California regulators last Thursday unleashed a $3.1 billion, three-year energy efficiency program to be implemented by the state’s four major private-sector utilities. It is said to be the state’s most ambitious efficiency effort to date.

The five California Public Utilities Commission (CPUC) members approved individual programs for each major utility. They stressed that the state’s Energy Efficiency Long-Term Strategic Plan will help meet climate change and economic recovery goals. Efficiency programs can create up to 18,000 jobs, they said.

In a 5-0 vote commissioners said the three years’ of intensive efficiency programs could eliminate the need for three 500 MW power plants, which would save 7,000 GWh of power, 150 metric therms of natural gas and 3 million tons of greenhouse gas (GHG) emissions, they said. The CPUC action reinforces the state’s so-called “loading order” for ranking of electric generation sources, making efficiency the first choice for new power supplies, followed by renewables.

The CPUC action Thursday exceeded in scope the draft decision on the utilities’ plans, which was released in August. While the cumulative energy, environmental and economic benefits from the program theoretically are “breathtaking,” the lead CPUC member on the case, Commissioner Dian Grueneich said the really important part of the regulatory action was the content of the individual utility portfolios. “For the first time ever, the utilities will run 12 programs that are consistent statewide,” she said.

“Capturing the full energy efficiency potential in the state requires more than simply providing rebates to support the installation of the latest and greatest widget,” said CPUC President Michael Peevey.

Commissioner Rachelle Chong warned that the utilities need to pay close attention to the implementation of programs and measurement of results. “Utilities have to be prepared to climb higher in the trees to get the high fruit,” said Chong. She and other commissioners alluded to two major challenges that always confront energy saving programs — tight measure of cost-effectiveness and achieving clear, quantifiable results on a regular reporting basis.

The allocation of the three-year, $3.129 billion budget approved by the CPUC for each of the utilities, accompanied by electric, gas and GHG savings goals, was:

Program dollars are expected to result in 6,965 GWh of electric savings, peak-demand reduction of up to 3,500 MW, cumulative natural gas savings of almost 310 million therms, and 3.07 million tons of GHG reductions.

Among the new programs are stepped-up efforts for residences, commercial buildings and a shift toward more sophisticated lighting equipment.

A statewide residential program called CalSPREE (California Statewide Program for Residential Energy Efficiency) will target 20% savings for up to 130,000 homes in the 2010-2012 period. CalSPREE will be designed to leverage other municipal funding programs, federal stimulus dollars and related programs at the California Energy Commission (CEC), according to a CPUC spokesperson. There also is a separate $175 million targeted for achieving zero net energy in homes and commercial buildings.

Under the expanded plans, utilities will begin to phase down subsidies for basic compact fluorescent (CFL) bulbs and shift emphasis to what the CPUC called “advanced lighting programs,” which include specialty CFL bulbs, solid state lighting and other technologies in that area.

Another $260 million is earmarked for 64 cities, counties and regional agencies for public-sector building retrofits and leading-edge energy efficiency opportunities.

The three-year plan is dedicated to CEC Commissioner Arthur Rosenfeld, a retired University of California Berkeley professor and physicist, who is regarded as an energy efficiency expert. He was an international pioneer “in raising the profile of energy efficiency as a key resource,” Peevey said.

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