Legislative Requirements for Energy Efficiency Savings

In response to the energy crisis of 2000-2001, the Energy Commission, the California Public Utilities Commission (CPUC), and the California Power Authority developed "the loading order" as a joint policy vision articulated in the Energy Action Plan. The state would invest in:

  1. cost-effective energy efficiency and demand-side resources
  2. renewable resources and
  3. clean conventional electricity supply

The CPUC adopts energy efficiency goals, conducts various potential studies, and performs evaluation, measurement and verification (EM&V) for investor owned utilities (IOUs). Publicly owned utilities (POUs) are not regulated by the CPUC and are not subject to the same energy efficiency mandates as the IOUs. California Code of Regulations Title 20 §1311 requires each POU to report to the Energy Commission its annual investments in energy efficiency and demand reduction programs. Public Utilities Code §9505(d) requires each POU to provide to its customers and the Energy Commission the results of evaluation that measures and verifies their claimed energy savings and demand reduction. Since the early 1990s, the Energy Policy Act requires POUs to file Integrated Resource Plans (IRP) every five years with annual progress reports to the Western Area Power Administration (WAPA). In the IRP, each POU is required to evaluate energy efficiency as an energy supply alternative.

Senate Bill 1037 (Kehoe, Chapter 366, Statutes of 2005) requires the CPUC, in consultation with the Energy Commission, to identify all potentially achievable cost-effective electric and natural gas energy efficiency measures for the IOUs, set targets for achieving this potential, review the energy procurement plans of IOUs, and consider cost-effective supply alternatives such as energy efficiency. In addition to these IOU requirements, SB 1037 requires that all POUs, regardless of size, report investments in energy efficiency programs annually to their customers and to the Energy Commission.

Assembly Bill 2021 (Levine, Chapter 734, Statutes of 2006) requires the Energy Commission to develop statewide energy efficiency potential estimates and savings targets. AB 2021 mandates the Energy Commission to report statewide energy efficiency potential estimates and savings targets as part of its Integrated Energy Policy Report (IEPR) proceeding.

Senate Bill 488 (Pavley, Chapter 352, Statutes of 2009) requires the Energy Commission to evaluate the effectiveness of POU "comparative energy usage disclosure programs" and include POU energy savings potential in the triennial assessment of utility energy efficiency potential and targets.

Assembly Bill 2227 (Bradford, Chapter 606, Statutes of 2012) consolidates reporting requirements into a single section of the Public Utilities Code, making compliance easier and more cost-effective for POUs, and amends the reporting timeline under AB 2021 to align more closely with the IEPR timeline. Rather than providing new 10-year targets every third year, POUs will provide updated targets every fourth year.