Energy Efficiency in California – A Matter of Community Control

Date: 26 Jan 2005 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

The California Public Utilities Commission (CPUC) is scheduled to vote tomorrow (1/27/05) on who will control about $400 million in state energy efficiency funds [see CPUC proceeding R0108028] Community aggregation advocate groups including Local Power and Women’s Energy Matters are demanding that the CPUC let community choice aggregators (CCAs) control and administer their own efficiency programs rather than give all the money and control to the investor-owned utilities.

Paul Fenn, director of Local Power, writes “This decision on Energy Efficiency Administrative Structure will have a profound impact on CCAs by denying their legal right to administer Energy Efficiency funds and handing control of all programs to utilities. If the utilities gain control over all programs in this decision, they may be able to lock out CCAs until 2010.”

Community Aggregation in California’s restructured electric system was allowed under AB 117, a law signed in 2002. In general, community choice, or aggregation, creates community-based pools of electricity users large enough to command leverage on the market. These pools are armed with sufficient legal authority and financial flexibility to demand contracts from energy suppliers that satisfy local economic and environmental goals. In short, it places authority in the hands of those who will feel the impact of their decisions, making investment in efficiency and renewable electricity more likely.

In 2002-2003 a portion of the fund dedicated toward energy efficiency in California were distributed to non-utility organizations. Women’s Energy Matters points to the results contained in two studies, the only comparative analysis of the impact of the non-utility programs vs. the utility programs, as the justification for letting community aggregators control their energy efficiency programs and funding. The CPUC had an outside contracter do an analysis of the effectiveness of the utilities’ energy efficiency programs

The Myth of IOU Cost-Effectiveness I (August 8, 2003) completed by SESCO Inc., analyzed the cost-effectiveness of the 2002-2003 efficiency programs. Nearly all non-utility residential programs were more cost-effective than utility programs, many by large margins. On the other hand, most of the utility-sponsored residential programs were found to be not cost-effective. In non-residential efficiency programs, utility porgrams and non-utility programs ended up just about even. SESCO issued a second report, Myth of IOU Cost-Effectiveness II (May 8, 2004) that provides an expanded and updated analysis of the programs.

As of December 2004, Local Power estimated that 48 cities and counties representing over 17% of statewide investor-owned electric utility customer demand are pursuing community choice aggregation.


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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.