State and Local Policy Database


State Scorecard Rank



45.0Scored out of 50Updated 9/2016
State Government
Score: 7 out of 7
State Government Summary List All

California offers several incentives for energy efficiency investments to schools, industry, residential consumers, and the public sector, as well as PACE financing. The state government leads by example by benchmarking energy usage in state buildings, requiring energy-efficient fleets and buildings, and encouraging the use of energy savings performance contracts. California is one of the few states to adopt a commercial building energy disclosure requirement, as well as a residential multifamily disclosure requirement. The state has several research and development institutions focused on energy efficiency investments.

Financial Incentives List All

Financial incentive information for California is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE Californiaand State Energy Office contacts. Information about additional incentives not present on DSIRE is listed here. In addition to the state-funded incentives on DSIRE and below, California has enabled Property Assessed Clean Energy (PACE) financing and has multiple active programs. For additional information on PACE, visit PACENation.

High Performance Incentive Grant: The High Performance Incentive (HPI) grant is a supplemental grant available to districts with projects that have increased costs associated with high performance attributes in school facilities.

The Governor's Strategic Growth Plan, approved by voters in Proposition 1D (AB 127, 2006), provided $100 million in incentive grants to promote the use of high performance attributes in new construction and modernization projects for K-12 schools. High performance attributes include using designs and materials that promote energy and water efficiency, maximize the use of natural lighting, improve indoor air quality, utilize recycled materials and materials that emit a minimal amount of toxic substances, and employ acoustics that are conducive to teaching and learning.

Energy Partnership Program: The Energy Partnership Program provides grants of up to $20,000 for technical assistance, such as energy audits, feasibility studies, performance specifications, and project design, for cities, counties, special districts, hospitals, public care facilities and colleges/universities.

Bright Schools Program: The Bright Schools Program provides grants of service valued up to $20,000 for technical assistance, such as energy audits, feasibility studies, performance specifications, and professional engineering support services, for LEAs eligible for Proposition 39 funding.

Statewide Energy Efficiency Program: Through this financing program, the California Infrastructure and Economic Development Bank (IBank) issues bonds to municipalities, universities, public schools, and hospitals for retrofits and clean energy projects.

California Clean Energy Jobs Act (Proposition 39): Provides funding to local educational agencies (LEAs) for planning and installing eligible energy measures, such a energy efficiency upgrades and clean energy generation. 

California Capital Access Program: California Pollution Control Financing Authority’s (CPCFA) CalCAP provides a loan loss reserve for small business lending. Eligible projects include energy-efficiency retrofits. The program provides an incentive to participating financial institutions to lend to businesses that would not otherwise qualify for a loan.   

Energy Conservation Assistance Act - Education Subaccount (ECAA-Ed): Provides 0% revolving loans to finance energy efficiency and renewable projects for local educational agencies (public school districts, charter schools, county offices of education, and special schools) and community college districts.

Last Updated: September 2016

Building Energy Disclosure List All
  • Building type(s) affected: commercial, residential multifamily

Assembly Bill 1103 requires nonresidential building owners or operators to disclose the energy consumption data consistent with the ENERGY STAR rating system to buyers, lenders, and lessees. It went into effect on July 1, 2013 for buildings over 50,000 square feet; January 1, 2014 for buildings over 10,000 square feet; and July 1, 2014 for buildings equal to or greater than 5, 000 square feet. 

Assembly Bill 802 expands and replaces this requirement to any building with five or more active utility accounts, including residential multifamily buildings. The new law requires utilities to provide energy consumption data for covered nonresidential buildings to the building owners upon request, and requires the Energy Commission to establish a building energy use benchmarking and public disclosure program for certain buildings.

Last Updated: July 2016

Public Building Requirements List All

CA Executive Order B-18-12, signed in April of 2012, established targets for energy and water efficiency, as well as GHG emissions and rescinded a previous CA Executive Order S-20-04. Energy savings targets included reductions in grid-based energy purchases by 20% by 2018 using 2003 as a baseline. State buildings have already reduced energy use by 17% through 2015 since 2003. 50% of newly constructed state buildings and major renovations started after 2020 must be constructed to be zero net energy (ZNE), and 100% by 2025.  50% of existing square footage shall include measures achieving zero net energy by 2025. 2 state buildings are completed already and 3 more under design are intended to achieve ZNE. New and existing buildings are required to incorporate building commissioning. Additionally, newly constructed buildings or major renovations smaller than 10,000 square feet must comply with the California Green Building Standards Tier I (15% more efficient than the California Building Energy Efficiency Standards), and larger than 10,000 square feet must comply with the California Building Energy Efficiency Standards plus earn the "Silver" level of LEED certification and incorporate on-site renewable energy if economically feasible. In addition, the state requires all newly constructed buildings to exceed California Energy Code T-24, part 6, by at least 15%. State agencies have installed over 43 MW of onsite renewable power generation at state facilities and more is planned or under construction. State facility energy, water, and GHG data are publicly displayed on the California Sustainable Buildings website.      

