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Burt: My key focus is on our customers and the customer experience, as reflected by my title of Senior Vice President and Chief Customer Officer. I’m developing and implementing customer-centric business strategies to create customer experiences that help define PG&E as a leading utility. In addition to that strategic focus, I am responsible for the overall management of PG&E’s Customer Service organization, including our business account services area, customer contact centers, credit operations, billing and customer records areas, and our customer energy efficiency and demand-response programs. e-FFICIENCY NEWS: For more than three decades, PG&E has displayed a strong corporate commitment to energy efficiency and conservation. What are some examples of energy-efficiency programs, products and services that have proven to be successful for PG&E and your customers? Burt: PG&E’s energy-efficiency programs have always focused on our customers and on helping them to lower their energy usage and costs. The challenge for the future is to reach even more customers with simple messages on energy efficiency that are easy for them to understand and act on. We’re doing that by using targeted and impactful marketing and outreach, often in multiple languages, that help customers optimize their energy use, whether at home or at their business. Since the late 1970s, we’ve offered energy audits that provide our customers with detailed efficiency recommendations, and now our audits integrate with an entire suite of options including demand response and solar. We also make participation easier by offering rebate and incentive applications online, as well as extensive information on our various programs. In addition, we continue to work more closely with our trade allies to simplify the process for customers, who can then work directly with contractors and retailers. As an example, as part of our trade ally efforts, retailers helped sell over 6 million compact fluorescent lamps during the 2001 energy crisis, and we expect them to sell over 8 million more in 2006. We also work directly with manufacturers, distributors, and other key stakeholders to promote energy efficiency – one notable success was the collaborative Golden Carrot utility program in the early 1990s that led to the design of energy efficient refrigerators. Currently, PG&E is working closely with high tech firms to advance energy efficiency in this market sector. In fact, we are the first utility in the nation to offer an energy efficiency incentive for virtualization technology, which allows computers to perform more work while using fewer servers. Other key areas of success include our building code and appliance standards programs and our emerging technologies efforts. PG&E continues to work very successfully with the California Energy Commission and the U.S. Department of Energy on energy efficient building codes and appliance standards – among the most cost-effective ways of ensuring that we have energy efficient homes, businesses, and appliances. PG&E’s Emerging Technologies program also collaborates with those agencies to identify new energy efficiency technologies and practices that are ready to move from development to the marketplace. As you noted, we’ve been working with our customers on energy efficiency for 30 years – and our joint efforts with those of other California stakeholders have helped keep per capita electricity use in California stable over that time period, while per capita electricity usage in the rest of the country increased by more than 50 percent. This success has meant that California has been able to avoid building 25 new power plants that would otherwise have been necessary to meet customers’ growing energy needs – a significant achievement. Since 1976, PG&E’s customers have saved over 118 million megawatt-hours (MWh) of electricity and reduced their energy bills by $9.9 billion through our energy efficiency programs. Enough to power more than 18 million homes for a year, these electricity savings also avoided the release of more than 61 million tons of carbon dioxide into the atmosphere – the equivalent of taking more than 8.6 million cars off the road for a year. e-FFICIENCY NEWS: I understand why a company would want to invest in and encourage energy efficiency, as more often than not these measures have a direct effect on the company’s bottom line. But for a utility, the situation seems to be more complicated. Aren’t you in essence telling your customers to use less of your product? What are the benefits to a utility for aggressively promoting energy efficiency? Burt: We definitely encourage our customers to use less of our products – both gas and electric – and it is counterintuitive. Let me explain: Although California faces the same energy challenges as the rest of the country; our state has a history of very aggressive policies on energy use, including the recent state initiative on climate change, which PG&E supports. Over the past three decades, PG&E and other California utilities have partnered successfully with state policymakers to implement energy policies that include different regulatory approaches than those of most other states. Traditionally, utilities earn more as they sell more energy, but California policymakers, with the support of utilities and other stakeholders, have separated sales and revenues from earnings for regulated energy utilities. Under this policy, utilities are assured of cost recovery, and don’t profit from selling more energy. To put it a different way, our regulators authorize PG&E to collect a specified amount of revenue to cover approved costs, and our rates are set accordingly. If we collect more revenue than specified, we return the extra back to customers; if we collect less, we collect the shortfall from customers in the future. We want our customers to use energy efficiently. California’s Energy Action Plan considers energy efficiency to be a resource, just like a power plant – and it turns out that energy efficiency is the cheapest resource available. The utilities must “purchase” energy efficiency before they purchase electricity from other sources. So when customers use energy efficiently, they