Extend Energy-Saving Program

Energy conservation has been a windfall for California, saving $34 billion since 1977, says a Rand Corp. study released last month. Much of the credit should go to a state program that adds a small charge to consumers’ electricity bills to promote conservation and green energy use. The energy savings boosted economic growth and cut industrial air pollution by 40% as well. Rand’s figures provide a persuasive argument that the conservation program, which is scheduled to expire next year, should be extended.

That’s not the only good news. Preliminary data in a Rand energy study in progress show that technology for the production of green, or renewable, energy can be brought to market much faster than previously thought, which could reduce the cost of such energy and make it more competitive with traditional energy sources.

From 1977 to 1995, the state-regulated utility companies paid a per-kilowatt-hour charge into state-administered conservation projects. In 1996, as energy was deregulated, the Legislature shifted assessments for the so-called public goods program directly to consumers, though some utilities, including the Los Angeles Department of Water and Power, do not list it separately. This is one of California’s best investments, the Rand study finds. The annual per capita spending of $125 in the energy efficiency program returned between $875 and $1,300 in benefits to the state economy and helped cut air pollution from stationary sources nearly by half.

About half of the $600 million collected by the energy conservation fund goes to the electric utility companies and other energy organizations for the promotion of energy efficiency. Much of the rest pays for programs to stimulate the use of electricity generated by renewable resources, such as solar and wind.

Rand was careful to point out that, unlike during the oil crises of the 1970s, when energy saving meant keeping houses colder in the winter and warmer in the summer, the California program centers on increasing the efficiency of energy use. For example, substantial savings come from more energy-efficient construction materials and methods developed, in part, to meet California’s stiff building construction code. Dramatic increases in the efficiency of consumer appliances also help greatly.

Bills to extend the program--introduced in the state Assembly by Roderick Wright (D-Los Angeles) and in the Senate by Byron Sher (D-Stanford)--top the Legislature’s energy agenda. The measures would extend the life of energy conservation in California for a decade and add flexibility to improve the administration of the fund. The Rand study puts a dollar figure on the big benefits reaped for a small investment. With energy use creeping upward again, according to the study, the program should be extended at least at its current level.