The Green Building Action Plan for EO B-18-12 further requires existing State buildings over 50,000 square feet to complete LEED-EB certification by December 31, 2015 to the extent it’s cost effective. Already, over 145 new and existing state buildings (over 18 million square feet0 have achieved LEED certification. State facilities were ordered to reduce water use by 10% by 2015, and 20% by 2020, from a 2010 baseline. State agencies have already reduced water use by 7.6 billion gallons, or 40% since 2010.  Both energy and water use for all state facilities are benchmarked annually into the Energy Star Portfolio Manager. To date, 100% of state-owned, executive branch facilities have been benchmarked since 2003. State agency energy use, water use, and GHG emissions are posted on the Governor’s public Green Building Website. The Department of General Services working with State agencies has developed policies and guidelines for the sustainable operations and practices of State buildings to achieve operating efficiency improvements and water and resource conservation.

These new polices continue to be developed, updated and incorporated into the State Administrative Manual (SAM). State agencies were also ordered to plan for and expand their electric vehicle charging infrastructure at state facilities, and DGS developed a guidance document for state facilities for planning and installation of electric vehicle supply equipment (EVSE).

Last Updated: July 2016

Fleets List All

In Management Memo 08-04, issued March 14, 2008, the Department of General Services and the California Energy Commission (CEC) established a minimum average fuel economy standard for passenger vehicles and light duty trucks in the state fleet. The combined annual purchases by each state entity must meet a standard of 27.5 miles per gallon (MPG) for passenger vehicles and 22.2 MPG for light duty trucks.  In 2015, DGS worked with CEC to update the standards for the passenger vehicles from 27.5 MPG to 38 MPG, issued through Management Memo 15-03.

As required by Executive Order B-2-11, issued January 28, 2011, an extensive analysis was conducted to eliminate all non-essential and cost-inefficient state fleet vehicles and equipment. The resulting right-sizing contributed to reduced petroleum use by the state fleet, particularly since the reduction was conducted to eliminate the most fuel inefficient vehicles.      

As required by Executive Order B-16-12, issued March 23, 2012, California's state vehicle fleet is increasing the number of its zero-emission vehicles through the normal course of fleet replacement so that at least 10 percent of light-duty fleet purchases are zero-emission by 2015 and at least 25 percent are zero-emission by 2020. Through this action, the state government’s fleet will be leading the way to the Executive Order’s goal of more than 1.5 million ZEVs in California by 2025, which will annually displace at least 1.5 billion gallons of petroleum fuels.

Recent policies enacted to improve the fuel efficiency of California’s state government fleet include:

  • Management Memo 15-03 (April 2015) – increases the minimum fuel economy standard for light-duty passenger vehicles to 38 miles per gallon (MPG) from 27.5 MPG.
  • Management Memo 13-04 (January 2013) – provides direction to state agencies for implementing Executive Order B-16-12 requirements
  • Management Memo 12-05 (May 2012) – reinforces the obligation for state departments to maximize their use of alternative fuels and reduces or displaces petroleum consumption for their fleets.
  • Management Memo 12-06 (May 2012) – requires state agencies to request reconditioned, used, or remanufactured automotive parts, and re-refined or synthetic motor oil and lubricants, whenever practical and cost-beneficial as state vehicles are repaired. The use of these products can help protect the environment and reduce petroleum consumption compared to the use of new materials.
  • Management Memo 12-03 (April 2012) – mandates solar reflective colors for most new vehicle purchases, which reduce air conditioning needs and related petroleum consumption
  • Management Memo 08-04 (March 2008) – established a minimum average fuel economy standard for most fleet vehicles. Efforts are currently underway to update the established minimum average fuel economy standard to reflect the market availability of more fuel efficient vehicles.                                                         

Assembly Bill 236 (2007) added California Public Resources Code §25722.8 (a), establishing the goal of reducing or displacing the state fleet’s petroleum use by 10 percent by January 1, 2012, and by 20 percent by January 1, 2020, as compared to a 2003 baseline. To date, the state fleet has reduced its petroleum consumption by at least 13-percent and is on its way to meeting the 2020 goal of a 20-percent overall reduction. Additional information is available in the 2012 Progress Report for Reducing or Displacing the Consumption of Petroleum Products by the State Fleet.

Last Updated: July 2015

Energy Savings Performance Contracting List All

Under the terms of Public Utilities Code Section 388, the statute that allows state agencies to enter into energy savings contracts, the Department of General Services (DGS) has developed a pool of qualified energy service companies (ESCOs), and oversees projects for most state buildings.  The university systems and the Department of Corrections and Rehabilitation implement such contracts for their own buildings. In 2009 DGS developed the State Building Energy and Sustainability Program, a statewide energy retrofit program, that utilizes a variety of loan and funding sources to improve energy efficiency in state facilities.  This program has already reduced energy around 25% in 46 facilities (450 structures) in its first phase, and an additional 20 facilities are currently engaging with ESCOs.  This program continues to expand and is available to all state facilities (1,700 facilities).

