PUC seeks energy incentives, penalties
State regulators Thursday proposed a $2.2-billion energy-efficiency initiative that for the first time would give utilities bonuses or assess penalties based on how much energy their programs saved over a three-year period.
The proposal by the California Public Utilities Commission would fund measures such as rebates for power-saving appliances and efficient lighting. They would be paid for by customers of Pacific Gas & Electric Co., Southern California Edison Co., San Diego Gas & Electric Co. and Southern California Gas Co.
Under the program, the utilities could be paid a maximum combined reward of $500 million for exceeding energy-efficiency targets or be subject to $500 million in penalties, based on a sliding scale.
If the utilities meet efficiency goals for the program, which would start retroactively in 2006 and extend to 2008, ratepayers would reap benefits equal to $2.7 billion, the utilities would get $323 million in rewards and three new power plants wouldn’t need to be built, said Commissioner Dian Grueneich, who co-wrote the 207-page proposal.
“We think we’ve ended up with a sensible approach to energy efficiency,” Grueneich said. “It delivers billions of dollars in savings to the ratepayers, and it avoids an awful lot of greenhouse gas emissions.”
State energy officials and the Natural Resources Defense Council have endorsed offering incentives to the utilities to surpass expectations for energy-efficiency savings.
“The utilities will really have to achieve energy savings, and not just spend money on energy efficiency,” said NRDC staff scientist Audrey Chang.
Critics have balked at handing the companies what could amount to a customer-funded bonus to work harder on the kinds of energy-saving programs that are vital to California’s emission-reduction goals.
During the commission’s deliberations, two utilities proposed getting $538 million for meeting the state’s goals, with a maximum possible payout of more than $1 billion for exceeding the targets.
“My initial reaction is, ‘Thank God they didn’t give the utilities everything they wanted,’ ” said Marcel Hawiger, staff attorney with the Utility Reform Network in San Francisco. But, he added, “I’m disappointed that the commission feels like it’s necessary to bribe the utilities to do the right thing.”
The utilities, consumer groups and others have 30 days to comment on the proposal. Grueneich said it probably would be considered at the commission’s Sept. 20 meeting.
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elizabeth.douglass@latimes.com
