​CPUC Expands On-Bill Financing Options for PG&E Energy Efficiency Upgrade Program

The California Public Utilities Commission has issued Decision 19-03-001, approving PG&E’s request for changes that will expand its on-bill financing (OBF) for non-residential energy efficiency (EE) upgrades.

The on-bill financing program offers eligible customers an opportunity to fund energy efficiency upgrades with unsecured loans to cover equipment and installation costs, with zero percent interest. Customers repay the loans through charges added to their regular utility bills. The payment schedule allows the OBF amount to match cash savings from the EE improvements on utility bills. This enables upgrades that might otherwise not be possible if funded through up front customer investment.

The new program changes will allow all eligible customers to obtain loans up to $250,000 with ten year repayment terms. These limits were previously only available to multi-family housing and government agency customers, and so offer an opportunity for customers in other categories (e.g. industrial and agriculture) to pursue more ambitious and diverse energy efficiency projects. The Commission also granted PG&E’s request to increase the exception loan limit from $2 to $4 million per project, for eligible projects presenting unique energy savings opportunities.

To ensure that the program is implemented effectively, the CPUC requires PG&E to demonstrate procedures for prioritizing projects that offer the largest potential for energy savings, and that safeguard against free ridership. PG&E will also be required to file an annual report on the expanded OBF program.

Since the request for expanded OBF was submitted by PG&E, the decision does not authorize similar changes for other California utilities. However, the CPUC authorized the other large utilities to seek similar changes through tariff filings, and clarified that expanded programs for other utilities would be subject to the conditions adopted for PG&E.

Other issues raised in responses to PG&E’s proposal were deemed outside the scope of the proposal, but may be addressed in the energy efficiency rulemaking (R.13-11-005), which is ongoing.

Our attorneys can provide more information regarding the utilities' OBF programs, and issues currently pending in the energy efficiency rulemaking proceeding. For more information contact: Lynn Haug or Ron Liebert.