Last Updated: July 2016

Research & Development List All

The California Energy Commission’s Energy Research and Development program includes the Electric Program Investment Charge (EPIC) Program, and Natural Gas Research and Development Program. The Energy Commission’s energy efficiency R&D focuses on technologies, tools,  strategies and demonstrations to maximize the efficiency of new and existing buildings, facilities and industrial, agriculture and water processes, with an ultimate goal  of making zero net energy buildings commonplace and/or meeting the state’s statutory goals for greenhouse gas reductions and installation of cost-effective energy efficiency. Improving the efficiency of appliances and equipment and process improvements for the industrial, agriculture and water sectors are also important objectives. The Energy Commission’s research programs support applied research and technology demonstration and deployment programs. Applied research and development focuses on pre-commercial technologies and approaches, and demonstration and deployment research focuses on the installation and operation of pre-commercial technologies on a large scale to enable appraisal of operational performance characteristics and financial risk.

The University of California-Davis houses the Energy Efficiency Center (EEC), whose mission is to accelerate the development and commercialization of energy efficiency technologies. EEC includes the California Lighting Technology Center, the Western Cooling Efficiency Center, and the Center for Water-Energy Efficiency.

The University of California-Berkeley’s Center for the Built Environment focuses on how to produce comfortable, healthful, and productive indoor environments in the most energy efficient way.

The University of California at Los Angeles’ Center for Energy Science and Technology Advanced Research (CESTAR) lists energy conservation as one of its four major research areas. UCLA developed the Home Energy Efficient Design software tool.

The University of California-Irvine's California Plug Load Research Center (CalPlug) researches efficiency in consumer and commercial electronics.

The Smart Grid Energy Research Center (SMERC) also performs research into the development of the next generation of the electric utility grid, with one of their criteria being improving its efficiency. SMERC is funded by a $10 million grant from the US Department of Energy.

Last Updated: July 2016

Score: 7 out of 7
Buildings Summary List All

California first adopted Building Energy Efficiency Standards in 1978, and has regularly updated them approximately every three years since. California’s energy code is considered to be one of the most aggressive and best enforced energy code in the United States, and has been a powerful vehicle for advancing energy-efficiency standards for building equipment. The Standards are required by statute to be performance-based, offering flexibility for builders and designers. The code also stands out because it includes field verification (residential) and acceptance testing (nonresidential) requirements for certain measures that are prone to construction defects or improper commissioning, and reports because high compliance rates overall are reported for requirements for newly constructed buildings. California is working toward the goal of achieving zero net energy in the 2020 Standards for residential buildings and 2030 Standards for nonresidential buildings.  



Residential Codes List All

The 2013 Building Energy Efficiency Standards, effective July 1, 2014, are mandatory statewide and exceed the 2012 IECC standards for residential buildings. The 2016 Standards were adopted in June 2015, effective January 1, 2017, and are expected to exceed the 2015 IECC standards for residential buildings. California’s voluntary reach standards, which local governments are encouraged to adopt as mandatory, are adopted in the 2013 California Green Building Standards – Tier I and Tier II, effective July 1, 2014.  The 2016 reach standards were adopted in October 2015, effective January 1, 2017, and establish standards for Design Ratings that are 15% (Tier I) and 30% (Tier II) beyond the mandatory standards, as well as a Zero Net Energy Design designation, that local governments consider for adoption as local ordinances.

Last Updated: June 2016

Commercial Code List All

The 2013 Building Energy Efficiency Standards, effective July 1, 2014, are mandatory statewide and exceed ASHRAE/IESNA 90.1-2010 for commercial buildings. The 2016 Building Energy Efficiency Standards, were adopted in June 2015, effective January 1, 2017, and are expected to exceed ASHRAE/IESNA 90.1-2013 for commercial buildings. California’s voluntary reach standards, which local governments are encouraged to adopt as mandatory, are adopted in the 2013 California Green Building Standards – Tier I and Tier II, effective July 1, 2014.  The 2016 reach standards were adopted in October 2015, effective January 1, 2017. They establish updated Tier I and II reach standards that local governments consider for adoption as local ordinances.

