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California's Energy Efficiency Initiatives

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  • The California Energy Commission estimates that due to California’s steady per capita electricity consumption, California has avoided building 40 500MW power plants.
  • At the California average price of 12 cents per kWh, the 40 avoided power plants are saving California $15 billion annually in avoided energy bills.[1]

California’s Energy Efficiency Policies

  • In 1977, California adopted the nation’s first building and appliance efficiency standards.
  • In 1982, California implemented decoupling, which removes the financial disincentive for encouraging energy efficiency by making profits independent of sales.  
  • In 2008, California developed a long term energy efficiency strategic plan to serve as the state’s first integrated framework of goals and strategies for saving energy.

California’s Energy Efficiency History

Not only has California continuously ranked in the top two on the American Council for an Energy-Efficient Economy’s (ACEEE) state energy efficiency scorecard, but its per capita electricity consumption has also remained relatively constant since the 1970’s, a period throughout which United States per capita electricity consumption has nearly doubled.[2] According to Art Rosenfeld, California’s energy efficiency progress can roughly be divided into a pie of thirds: one third climate, one-third electricity price and one-third policy. This claim is supported by a recent study which finds that 23% of the difference in electricity consumption per capita between California and the United States is due energy efficiency policies.[3]

From adopting the nation’s first appliance standards and building codes in the late 1970s to implementing a utility decoupling mechanism, California has established energy efficiency as the highest priority resource in meeting energy demand.  This, along with adopting a long term energy efficiency strategic plan, has allowed California to lead the way in implementing effective energy efficiency policies.

Energy Efficiency Savings

  • For every 1 GWh of electricity consumed California produced more than $5 million of GDP, double the average of all other states.
  • If the U.S. had kept its energy consumption at the same level as California starting in the 1970s, it would have avoided building the equivalent of over 300 new 500 MW power plants.

Source: Martinez, Wang, and Chou, p.2.

California Energy Crisis: Utility Investment

A pivotal moment for energy efficiency in California was the 2000-2001 energy crises that caused rolling blackouts throughout the state. After the energy crisis, annual investment in energy efficiency through utility budgets more than tripled from $210 million in 1998 to over $1 billion in 2008.[4] In 2009, the California Public Utility Commission (CPUC) approved the largest ever ratepayer funding for energy efficiency at $3.1 billion for the three-year cycle (2020-2012).[5] By 20011, electric efficiency program budgets represented more than 3% of California utilities’ revenues, and in the previous year, net incremental electricity savings represented almost 2% of utility retail electricity sales, both signifying much larger percentages than the average state. [6]

 

 

[1] Art Rosenfeld personal communication, November 5, 2012.

[2] Sudarshan, Anant and James Sweeney, “Deconstructing the Rosenfeld Curve: Understanding California’s Low Per Capita Electricity Consumption,” Stanford University, September 30, 2008, http://www.stanford.edu/group/peec/cgi-bin/docs/modeling/research/Decons....

[3] Ibid.

[4] Martinez, Sierra, Devra Wang, and James Chou, “California Restores its Energy Efficiency Leadership,” Natural Resources Defense Council, p.3, March 2010,http://docs.nrdc.org/energy/files/ene_10030901a.pdf.

[5] Rosenfeld, Arthur, “California Enhances Energy Efficiency,” 2011, https://sites.google.com/a/lbl.gov/cool-white-planet/.

[6] Foster, Ben et al, “2012 State Energy Efficiency Scorecard,” American Council for an Energy-Efficient Economy, p.31, October 2012, http://aceee.org/research-report/e12c.

Alliance Policy Interns Christina Ospina and Jen Richmond for their invaluable help in the crafting of this one pager.