CPUC Workshops 1 & 2 on Long Term Energy Efficiency Resource Planning

The California Public Utilities Commission is conducting a series of energy efficiency workshops in collaboration with the California Energy Commission and California Power Authority in furtherance of the Energy Action Plan to learn from utilities, program providers, consumers, manufacturers, consultants, government agencies and community organizations how the Commission may make the most of the state's energy efficiency resources in the coming years.

The Assigned Commissioner's Ruling ("ACR") that was issued October 30^th summarizes the Commission's first and very successful energy efficiency workshop in this phase of this proceeding and solicits post-workshop comments from the parties in order to determine next steps for the Commission to take in determining how to best achieve statewide energy efficiency potential. At the same time, the ACR scheduled the second workshop in this proceeding.

As discussed in the September 24, 2003 ACR, the purpose of the second workshop on "Customer Needs" is to hear from residential, industrial, commercial and other customers such as retailers, manufacturers, and local governments who are interested in energy efficiency programs and energy efficient technologies and who may or may not have participated in existing state funded programs. (The findings of this workshop will inform future program design and criteria used for state funded programs, but will not influence the 2004-2005 program review and approval process.) The ACR solicits pre-workshop comments for the second workshop in order to select speakers and also to aid in structuring the agenda.

Summary of Workshop #1 Addressing Energy Efficiency Potential

The Commission held a workshop on October 8, 2003 to explore the potential for energy efficiency in California using the Hewlett Foundation Energy Series report, "California's Secret Energy Surplus," as the basis for discussion. The report provided a useful and insightful foundation for the workshop and motivated presentations and comments from parties representing all interests, including program providers, equipment contractors, government agencies, consumers and consultants.

The success of the workshop derives in large part from the willingness of these various interests to share their ideas and concerns in an open forum. The workshops are initial steps to creating an active dialogue between diverse members of the energy efficiency community. Such open communication will facilitate information sharing, disclose common interests, identify barriers to savings potential and increase the policy options available to the state's energy efficiency decision-makers.

Based on the discussion and presentations at the workshop, the Assigned Commissioner (AC) drew the following general conclusions about the potential for energy efficiency in California:

• The state is not currently maximizing its energy savings potential;
• The Xenergy report on energy savings potential and the technologies and measures identified at the workshop can provide a useful foundation for the Commission to use in estimating the range of savings potential that could be achieved in the next few years;
• Maximizing energy efficiency savings in California will require improved coordination between government, non-profit organizations and private-sector entities, an emphasis on a systems approach to program implementation and a commitment to permanent market and behavioral changes;
• In addition to encouraging customers to install existing efficiency technologies, the state will need to promote more innovation in emerging energy efficiency technologies and in energy efficiency programs that will be included in California's energy efficiency programs;
• Some of the Commission's existing policies should be modified to maximize opportunities to promote energy savings;
• Information about markets, products and programs needs to be more accessible to all involved in energy efficiency efforts;
• Program design needs to recognize customer preferences and the most effective ways to motivate customers to participate in programs; and
• The Commission must evaluate program success and use evaluations as the foundation for subsequent funding cycles and program implementation.

These observations of the parties will guide the AC's thinking in subsequent policy discussions and Commission decisions. They are useful in honing the inquiry and form the basis for the next round of questions below.

Questions for Follow-Up to Workshop #1

The following questions seek to build on the information and insight provided by the workshop. The AC asks that responses emphasize practical ways the Commission may take advantage of an opportunity or resolve a problem. For example, the Commission may need to modify its Energy Efficiency Policy Manual, cost-effectiveness methodologies, or incentives. It may need to commit to a forum for coordinating program design or to publishing evaluation results. Responses should be as specific as possible so that the Commission may move quickly to adjust policy and program rules.

1. How can the Commission encourage innovation and emerging technologies while assuring the state is using its limited resources wisely to fund proven efficiency technologies and programs? Should emerging technologies program proposals be judged differently from other program proposals? Should the Commission set aside funding levels for emerging technologies? Should programs using emerging technologies be on a different schedule than other programs? How should emerging technologies be better integrated into "mainstream" programs and services?
2. In order to meet the minimum statewide goal of 1% reduction of energy use per capita as stated in the Energy Action Plan, what should the statewide target be for energy efficiency savings in terms of overall kWhs, MWs of peak demand, and therms of natural gas? What additional information should the Commission consider in funding programs that will most effectively reach these savings goals?
3. How, if at all, should the Commission's use of cost-effectiveness criteria and results be modified to promote more energy efficiency and the best program design, technology options, and overall program mix; such as consideration of peak and off-peak load reductions, natural gas versus electric measures, new construction versus retrofits, and customer classes and types?
4. Should the Commission modify its Policy Manual position with regard to "fuel switching" programs or activities?
5. How can state-funded programs motivate manufacturers to improve the design of products in ways that promote energy savings?
6. How, if at all, is existing rate design impeding the deployment of cost-effective energy efficiency measures? If so, how should the Commission overcome those impediments?
7. How, if at all, should the CEC and the Commission coordinate efforts to develop new technologies using Public Interest Energy Research (PIER) funding and then spur their deployment via public goods charge funding?
8. What formal and informal procedures and processes should the Commission, the CEC, the CPA and other state agencies put into place to improve coordination of efficiency measures and program delivery?
9. How should California energy efficiency programs better complement or improve upon Title 24 energy efficiency building standards?
10. What should the Commission do to improve public input on and access to studies and reports that analyze and assess energy efficiency in the state? While some of these reports and studies are supported by PGC funds, such as state funded energy efficiency studies and individual energy efficiency program reports, there are also independent reports and studies being undertaken. What is the proper way to ensure complete and open sharing of this information to further increase the energy efficiency knowledge base?

The AC asks the parties to file their responses to any and all of these questions no later than January 7, 2004. After that time, she will consider whether the Commission has enough information on the record of this proceeding to consider changes to rules, policies or practices.

Continued…

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