Last Updated: June 2016

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: The California Public Utilities Commission (CPUC), in collaboration with the Energy Commission, adopted the state’s Long Term Energy Efficiency Strategic Plan (“Strategic Plan”), presenting a single roadmap to achieve maximum energy savings across all major groups and sectors in California. This comprehensive Strategic Plan for 2009 to 2020 represents the state’s first integrated framework of goals and strategies for saving energy, covering government, utility, and private sector actions, and holds energy efficiency to its role as the highest priority resource in meeting California’s energy needs. The Strategic Plan established the Big Bold Energy Efficiency Strategies (BBEES), which call for all newly constructed residential buildings to be Zero Net Energy by 2020 and all newly constructed Commercial buildings by 2030. The Codes and Standards Action Plan and Zero Net Energy Action Plan add detail to the Strategic Plan.  In addition, the CPUC/IOUs on an ongoing basis conduct EM&V studies to investigate ways to improve compliance with the Standards. The IOU Compliance Enhancement Program developed a Best Practices report in 2012 based on a gap analysis of seven building departments.
  • Baseline & Updated Compliance Studies: The CPUC completed evaluations of building energy code compliance for the 2006-2008 program cycle in 2010 and for the 20010-2012 cycle in 2014. Reports can be found on the CALMAC website ( The CPUC is in the final stages of the 2013-2015 Impact Evaluation Phase 1 which focuses on state and federal appliance standards that were effective between 2013-2015. Phase 2 of the 2013-2015 Impact Evaluation, which is in the final planning stages, will assess compliance with the 2013 Building Energy Efficiency Standards. Results are expected in 2017. The CPUC is also conducting a comprehensive market study of compliance with Building Standards for alterations - HVAC changeouts - in both permitted and unpermitted installations. Results are expected in late 2016. Previous studies have shown compliance rates for whole building compliance with California’s performance standards for newly constructed buildings to be above 100%
  • Utility Involvement: California codes are supported by IOU incentive and rebate programs. Besides utility incentive programs, they develop and deliver building energy code training to a variety of stakeholders including builders, building departments, trades people, engineers, and architects in support of increase compliance. Regulatory guidelines have been established requiring significant utility involvement in supporting building energy code compliance. The CPUC has authorized the IOUs to support standards development since the early 2000s. Since 2008, the CPUC has authorized the IOUs to claim savings from standards development activities and to specifically develop and implement actions to support compliance improvement and standards implementation.
  • Stakeholder Advisory Group: The Energy Commission participates with several collaborative stakeholder groups and organizations that focus on improving code compliance throughout the state. These groups include the Compliance Improvement Advisory Group, the Western HVAC Performance Alliance Compliance Committee, the Bay Area Regional Energy Network Codes and Standards Program, the Center for Sustainable Energy HVAC Permit Compliance and Financing Pilots, and others. 
  • Training/Outreach: 

    The Energy Commission, IOUs and other stakeholders conduct ongoing training and outreach throughout the state.  In combination, these collaborating organizations each year provide hundreds of in-person training sessions on Standards requirements and compliance options, compliance software, building department plan review and site inspection, and HERS rater field verification to increase compliance and enforcement with the Standards.  The IOUs also developed online courses that are available at any day and time of the year. The Energy Commission, IOUs and BayREN conducted over 350 training and outreach events in 2015. These efforts included: developing and providing in-person training at CALBO Education Events, ICC Chapter Meetings, AIA Chapter Meetings; Institute of Heating and Air Conditioning Industries; attending events on a monthly basis to provide CEC updates; developing tools and resources to help simplify compliance and enforcement of the Energy Standards; and providing technical support to utilities' Energy Code Ace by reviewing their Energy Standards tools/resources and promoting utility funded training on the Energy Standards. The Energy Commission's budget for building code compliance, enforcement, and training and outreach was $3.2 million. The IOU and BayREN authorized budget was approximately $6 million.

Last Updated: June 2016

Score: 4 out of 4
CHP Summary List All

California has implemented a variety of policies to encourage CHP including interconnection standards, incentive programs, financial assistance, and additional supportive policies. In 2015, 28 new CHP installations were completed.

Interconnection StandardsList All

Policy: Rule 21

Description: California was among the first states to establish a standard interconnection policy for distributed generation. Approved in 2000, Rule 21 applies to CHP and other DG systems up to 10 MW. It has been adopted as a model by all three major investor-owned utilities, and follows the established technical guidelines of the IEEE 1547 interconnection standard.

In September 2012, the California Public Utilities Commission enacted several major changes to Rule 21 for the first time since 2000. Changes include a "fast track" application process for systems that meet certain size standards, as well as several detailed study options for larger facilities.

Last Updated: July 2016

Encouraging CHP as a ResourceList All

CHP in energy efficiency standards: There is currently no portfolio standard in place under which CHP is eligible, but two state policies set targets for CHP deployment in California. One is Assembly Bill 32, the California Global Warming Solutions Act of 2006, which calls for 4,000 megawatts (MW) of new CHP resources to result in 6.7 million metric tons (MMT) of greenhouse gas reductions. The second is the Governor’s Clean Energy Jobs Program, which calls for the addition of 6,500 MW of CHP by 2030.

Under Assembly Bill 1890 (1996) and Assembly Bill 995 (2000), California established a "loading order" that calls for first pursuing all cost-effective efficiency resources to meet new load. The CPUC considers CHP a key element of this loading order, which is a guiding principle that specifies the state's general preference to pursue opportunities for energy efficiency and renewable generation before constructing new fossil fueled generation resources.

CHP programs:  The state and investor-owned utilities are running several programs designed to acquire cost-effective CHP energy resources. The Qualifying Facilities and CHP Program Settlement is the primary mechanism to require electric utilities to acquire new, efficient CHP resources. A technology incentive is also available through the Self-Generation Incentive Program (SGIP), which provides incentive payments to support the commercialization of new, efficient CHP technologies, among other eligible technologies.

Production Goal: The Qualifying Facilities and CHP Program Settlement established a mandatory requirement for California's three large electric utilities to procure a minimum of 3,000 MW of CHP by 2015 and sufficient capacity and energy from efficient CHP facilities to acheive 2.72 MMTCO2e of emissions reductions by 2020. The program was recently updated in a long-term procurement planning decision (D.15-06-028), which reduced previous procurement targets and required the electric utilities to hold solicitations between 2015 and 2020 to procure energy and capacity from efficient CHP resources sufficient to acheive 2.72 MMTCO2e of greenhouse gas emissions reductions.

