LGSEC October 2010 Newsletter

ENERGY EFFICIENCY

CPUC and CEC Host Whole House Workshop

On Thursday, October 7, the California Public Utilities Commission and the California Energy Commission held an all-party meeting on rollout of the "whole house" energy efficiency program. In addition to a statewide program on which the utilities are working jointly, each utility has its own version of a whole house program for 2010-2012. Speakers at the workshop highlighted the new Energy Upgrade California web site, a one-stop site for customers who want to learn more about energy efficiency opportunities. The County of Los Angeles, a founding member of the LGSEC, has been actively involved in developing Energy Upgrade California. Melinda Barrett from the County of LA made an excellent presentation at the workshop on the marketing approach for Energy Upgrade California. Check out the new site at www.energyupgradecalifornia.com/. Another theme of the workshoip was determination on the part of both agencies to find other ways to support municipal finance programs, with greater engagement from the private sector.

LGSEC and the Smart Grid

As part of its ongoing proceeding on how to best deploy the "Smart Grid," the CPUC in late September called for comments on how customer energy usage data can be appopriately shared. The LGSEC has been vigilant in other CPUC proceedings in advocating that utilities must provide us with energy usage data in an easy-to-use format so we can better design our energy efficiency and climate action programs. With significant lifting from LGSEC member Shawn Thompson, with the City of Irvine, we have joined the Smart Grid proceeding to further our goal of better access to comprehensive data.

Lighting - It's in the Plan!

In September, the CPUC adopted an additional chapter to the California Energy Efficiency Strategic Plan (Decision 10-09-027 in Rulemaking 09-11-014). The new chapter focuses on lighting, with a vision that "by 2020, advanced products and best practices will transform the California lighting market. This transformation will achieve a 60-80 percent reduction in statewide electrical lighting energy consumption by delivering advanced lighting systems to all buildings." There are no specific roles for local government in this new lighting chapter, but there will undoubtedly be task forces and research projects. For more information, check out http://docs.cpuc.ca.gov/PUBLISHED/NEWS_RELEASE/123803.htm.

Debate Continues Over Utility Incentives for Energy Efficiency

In late September, Administrative Law Judge Tom Pulsifer recommended that the investor-owned utilities should not receive any further awards for their 2006-2008 energy efficiency programs. The utilities have already been granted about $144 million in energy efficiency incentives; the energy efficiency portfolio for 2006-2008 was about $2.1 billion. Under the complex process by which the CPUC determines whether utilities should receive incentives, there are a series of true-ups based on reports of the actual amount of energy savings achieved during the program period. A final report on the 2006-2008 program released several months ago from the CPUC Energy Division found the utilities did not achieve their goals, and in fact had been overpaid. The utilities argue they should receive an additional $108 million in incentives. An Alternate Decision from Commission John Bohn would grant them $77.3 million: $40.3 million for PG&E, $.27.1 million for Southern California Edison, $6 million for San Diego Gas & Electric, and $3.9 million for Southern California Gas. Parties are submitting comments and reply comments. The CPUC could vote on this matter October 28.

RENEWABLE ENERGY

Tradable Renewable Energy Credits, Back and Better Than Ever

In March, the CPUC approved the use of Tradable Renewable Energy Credits ("TRECs") to meet renewable portfolio standard ("RPS") goals. The March decision (D.10-03-021) allowed the utilities to use TRECs for up to 25% of their required RPS obligation. In May, the CPUC and stayed its own decision from two months earlier. In August, the CPUC issued a new version of the TREC program in a Proposed Decision from CPUC President Peevey. This version would allow TRECs to meet up to 40% of the RPS obligation. The utilities like the higher limit, saying it will give them more flexibility in meeting the RPS. Other groups, particularly the Utility Reform Network, are very opposed to the revised TREC program, citing concern that it will not lead to the construction of any new renewable resources in California. Parties have submitted comments and reply comments on the Proposed Decision, and it should appear on the CPUC agenda October 28.

Renewable Auction Mechanism - Can it be a Feed-in Tariff?

In August, the CPUC issued a Proposed Decision for a Renewable Auction Mechanism ("RAM"). Billed as a mechanism for getting more renewable distributed generation onto the grid, the RAM would establish a new bidding program for projects up to 20 MW.   Under the RAM, utilities would take projects starting with those that are lowest priced, up to a pre-determined program capacity limit. Many parties had argued for many years that the CPUC should adopt a feed-in tariff modeled on those used successfully in Europe, whereby prices are set for different renewable technologies. The RAM does not offer the price-certainty that many small projects believe they need in order to secure financing.

In comments on the Proposed Decision filed last week, the RAM idea is disliked by many parties, including TURN, environmental groups such as the Sierra Club and Sustainable Conservation, the Center for Energy Efficiency and Renewable Technologies, and some of the solar trade groups. Most of these entities prefer different model for small, renewable distributed generation that is easier to access and offers certainty. The utilities also dislike the RAM idea. They claim the CPUC does not have the jurisdiction for this type of program, and believe it is duplicative of their ongoing efforts to procure renewable energy.

The CPUC is under order from the Legislature to expand the current fixed-price contract from small projects from a size limit of 1.5 MW to 3 MW, but has yet to implement Senate Bill 32, which was signed into law in October 2009. Several parties criticized the CPUC for its failure to move on SB 32.

The CPUC could vote on the RAM Proposed Decision at its November 19 business meeting.

Expanding Self-Generation Incentive Program

The CPUC has established a timeline for determining which technologies can be added to the Self-Generation Incentive Program. This program provides incentive payments to certain renewable technologies. Senate Bill 412 (2009) orders the CPUC to determine, based on greenhouse gas emissions, additional renewable technologies that should allowed to participate. The Self-Generation Incentive Program has included various renewable technologies over the years, and had most recently been restricted to wind and solar. SB 412 extends the program through 2015, as well as directs the inclusion of more types of renewable energy in the program. The CPUC has issued a staff proposal on how to implement SB 412. There will be a workshop to discuss the staff proposal on November 1, and parties can submit comments on the staff proposal on November 14.

More Money Available for Solar Incentives

In September, the CPUC shifted $40 million in funds that had been designated for administration of the California Solar Initiative ("CSI") to the incentive budget for the CSI (Decision 10-09-046). One of the motivating factors in shifting the funds was the high participation in the CSI by government entities, many of whom are using funds from the American Recovery and Reinvestment Act to install solar systems. The CPUC had earlier in the summer proposed suspending the incentive for government entities, a proposal that was almost universally decried and quickly withdrawn.