Looking Closer At Utilities’ Energy Efficiency Programs

Energy efficiency should not be a gravy train for utility companies.

Not all energy efficiencies are created equal. At least, that’s the argument of consumer and environmental groups lobbying the California Public Utilities Commission – and those advocates are increasingly frustrated with the quality of those programs at the investor owned utilities.

Back in December, PUC commissioners voted to give PG&E, SDG&E, and So Cal Edison 68 million dollars for energy efficiency programs the utilities ran between 2006 and 2008. That was on top of nearly 144 in incentives already paid to utilities for the same underperforming programs. And it was in direct opposition to an administrative law judge’s ruling that not only did the utilities fail to meet their goals and should receive no payments, but that they should actually pay money back to consumers.

Actions like that have raised scrutiny on the state’s energy efficiency programs – and all the savings they boast about.

"When ratepayers are asked to pay hundreds of millions of dollars in bonuses to the utilities, they ought to be getting what they paid for," said Joe Como, acting director of the commission’s Division of Ratepayer Advocates. "That’s simply not happening here."

The DRA – an office at the PUC that analyses rate hikes and other decisions for their consumer impact – worked with The Utility Reform Network (TURN), based in San Francisco, a consumer-advocacy watchdog group – to file an appeal to the 68 million dollar payout. PUC commission chair Michael Peevey has defended the programs.

"That’s pure nonsense," Peevey said. "We’ve done a very, very good job. We’ve kept rates below the consumer price index. We’ve moved the state dramatically in such fields as energy efficiency and renewables. As a group, we’ve tried to do a good job in serving the interests of the people of our state."

But for some, the dispute functions as an indictment of the programs’ usefulness – and if nothing else, an opportunity to wonder how real the savings is in the long run. The DRA has suggested that utilities should spend more time targeting big fish manufacturing and building, requiring more energy efficient buildings, improving heat and air conditioning units, financing solar units through property taxes and enforcing new land-use policies. DRA has also called attention to the fact that energy efficiency programs are often if not always run by outside companies that contract for the job.

Consumer groups are perhaps a little optimistic that Governor Brown’s appointees to the California Public Utilities Commission could herald a different approach to regulating the investor-owned utilities in the state. Mike Florio was a lawyer for decades at . Catherine Sandoval has expertise in public interest and business issues (her bio from Santa Clara University’s School of Law tells us). They joined the PUC in January. Mark Ferron – formerly of Deutchebank, now a senior partner at Silicon Valley Social Ventures – joined in March.

Still, the commission hasn’t decided how to assess energy efficiency incentive programs for 2009-2011. That’s next. As for the appeal of the rehearing for the 68 million – the bonuses paid in December – nothing more has happened with that. You get bills from your utility, laced with offers for refrigerator rebates and compact fluorescents – what do you want to see San Diego Gas & Electric, PG&E, SoCalGas, and Edison do about energy efficiency?