Talkin’ Chickenomics

Guest Juice: California Energy Efficiency Dreamin’

March 30, 2017

By Cynthia Mitchell

In the 1990s, California led the nation in deregulating its electric utility industry. The result was a disaster. The subsequent energy crisis during 2000 and 2001 was characterized by extraordinarily high prices and blackouts.

Re-regulation included proclaiming energy efficiency as the state’s highest priority[i]  “first loading order resource”[ii] based upon three decades of perception that state energy efficiency had accomplished what no other state or jurisdiction had been able to do: significantly reduce per capita electricity consumption.[iii]

Today, California’s decade-old greenhouse gas reduction policy is in large part premised on the state having achieved a direct and strong “cause and effect” between energy savings (utility programs and building and appliance standards) and declining per capita energy consumption.[iv]

That makes this is a good time to check-in on the veracity of this proclaimed success story given current lackluster energy efficiency results.

Over the past decade, California has spent billions in ratepayer dollars on an increasingly complex and complicated mix of utility energy efficiency programs and building and appliance standards.

The story goes that from 1975 to 2003, the state saved about 40,000 GWh, or the equivalent of 15 percent of annual electricity use, through a combination of utility energy efficiency programs and appliance and building standards.

Until the mid-1970s, per capita electricity use in California and the U.S. increased at about the same rate. After that, California’s usage leveled off, while nationwide usage continued to increase. The graphic representation of this tapering off of per capita consumption is known as the “Rosenfeld curve,” named after energy efficiency pioneer and former California Energy Commission member Arthur Rosenfeld.  The underlying phenomenon is called the “Rosenfeld effect,” and even has its own Wikipedia page.[v]

The CEC asserted that energy efficiency improvements were the cause of California’s declining per capita consumption.[vi] The commission continues to assert that “…energy efficiency efforts have saved California consumers billions of dollars since the 1970s and have held per capita energy use in the state relatively constant, while the rest of the United States has increased by roughly 40 percent.”[vii]

These assertions have not gone unchallenged.  When I controlled for the price of residential electricity, climate, household size, housing mix, conservation ethic, and long-term trends in the structure of the economy, my firm’s 2009 analysis showed that annual changes in state-level energy efficiency activities did not correlate highly with changes in per capita electricity consumption.[viii] Others have raised similar points.[ix]

Whatever one thinks about the causes of the Rosenfeld effect, it seems clear that more is needed to achieve the state’s carbon reduction goals, as set out in 2015’s Senate Bill (SB) 350. Flattening load growth isn’t enough–load needs to start going down. Assuming a flat or growing population, this means that per capita electricity use has to decline.

It is not doing that.

In fact, 40-years of data on both absolute and per capita consumption show that both were higher in 2014 than in 1972 (fluctuating over the 40-year period largely in response to economic conditions),[x] as set out in my March 10, 2017, Guest Juice.

The CEC seems to be aware of both the need for load to decline (though they couch this in terms of “savings increasing”), and of the inadequacy of current savings approaches: “The doubling of projected energy efficiency savings called for in SB 350 is beyond the significant savings that are projected to be achieved by 2030 through California’s existing suite of energy efficiency programs and activities.”[xi]

CEC staff is in the process of establishing the energy efficiency targets for SB 350 based on a doubling of the mid-case estimate of additional achievable energy efficiency [AAEE] savings, as contained in the CEC’s Demand Forecast. AAEE is the CEC’s method for extending current utility energy efficiency savings [i.e., existing “maxed out” programs] through the CEC demand forecast time period.[xii] CEC staff will temper the AAEE doubling projections based on what is “cost effective, feasible, and reliable”.[xiii]

California’s energy efficiency community needs to take a hard look at the very real economic and market limits of the current approaches to efficiency. When most savings are coming from command-and-control approaches (i.e., codes and standards) and generally short-lived savings from florescent lighting, something is amiss.

That’s why it’s far overdue to do the hard work required to simultaneously reduce ratepayer and utility risk, and make efficiency attractive to the investment community in ways analogous to generation-side resources, and other distributed energy resources. Doing that will take new meter-based approaches that procure metered efficiency from suppliers analogous to how California obtains metered generation from generators.

We will address this more in our next column.

