California funds biggest energy efficiency plan

California funds biggest energy efficiency plan
Regulators set $3 billion budget for home retrofits, other conservation

California's $3.1 billion energy efficiency budget for utlities includes money to help homeowners use less power from the electricity grid and instead produce some of their own electricity via solar panels.

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updated 4:53 p.m. ET, Fri., Sept . 25, 2009
LOS ANGELES - California is embarking on the most aggressive energy efficiency plan among U.S. states, having earmarked $3.1 billion to retrofit homes and other programs that will cut power needs equivalent to three medium-sized power plants.

The California Public Utilities Commission on Thursday unanimously approved plans by Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric, and Southern California Gas to provide $3.1 billion in consumer rebates and other efficiency programs over the next three years.

That budget is 42 percent higher than the previous three-year plan. The state pioneered the concept of letting utilities raise rates as they spurred conservation, which still is not the case in many U.S. states.

Edison International's unit Southern California Edison, PG&E Corp's main unit Pacific Gas and Electric Company, Sempra Energy's San Diego Gas & Electric Co and its Southern California Gas Company will funnel the money into a dozen statewide programs and some extra smaller initiatives.

The energy saved through the programs would be the same amount of power produced by three 500 megawatt power plants, according to the CPUC.

The programs will also avoid 3 million tons of greenhouse gas emissions and create between 15,000 and 18,000 jobs.

The move by regulators follows Gov. Arnold Schwarzenegger's order earlier this month that the state get a third of its electricity from renewable resources by 2020.

The most populous state is also the biggest U.S. alternative energy market, and its environmental standards, including car pollution rules and green building regulations, are models for national and international policies.

To reach California's goals, however, broader programs that have "holistic approaches" to energy efficiency are key, said Michael Peevey, the commission's president, in a statement.

"Capturing the full energy efficiency potential in the state requires more than simply providing rebates to support the installation of the latest and greatest widget," Peevey said.

The funds will kick off the largest residential retrofit effort in the United States. Called CalSPREE, the program aims to cut energy use by 20 percent for up to 130,000 homes in the state by 2012.

The budget also includes $175 million for innovative programs to make zero net energy homes and commercial buildings; $260 million for local efforts to retrofit public sector buildings and save energy; and more than $100 million for education and training programs.

It also phases down subsidies for basic compact fluorescent lamps, shifting to solid state lighting and other efficient light technologies.