CPUC Sets 2022-2032 Energy Efficiency Goals

California law requires the California Public Utilities Commission (CPUC), in consultation with the California Energy Commission, to identify all potentially achievable cost-effective electricity and natural gas efficiency savings and to establish utility energy efficiency targets. Over time the CPUC has developed a process for updating these goals, and last May issued Decision 21-05-031 adopting a new “total system benefit” metric for valuing lifecycle energy, capacity and greenhouse gas benefits achieved through investment in energy efficiency measures, beginning in 2024.

Incorporating this metric and addressing other issues surrounding the latest draft study updating energy savings potential, the CPUC issued Decision 21-09-037 last week adopting energy savings goals for 2022-2032, and providing updated guidance to program administrators for 2022-23 efficiency budget advice letter filings and for future portfolio applications. Specifically, the decision adopts energy efficiency goals for the large investor-owned utilities (IOUs), Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and Southern California Gas Company, based on findings that:

• Utility energy efficiency program goals for 2022 and 2023 will be based on the 2020-adopted Avoided Cost Calculator. This affirms Decision 21-05-031. Program administrators will use the 2021 Avoided Cost Calculator in developing their 2024-2027 energy efficiency program applications.
• Goals will be set using Scenario 2 (incorporating Total Resource Cost (TRC) screen of 0.85 and business-as-usual adoption assumption).The CPUC concluded that Scenario 3 (incorporating an “aggressive level” of adoption) reflects “unrealistic assumptions of the extent to which customers will adopt energy efficiency measures.”
• Goals will not use the draft study’s COVID-19 sensitivities to set 2022-2032 goals because further research is needed to understand the impacts of the pandemic on energy efficiency potential.
• For the 2022-2023 period, energy savings will be credited by adding converted gas savings to electric savings goals from fuel substitution measures that displace gas usage, and vice versa. This follows the approach previously outlined in Decision 19-08-009.
• Energy Division staff has published and will update as necessary a technical guidance document providing more specific guidance for calculating the total system benefit metric.

The decision also provides updated guidance that the IOUs and non-IOU program administrators will have until November 2021 to submit their upcoming 2022-2023 budget advice letters, using the 2020 Avoided Cost Calculator. Their portfolio applications, which will be submitted on February 15, 2022, will use the 2021 Avoided Cost Calculator.

Recognizing that the goals adopted in the decision apply only to the IOUs, the CPUC provided additional instruction for non-IOU program administrators, based on a recommendation from Marin Clean Energy. Non-IOU program administrators may propose to update their 2022-2023 portfolio goals via the November 1, 2021 advice letter, may propose energy savings goals every four years through the portfolio application process, and may propose to revise their goals and savings forecast in the true-up or mid-cycle advice letters.

Contact: Lynn Haug or Andy Brown