—Cynthia Mitchell is a 40-year veteran energy economist and utility consumer advocate and consultant for The Utility Reform Network. The views expressed herein are her own.

Notes:
[i] 2006 CPUC “Energy Efficiency: California’s Highest Priority Resource”.
http://chinauseealliance.org/wp-content/uploads/2012/02/calif_cleanenergy508.pdf
[ii] The loading order was adopted in the 2003 Energy Action Plan (EAP) prepared by the joint energy agencies and the Energy Commission’s 2003 Integrated Energy Policy Report (IEPR). The 2005 and 2008 EAP updates and subsequent IEPRs confirm the 2003 loading order. http://www.energy.ca.gov/energy_action_plan/2003-05-08_ACTION_PLAN.PDF
[iii] Ibid i and iii.
[iv] Ibid i and iii.
[v] https://en.wikipedia.org/wiki/Rosenfeld_Effect
[vi] Ibid i and iii.
[vii] CEC 2016 Final IEPR Update, Feb. 28, 2017, p. 23. http://www.energy.ca.gov/2016_energypolicy/
See also PG&E Testimony Retirement of Diablo Canyon Power Plant, Chapter 4 Energy Efficiency, p. 4-2, August 11, 2016, https://pgera.azurewebsites.net/Regulation/; PG&E Energy Efficiency 2018-2015 Business Plan, Executive Summary, p. 14, https://www.caeecc.org/business-plans-1; Natural Resources Defense Council, August 2015, “California’s Golden Energy Efficiency Opportunity,” https://www.nrdc.org/sites/default/files/caenergy-efficiency-opportunity-report.pdf.
[viii] Stabilizing California Demand: The Real Reasons Behind the State’s Energy Savings”, Public Utilities Fortnightly, March 2009. Regression results determined that California electricity prices, which are higher than the balance of the national average price, accounted for 40% of the decline in state per capita consumption, with energy efficiency accounting for at most 20%. Additional factors affecting state per capita consumption include fewer cooling degree days (CDD) than balance of U.S.; higher ratio occupancy per dwelling unit and more detached multifamily homes, and long-term structural changes in California’s economy marking a shift to to less energy intensive industries. https://www.fortnightly.com/fortnightly/2009/03/stabilizing-californias-demand
[ix] Sudarshan, Anant. “Deconstructing the Rosenfeld curve: Making sense of California’s low electricity intensity.” Energy Economics. Vol. 39, September 2013, pp. 197-207. “California energy efficiency: Lessons for the rest of the world, or not?” Arik Levinson, Journal of Economic Behavior & Organization 107 (2014) pp. 269–289, http://faculty.georgetown.edu/aml6/pdfs&zips/CaliforniaEnergy.pdf
Stanford and Levinson works backing up Mitchell analysis.
[x] http://cacurrent.com/subscriber/archives/29130
[xi] CEC Staff White Paper “Framework for Establishing the SB 350 Energy Efficiency Savings Doubling Targets”, January 2017, CEC-300-2017-045. IEPR Joint Agency Workshop on Energy Demand Forecast & Doubling of Energy Efficiency – Data & Analytical Needs, 1/31/2017, p. 2. http://docketpublic.energy.ca.gov/PublicDocuments/17-IEPR/TN215437_20170118T160001_Framework_for_Establishing_the_Senate_Bill_350_Energy_Efficienc.pdf
[xii] Ibid xii, p. 5; for AAEE see CEC California Energy Demand 2014–2024 Final Forecast, January 2014 CEC‐200‐2013‐004‐V1‐CMF, p. 88.
[xiii] Ibid xii, pp. 5, 7, 16.

Guest Juice: Energy Efficiency as a Distributed Resource

March 17, 2017

Editor’s Note: This is a second in a series of articles on how California counts on energy efficiency to help meet state greenhouse gas reduction and clean energy goals while serving as a meaningful distributed energy resource alongside of rooftop solar, energy storage, and demand response.[1]

By Cynthia Mitchell

As California’s “first loading order resource,” energy efficiency is to help with much needed utility rate relief. And, as California moves away from fossil fuels to reduce greenhouse gas emissions through a more decentralized system of significant variable renewable resources, energy efficiency also is needed to help meet ramping and peak capacity requirements caused by California’s infamous “Duck Curve.” 

