Bill Would Assess Utility Efficiency

A Van Nuys lawmaker is pushing a bill that would authorize regulators to hit the Los Angeles Department of Water and Power and other municipal utilities with millions of dollars in charges if they fail to meet energy efficiency targets.

Assemblyman Lloyd Levine said Tuesday that his bill, AB 2020, would assess charges of as much as 3 cents per kilowatt hour to cover the cost of investments needed to meet energy efficiency standards similar to those now applied to investor-owned utilities such as Southern California Edison.

The charges ultimately could result in higher bills for customers of the DWP and other municipal utilities.

The DWP and 37 other municipal utilities, which generate about 25% of the electricity consumed in California, are “lagging behind investor-owned utilities” in developing efficiency programs that could save ratepayers an estimated $300 million a year, said Levine, a Democrat who chairs the Assembly Utilities and Commerce Committee.

Efficiency programs include providing rebates to customers who purchase energy-efficient appliances, replacing bulbs in street lighting, installing double-paned windows and planting shade trees to reduce air-conditioning demands.

Municipal utilities must increase their efficiency programs by as much as 200% “to meet their fair share” of the state’s target for cutting consumption through improved efficiency, said Sheryl Carter, director of Western energy programs for the Natural Resources Defense Council, which is backing Levine’s bill.

DWP Board President Mary Nichols agreed that her utility could do more to encourage efficient use of energy by its 3.8 million residential and business ratepayers.

Though she’s not familiar with the details of Levine’s proposal, Nichols said she was not opposed to the idea that “publicly owned utilities as well as investor-owned [utilities] should be subject to statewide policies about energy efficiency, air pollution and global climate change.”

Nichols, a veteran environmental activist and former Cabinet-level resources secretary under Gov. Gray Davis, was appointed to the DWP board by Mayor Antonio Villaraigosa in August. Since then, the mayor and the board have made a commitment to buying more power from renewable resources, such as wind and solar, and to increase conservation and efficiency programs.

The DWP, which held a workshop on energy efficiency Tuesday, offers a variety of programs, including paying rebates for replacing old appliances and upgrading commercial lighting systems. The utility this year is expanding those efforts and hopes to reduce its peak power generation needs by up to 500 megawatts -- enough power to run 375,000 houses -- over the next decade.

Though Nichols said she planned to work with Levine on his legislation, the organization that represents the DWP and other municipal utilities expects to oppose the Levine bill, said Jerry Jordan, executive director of the California Municipal Utilities Assn.

A law that went on the books Jan. 1 already requires municipal utilities to seek “cost effective, feasible and reliable energy efficiency” before investing in new power plants, Jordan said. However, Levine’s bill would put teeth into the requirement by assessing charges against utilities that fail to meet the efficiency goals -- charges that ultimately could be passed on to customers.