Description

California’s 1996 electric industry restructuring legislation (AB 1890) directed the state’s three major investor-owned utilities (Southern California Edison, Pacific Gas and Electric Company, and San Diego Gas & Electric) to collect a "public goods charge" (PGC) on ratepayer electricity use from 1998 through 2001 to create public benefits funds for renewable energy, energy efficiency, and research, development & demonstration (RD&D).

Subsequent legislation in 2000 extended the programs for 10 years from 2002 to 2012. This fund is used by the California Energy Commission (CEC) to administer renewable energy and RD&D programs, and by the electric utilities to administer energy efficiency incentive programs. The California Public Utilities Commission separately collects funds to administer the California Solar Initiative, the Self-Generation Incentive Program, the Renewables Portfolio Standard and others. These programs are separate from the PGC, and are not discussed here.

Renewable Energy and RD&D Funding

The California legislature did not pass legislation in 2011 to authorize PGC collections in 2012 or later years. But the California Public Utilities Commission (CPUC) stated in Decision 11-12-035 that even though their authority to collect funds under Public Utilities Code 399.8 expired, the CPUC still has authority to collect funds through a PGC from Public Utilities Code 381, which has no expiration. The same decision created a new fund, the Electric Program Investment Charge Fund (EPICF), which will be used to collect funds to continue support for renewable energy and RD&D projects. Senate Bill 1018 of 2012 later provided the statutory authority for the EPICF. The portion of the PGC used to support energy efficiency is not accounted for in the new EPICF, but was addressed separately, and is discussed below.

Decision 11-12-035 established the EPICF on an interim basis, and kept funding levels basically the same as the previous year. But this decision is only Phase 1 of a 2-Phase decision. The Phase 2 decision determined how the money in the fund will be allocated between programs, and what the funding levels will be through 2020. Further, Senate Bill 1018 of 2012 withdrew funding for the Emerging Renewables Program, which had previously received the most funding of the California Energy Commission’s renewable energy programs. It is unclear at this time how the EPICF will be administered. Click here for more information about California’s renewable energy programs.

Energy Efficiency Funding

The California Public Utilities Commission (CPUC) oversees the allocation of energy efficiency funds for program implementation to each of the four investor-owned utilities in California: Pacific Gas & Electric, Southern California Edison, Southern California Gas Company, and San Diego Gas & Electric. The original restructuring legislation did not address surcharges on natural gas companies. AB 1002, signed in 2000, established a gas surcharge for energy efficiency, low income assistance, and RD&D, beginning in 2001. Every year, the CPUC approves each utility’s plan for efficiency programs, which the utility then carries out within its service territory. A number of programs are also coordinated on a statewide basis.

Energy efficiency programs were originally funded by the PGC. With the expiration of that fund, the CPUC approved a decision in December 2011 to use a portion of the Procurement Energy Efficiency Balancing Account (PEEBA) to replace the PGC funding. This decision is only valid for the 2010-2012 funding cycle. The CPUC later established program funding levels for 2015 in Decision 14-10-046.

See the financial incentive section of DSIRE’s California page for individual utility energy efficiency incentive programs.