The opportunities (imperative) for using efficiency to ameliorate the duck curve are there[2] – how to make them happen is the “billions of dollars” question. (The duck’s neck reflects a run-up in late afternoon of commercial building loads from internal heat gains [increased space cooling, lighting, data centers, other office and retail functions] and early evening residents returning home from school and work [turning on/up air conditioners, lights, starting cooking, watching television, etc.]. Californians and others have recognized for some time that energy efficiency solutions targeted at reducing electrical demand on a whole building/home basis can ease the need for and provide dramatic ramping and peak capacity.)

The market for energy efficiency meter-based savings tools is fledgling. California needs to accelerate CPUC-approved commercial specification of automated, open-source, meter-based savings tools (developed by CPUC-retained experts) for the commercial building sector, where non-routine adjustments to savings baselines are needed.

CPUC President Mike Picker, at a recent conference on California’s Distributed Energy Future, said the today’s challenge is greenhouse gas reduction:[3] “As we have seen from the Germans and China, you can increase the amount of renewables and still have to build backup [gas-fired] generation, thus contributing to more GHG emissions.”

He added that increasing amounts of variable resources lead to a grid becoming “highly variable,” causing over-generation, peak shifts, and annual shifts in generation. “The most important part of this [electric system transformation] is at the distribution level where you can prioritize ‘negawatts versus megawatts’ – demand resources become part of the exchange, and customers become part of the exchange, as generation technologies.”

Picker’s recent remarks speak to the critical intersection of energy efficiency at both the aggregate system and distribution level.

Despite CPUC proceedings on distributed energy resources and distribution resource  plans, and all source solicitations,[4] energy efficiency as a distributed energy resource is not being developed at anywhere near the scale and pace of rooftop solar and energy storage.

There are various reasons why this is so. Perhaps the largest is that energy efficiency programs number in the hundreds. Each program, in turn, is made up of thousands of discrete and dispersed efficiency measures. The savings from nearly all of these measures are not metered.

As a result, energy savings measurements are unmetered estimates.

Moreover, savings from individual measures do not always equate to absolute reductions in energy usage, whether at an individual customer’s meter or aggregated system-wide.[5] From the perspective of the California Independent System Operator, the contribution of energy efficiency to grid reliability is unclear, given the difficulties in accurately monitoring and measuring efficiency on a location-specific basis. Assorted legislation – notably AB 758, SB530, and AB 802 – seeks to promote energy efficiency at larger scales. But to realize that vision will require transaction solutions designed to match core utility attributes.

Energy efficiency needs to “walk and talk” like other energy resources—historically generation, now increasingly rooftop solar, energy storage, electric vehicles, and demand response. These resources create investor-grade revenue streams of net income based on a product (output) that is measured at the meter. What you can meter, you can charge and collect revenue.

With meter-based savings measurements, efficiency becomes an energy resource, analogous to generation. Efficiency as energy can be applied at individual sites, or at a project portfolio level, and it correlates well to circuit and substation loads, is persistent, and is measurable at the meter.

As an energy source, efficiency can be invested in over long periods of time (perhaps decades) as a new resource asset type, with flexible load management and reliability measurements.

California utilities could invest in efficiency, alone or bundled with other distributed resources. Transaction structures can be designed to bill the building at the energy usage up to (or less than) the dynamic baseline. The difference between the dynamic baseline and metered bill is used to recoup efficiency investment costs, with possible additional bill saving benefits shared with building owners and tenants. This holds the potential to turn efficiency savings into energy yield: EE = Energy, not just operationally, but transactionaly in markets for both energy and capital.

In short, California needs new transaction structures that move beyond consumers’ limited investment horizons to more intelligent bundled efficiency; in turn, that will lead to lower utility costs and lower cost of utility capital formation.

If California fails to take advantage of abundant bundled efficiency resources it will be left with a grid that is too expensive. This could result in customers seeking bypass options, whether through self-supply or microgrids.

California’s grid needs to be “smart” and an essential ingredient is taking advantage of the lowest cost options to provide reliable service.

It begins with the automated meter-based tools – what some of us are calling “EE meters.”

