energy bills by about $350 per year at current prices. This spending, in turn, spurs low-income communities toward job growth and economic development.

Community Economic Development and Green Community Jobs
Utility companies have done little to create and promote green jobs in low-income communities installing weatherization or conducting energy audits as part of their Energy Efficiency program, and have done little to partner with community-based organizations and minority-owned contractors to provide Energy Efficiency services in low-income communities. According to the Department of Energy, weatherization supports 8,000 technical jobs in low-income communities. These jobs represent a significant source of economic development through what economists call the "multiplier effect."