Jeanne Clinton Climate Strategies Branch Manager California Public Utilities Commission

1. A Regulatory Commission as Sponsor of an Energy Efficiency Strategic Plan???National Association of State Utility Consumer AdvocatesSan Francisco, June 14, 2010Panel: The Next Generation of Energy Efficiency Jeanne Clinton Climate Strategies Branch Manager California Public Utilities Commission cln@cpuc.ca.gov or (415) 703-1159

2. Outline of Remarks • CPUC motivation for Strategic Plan, process, outcomes • Roles of non-utility stakeholders • Plan’s influence on 2010-12 utility programs • Welcome other states to borrow freely from our experience

3. Why We Needed to Do This • Refocus on 10-year cumulative savings goals, not 3-year programs • Maximize chance to afford achieving full “economic potential” • Comprehensive program designs to reach deeper savings and avoid repetitive marketing costs to same customers • Expanded market player input could improve program designs & outcomes • Focus on non-compliance issues with state & federal codes and standards • Renew market transformation perspective – coordinated strategies from RD&D and emerging technologies, through incentives/technical assistance, on to eventual “MT”

4. Regulator -- Unusual Champion? • Motivation:Wanted impending 3-year utility EE filings to be more effective for multi-billion price tag • Leadership:vision for role of EE in energy resources and GHG reductions • Leverage:utilities important to catalyze others • The Market:unprecedented engagement by stakeholders (40 workshops, 500+ participants) • Resources:Tapped evaluation & planning budget to engage expert convenors & support

5. Identifying Strategies to Fill in the “White Space”

6. Choosing Big, Bold Targets – Where is The Potential?

7. Choosing Targets– The Leverage Opportunity

8. The Canvas for Achieving “All Cost-Effective Energy Efficiency” Potential:IOU Efficiency Programs in Context Manufacturers, Retailers/Distributors, Builders, Property Owners, Business & Industry Market Actors Consumer Voluntary Action CEC Building Codes & Appliance Standards Investor-Owned Utilities EE Programs Public Utility EE Programs Public Interest EE R&D

9. The California Long Term Energy Efficiency Strategic Plan www.californiaenergyefficiency.com Making Energy Efficiency a Way of Life in California

10. 4 BIG BOLDEnergy Efficiency Strategies Commercial New Construction All new commercial construction in California will be zero net energy by 2030. Residential / Small Commercial HVAC Heating, Ventilation, and Air Conditioning (HVAC) industry will be reshaped Residential New Construction All new residential construction in California will be zero net energy by 2020. Low- Income Energy Efficiency All eligible low-income homes will be energy-efficient by 2020

11. Example: COMMERCIAL SECTOR These goals will spur actions to transform the energy patterns of California’s largest energy-consuming sector—its commercial buildings

12. Beyond “Big, Bold” – What Else? • Whole-Building orientation, not “widgets” • Advanced lighting, beyond CFLs • Transform HVAC market to demand whole systems view and quality installations • Recognize industry has broad resource and environmental obligations to balance • Marketing based on solid market research on beliefs, motivations, behavior

13. Going Forward – Plan as Road Map/Reference • Shape better utility programs • Reference for: • GHG reduction strategies & regulations; • Legislative initiatives • Invitation to non-utility stakeholders to choose their own roles – collaboration or market services. Examples: • HVAC industry alliance • Architect, Engineer, Builder, Green building collaboration on “Pathway to Zero”

14. Collaborative Process Observations • Stakeholder engagement: • Discussed moving edges needed to achieve bold levels of EE • Identified stakeholders with good ideas, beyond utilities • Asked “How do we stir up motivation, create a market demand, and ensure capabilities to deliver results?” • Keys to process success: • Obtained enthusiastic, objective, subject-experts to facilitate • Non-utility stakeholders were a majority • Facilitators drafted strategies & action plans • Take-aways: • Was highly productive to engage stakeholders to look at statewide California or larger regions, not just at utility program level – e.g. builders and designers, operators & managers, manufacturers & distributors • Very possible to envision long-term actions

15. Shifts in Utility 2010-12 Programs • Residential: Pilot Whole House Retrofit Program • Commercial: Benchmarking to target and motivate • Industrial: Continuous Energy Improvement added • Zero Net Energy: A pathway for new construction • HVAC: Focus on compliance, quality, market alliance • Lighting: Advanced technologies, fewer CFLs • Marketing & Outreach: Statewide strategy built on multi-dimensional market research • Emerging Technologies: Strategic direction thrust • More pilot programs to test out other strategies

16. Welcome Other States to “Borrow” From Our Experience Policy Direction “Suggestions” • Statewide (or regional) Efforts • Capture Wide-Ranging Motivations of End Users • Comprehensive, Durable Savings • Ensure End-to-End Strategic Plans Much of California’s Plan Directly Applicable • Perhaps adjusting targets, timeframes, local actors

17. One Question Many Wonder: the Cost?This effort spent about $2-3 million of EE evaluation & planning funds for experts, facilitators, & logistics support -- 5 - 8 cents per capita --,not counting staff time.