Revenue streams: CHP systems in California have access to a feed-in tariff (FIT), which establishes a price paid and approved standard offer contracts for the purchase of excess electricity from eligible CHP generators.  Public Utilities Code 2840 directs the CPUC, the California Energy Commission, and the Air Resources Board to implement the Waste Heat and Carbon Emissions Reduction Act, which required the CPUC to establish a feed-in tariff for CHP systems that are smaller than 20 MW, in operation after January 1, 2008, and highly efficient (operating above a 62% total efficiency).

Last Updated: July 2016

Deployment IncentivesList All

Incentives, grants, or financing: CHP systems may have access to grants and loans through the Self-Generation Incentive Program (SGIP), which provides incentives to customers who produce electricity from a variety of sources. The 2016 incentive payments for non-renewable conventional CHP are $0.42/W, with larger incentives for waste heat to power and fuel cells. The program is administered by San Diego Gas & Electric (SDG&E), Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and Southern California Gas (SoCal Gas). There is no minimum or maximum eligible system size, although the incentive payment is capped at 3 MW. Further, the first megawatt (MW) in capacity will receive 100% of the calculated incentive, the second MW will receive 50% of the calculated incentive, and the third MW will receive 25% of the calculated amount. In 2016, the CPUC issued a proposed decision that would make reforms to the SGIP Program.

Net metering: Under the current net energy metering (NEM) tariff, participating customers receive a bill credit for excess generation that is exported to the electric grid. On a month-to-month basis, bill credits for excess generation are applied to a customer's bill at the retail rate. At the end of a customer's 12-month billing period, any balance of surplus electricity is trued-up at a separate fair market value, known as net surplus compensation (NSC), which is based on a 12-month rolling average of the market for energy.

In January 2016, the California Public Utilities Commission (CPUC) adopted a NEM successor tarriff (AB 327, 2013), which continues the existing NEM structure while making adjustments to align the costs of NEM successor customers more closely with those of non-NEM customers. Among the new elements to NEM mad by the decision is a requirement that NEM successor customers must pay non-bypassable charges on each kilowatt-hour (kWh) of electricity they consume from the grid. Each investor owned utility (IOU) must offer the current net metering tariff until it reaches its net metering program limit or by July 1, 2017, whichever comes first, after which the NEM successor tariff will be available to new customers. Customer-sited CHP facilities are eligible for both NEM tariffs if they are fueled by eligible renewable fuels.

Last Updated: July 2016

Additional Supportive PoliciesList All

California provides CHP-focused technical assistance through the Center for Sustainable Energy and through the California Energy Commission, which provides information on air permitting, demand response with CHP, financial incentives for CHP projects, and other issues.

Additionally, a 2015 CPUC decision allows Southern California Gas Company to provide Distributed Energy Resources (DERS) Tariff, which offers customers a fully elective, optional tariff under which SoCalGas would design, own and maintain CHP facilities on a customer's premise and charge the customer market-based prices for the service. 

The state also has policies to encourage the use of renewable-fueled CHP systems. In addition to offering incentives through the SGIP that are higher for projects powered with renewable fuels, the CPUC also began administering a bioenergy feed-in tariff in 2014, for which bioenergy projects are eligible.

Last Updated: July 2016

Score: 15 out of 20
Utilities Summary List All

California is a long-time leading state for its utility-sector customer energy efficiency programs, which date back to the 1970s and have grown and evolved substantially over three decades. Investor-owned utilities administer energy efficiency programs with oversight by the California Public Utilities Commission (CPUC), which establishes key policies and guidelines, sets program goals, and approves spending levels.  California's publicly owned utilities (POUs) also administer customer programs. All of the investor-owned electric and gas utilities in California have decoupling, which has been in place for many years in California and is an integral part of California's "big, bold" energy efficiency initiative. Utilities may also earn performance incentives for energy efficiency efforts. 

In October 2015, California enacted SB 350, calling on state agencies and utilities to work together to double cumulative efficiency savings by 2030.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last updated: September 2016

Customer Energy Efficiency Programs List All

Investor-owned utilities administer energy efficiency programs with oversight by the California Public Utilities Commission (CPUC), which establishes key policies and guidelines, sets program goals, and approves spending levels. Investor-owned utilities and third-party contractors implement the programs. A share of public benefits funding is designated to go to non-utility organizations to offer programs that supplement and complement those of the IOUs and POUs. California's publicly-owned utilities (POUs), such as large municipal utilities serving Los Angeles and Sacramento, also administer and provide programs to their customers.

Several utilities provide on-bill financing.  More information may be found in the ACEEE report, Energy Efficiency Financing Programs.

