In 2004 the Commission adopted aggressive ten-year energy savings goals to meets its commitment to make Energy Efficiency the resource of first choice, as established in the Energy Action Plan. The goals serve several important roles in the State regulatory framework:
1. To provide guidance for the utilities’ next energy efficiency portfolios: The energy efficiency goals were first adopted in Decision (D.)04-09-060 to set the benchmark that the IOU energy efficiency programs were expected to achieve. The goal-setting process set a framework for the program planning cycle, determining the targets for utility energy efficiency program portfolio performance. Based on this decision, the CPUC adopted aggressive annual and ten-year cumulative goals for verified electric and natural gas savings and allowed the utilities to develop their own programs and portfolios. To measure the IOUs' progress toward their goals, the Energy Division developed an extensive evaluation, measurement and verification program (EM&V) to verify that utility programs meet their commitments. Since D.04-09-060, the Commission adopted interim goals in 2007 in D.07-10-032. The Commission also reviewed the IOUs' 2009-11 (later 2010-12) portfolio applications to ensure that they are projected to meet or exceed the goals.
2. To update the forecast for energy procurement planning: As the Energy Action Plan established energy efficiency as first in the loading order, the state must adopt a long-term benchmark that can be used in utility energy procurement planning. The IOUs' energy efficiency goals adopted from this study will be incorporated into the California Energy Commission’s (CEC's) Integrated Energy Policy Report (IEPR), which establishes the demand forecast for long-term procurement planning. This forecast is an input into the CPUC’s Long Term Procurement Planning Proceeding (LTPP), which determines the generation resources that energy efficiency is expected to offset in order to minimize costs to ratepayers.*
3. To inform strategic contributions to California’s greenhouse gas reduction targets: The California Global Warming Solutions Act of 2006 (AB 32) relies on intensified energy efficiency efforts across California. The California Air Resources Board's (CARB's) Scoping Plan for Assembly Bill (AB) 32 establishes a statewide energy efficiency target of at least 32,000 GWh and 800 million therms by 2020, making it the second largest component in the State’s overall emissions reduction program. Future EE goals updates will have more implications for forecasts of GHG reductions to be provided by EE policy initiatives.
4. To set benchmarks for Risk Reward Incentive Mechanism (RRIM): The Shareholder RRIM for Energy Efficiency Programs was adopted in D.07-09-043 for the 2006-2008 energy efficiency program cycle to provide a shareholder incentive for utilities that meet or surpass their energy efficiency goals. This return represents the expected substantial cost savings to ratepayers created by displacing more expensive supply-side alternatives with energy efficiency, resulting in lower utility revenue requirements and lower customer bills. However, the role of the energy efficiency goals in RRIM is subject to change under a proposed decision for 2010-12 RRIM reforms and thus does not need to be addressed by bidders in this proposal.
2012 Goals & Targets Study
The primary objective of the Goals and Targets Study is to provide a comprehensive quantitative and qualitative assessment of energy savings potential from a variety of perspectives in order to help the CPUC frame and choose energy efficiency goals in a way that best meets the CPUC’s policy objectives. As Phase 2 of the Analysis to Update Energy Efficiency Potential, Goals, and Targets, this study builds upon the 2011 Potential Study to establish scenarios for demand forecasting and IOU program planning. The 2012 Goals and Targets Study will inform the Post 2014 portfolio guidance. For more information, contact Dina Mickin at dina.mackin@cpuc.ca.gov.
2011 Potential Study
The 2011 Potential Study provided a forecast of potential energy savings through 2024, which was used to inform the energy efficiency goals for the 2013-14 portfolio cycle. Consistent with previous potential studies, the study identified all energy savings that were cost effective, and expected that the market capture on an annual basis.
Recent activity:
To view the IOU Potential Model, you can download the free analytica player at http://www.lumina.com/products/analytica-editions/free-player/
Codes and Standards Model
Behavior Potential Model
Goals Background and History
Since 2003, the CPUC has established energy efficiency goals based on legislative requirements set in SB 1037.
- History of Goals: Provides background of Commission decisions that have established the structure and application of goals.
- 2004 Adopted Goals: Table of IOUs progress toward achievement of goals 2004-2011.
Previous Goals and Potential Studies
- *"The energy savings goal adopted in this proceeding shall be reflected in the IOUs' resource acquisition and procurement plans so that ratepayers do not procure redundant supply-side resources over the short- or long-term...subsequent procurement plan cycles...shall incorporate the most recently-adopted energy savings goals into those filings." D.04-09-060, pp. 52-53