Energy Efficiency & Community Choice

Around $250m a year for Energy Efficiency in California is currently collected through the Public Goods Charge (PGC) on all ratepayer bills. Women's Energy Matters (WEM) has been fighting for Community Choice Aggregators' (CCAs) rights to their portion of these funds *

Unfortunately, Calif. Public Utilities Commission (CPUC) Decision 05-01-055 (January 27, 2005) gave utilities monopoly control of energy efficiency and did not provide for CCAs.

However, it left the door ajar, stating ""We may revisit the issue of allocating energy-efficiency funds to Community Choice Aggregators...we may ultimately find that Community Choice Aggregators are appropriately independent agencies that should have considerable deference to use [Public Goods Charge] funds."

Women's Energy Matters advises cities and counties interested in becoming CCAs to take action in a timely way to secure their rights. Failure to act may mean that Energy Efficiency (EE) funds are unavailable until 2009 - or worst case, permanently off limits.

Utilities are currently designing three-year EE programs 1/1/06 through 12/31/08. They submit plans June 1, 2005 for CPUC endorsement this summer and final approval in October. Meanwhile, CPUC has not yet provided a way for CCAs to claim EE funds, though its recent EE decision suggests it will take up this issue after January 2006. By then, utility programs will be set in stone through 2009. WEM believes the CPUC will take action only if and when prospective CCAs make their desires known.

1. Pass a resolution informing CPUC that as a prospective CCA, you should have access to these funds when you need them and requesting a method for you to apply for them.
   Timing: ASAP. There is no need to wait until you officially declare your city a CCA or file an implementation plan, or for the CPUC to complete the CCA proceeding.
   San Francisco passed a Resolution you can adapt which addresses energy efficiency as well as utility power purchase contracts. Utilities are currently lining up too much power in long-term contracts, which could raise exit fees for CCAs.

2. Approve a letter to the CPUC stating your support for Women's Energy Matter's Application for Rehearing of CPUC's recent EE decision.
   Timing: Again, no need to wait. Your letter can be submitted with Women's Energy Matters formal comments March 28, or directly to CPUC, best before April 30.

3. Include Energy Efficiency in your CCA Implementation Plan and RFP.
   Timing: CCAs can file Implementation Plans at any time, without waiting for completion of the CCA proceeding. You can get a detailed template from Local Power and hire them to adapt it for your city and county.
   WEM can get your city started with an energy efficiency system that's guaranteed to be more effective than the utilities' programs — even if you've never done it before. WEM's California Standard Offer System for Energy Efficiency is well-suited for new CCAs. A similar system in other states has low administrative costs, no need for micromanaging, and flexibly responds to local needs. It saves 40% more energy than CA's system, creates a vibrant local EE infrastructure and has a money-back guarantee!

1. Energy Efficiency (EE) can be and should be the cheapest, quickest and cleanest energy resource, making it an essential part of a Community Choice Aggregator's (CCA) "integrated resource plan."

2. Effective CCA control of Energy Efficiency means lower rates for CCA customers and a wealth of economic development for the community.

3. Energy Efficiency can help CCAs retain large customers that might be tempted to "opt out" of CCA -- just as utilities currently use EE to romance big customers to stay in their system and stay away from direct access.

4. The effectiveness of EE depends largely on who is in charge. Utility-controlled EE has been shown to be more costly and less effective than non-utility programs -- not surprising since utilities have a conflict of interest against saving energy. WEM has documented utility "gaming" of the EE system --enabling them to claim a large amount of phantom savings while charging exorbitant amounts for administration and other costs.

5. The only potential escape route from a dysfunctional utility monopoly over energy efficiency

The CPUC initially ruled that EE funds in CCA territories would be calculated "per capita" (which would amount to approximately $10 per person). However, CCAs should request all EE funds collected from their ratepayers; otherwise local businesses will be shortchanged, possibly persuading them to "opt out" and stay with utilities.

Historically, the Public Goods Charge for Energy Efficiency has financed a wide variety of energy-saving technology and activities for homes and businesses such as installing and servicing efficient lighting and other appliances, insulation, heating/ cooling and industrial/ agricultural machinery; and providing EE information and education to trades-people and the public. "Conservation messages" (such as turning off lights or doing laundry after 7pm) were typically not included. Municipal utilities such as Sacramento Municipal Utility District (SMUD) have fostered innovative programs such as tree-planting, which reduces air conditioning needs and can lower the whole city's temperature as much as 7 degrees.

Energy Efficiency has traditionally been considered separately from Renewable Energy such as solar and wind, reflecting the separation between the CPUC (and mostly utilities) controlling Energy Efficiency funds, and the Calif. Energy Commission providing grants for Renewable Energy (usually not to utilities). However, it makes more sense to plan and install them together, particularly with solar installations.

*WEM worked with Local Power and the Legislature to make sure Energy Efficiency was included in AB117 and helped pass the bill. As an "intervenor" in the CPUC's Energy Efficiency Rulemaking (R0108028), WEM is leading the fight for CCA access to Energy Efficiency funds.