California's utilities fund some of their programs and initiatives through resource procurement budgets and recover their costs through rate cases brought before the CPUC. California's utilities also used to collect a Public Goods Charge (PGC) on customer utility bills to fund utility energy efficiency programs. Public Goods Charge is California’s name for a public benefits fund established in Assembly Bill 1890 in 1996. The PGC (see R.09-09-047, section 11) was not reauthorized by the California Legislature in 2011, and Governor Brown directed the CPUC to pursue continuation of funding for these programs before the PGC expires.  About one-quarter of the utility energy efficiency portfolio budgets came through the PGC; the remaining majority of the energy efficiency portfolios is funded through utility procurement funds and is unaffected by the expiration of the PGC.

California also funds energy efficiency programs through funds collected as part of its AB 32 cap and trade program. AB 32 requires California to reduce its GHG emissions to 1990 levels by 2020 — a reduction of approximately 15 percent below emissions expected under a “business as usual” scenario. AB 32 authorizes the collection of a fee from sources of GHGs, including  oil refineries, electricity power plants (including imported electricity), cement plants and food processors.  Funds collected are used to provide staffing, contracts and equipment to ARB and other state agencies to implement AB 32. 

Beginning in fiscal year 2013-2014, California has particularly targeted energy efficiency improvements in schools. The California Clean Energy Jobs Act (Prop. 39) changed the corporate income tax code and allocates projected revenue to California's General Fund and the Clean Energy Job Creation Fund for five fiscal years. Under the initiative, roughly $550 million annually is available for appropriation by the Legislature for eligible projects to improve energy efficiency and expand clean energy generation in schools.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last Updated: June 2016

Energy Efficiency as a Resource List All

California has established energy efficiency as its highest priority energy resource for procurement of new resources. Under Assembly Bill 1890 (1996) and Assembly Bill 995 (2000), California has established a “loading order” that calls for first pursing all cost-effective efficiency resources, then using cost-effective renewable resources, and only after that using conventional energy sources to meet new load.  As authorized under Cal. Pub. Util. Code § 454.55-56, the CPUC has established aggressive targets and associated funding for energy efficiency programs.

In Decision 12-11-015 the CPUC directed IOUs, regional energy networks, and community choice aggregators to apply a market spillover effects adder of 5% to their program tracking claims, acknowledging the impacts of energy efficiency programs on the market overall. 

California has effectively doubled its energy efficiency goals as a result of SB 350, passed in October 2015. This bill  requires the State Energy Resources Conservation and Development Commission to establish annual targets for statewide energy efficiency savings and demand reduction that will achieve a cumulative doubling of statewide energy efficiency savings in electricity and natural gas final end uses of retail customers by January 1, 2030. 

Decision 15-10-028 adopted 2016 goals of 2,864 GWh/yr electricity savings and 50.7 MMT/year in natural gas savings. Compared to the goals adopted in the previous year's D.14-10-046, gigawatt hours (gWh) goals are 10% higher, megawatt (MW) goals are 20% higher, and gas goals are 12% lower.

Last Updated: June 2016

Energy Efficiency Resource Standards List All

Summary:  Electric: Long-term goals average about 1.15% of retail sales electricity through 2024. Natural Gas: Incremental savings target of 0.56% through 2024.

Following California’s 2001 electricity crisis, the main state resource agencies worked together along with the state’s utilities and other key stakeholders and developed the California Integrated Energy Policy Report that included energy savings goals for the state’s IOUs. The CPUC formalized the goals in Decision 04-09-060 in September 2004. The goals called for electricity use reductions in 2013 of 23 billion kWh and peak demand reductions of 4.9 million kW from programs operated over the 2004–2013 period. The natural gas goals were set at 67 MMTh per year by 2013.

The California Legislature emphasized the importance of energy efficiency and established broad goals with the enactment of Assembly Bill 2021 of 2006. The bill requires the California Energy Commission (CEC), the California Public Utilities Commission (CPUC) and other interested parties to develop efficiency savings and demand reduction targets for the next 10 years.  Having already developed interim efficiency goals for each of the IOUs from 2004 through 2013, the CPUC developed new electric and natural gas goals in 2008 for years 2012 through 2020, which call for 16,300GWh of gross electric savings over the 9-year period (see CPUC Decision 08-07-047). See Decision 09-09-04 for 2010-2012 energy efficiency portfolios and Decision 14-10-046 for 2015 goals.

California’s current targets are embedded in the approved 2016-2024 program portfolios and budgets for the state’s IOUs, which calls for incremental electricity savings of about 1.15% (see CPUC Decision 15-10-028)

In 2015, California essentially doubled its energy efficiency goals by passing SB 350.  This bill  requires the State Energy Resources Conservation and Development Commission to establish annual targets for statewide energy efficiency savings and demand reduction that will achieve a cumulative doubling of statewide energy efficiency savings in electricity and natural gas final end uses of retail customers by January 1, 2030. The bill would require the PUC to establish efficiency targets for electrical and gas corporations consistent with this goal. The bill would require local publicly owned electric utilities to establish annual targets for energy efficiency savings and demand reduction consistent with this goal.  The CEC's SB 350 energy efficiency target setting efforts are anticipated to be completed in late 2017. In May 2016 the CPUC reported initial estimates of the impact of SB350, available here

Additional efforts that will impact savings levels include recent all-source procurement RFOs that took place in Southern California.  These resulted in 145 MWs of procurement and are expected to come on line between 2016-2022.  The recent Diablo Canyon Power Plant retirement proposal includes replacement of some of the energy with energy efficiency.  The first phase of this, if approved, would be for 2,000 GWhs of savings that commence in the years 2019-2024.

