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Devra Wang’s Blog

Energy Efficiency Continues to Save Money and Cut Pollution in California

Devra Wang

Posted May 26, 2010

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Californians know that energy efficiency is the cheapest, fastest, and cleanest way to meet our energy needs. As the California Public Utilities Commission (CPUC) evaluates the success of the utilities 2006-2008 energy efficiency programs, it’s important to recognize that this cycle of efficiency programs was a huge success by the metrics that matter the most: the impact on utility customers’ pocketbooks, the state’s economy and the environment.

While the results are still being debated and finalized, even the most conservative estimates show hundreds of millions of dollars in net savings for customers from avoiding costly investments in dirty sources of energy, and annual reductions in global warming pollution equivalent to emissions from more than half a million cars.

The Gulf Coast oil spill is a painful reminder of the environmental and economic consequences of our energy choices, and the urgent need to transition California and the nation to a clean energy economy. While California has made great strides in cleaning up its electricity system (our electricity supply is much cleaner than the national average), every time we flip on the light switch we are still burning coal and natural gas, sending billions of dollars out of the state, polluting our air, and contributing to global warming. Efficiency keeps that money in our pocketbooks here at home while improving the environment and strengthening our green workforce.

California has made great progress on energy efficiency over the last decade, as my colleague Sierra Martinez reported here. The state’s energy savings have increased significantly – even the most conservative estimate of the annual savings from 2006-08 were more than double the savings from a decade earlier. 

The investments in energy efficiency over the past several decades have provided enormous savings and played an important role in making the state’s cost of electricity the fifth lowest in the country, measured as a fraction of GDP, and in making household electricity bills 16 percent below the national average. California’s utilities and their efficiency programs have been a key part of this achievement, thanks to State regulations that require utilities to invest in all cost-effective efficiency and make them financially indifferent to how much energy they sell, unlike most utilities around the country that automatically profit by selling more energy.

California’s policies have encouraged the utilities to make efficiency a core part of their business, and the transformation has been critical at the state and federal level, from path-breaking national lighting efficiency standards adopted by Congress in December 2007 to California's first-ever and most advanced television efficiency standards in the world adopted in November 2009 to tighter federal residential water heater standards adopted this year in April. Rather than blocking improvements in minimum efficiency standards, California’s utilities have been crucial allies in securing many of these recent improvements. So, the savings from the utilities’ efficiency programs have been magnified many times over around the state and country.

The efficiency programs have clearly provided valuable benefits to California and beyond. The question before the CPUC now is how to most accurately measure the significant amount of energy that has been saved through these programs, and how to best encourage California utilities to maximize additional opportunities to lower customer bills and reduce global warming pollution through their extensive portfolios of efficiency programs.

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