Customer Energy Efficiency– PG&E 2012 Corporate Responsibility and Sustainability Report

Customers and Communities

Customer Energy Efficiency

$300

million

Amount that PG&E helped customers save on their energy bills through energy efficiency programs in 2012

Energy efficiency is an important part of our core business and we offer a diverse array of programs, services and campaigns designed to help our customers save energy and money. In fact, over the last three decades, PG&E’s programs have avoided the release of more than 188 million metric tons of carbon dioxide (CO₂) emissions, based on cumulative lifecycle gross energy savings.

PG&E’s efforts are an integral part of California’s model for energy efficiency, which has helped the state achieve nearly flat growth in per capita electricity consumption over the last 35 years while the rest of the nation has seen a steady rise. Key aspects of this model include:

A “loading order” that puts energy efficiency first for meeting new energy demand—ahead of renewable and conventional sources of energy
Decoupling utility profits from the sale of energy
Aggressive building codes and appliance standards
Legislative and regulatory support that makes energy efficiency a priority
Ready availability of energy efficiency programs, training and strong customer participation

Our Strategic Approach

We tailor our energy efficiency programs to meet our customers’ diverse needs across all customer segments, sizes, geographic locations and engagement preferences. Through the largest energy efficiency funding of any utility in the nation, PG&E’s programs are helping to transform markets and increasingly engage customers in taking action to manage their energy use.

One barrier to investing in energy efficiency is the upfront cost. In response, PG&E launched an on-bill financing program for business customers and government agencies, which provides funding for energy efficiency upgrades with no out-of-pocket costs. Instead, PG&E will finance the projects under the guidance of the California Public Utilities Commission (CPUC) and customers repay the loan—interest-free—through their monthly utility bills. The loans cover energy upgrades such as lighting, refrigeration, HVAC and LED street lights. By the end of 2012, the program funded nearly 190 loans for more than $9 million, with more than 270 additional projects in the queue.

For residential customers, PG&E works with the CRHMFA Homebuyers Fund (CHF) to offer access to attractive bank financing for residential loans continuing CHF’s successful ARRA-funded program. As of the end of 2012, CHF had received commitments from banks to provide up to $10 million in financing to support energy efficiency projects for PG&E’s residential customers.

The Better Buildings Challenge, sponsored by the White House and the U.S. Department of Energy, was launched in 2012 and calls on leading companies, universities and communities to make energy upgrades and invest in private sector financing for energy efficiency projects. The Challenge seeks to make America’s buildings 20 percent more efficient over the next decade—reducing energy costs by about $40 billion and creating jobs.

PG&E signed on as a Challenge “Utility Ally,” providing programs, including benchmarking, that will help up to 30 million square feet of commercial-building space become more energy efficient by 2015.

Our programs include:

Efforts to directly educate and incentivize customers to purchase energy efficient products. For example, we give money back to customers who purchase energy-efficient home appliances such as refrigerators, clothes washers, air conditioners and water heaters. One online tool is our Home Money Saver, which helps customers choose the most efficient products to meet their needs.
Working with retailers, distributors, vendors, trade professionals, contractors and utility organizations to increase the availability of high efficiency products. This includes providing incentives to encourage increased stocking, promotion and sales of high-efficiency lighting products and TVs. Our efforts benefit from a 2,000 member alliance of contractors, executive-level strategic agreements with leading national retailers and a formal network of regional utilities focused on collaborating with shared retail and manufacturer partners.
Partnering with manufacturers and distributors to increase the market share of higher efficiency products. This includes offering incentives to distributors who sell qualifying high-efficiency HVAC equipment.
Advocating for stronger building codes and appliance standards. In fact, PG&E is an active member of a statewide team that has supported 80 building codes and 60 appliance standards in California, as well as 40 federal appliance standards or test procedures since 1998.

PG&E reaches customers through a variety of channels and methods—ranging from self-service software tools that provide intelligent, customized insights and energy saving recommendations to one-to-one relationships through seasoned business customer account representatives that work directly with commercial and industrial customers of all sizes. We also serve customers through partnerships with state and local governments and through third-party energy efficiency specialists.

Partnering to Serve Customers Locally

To better support the communities we serve, PG&E actively partners with local governments and community-based nonprofits to offer turnkey energy efficiency solutions that are tailored to the local area. These partnership programs target municipal facilities and the local community as a whole to help reduce energy usage, save money and reduce greenhouse gas emissions.

The Fresno metropolitan area, home to approximately 900,000 people, is the fifth largest city in California. With the region’s hot climate, Fresno has the highest residential electricity use per capita within PG&E’s service area. Lowering this energy use—and the associated costs—is particularly important given the region’s economic difficulties.

Through the Fresno Energy Watch, PG&E is partnering with the City of Fresno and the Economic Development Corporation (EDC) serving Fresno County to help customers lower their energy use. In 2012, PG&E analyzed community-wide energy use data to help the program strategically deliver energy efficiency audits, incentives and financing tools to residential and small business customers.

