Update
on Energy Efficiency for Community Choice Aggregators
Around $250m a year for Energy
Efficiency in California is currently collected through the
Public Goods Charge (PGC) on all ratepayer bills. Women's
Energy Matters (WEM) has been fighting for Community Choice
Aggregators' (CCAs) rights to their portion of these funds
Unfortunately, Calif.
Public Utilities Commission (CPUC) Decision 05-01-055 (January
27, 2005) gave utilities monopoly control of energy efficiency
and did not provide for CCAs. However, it left the door ajar,
stating ""We may revisit the issue of allocating energy-efficiency
funds to Community Choice Aggregators...we may ultimately
find that Community Choice Aggregators are appropriately independent
agencies that should have considerable deference to use [Public
Goods Charge] funds."
Women's Energy Matters advises
cities and counties interested in becoming CCAs to take action
in a timely way to secure their rights. Failure to act may
mean that Energy Efficiency (EE) funds are unavailable until
2009 - or worst case, permanently off limits.
Utilities are currently designing three-year EE programs
1/1/06 through 12/31/08. They submit plans June 1, 2005 for
CPUC endorsement this summer and final approval in October.
Meanwhile, CPUC has not yet provided a way for CCAs to claim
EE funds, though its recent EE decision suggests it will take
up this issue after January 2006. By then, utility programs
will be set in stone through 2009. WEM believes the CPUC will
take action only if and when prospective CCAs make their desires
known.
Please take the following
actions to ensure your future access to EE funds:
1. Pass a resolution informing
CPUC that as a prospective CCA, you should have access to
these funds when you need them and requesting a method for
you to apply for them.
Timing: ASAP. There is no need to wait until you officially
declare your city a CCA or file an implementation plan, or
for the CPUC to complete the CCA proceeding.
San Francisco passed a
Resolution you can adapt which addresses energy efficiency
as well as utility power purchase contracts. Utilities are
currently lining up too much power in long-term contracts,
which could raise exit fees for CCAs.
2. Approve a letter to the
CPUC stating your support for Women's Energy Matter's Application
for Rehearing of CPUC's recent EE decision.
Timing: Again, no need to wait. Your letter can be submitted
with Women's Energy Matters formal comments March 28, or directly
to CPUC, best before April 30.
3. Include Energy Efficiency
in your CCA Implementation Plan and RFP.
Timing: CCAs can file Implementation Plans at any time,
without waiting for completion of the CCA proceeding. You
can get a detailed template from Local Power and hire them
to adapt it for your city and county.
WEM can get your city started with an energy efficiency
system that's guaranteed to be more effective than
the utilities' programs — even if you've never done
it before. WEM's California Standard Offer System for Energy
Efficiency is well-suited for new CCAs. A similar system in
other states has low administrative costs, no need for micromanaging,
and flexibly responds to local needs. It saves 40% more energy
than CA's system, creates a vibrant local EE infrastructure
and has a money-back guarantee!
See below for more background
on energy efficiency and Community Choice,
Why Community Choice
Aggregators should request Energy Efficiency funds
1. Energy Efficiency (EE) can
be and should be the cheapest, quickest and cleanest energy
resource, making it an essential part of a Community Choice
Aggregator's (CCA) "integrated resource plan."
2. Effective CCA control of
Energy Efficiency means lower rates for CCA customers and
a wealth of economic development for the community.
3. Energy Efficiency can help
CCAs retain large customers that might be tempted to "opt
out" of CCA -- just as utilities currently use EE to romance
big customers to stay in their system and stay away from direct
access.
4. The effectiveness of EE
depends largely on who is in charge. Utility-controlled EE
has been shown to be more costly and less effective than non-utility
programs -- not surprising since utilities have a conflict
of interest against saving energy. WEM has documented utility
"gaming" of the EE system --enabling them to claim a large
amount of phantom savings while charging exorbitant amounts
for administration and other costs.
5. The only potential escape
route from a dysfunctional utility monopoly over energy efficiency
is through Community Choice.
How much Energy Efficiency
money should be available for CCAs?
The CPUC initially ruled that
EE funds in CCA territories would be calculated "per capita"
(which would amount to approximately $10 per person). However,
CCAs should request all EE funds collected from their ratepayers;
otherwise local businesses will be shortchanged, possibly
persuading them to "opt out" and stay with utilities.
What exactly is
Energy Efficiency? Could CCA control make a difference?
Historically, the Public Goods
Charge for Energy Efficiency has financed a wide variety of
energy-saving technology and activities for homes and businesses
such as installing and servicing efficient lighting and other
appliances, insulation, heating/ cooling and industrial/ agricultural
machinery; and providing EE information and education to trades-people
and the public. "Conservation messages" (such as turning off
lights or doing laundry after 7pm) were typically not included.
Municipal utilities such as Sacramento Municipal Utility District
(SMUD) have fostered innovative programs such as tree-planting,
which reduces air conditioning needs and can lower the whole
city's temperature as much as 7 degrees.
Energy Efficiency has traditionally
been considered separately from Renewable Energy such as solar
and wind, reflecting the separation between the CPUC (and
mostly utilities) controlling Energy Efficiency funds, and
the Calif. Energy Commission providing grants for Renewable
Energy (usually not to utilities). However, it makes more
sense to plan and install them together, particularly with
solar installations.
Community Choice
Aggregators are in a unique position to combine and maximize
Energy Efficiency and Renewable Energy, leading the way to
a clean, efficient, affordable energy future that
is less vulnerable to fossil fuel disruptions and price hikes,
as well as risky behavior by the holding companies of California's
investor-owned utilities, which have come to rely on repeated
bailouts by their ratepayers.
WEM
worked with Local Power and the Legislature to make sure Energy
Efficiency was included in AB117 and helped pass the bill.
As an "intervenor" in the CPUC's Energy Efficiency Rulemaking
(R0108028), WEM is leading the fight for CCA access to Energy
Efficiency funds.
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