Triggered by the state’s “Energy Action Plan” adopted last year and the chance to reduce the number of new power plants needed to be built, the California Public Utilities Commission Thursday adopted new, more stringent energy efficiency goals for the state’s major investor-owned utilities. The cumulative goal is expected to forestall the need for up to five new generating plant’s, according to the program’s chief backer among the five regulators on the CPUC, which adopted the goals on a unanimous vote.

In a prepared announcement, the CPUC said its action “translated” the statewide energy action plan mandate into “explicit numerical goals for electricity and natural gas savings” among the private-sector utilities. Ratepayer-funded energy efficiency programs and low-income energy efficiency measures both will contribute to achieving the goals, the CPUC said. Ultimately, the goals are to save a cumulative 23,183 GWh/year of electricity at the end of ten year, with a total peak-demand reduction of 4,885 MW over that period. Cumulative natural gas savings would be 444 million therms/year.

Although it still debatable how widely accepted it is, the action plan carved out by the CPUC, state energy commission and state power authority last year places energy efficiency as the first priority in planning for future energy supplies, with renewable energy next, and traditional sources of electric generation in the third position.

“The CPUC upcoming decision concerning the long-term procurement plans and 2005-06 ongoing procurement authorizations of PG&E, Edison and San Diego Gas and Electric will be made in full recognition of the aggressive energy saving goals,” the regulatory commission said in announcing its action. The utilities next year will be expected to incorporate the newly adopted energy saving goals in all of their procurement filings with the CPUC.

The adopted goals “reflect the expectation that energy efficiency efforts in (the utilities’) combined service territories should be able to capture on the order of 70% of the economic potential and 90% of the maximum achievable potential for electric energy savings over the 10-year period (through 2013),” the CPUC order stated. Although sensitive to criticism that they are not stretching enough, the goals for natural gas savings represent “a 116% increase” in savings over the next decade, a CPUC spokesperson said.

“For natural gas, the CPUC’s adopted savings goals are designed at this time to caputre approximately 40% of the maximum achievable potential identified in the most recent studies of that potential,” said the spokesperson, adding that natural gas program funding “has dropped substantially over the last five years,” so a “ramping up” period will be needed and reaching the goals may take longer than it does on the electric side.

Commissioner Susan Kennedy who championed the new goals said in the past the state’s energy efficiency has been measured “by how much money we push out the door, or how geographically diverse the funding allocation is, or how many entities received funding. It is a little like measuring the success of a baseball team by its payroll.”

The state action plan took the “most energy efficient state in the nation on a per-capita basis and called for further reducing per-capita electricity use,” Kennedy said. “This task will not be easy, but it is achievable.” For the first time, there will be annual savings goals for the energy efficiency portfolios of the major private-sector utilities, along with cumulative goals for the rest of the decade.

Commissioner Loretta Lynch said she thinks natural gas has been “lagging” in its efficiency achievements, relative to the electric side, although CPUC President Michael Peevey strongly disagreed with her in his closing remarks. The order calls for the natural gas utilities to adopt goals of increasing energy efficiency savings by 116% over the next decade.

On the electric side, utilities are expected to meet between 55% and 59% of the cumulative incremental electric energy needs over the next 10 years.

At an energy conference in San Francisco, a California-based community energy efficiency activist alleged that the private-sector utilities have consistently over-stated the energy savings achieved from their programs, and another consultant and former state energy commission staff member confirmed that the measurements are not precise. Nevertheless, another consultant that helps state energy officials calculate energy savings statewide said she would stick by the accuracy and integrity of her colleagues’ numbers.

“If there were no additional energy efficiency programs going forward, the state would have to build up to ten new power plants to meet the state’s incremental energy needs,” Kennedy said. “With the goals were establishing today, we will only have to build five of those power plants.”

The four major private sector utilities (Pacific Gas and Electric Co., Southern California Edison Co., San Diego Gas and Electric Co., and Southern California Gas Co.), under the new goals, will have to demonstrate in any filing for new utility supply-side infrastructure that the added facilities are “fully consistent with and reflect (the) adopted energy savings goals, or updates to these goals,” the CPUC order stated.

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