Spring 2010

NRDC Whitepaper: California Restores Its Energy Effiency Leadership

The Natural Resources Defense Council released a white paper in March describing how California restored its leadership on energy efficiency over the last decade. It found that remarkable advances in California’s energy efficiency programs over the last decade have yielded enormous economic and environmental benefits.

Efficiency programs provided nearly $5 billion in net benefits to customers statewide over the last decade alone. New programs planned over the next three years are expected to provide even greater savings to consumers while creating more than 15,000 skilled green jobs. In 2008, the pollution savings from efficiency programs (which have accumulated since the state first began programs in earnest in the mid-1970s) totaled nearly 1,000 tons of smog-forming nitrogen-oxides and provided global warming pollution savings equivalent to the emissions from approximately 3 million cars.

California adopted a suite of smart policies over the last decade, which spurred a significant increase in savings from efficiency programs:

• The net benefits consumers reaped from efficiency increased nearly five-fold from 1998 to 2008 (from about $185 million to almost $900 million).
• Energy savings increased almost six-fold, from 582 GWh in 1998 to 3,414 GWh in 2008 (savings in 2008 were equivalent to the electricity consumed by approximately 460,000 households every year – or more than all the households in San Francisco and San Mateo counties consume each year).
• These gains were the result of a nearly five-fold increase in annual investments (from about $210 million in 1998 to $1.04 billion in 2008).

The programs continued to provide the cheapest, cleanest resource available to meet California’s energy needs, costing less than 3 ¢/kWh, or less than half the California Public Utilities Commission’s (CPUC) recent benchmark for baseload power. Additional programs targeted specifically to help lower-income households improve their efficiency and lower their energy bills reached more than 1.6 million households over the last decade, or more than 40% of all eligible participants.

The state’s recent success with energy efficiency (EE) programs builds on decades of progress that helped California keep per capita electricity consumption nearly flat over the last 30 years, while the rest of the nation increased by over 50%. This remarkable achievement is commonly known as the “Rosenfeld Curve,” after Dr. Arthur Rosenfeld, one of the “fathers” of energy efficiency and recently retired member of the California Energy Commission. While some of the difference between California and national per capita consumption may be explained by factors that are independent of energy policy, such as industry composition and average household size, at least one-quarter of this progress was based on the state’s integrated effort to advance research, development and demonstration (RD&D) of more efficient technologies and processes through the Public Interest Energy Research (PIER) program, utility investments in efficiency programs that help consumers use those efficient technologies to lower their utility bills, and minimum efficiency standards for buildings and appliances that lock in the savings.

The NRDC whitepaper is available online at: http://switchboard.nrdc.org/blogs/smartinez/california_restores_its_energy.html