2008 Corporate Responsibility Report

How we are creating a smarter foundation for a sustainable future

Customer Energy Efficiency

Over the past 32 years, PG&E has implemented some of the most comprehensive and aggressive energy efficiency programs in the nation, working to help customers achieve cost-effective energy savings. Our results demonstrate that energy efficiency offers the fastest and lowest-cost way to meet growing energy demand while minimizing greenhouse gas emissions. In total, PG&E’s programs have helped customers save almost $24 billion and prevented more than 155 million tons of carbon dioxide (CO2) from being emitted into the atmosphere, based on cumulative lifecycle savings.

Through trials in Oakland and San Francisco, PG&E demonstrated that LED streetlights can reduce energy usage by up to 50 percent compared with traditional streetlights. This was one of 25 new and emerging technologies that PG&E evaluated in 2008, from data center airflow processes to high-efficiency consumer electronics.

PG&E’s energy efficiency programs are funded through a modest “public goods charge” embedded in PG&E’s rates. Our team leverages these resources to offer a diverse portfolio of programs that includes a mix of rebates and financial incentives, training and education, support for commercializing new and emerging technologies and other activities, such as advocacy for stronger building codes and appliance standards.

One of the key factors in California's success with energy efficiency is a regulatory policy known as decoupling. Because it provides for fixed utility revenue levels independent of actual energy sales, decoupling helps neutralize the financial incentive that most utilities have to sell more energy. Rather than focusing on growing energy sales, PG&E can focus on aggressively pursuing efforts to reduce energy use without the disincentive of a significant financial loss. Moreover, the state of California has also once again begun offering utilities the opportunity for a financial benefit in return for achieving ambitious energy efficiency targets. The policy also includes the potential for penalties if goals are not met. This combination of decoupling and incentives has the potential to continue to drive significant efficiency gains.

To raise public awareness on energy efficiency, PG&E set up and staffed a custom-built, interactive energy-efficient home in San Francisco’s historic Union Square in support of the U.S. EPA’s ENERGY STAR® program.

In 2008, PG&E and its customers continued to achieve unprecedented energy savings and greenhouse gas reductions. From 2006 through 2008—the most recent three-year program cycle authorized by the CPUC—PG&E spearheaded nearly $1 billion in natural gas and electric customer energy efficiency programs, the largest effort of its kind by a U.S. utility company. As a result, we delivered the highest energy savings in our history during the three years, totaling 899 MW, 5,465 GWh and 72.55 million therms. These savings avoided the emissions of approximately 3.4 million tons of CO2—which has the same emissions effect as taking 476,000 cars off the road for one year.

In return for these accomplishments, last year state regulators awarded PG&E $41.5 million as part of an interim reward for the 2006 to 2008 energy efficiency program cycle. This represents 35 percent of the $118.6 million total incentive payments we believe PG&E has earned for our 2006 to 2007 programs. We anticipate that the remainder of the incentive for 2006 to 2008 will be resolved once regulators complete their final verification of PG&E’s energy savings in 2010.

PG&E also applied for the 2009 to 2011 cycle last year. Our proposal included 57 programs in partnership with third parties to increase efficiency in niche markets and expand efficiency innovation. PG&E also proposed a pilot program to support the CPUC’s goals of achieving “zero net energy” in all new residential buildings by 2020 and all new commercial buildings by 2030. We also included an innovative proposal to help build “green communities” by helping cities analyze and reduce greenhouse gas emissions.

We are also targeting energy-efficient televisions, computers and monitors—recognizing the rapidly increasing demand for electronics, which already account for 18 percent of residential energy consumption in our service area.

The following examples showcase energy efficiency highlights from 2008:

  • Our team of experts provided technical assistance to help the California Energy Commission (CEC) set new efficiency requirements for appliances. These include energy efficiency standards for appliances and equipment ranging from portable lamps to residential pool pumps. Codes and standards for appliances and buildings are a key strategy for locking in long-term energy savings across a wide spectrum of energy consumers.
  • We developed an easy-to-use, automated and voluntary system enabling building owners and managers to upload their energy usage data into the U.S. EPA’s ENERGY STAR® Portfolio Manager building performance rating system. Customers can compare their buildings with similar facilities in the same climate zone, providing a guide for future goal setting and helping to identify buildings with high energy-usage levels. In addition, we have offered several workshops on the benchmarking tool for building operators and managers. EPA recognized this accomplishment with the 2008 ENERGY STAR Partner of the Year Award.
Annual1 Energy Savings from Customer Energy Efficiency Programs
 
2006–2008
Actual Savings
2006–2008
CPUC Goal2
2006–2008
% of Goal

Megawatts (peak)
899
613
147%

Gigawatt Hours (total)
5,465
2,826
193%

Million Therms
72.55
44.9
162%

1 Annual energy savings refer to the first-year impacts associated with installed customer energy efficiency projects. Data are consistent with PG&E’s 12th Quarter and 2008 December Monthly Reports as filed with the CPUC on March 5, 2009.

2 CPUC Energy Savings Goals established in Decision 04-09-060.

Championing Energy Efficiency on a Global Scale

In 2008, PG&E’s expertise in energy efficiency was tapped by a worldwide audience seeking innovative ideas on program design and implementation, best practices and lessons learned. Policymakers and energy program staff from countries throughout the world visited PG&E to meet with our energy efficiency team. In addition, PG&E experts traveled to India and China at their request to consult on-site with regulators and policymakers as they develop demand-side management initiatives to address the skyrocketing electrical demand in their countries and reduce greenhouse gas emissions.

We also earned recognition by key industry partners for our commitment. For example, PG&E’s Roland Risser was elected chair of the U.S. Technical Advisory Group to the International Organization for Standardization (ISO), to develop a new standard on energy management (ISO 50001)—an initiative that currently involves experts from 40 countries. PG&E’s role as a leading champion for energy efficiency also shines a light on California’s regulatory climate as a model for other states and nations to emulate.