—Cynthia Mitchell

Footnotes:
[1] See distributed energy resources definition per AB 327 (Perea, Chapter 611, Statutes of 2013).
[2] The Lawrence Berkeley National Laboratory’s Final Report on Phase 2 Results, 2015 California Demand Response Potential Study Charting California’s Demand Response Future, (November 14, 2016)  replaces a traditional monolithic concept of demand response with a more nuanced alternative: shape, shift, shed, and shimmy – four flavors of demand response, each with a unique character complementing the needs of the grid. Energy efficiency generally goes hand in hand in these advanced forms of demand response.
LBNL found that the market and technology development for ‘Shift’ DR “…is a resource with an energy-based, cumulative value, rather than a power-based capacity value, placing it in a separate category from conventional Shed DR….the value of Shift resources come from multi-hour changes and accumulate through the years. As more renewable electricity that would otherwise be curtailed is captured, the value increases.” p.. 5-26.
Also, a 2016 Energy Institute at Haas School of Business UC Berkeley paper—“Do Energy Efficiency Investments Deliver at the Right Time?”—found that: “As more solar generation comes online, there is growing concern about meeting the steep evening ramp. Our estimates suggest that air conditioning investments deliver more savings than expected during these evening hours, and thus could become more valuable as renewables penetration increases.”
“These savings are highly correlated with the value of electricity… [e.g.] summer afternoons are crunch time in California electricity markets. https://energyathaas.wordpress.com/2016/06/06/do-energy-efficiency-investments-deliver-during-crunch-time/

And, Colleague Jim Lazar’s work “Teaching the Duck to Fly” includes a package of strategies including but not limited to energy efficiency, demand response, peak-oriented renewables, and rate design, to produce a gradual change in the load shape, that if aggressively deployed, can dramatically reshape the electricity load from a “duck in water with its weight in the water floating easily, to a duck in flight that  stretches out its profile to create lower wind resistance in flight.” Notably, the first strategy is to target energy efficiency to the hours when load ramps up sharply. http://www.raponline.org/document/download/id/7956/
 
[3] Green Tech Media Squared GTM2, California’s Distributed Energy Future Conference, Fireside Chat: The State of the California Energy Transformation, March 9, 2017, https://www.gtmsquared.com.

[4] Distributed Resource Plans: R.14-08-013; Integrated Distributed Energy Resources: R14-10-003;
SCE and SDG&E All Source Solicitations have resulted in very little energy efficiency.
[5] Ibid 2.

Guest Juice: The Role of Energy Efficiency in State Climate Change Policy

March 10, 2017

By Cynthia Mitchell

Introduction

California is counting on energy efficiency to help meet state greenhouse gas reduction goals and as a meaningful distributed energy resource alongside rooftop solar, energy storage, and demand response. And, as California’s “first loading order resource,”[1] efficiency is to help with much needed utility rate relief.

There’s a growing number of state mandates[2] that call for efficiency to scale up significantly beyond the accomplishments of the past decade. The California Public Utilities Commission, Energy Commission, utilities, various other government agencies, institutions, organizations, and other stakeholders are in the trenches in several related regulatory proceedings and  working groups trying to figure out how to scale energy efficiency to meet state policy directives.[3] To say that this is all terribly complex does not begin to describe the spider’s web that currently tangles up California’s efficiency efforts. Couple that with a regulatory pace best described as “It’s an all happening now, no time to waste,” and it means it’s high time for a critical look under the existing energy efficiency hood to consider the strength and performance of the existing energy efficiency program framework.[4] From here, policy makers and regulators can more fully assess the road worthiness of relying on the existing energy efficiency engine, and what tune ups or overhauls are necessary to get California where it needs to go.

Through a series of columns published here periodically this spring, I with others will examine efficiency’s role as a greenhouse gas reduction strategy and as a distributed energy resource that is supposed to provide utility rate relief along the way.  Next we will discuss the existing efficiency program framework and share our research and findings as to what’s working and what’s not. From there we will share what it will take to scale up energy efficiency so it can fuel California’s expanding population and robust economy while greening the planet.