Last Updated: September 2016

Utility Business Model List All

California initially implemented decoupling through the Supply Adjustment Mechanism (SAM) for gas utilities beginning in 1978 (Decision 88835).  By 1982, similar mechanisms were in place for the three electric IOUs.  As the gas industry restructured, gas utilities began to serve large customers under a straight fixed-variable rate design, which continues through today.  The CPUC stopped the electric decoupling mechanisms in 1996 due to restructuring of the electric power industry. 

In 2001, the Legislature passed Section 739.10, which required that the CPUC resume decoupling.  Decoupling resumed for Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric beginning with the 2004 revenue requirement. Currently, the revenue decoupling program is combined with performance incentives for meeting or exceeding energy efficiency targets. Revenue requirements are adjusted for customer growth, productivity, weather, and inflation on an annual basis with rate cases every three or four years, varying by utility.

Decoupling mechanisms have been developed and applied in individual cases with the IOU utilities. All of the investor-owned electric and gas utilities have decoupling.  It has been in place for many years in California and is an integral policy for California's "big, bold" energy efficiency initiative (CA Code Sec. 9 Section 739(3) and Sec. 10 Section 739.10 as amended by A.B. XI 29; Decisions 98-03-063 & 07-09-043).

The California Public Utilities Commission defined a new Energy Savings and Performance Incentive (ESPI) for investor-owned utilities in Rulemaking 12-01-005. Decision 13-09-023 (September 2013) allocates incentive earnings among four major categories: Energy Efficiency Resource Savings; Ex Ante Review Process Performance; Codes and Standards Advocacy Programs; and Non-Resource Program. Incentives for energy efficiency resource savings are capped at 9% of resource program expenditures. Incentives for successful implementation of ex ante "lock down" are based on performance scores and paid as an award of up to 3% of resource program expenditures. Utilities are also incentivized for their involvement in codes and standards programs, and may earn a management fee equal to 12% of approved program expenditures. For non-resource programs, utilities may earn a management fee equal to 3% of non-resource program expenditures (exclusive of administrative costs). D.13.09.023 directs Commission staff to identify deemed measures with sufficiently uncertain ex ante savings parameters such that the savings claim should be subject to ex post verification in oprder to be included in the incentive payment.  For the purposes of the Energy Savings and Performance Incentive (ESPI) mechanism, "sufficiently uncertain" measures are defined as those measures for which the Commission believes the net lifetime savings of the current DEER or non-DEER savings estimate may be as much as 50% or more under- or over-estimated.

Last Updated: June 2016

Evaluation, Measurement, & Verification List All
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, SCT, RIM
  • Uses a deemed savings database: yes (DEER)

California is a national leader in EM&V. The evaluation of ratepayer-funded energy efficiency programs in California relies on regulatory orders (CPUC Decision 09-09-047). Evaluations are administered by both utilities and the California Public Utilities Commission. The CPUC oversees EM&V studies for investor owned utilities, regional energy networks (RENs), and Community Choice Aggregators (CCA) programs, with a budget of 4% of the statewide portfolio. The 2010-2012 Energy Efficiency Evaluation Report is available on the CPUC web site here. Evaluation reports for program years 2013-2014 have been finalized and published on CalMAC
Evaluation is now underway for program year 2015.  As the energy program funding cycle changes from a three-year cycle to a rolling portfolio cycle, EM&V will follow a predictable schedule of study scoping in the fall and study publication in the spring.

California has established formal rules and procedures for evaluation, which are stated in Decision 09-09-047. Evaluations are conducted statewide and for each of the utilities. California uses all of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Programs Administrator (UCT), Participant (PCT), Social Cost (SCT), and Ratepayer Impact Measure (RIM). The rules for benefit-cost tests are stated in CPUC Decision 05-04-051. California currently specifies the TRC to be its primary cost-effectiveness test. These benefit-cost tests are required for overall portfolio screening. 

Last Updated: June 2016

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

California’s Long Term Energy Efficiency Strategic Plan, first adopted in 2008 and updated in 2011, establishes a goal that by 2020 100% of eligible and willing customers will have received all cost-effective low-income energy efficiency measures.

Rules for the Low-Income Energy Efficiency Program (LIEE), later named the California Energy Services Assistance Program (ESAP), were instituted in Decision 07-12-051 in 2007. Programs are funded by non-participating ratepayers as part of a statutory “public purpose program surcharge” that appears on their monthly utility bills. For each budget cycle, the California Public Utilities Commission establishes program funding for each utility, which includes the utility’s administrative budget.