lower their own energy bills and the energy bills for all customers, since it means we need to buy less power, build fewer power plants and transmission lines, and so on. Our customers like our energy efficiency programs and PG&E wants to provide them. We all win. e-FFICIENCY NEWS: How do you feel about the potential of plug-in hybrid vehicle technology and what some are calling the “electrification” of the transportation industry? Is Pacific Gas and Electric doing anything specific to promote or advance plug-in hybrids? Burt: PG&E has assumed national leadership in the promotion of plug-in hybrid vehicle technology. PG&E’s current program strategy is to help establish wideBurt:spread consumer demand for plug-in hybrids, to communicate that demand with automakers, to encourage development of production vehicles, and to establish an infrastructure to support this emerging technology. We are a founding member of Plug-In Partners, a national organization committed to the commercialization of plug-in hybrid vehicles, and are involved in joining with our customers to demonstrate projected market demand for these vehicles. We are working closely with manufacturers such as Toyota, Nissan, Ford and GM to quickly bring plug-in hybrid vehicles to market on a production scale, which will reduce costs and make them more affordable. And we are establishing a vehicle-to-grid program where the stored energy in plug-in hybrid vehicle batteries will be uploaded back to the grid to help reduce peak energy demand on the system. To sum it up, PG&E is committed to ensuring plug-in hybrid vehicles are successful and that they play a major role in helping us meet our electric resource and environmental goals. e-FFICIENCY NEWS: The developing world is using energy at an alarming rate. I recently read where PG&E is working with several partners to encourage energy efficiency overseas, specifically in China. Can you tell us a little about this effort? Burt: PG&E is a founding member of the China-US Energy Efficiency Alliance, which promotes cooperative efforts with China on clean energy policy and solutions. As you may be aware, China will soon become the leading country in the world producing greenhouse gas emissions, overtaking the U.S. PG&E supports the Alliance because it is seen as a trusted advisor by senior policy-makers in China, and also achieves results working with provinces in China that are at the forefront of energy efficiency program design and implementation. We’ve worked with the Alliance for two years and have been able to contribute to several significant projects in China, including helping to co-author a draft Chinese Demand-Side Management Decree – a major policy statement. We’ve also provided technical assistance, including PG&E program materials and tools, and we’ve met with provincial officials and utility executives in China to discuss demand-side management and energy efficiency efforts. In the next year, we’re looking forward to collaborating on several other major initiatives, including having the opportunity to comment on the Chinese Energy Law. We believe that the future of China and the US are closely linked and that establishing a positive, productive association with our colleagues in China can positively impact climate change, clean air, and our children’s future. e-FFICIENCY NEWS: How does PG&E plan to meet the ambitious greenhouse gas emission reduction goals recently put in place by Governor Schwarzenegger? The goals include targets of reducing greenhouse gases to 2000 levels by 2010, 1990 levels by 2020, and 80% below 1990 levels by 2050? Burt: PG&E supports California’s historic legislation to combat global warming, adopted through Assembly Bill (AB) 32. This legislation will cover not only utilities but also the entire range of public and private entities that produce greenhouse gases in the state. Right now, the state is just starting on the process of implementing this legislation – a process that will continue over the next four years or so. PG&E believes we are well positioned to broadly meet the bill’s objectives, since we have already taken numerous steps to reduce the greenhouse gas footprint of our operations and electric supply area. We’ve been aggressively pursuing energy efficiency and demand-reduction programs for many years; we are making significant progress in meeting our renewable resource goals, and we’re already factoring in the greenhouse gas implications of the power we purchase on behalf of our customers. We are also taking steps to reduce the overall greenhouse gas impact of our electric and natural gas delivery system, as well as our company’s vehicle fleet. The results of these actions are significant: The overall greenhouse gas emissions profile for our electric supply is among the lowest of any major utility in the country, as well as in the state, with more than 50 percent of the electricity we provide to our customers coming from non-greenhouse-gas emitting resources. As we engage in the AB 32 implementation process, we will be working to ensure that the steps we have taken, and investments both we and our customers have made in reducing our impact on global warming is recognized, and that our customers are not asked to "pay twice" for these emission reductions. We will also work to ensure that AB 32 is implemented using a market-based approach, such as a cap-and-trade system, in order to minimize the overall cost of the greenhouse gas reduction program and provide the greatest impetus for business to develop and deploy the new technologies that will undoubtedly emerge to meet the climate challenge. Originally published in the November 2006 edition of e-FFICIENCY NEWS |
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Serving approximately 15 million people, Pacific Gas and Electric is one of the largest combination gas and electric utilities in the United States. e-FFICIENCY NEWS wanted to find out how a company whose primary commodity is energy can remain profitable by encouraging its customers to be more energy efficient. This month we spoke with Helen Burt, Senior Vice President and Chief Customer Officer for PG&E about efficiency programs, global warming and the possible electrification of the transportation sector.