Meanwhile, here’s our premise: It’s possible to scale efficiency to achieve more significant, strategic and reliable savings, though not by relying on the existing program framework. That’s why California’s energy efficiency community needs to take a hard look at the very real economic and market limits of the current construct and embrace them as opportunities for real change rather than merely resorting to rearranging deck chairs at this time.  That means dropping old ways of thinking and stop trying to change the optics of how we value and measure efficiency to make it appear more successful without significant changes in approach. Instead, it’s time to break out, go non-linear and make efficiency attractive to the investment community thus shifting it to generation-equivalent status. Doing that will take new meter-based approaches that procure metered efficiency from suppliers analogous to how California obtains metered generation from generators.

Role of Energy Efficiency in CA Climate Change Policy

The Golden State is considered the country’s leading “Green State” for its growing commitment to reducing greenhouse gas emissions. At 1 percent of the world’s total emissions, and nearly 7 percent of U.S. emissions, what California does matters a great deal, particularly given the Trump Administration’s stance of climate change denial and its immediate withdrawal from the 2015 Paris Agreement.[5]

California has adopted the most ambitious GHG reduction targets in North America.  Amendments to the state’s 2006 landmark law AB 32 in 2015 require the state to cut carbon emissions to 40 percent below 1990 levels by 2030 and by 80 percent below 1990 levels by 2050, a more ambitious target than the previous goal of hitting 1990 levels by 2020. In his Inaugural Address in January 2015, Gov. Jerry Brown identified key goals for reducing greenhouse gas emissions in California through 2030, including increasing renewable electricity to 50 percent, doubling energy efficiency savings in existing buildings and making fuels cleaner for heating, and reducing petroleum use in cars and trucks by up to 50 percent. Speaking months later on the passage of SB 350, Brown declared that decarbonizing the modern economy requires “heroic efforts and tireless struggle,” and that SB 350’s energy efficiency and higher renewable energy standard ratchet up “the California commitment.” [6]

To pursue AB 32 climate change policy goals and gauge progress toward achieving them it is necessary not only to understand the difference between energy efficiency savings and consumption reductions, but to recognize how limited and limiting the efficiency savings framework is in the context of climate change legislation and targets.

The terminology used to measure progress saving energy via efficiency—energy savings, energy intensity, increased energy efficiency, etc.—all refer to changes with no direct bearing on absolute consumption. Treating the efforts that are evaluated according to these scales is helpful in the pursuit of greenhouse gas reductions, but it also obstructs progress toward these goals by mixing relative with absolute scales and obscuring the difference between energy consumed (as metered) and energy saved through efficiency (generally a ratio of program effects divided by a hypothetical energy growth trajectory).[7]

For instance, absolute increases in energy consumption can (and are) occurring alongside efficiency savings. Figures 1 and 2 below show California’s total electricity consumption and per capita consumption from 1972 through 2014. Figure 1 shows 40-plus-year steady growth in overall consumption interrupted by periodic recessions. The data show that between the 2001 and 2008 recessions, statewide electricity consumption grew at an average annual rate of 2,914 GWhs. Since the 2008 recession, the rate of growth in consumption has slowed considerably to an average annual rate of 600 GWh (2009-2014). Figure 2 below shows California’s per capita electricity consumption in 1972 at 6,573 kWh; in 2014 it was 6,769 kWh.[8] The data show that since the high in 2008, per capita consumption has continued to trend downward, with 2014 now again on par with 2002 (6,745 kWh per capita in 2002 and 6,769 kWh per capita 2014). To achieve the greenhouse gas reductions SB 350 contemplates per capita consumption must go down because the state’s population continues to grow, causing the overall electricity use in the state to continue to rise, even if per capita consumption remains flat.[9]  AB32 emission reduction targets are permanent, so efficiency savings must translate into enduring consumption reductions.

That’s why it’s crucial, particularly with the California Air Resources Board banking on efficiency to meet greenhouse gas reduction requirements, for a paradigm shift in the state’s energy efficiency programs.

—Cynthia Mitchell is a 40-year veteran energy economist and utility consumer advocate and consultant for The Utility Reform Network. The views expressed herein are her own.

