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Kristin Eberhard’s Blog

New Report Examines Benefits of Energy Efficiency in LA

Kristin Eberhard

Posted February 15, 2012

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LAANE has put together a terrific report (Clean Power, Good Jobs) that will tell you where LADWP's power comes from, what legislative mandates and other challenges it faces, expected trends in energy prices, and why energy efficiency is so important for creating local jobs while getting us off of dirty fossil fuels. I just want to pull out a few facts that I found particularly powerful.

First, the basics: where does LADWP’s power come from?

2010 LADWP Sources

Source: LAANE, 2012 (from LADWP, 2011)

This is pretty similar to the national average power mix which is 49% coal and very little from efficiency.  It is rather different from the average California mix, which is only 18% coal (much of which is from LADWP and other Southern California publicly owned utilities) and, cumulatively, nearly 20% from efficiency.

Voters and Small Businesses Want LADWP to do more Energy Efficiency

As LAANE points out, everybody but everybody thinks energy efficiency is a good idea. But their report points to two particularly striking recent studies in LA.

“In June 2011 the non-profit group Strategic Concepts in Organizing and Policy Education (SCOPE) polled over 9,000 Los Angeles voters. Of those surveyed, 93% said they supported LA Department of Water and Power investments in energy efficiency to lower energy bills and create good jobs.”

And it's not just voters. Small businesses are also clamoring for these programs.

“The non-profit “Initiating Change in Our Neighborhoods Community Development Corporation” (ICON CDC) surveyed 240 small businesses in the San Fernando Valley, most of which are in premises under 2,200 square feet. Over 80% of the businesses surveyed said that an energy efficiency campaign would be “very helpful” or “extremely helpful.” High utility bills are a financial difficulty for many businesses of this size. At Birrieria Rosamaria, a small restaurant in Pacoima, the rent is $1,150 a month. Utility bills are an additional $1,100, almost as much as the rent itself. They would like to purchase new equipment and hire additional employees. A program that saves them money on their electricity bills could help them do that.

“I’m interested in learning how to make my business more efficient. We have to figure it out in order to stay in business, be in compliance, and be part of this community.””

Which brings me to an important point:

Direct and Indirect Jobs

LAANE is working on a program to train new workers to do energy efficiency, thereby achieving all the promise that energy efficiency holds while also guaranteeing well-paying jobs for people in Los Angeles. But there are even more and bigger local jobs benefits from energy efficiency, beyond the direct jobs of workers skilled in implementing energy efficiency measures.

The small restaurant cited above in the report would love to put some of the money they're currently paying towards their electricity bill towards hiring more workers instead. If LADWP can help them reduce their electricity bill, the additional waiters and cooks they hire will be real jobs, right here in LA.

And there are even more jobs to be created from energy efficiency! Individuals who save money on their utility bill put that money back into the local economy. If you save $10 or $20 or $50 on your bill every month, you might go buy dinner out or go see a movie, thereby plowing the money right back into an increasingly thriving Los Angeles. This is particularly important because the fossil fuel industry is not very job intensive compared to the rest of the economy.  By using energy efficiency instead of coal, we can create not only the direct energy efficiency jobs LAANE is helping to train workers for, but more jobs across the entire LA economy.*


Energy efficiency is a resource just like coal (but with more jobs and less pollution)

As LAANE points out, energy efficiency is not just a bonus or a personal virtue: it is an energy resource.  It is in the pie chart above.  And it should be a bigger part of LA’s pie. An individual or small business that participates in an energy efficiency program might save 20% or more on their monthly bill. However, even customers who don't participate in the program will still benefit. This is because energy efficiency is cheaper than the other energy resources. As LADWP increases the efficiency sliver of the pie above (currently at 1%), it is increasing its dependence on low cost resources, and reducing the need to purchase more expensive power. This means that the overall portfolio will become cheaper over time than it would be if LADWP were to leave the pie as is.

Bottom line from LAANE: LA needs more efficiency, more jobs, more economic and environmental benefits right here in LA.

* Roland-Holst, University of California, Berkeley, Energy Efficiency, Innovation, & Job Creation in California, October, 2008, p. 5.

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