PUC OKs Plan to Save Energy

The California Public Utilities Commission moved aggressively Thursday to counter tightening fossil fuel markets and rising natural gas prices by approving the nation’s largest energyefficiency program.

With little discussion and a unanimous vote, the panel of regulators authorized the state’s four investor-owned utilities to use nearly $2 billion of ratepayer money to offer a variety of incentives, including rebates on high-efficiency refrigerators, furnaces and air conditioners.

The initiative is expected to save utilities and their customers a net $2.7 billion during the first three-year cycle.

The need for conservation and efficiency will become particularly acute this winter because of recent damage to Gulf Coast oil and natural gas facilities by Hurricane Katrina and the possibility of further refinery shutdowns as a result of the approaching Hurricane Rita.

“With Californians already facing a winter of the highest natural gas prices we’ve seen in history -- and knowing the huge impact that natural gas prices have on the cost of electricity, which also is passed on to consumers one way or another -- our first responsibility is to batten down the hatches here at home,” said Susan P. Kennedy, the commissioner leading the efficiency drive.

The 62% increase in funding through 2008 ensures that “before our electric utilities spend a dollar to buy or build new generation, they will first invest in ways to help us use energy more efficiently,” she said, noting that the PUC hopes to cut electricity demand enough to avoid building three new power plants in the next three years.

California’s large-scale commitment to energy efficiency is the best way to counter high prices and global warming, said Bill Prindle, deputy director of the American Council for an Energy-Efficient Economy in Washington. “This is the only thing we can do to try to control the demand side,” he said.

Prindle praised California regulators for creating a system of economic incentives that allow utility companies to profit without selling ever greater volumes of power.

“When there’s no real profit loss from reducing your sales growth, that makes it easier for utilities to consider investing in efficiency,” he said.

The PUC’s program involves Edison International’s Southern California Edison Co.; Sempra Energy’s Southern California Gas Co. and San Diego Gas & Electric Co.; and PG&E; Corp.’s Pacific Gas & Electric Co.