Footnotes:
[1] California 2003 Energy Action Plan, https://www.energy.ca.gov/energy_action_plan.  See “Breaking News! California Electricity Prices are High”, “California retail electricity prices are high, about 50% higher than the national average.” March 1, 2017, http://ei.haas.berkeley.edu/
[2] AB32 GHG 2006 and update 2015, SB350 Clean Energy and Pollution Reduction Act 2015, AB 802 Demand Forecast Baseline Conditions 2015, AB758 Comprehensive EE Existing Buildings 2009.
[3] EE and EE-related proceedings and processes at the CPUC include: Rulemaking R.13-11-005 EE Rolling Portfolios; Program Administrators’ Applications EE Business Plans 2018-2025; PG&E Application 16-08-006 Diablo Retirement Proposal; R. 14-10-003 Integrated Distribution Energy Resources; DRP 14-08-013 Distribution Resource Plans; R. 16-02-007 Electricity Integrated Resource Planning Framework; R13-12-011 Water-Energy Efficiency Nexus; ongoing EE measurement and verification (M&V) meetings; EE Shareholder Incentive Mechanism workbooks and updates.  EE and EE-related proceedings and processes at the CEC include: Appliance EE Program Title 20 and Building EE Program Title 24; Integrated Energy Policy Report (IEPR); California Energy Demand Forecast and Demand Analysis Working Group (DAWG); AB758 Comprehensive EE Program for Existing Buildings; Clean Energy Jobs Act (Proposition 39) EE in Schools K-12.
[4] “Existing EE framework” refers the CPUC’s forecast of EE potential that the utilities are tasked with obtaining through their EE programs, known as “market potential.” “Market Potential” is a subset of Economic Potential including “energy efficiency savings that could be expected in response to specific levels of incentives and assumptions about policies, market influences, and barriers.” See Navigant Consulting, Inc. EE Potential and Goals Study for 2015 and Beyond, Stage 1 Final Report (“Navigant”), September 25, 2015, pp. iii, iv-v. http://www.cpuc.ca.gov/General.aspx?id=2013.
[5] The Paris Agreement is an agreement within the United Nations Framework Convention on Climate Change dealing with greenhouse gas mitigation, adaptation, and finance starting in the year 2020. The language of the agreement was negotiated by representatives of 195 countries at the 21st Conference of the Parties of the UNFCCC in Paris and adopted by consensus on Dec. 12, 2015.
[6] With AB 32 in 2006, the Air Resources Board’s Climate Change Draft Scoping Plan envisioned that the electricity sector would contribute at least 40 percent of the total statewide GHG reductions, even though the sector created just 25 percent of California’s GHG emissions. AB32 2006 set an absolute emissions reduction of 174 MMT CO2e by 2020.  CARB Adopted Scoping Document (Dec 2008) assumed 15.2 MMT CO2e, equivalent to 32,000 GWh net cumulative by 2020—or 3,200 net annual average savings using the 2010 implementing legislative date—in emission reductions from utility energy efficiency programs and C&S. Calculations then (author) determined that those utility EE goals were about 25 percent short of the CARB 2008 electricity sector EE savings goals. The calculation did not consider the decay in savings over time from utility EE program reliance on short-lived savings such as fluorescent lamps. The 2015 AB32 update increases the shortfall.
[7] Energy consumption is a first order concept that bears on climate change, GHG emissions, and future reduction targets and dates. EE, the more common phrase in use today, is, by contrast, a second order concept, a ratio (kWh/cubic foot, miles per gallon, BTU output/BTU input, etc). Changes in this second order concept may correspond to absolute reductions in energy consumption—as is often assumed or asserted—or they may not.
[8] Data source for Figures 2 and 3 from the Energy Information Administration, SEDS (State Energy Data System), 1960-2014. The link is: https://www.eia.gov/state/seds/seds-data-complete.cfm.
[9] State of California, 2008 Update Energy Action Plan, February 2008, p. 7. http://www.energy.ca.gov/2008publications/CEC-100-2008-001/CEC-100-2008-001.PDF.

October 2015. Capitalizing Energy Efficiency.

CA_CURRENT_10_9-2015_Mitchell

California’s “up the ante” on energy efficiency savings needs new capital market money to make it happen. California consumers as ratepayers and taxpayers cannot afford the billions to achieve CA’s new efficiency legislation.

California needs new banking and institutional capital transaction structures that match investment and to long term efficiency yield, and, creating long term net income streams as efficiency is capitalized equivalent to generation, transmission, distribution.

California is at a critical juncture: chart the described new course, or continue to game energy efficiency accomplishments. Read my 2-pg OP piece.

 

September 2015. NRDC Misleading Regarding California’s Energy Efficiency Success Story.

