Energy efficiency gets a boost, but foxes still guard the hen house

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By Rebecca Bowe

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The California Public Utilities Commission (CPUC) approved a $3.1 billion budget yesterday for statewide energy efficiency programs that will be in place until 2012. California’s powerful investor-owned utilities --- Pacific Gas & Electric Company, Southern California Edison, San Diego Gas and Electric Company, and Southern California Gas Company -- are in charge of implementing the programs, while the funding is derived from ratepayers.

While the decision marks the creation of the largest energy-efficiency program in the country, some question the wisdom of the colossal investment, because it relies on utility companies to implement dramatic reductions in energy use.

It's the greatest financial contribution the state utility commission has ever pledged toward energy efficiency. According to the CPUC, the potential energy savings will negate the need for three new 500-megawatt power plants, and avoid 3 million tons of greenhouse gas emissions. The funding from this decision could create between 15,000 and 18,000 green jobs, the CPUC estimates.

The decision will provide $260 million for local efforts such as municipal building retrofits. It also requires utilities to track progress toward goals and strategies established in a long-term statewide plan for reducing energy use. Included in the effort is an ambitious home-retrofit program, which sets a goal of 20 percent energy savings for up to 130,000 homes.

"This investment in California's clean energy economy is just what we need to create new jobs for our communities and fight global warming pollution," said Lara Ettenson, director of California Energy Efficiency Policy at the Natural Resources Defense Council (NRDC), a prominent environmental organization.

Not everyone shares NRDC’s optimism, however.

The Division of Ratepayer Advocates (DRA), an independent consumer advocacy division of the CPUC, warned that the powerful utility companies should be closely monitored to see how they make use of such a tremendous sum.

In a statement released this morning, the DRA highlighted “a continuing need for stronger mechanisms to ensure transparency and accountability in the utilities’ use of the billions of dollars of ratepayer money.” Utility giant PG&E has been criticized in the past for misuse of energy-efficiency funds.

Grassroots organizations advocating for publicly owned electricity systems charge that PG&E has funneled energy efficiency money into campaigns that directly attack public power programs, or to sway public opinion against these alternatives, for its own economic advantage.

DRA has also pointed out that the utility has failed to meet its energy-efficiency targets in the past. At the end of the last energy efficiency program cycle, the company was granted about $41 million in incentive money for successful program implementation, even though an independent analysis revealed that it fell short of its energy-reduction goals.

Despite a 70 percent budget increase relative to the last energy-efficiency program cycle, DRA points out that the utilities have projected comparatively lower energy savings from now until 2012. The division also notes that hard evidence is lacking that the utilities’ energy-efficiency programs are viable and cost-effective. As a result, “ratepayers are investing billions of dollars on faith alone that actual energy savings will result from the programs,” DRA warned in a press statement.

While the potential for mismanagement of ratepayer dollars is part of the concern, an overarching issue is whether or not the new energy efficiency programs can begin to address climate change in a meaningful way.

“It is of grave concern that we are close to doubling budgets for utility-managed programs while dramatically reducing energy savings targets,” said Dana Appling, director of DRA. “California needs to ramp up energy savings to address climate change.”

The only way to effectively turn the battleship on climate change is to dramatically reduce energy consumption and transition to power-generating sources that do not burn fossil fuels. As it stands, the ones in charge of the state’s new $3 billion energy-saving measures are the same corporate entities that sell electricity and operate fossil fuel powered facilities.

Women's Energy Matters (WEM), a nonprofit that has advocated for ratepayers in CPUC energy-efficiency proceedings since 2001, proclaimed that yesterday’s decision amounted to “keeping the foxes and wolves in charge.” WEM's Executive Director, Barbara George, stated, "The decision puts in place more of what's needed for energy savings to happen. But it keeps utilities in charge, with all their conflicting motivations. There are more watchdogs, but the foxes and wolves are still running the barnyard."