LAO Releases Report on CA Energy Efficiency Programs

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The Legislative Analyst’s Office (LAO) recently determined that California maintains over a dozen major programs that are intended to support the development of energy efficiency and alternative energy in the state. Funded primarily through utility rates, the LAO has estimated that over the past 10 to 15 years, the state has spent a combined total of roughly $15 billion on such efforts. Despite the decline in the economy and a sluggish California recovery, the state will not only continue to spend a significant amount of money funding these programs, but the funding will likely increase substantially given the added dollars from the state’s cap-and-trade auction and the passage of Proposition 39 by voters in 2012.

In its report, the LAO provides an overview of these different programs, as well as a preliminary assessment of them in terms of priority, overlap and redundancy. The LAO concluded that the state currently lacks a comprehensive framework that fully coordinates the state's energy incentive programs to help ensure that the state’s goals are being achieved in the most cost-effective manner.

According to the report, some of the problems resulting from the absence of such a comprehensive framework include: a significant duplication of programs; agencies and departments making policy choices that may not be aligned to legislative priorities; and an increasing difficulty in making worthwhile comparisons as to the effectiveness across programs.

As a result, the LAO has recommended that the Legislature develop a comprehensive strategy for meeting the state’s energy efficiency and alternative energy objectives. In general, the LAO suggests that any comprehensive strategy should, at a bare minimum, specify: (1) the state’s energy efficiency and alternative energy goals, (2) how such programs should fit together in order to achieve the state’s goals, and (3) how each programs’ effectiveness will be measured.

Link to the Report: http://lao.ca.gov/reports/2012/rsrc/energy-efficiency/energy-efficiency-121912.pdf

Article contributed by John Larrea, Director, Government Affairs

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