NRDC’s new report, California’s Golden Energy Efficiency Opportunity: Ramping Up Success to Save Billions and Meet Climate Goals, is a rehash of prior , and teeing up of some nes, overstated claims of California’s energy efficiency success story.

For over a decade, the Golden State has claimed to be a, if not the, national and international leader in saving energy. Such folklore wouldn’t be so bad if it stayed in California. But California’s “energy efficiency success story” is the under girdle of state and national energy policies, and hand-carried to the likes of China as the “how to” primer on reducing electric carbon emissions.

The truth is, while California has accomplished a great deal in saving energy, but not to the scale and scope represented by NRDC claims in its recently released report “California Energy Efficiency Opportunity: Ramping Up Success to Save Billions and Meet Climate Goals”. Clinging to an overstated glory has resulted in a huge Rube Goldberg construct of complex and convoluted utility-run, ratepayer funded efficiency programs that dance to the rhythm of two steps forward – one or two steps back on energy savings and cost efficiencies.

The opportunities and challenges ahead are tremendous, calling for structural shifts in CA’s regulatory approach to energy efficiency. NRDC would have regulators stay largely with the status quo, reasoning that it will get CA where it needs to go. I appreciate NRDC’s commitment to CA energy efficiency, and have a different perspective on CA’s energy efficiency success story. My November 2014 Electricity Policy article CA EE Manifesto lays this out.

If Governor Brown’s 2015 Inaugural 50-50-50 goals (reduce transportation fuel use by 50%, increase renewables to 50% of electric generation, and make buildings 50% more energy efficient) – has a chance in hell, California will have to (at least with building efficiency), do something radically different.

It begins in part with deconstructing the current Rube Goldberg construct of complex and convoluted efficiency programs through some fairly basic changes, in tandem with new market-based approaches to financing efficiency through the large capital markets.

  • Cumulative savings are at best about one-half of what NRDC claims, meaning that far fewer than 30 power plants have been avoided via EE, and, EE savings are short of the 2020 AB 32 GHG target.
  • EE costs are close to, if not more than, the cost of equivalent energy and capacity.

Follow the link to The Utility Reform Network’s media response to the NRDC report.

NRDC and E2 Report – TURN-Media-Rxn

 

July 2015. Governor’s Brown’s New Efficiency Goals

CMitchell_TURN_CEC_Gov’s_EE_Goals_July_6_2015

CMitchell_TURN_Comments_July_6_2015

“TURN CEC Gov’s EE Goals” is shorthand for “The Utility Reform Network (my client –the largest, oldest, and most dedicated consumer advocate office in the country — what a privledge and pleasure to work with TURN as their efficiency expert!) “CEC” is the California Energy Commission. This was a recent proceeding regarding Governor’s Brown’s 2015 goal of 50% improvement in building efficiency. My ppt and text attached.  Nice picture of my girls (hens) basket of eggs toward ppt end.

November 2014. “California Energy Efficiency Manifesto”

Mitchell_EE_Manifesto_11_17_2014

“Mitchell EE Manifesto” is shorthand for my November 2014 Electricity Policy article “A New Energy Efficiency Manifesto: California Needs a More Integrated Cost-Effective Approah”.  In many ways this sums up my 15 years of California work with all the stops pulled out.  I am forever grateful to and for Robert Marritz, editor and publisher for his tremendous work on this piece.

 

2014 “The Risk Takers — Powering Our Future”

“The Risk Takers – Powering Our Future” produced by friend and dear mentor Robert Kahn, explains in under 20 minutes the history and evolution in competition in power generation in this country. It’s not been an easy row to hoe, and certainly imperfect in many ways. You’ll find me here as one of the storytellers.

 

2009. Stabilizing CA’s Energy Demand, The Real Reasons

This 2009 Public Utilities Fortnightly article exposed and debunked the forelore / myth that California was wildly sucessful in reducing electricity consumption via utility-run, ratepayer funded energy efficiency programs. Boy, did this ever stir up the ant hill.

2006. Critical Thinking on CA’s EE Performance Incentives

This article with collegue William Marcus details how California’s regulatory approach providing millions in financial incentives to utilities for running energy efficiency programs does little if anything to change the utility corporate bottom line from selling to saving energy.