For instance, in the fall of 2012, the Fresno Energy Watch launched the Five Cities Five Days campaign to bring unprecedented energy efficiency services and technical resources to five rural communities. By designating a week and bringing media attention to the issue, the campaign resulted in energy efficiency upgrades for 24 small businesses and municipal facilities.

PG&E data has also been instrumental in targeting hard-to-reach and underserved businesses in Fresno County. For example, leveraging community-wide energy use data, the city performed audits of local businesses in 2013 with an average identified energy savings of nearly 250,000 KWh per site.

The foundation of this support is PG&E’s network of 24 local, regional and statewide government partnerships that implement energy efficiency and climate planning programs. The programs are tailored to the unique needs of individual communities, in coordination with the Statewide Energy Efficiency Collaborative. These customized programs have served hundreds of municipalities, small businesses and non-profit organizations, as well as thousands of low-income residential customers. In 2012, they collectively achieved savings totaling about 28 MW, 172 GWh and 2.7 million gross therms, which is equivalent to reducing approximately 30,000 metric tons of greenhouse gas emissions.

Through our Innovator Pilot program, we helped communities test new ways of achieving deeper energy savings. The program provided funding to local and regional governments and nonprofits to support innovative approaches to energy efficiency. Projects were selected based on their likelihood of being scalable and replicable throughout our service area.

Zero Net Energy and Other Emerging Technologies

California energy policy calls for all newly constructed residential and commercial buildings to be zero net energy (ZNE) by 2020 and 2030, respectively. ZNE buildings are designed to produce as much energy as they use in a year, emphasizing energy efficiency and offsetting power needs with on-site, grid-tied renewable energy.

PG&E’s state-of-the-art Zero Net Energy classroom in Stockton showcases the very techniques our instructors teach.

PG&E is working in numerous ways to support the transition to ZNE buildings:

We constructed a hands-on ZNE classroom at our Energy Training Center in Stockton, which graduates more than 500 students a year from a special ZNE program. The state-of-the-art classroom showcases integrated design and building techniques and includes a meter to show the balance of energy produced and consumed in real time.
We partnered once again with the San Francisco chapter of the American Institute of Architects on a ZNE building design competition sited at the UC Merced campus in the Central Valley. The competition, which was open to designers, academics, researchers and students, drew applicants from four continents and awarded $25,000 in total prizes.
We offered technical consulting services to building design teams looking to pursue ZNE projects involving school districts, large high-rises, individual homes and large subdivisions.
We completed two substantial and complementary analytic studies. In the first study, modeling conducted across all common building types and the full range of California climate zones found that ZNE will be technically feasible for the majority of new buildings in the state by 2020. The second study identified a number of non-technical issues that could affect ZNE implementation, including the need for stronger alignment of interests among regulators, utilities, building designers, builders and consumers.

PG&E will continue to be engaged and play a constructive role in moving ZNE buildings forward, learning from the experiences of early adopters.

More broadly, PG&E is also working to accelerate the development and commercialization of energy efficient technologies by funding emerging technology projects, technology demonstrations and the development of building codes and appliance standards.

As one example, last year we worked with the California Lighting Technology Center at the University of California, Davis to hold a showcase event aimed at educating retail owners and managers about the performance of LED lamps in a realistic store setting.

Measuring Our Performance

PG&E’s gas and electric energy efficiency programs and goals are authorized by the CPUC on a three-year program cycle. Funded by a budget of $1.3 billion, PG&E’s savings goals for the 2010 to 2012 cycle were 3,110 GWh, 703 MW and 48.9 million therms.

Modeled after popular TV shows that focus on home renovation and design, Energy House Calls is an online educational initiative to engage residential customers by finding ways to lower their energy usage. Complete with videos, tips and interactive features, the site features six households who have worked with PG&E to become more energy savvy and implement energy-saving solutions.

Energy Upgrade California is a statewide program that offers incentives to homeowners who complete comprehensive energy-saving home improvements on a single-family residence. Since 2010, more than 4,500 customers have received incentives from PG&E for performing comprehensive energy efficiency upgrades to their homes.

PG&E exceeded the CPUC’s energy savings goals for the 2010 to 2012 cycle, achieving total savings of approximately 5,454 GWh, 948 MW and 62 million therms. These results helped save customers more than $900 million on their energy bills and avoided the emission of nearly 2.8 million metric tons of CO₂ and 627 tons of nitrogen oxide (NO_X).

As part of this effort, PG&E also exceeded the CPUC’s energy savings goals for 2012—achieving savings of 1,829 GWh, 314 MW and 20 million therms. This helped customers save more than $300 million on their energy bills and avoided more than 900,000 metric tonnes of CO₂ emissions.

PG&E can earn a financial incentive for achieving the CPUC-approved customer energy efficiency targets. In recognition of the successful results from program year 2010, the CPUC awarded PG&E’s shareholders $21 million in incentives in 2012; the CPUC has yet to award an incentive for our 2011 and 2012 program years.

In 2012, the CPUC approved an energy efficiency portfolio for 2013 and 2014 that allows PG&E to invest $444 million each year to continue to deliver strong energy efficiency programs. This does not include low income energy efficiency funds, which total $156 million for 2013 and $162 million for 2014.