Energy Efficiency and Demand Response

Training Smarter Energy Users

For nearly 30 years, PG&E's Energy Training Center in Stockton has provided energy efficiency education, making it the longest continually operating energy education and training facility in the United States. A sister facility in San Francisco, PG&E's Pacific Energy Center, also offers educational programs, design-tools, advice and support to create energy-efficient buildings. Combined, these centers held 410 training sessions and participated in an additional 120 outreach events in 2007—disseminating important information to skilled tradespeople to the benefit of PG&E's customers.

PG&E has built a 30-year track record of working with customers to deliver both cost and energy savings through energy efficiency. Since 1976, our energy efficiency programs have saved customers more than $22 billion and prevented more than 135 million tons of CO2 from being emitted into the atmosphere, based on cumulative lifecycle savings. Together, we are demonstrating that energy efficiency offers the lowest-cost way to meet growing energy demand, while minimizing greenhouse gas emissions.

PG&E's energy efficiency programs are conceived, created and implemented by experts in our industry-leading Customer Energy Efficiency organization. Funding for the programs comes from customers through a modest public goods charge on each monthly bill. 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. The CPUC estimates that every dollar spent on energy efficiency in California provides about $2 in net benefits to the state's economy.

A key factor in California's success is a regulatory structure that creates and aligns incentives for utilities to drive energy efficiency. Importantly, California has long embraced a policy known as decoupling, which breaks the linkage between energy sales and utility profits.

Under decoupling, utilities collect a fixed level of revenue, regardless of their actual energy sales. If energy sales are higher than the target level, the excess revenues go back to the customer. And if sales are lower than the target, utilities recover the shortfalls the following year. Utilities are still responsible for managing their expenses, but this neutralizes the incentive that most utilities have to sell more energy. Rather than focusing on how much energy we can sell, PG&E can focus on helping our customers save energy, money and the environment.

As a complementary policy, California reinstated an energy efficiency shareholder incentive mechanism in 2007 for the state's investor-owned utilities, including PG&E. The policy, which provides a risk-and-reward incentive to achieve energy savings' goals, serves as another innovative approach to extend California's leadership in energy efficiency. PG&E will be rewarded or penalized based on the extent to which our energy efficiency programs meet or exceed California's targets for reducing customers' demand for electricity and natural gas.

Against this backdrop, PG&E continued to make significant strides in 2007. We delivered the highest gross energy savings in our history as part of a $1 billion customer energy efficiency commitment from 2006 to 2008. As this report was completed, no final energy savings data were available for 2006 and 2007 due to ongoing proceedings at the CPUC to determine appropriate energy savings calculation methodologies. Please visit www.pgecorp.com for the final data once it becomes available.

PG&E's programs earned high marks for customer satisfaction among both residential and business customers in 2007. Approximately 95 percent of customers gave our energy efficiency rebate programs a positive satisfaction rating, and nearly 96 percent of recent residential customers said they were likely to participate in another PG&E-sponsored energy efficiency program.

Other energy efficiency program highlights from 2007 included the following:

  • PG&E became the first utility to join The Green Grid, a non-profit consortium dedicated to advancing energy efficiency in data centers and business computing systems. This partnership supports PG&E's industry-leading IT and data center energy efficiency program and service portfolio. It also represents an opportunity to leverage our activities with leading high-tech companies.
  • We helped customers save money by safely recycling old, inefficient refrigerators, freezers and room air conditioners. In 2007, PG&E recycled nearly 47,000 units, almost doubling the results from the prior year. PG&E's recycling program retrieves the units for free and provides a $35 rebate for refrigerators and freezers and $25 for air conditioners. Ninety-eight percent of the raw materials from each unit is recycled.

  • Tom Reiser owns the Dolphin Inn at Carmel-by-the-Sea, among eight other properties, all of which received energy audits.

  • We partnered with the Association of Monterey Bay Area Governments to help the region's hospitality industry become more energy efficient. The partnership has worked with more than 200 establishments—from large chain hotels to independent inns—by offering simple energy audits and installing customized energy saving measures for free.

PG&E is also working to advance opportunities associated with energy efficiency outside of California by working with other utility leaders. PG&E Corporation's Chairman and CEO Peter Darbee co-chaired the Edison Electric Institute's (EEI's) Energy Efficiency Task Force. This Task Force focused on broadening industry executives' understanding of alternative business and regulatory models for advancing energy efficiency as a response to rising energy demand and environmental challenges. As a result of these efforts, the EEI Foundation is launching a new Institute for Electric Efficiency to help utilities and others working on energy efficiency to identify and implement best practices.

In addition to energy efficiency, PG&E also manages a variety of demand response programs to help cut peak energy use. Focusing on ways to reduce peak energy use is vital to our environmental and resource planning objectives. These programs reward participating customers for voluntarily reducing their energy use when asked to do so in response to a peak-demand event, typically no more than a few critical hours each year.

While we rely primarily on the participation of commercial and industrial customers to achieve large-scale demand response savings, PG&E also enables its residential customers to participate. For example, we created a new Smart AC program that pays residential customers a small one-time amount in return for allowing PG&E to remotely adjust their air conditioners at peak times. PG&E provides the technology that allows for the remote control at no cost to the customer. Participation is voluntary, and customers have the ability to opt out if they choose.