THE CALIFORNIA PUBLIC UTILITIES COMMISSION picked an opportune time last week to approve the largest energy-efficiency program in U.S. history.
The program funnels nearly $2 billion from electricity and natural gas bills over the next three years into an array of projects aimed at reducing the demand for energy.
If all goes according to plan, the incentives provided by the program will save about $5 billion and eliminate the need for three new power plants, PUC officials say.
The initiative was launched as Hurricane Rita was churning through Gulf Coast states that provide much of the nation’s natural gas and its oil-refining capacity. The damage inflicted by hurricanes Katrina and Rita on wells and refineries will probably cause natural gas prices to jump by a third or more. That increase will be seen not only in gas bills but indirectly in electric bills, given that many of California’s power plants are fueled by natural gas.
The shock to the nation’s energy system was so great that even President Bush -- a former Texas oilman who has focused more on increasing supplies than reducing demand -- called on government to pare its appetite for fuels. Among other things, Bush urged officials in his administration Monday to buy and use energy-efficient appliances and products.
The problem is, buyers pay more in the short term to be energy efficient. For example, a 20-watt compact fluorescent bulb lasts far longer and produces light more cheaply than a conventional 75-watt bulb, but it can cost 10 times as much.
The PUC’s previous programs have cut such short-term costs by helping buyers of energy-efficient appliances benefit from rebates. The new program, which applies to the state’s four investor-owned utilities, tries to push the incentives even deeper into the manufacturing and design process -- into the way commercial buildings are constructed and electronic components are built.
For example, one target of the new program is power adapters used by laptop computers. The makers of these palm-sized transformers typically are under pressure from computer companies to cut costs, not energy use. So they use cheaper components that waste energy by running hotter. Under the new program, several utilities are banding together to reward manufacturers for designing a more efficient type of adapter.
Many Californians used previous rebate programs to cut the cost of energy-efficient appliances, and the new program will make it easier to do so. But the most important changes in the long run may be those that don’t hinge on consumers spending more in exchange for future savings. Instead, they are the ones that give everyone involved a reward for helping utility customers use less power.