In addition, the California Department of Community Services & Development (CSD) administers the Low‐Income Weatherization Program (LIWP), which installs solar photovoltaics, solar hot water heaters, and energy efficiency measures in low‐income single family and multi‐family dwellings in disadvantaged communities to reduce GHG emissions and save energy. LIWP is funded through AB 32 cap-and-trade auction revenues and was allocated a total of $154 million in the 2014–15 and 2015–16 state budgets. CSD has 38 weatherization subgrantees statewide leverage LIHEAP and WAP resources with LIWP services. SB 350 was passed in 2015 establishing annual savings targets to achieve a cumulative doubling of statewide energy efficiency savings by 2030. The bill mentions no specific low-income energy efficiency targets, but directs the California Public Utilities Commission to publish a study on barriers for low-income customers to energy efficiency and weatherization investments, including those in disadvantaged communities, as well as recommendations on how to increase access to energy efficiency and weatherization investments for low-income customers.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

Currently California applies the utility cost test (UCT) and the modified Participant Cost (PCm) test to low-income weatherization programs. These tests both incorporate non-energy benefits and are related to the social goal of providing equitable demand-side management (DSM) treatment to the portion of the California housing stock in which low-income customers reside.

Decision 08-11-031 specifies that the cost effectiveness of low-income measures is measured using the UCT and PCm test. Where a measure has a cost-effectiveness figure above 0.25, IOUs may offer it in their LIEE programs, and the CPUC will consider the measures to be consistent with its goal of increasing the energy savings of the program. 

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

Level of coordination is unclear from publicly available data.

Last updated: April 2017

Self Direct and Opt-Out Programs List All

California does not have structures in place for large customers to self-direct energy efficiency efforts or to opt-out from funding energy efficiency programs. 

Last updated: July 2016

Data AccessList All

Guidelines for Third Party Access

In May 2014, the Commission approved Decision (D.) 14-05-016 adopting rules to provide eligible third-party access to energy usage and usage-related data within IOU territories.  The decision directed the CA IOUs to establish the Data Request and Release Process, which is underway, as well as an Energy Data Access Committee comprised of relevant stakeholders to serve as an informal advisory body. 

Requirements for Provision of Energy Use Data

Decision (D.) 14-05-016 creates a process whereby entities can request energy usage and usage-related data from utilities and receive action on the request and resolution of disputes over access to data.

AB 1103 (Cal. Pub. Res. Code 25402.10(b)) requires utilities to deliver Whole Building Usage Information (WBUI) to building owners for nonresidential buildings covered by the Act “in a manner that preserves the confidentiality of the customer.” Currently, WBUI provision has been interpreted by the IOUs to exclude buildings with fewer than 15 tenants. Building owners must still acquire permission from tenants to access whole building information via Green Button-Connect.

D.13-09-025 authorizes the provision of customer energy data to third parties upon customer request via Customer Data Access or Green Button Connect.

D. 14-015-016 also directs utilities, after informing the Commission, to provide energy data to State and federal government entities that need data to fulfill statutory obligations and request such data pursuant to this decision. 

Energy Use Data Availability

The data request and release process enables IOUs to grant requests for aggregated usage data by university researchers, state and federal agencies and local governments. 

Last Updated: June 2016

Score: 10 out of 10
Transportation Summary List All

California has some of the most comprehensive transportation and land-use planning policies in the nation.

Tailpipe Emission Standards List All

The 2002 passage of the Pavley Bill in California was the first time that a law in the United States addressed the issue of greenhouse gas emissions from cars and light trucks. In 2004, California adopted a new set of vehicle emission standards to implement the Pavley law. The regulations require automakers to produce vehicles that will, on average, reduce greenhouse gas emissions by about 30% from 2002 levels by 2016. Increased efficiency through the use of improved vehicle technology is expected to be the primary method for obtaining these reductions. Several other states have adopted California’s emissions program.

California’s vehicle emission standards were harmonized with the federal fuel economy and greenhouse gas programs upon the adoption of new, more stringent federal fuel economy standards in April 2010 for model years 2012-2016. California is also working with the US.  California standards for this period will either coincide with federal standards or may be stronger. In 2012, the California Air Resources Board adopted new GHG standards for model years 2017 to 2025 calling for a fleet-wide average between 48.7 and 49.7 miles per gallon by 2025. California also has  an updated zero-emission vehicle (ZEV) program that requires increasing production of plug-in hybrid, battery electric, and fuel-cell vehicles from 2018 to 2025. 

In 2008, California adopted new GHG regulations to reduce emissions through the fuel efficiency improvement of tractor-trailers. Between 2010 and 2020, tractor-trailers are subject to stringent fuel economy regulations.

Last Updated: July 2015

Transportation System Efficiency List All

Transportation and Land use Integration

California has identified smart growth and transportation system efficiency strategies as a major component of its plans to implement AB32, which requires a 25% reduction from 1990 levels in greenhouse gas emissions by 2020. In 2008, California passed SB 375, requiring that the Air Resources Board (ARB), in consultation with the Metropolitan Planning Organizations, set regional goals for greenhouse gas emissions from vehicles.  Regional transportation plans will need to incorporate those targets, and Regional Housing Needs Assessments in turn will have to be aligned with the land use component of the transportation plans. SB 375 also relaxes the California Environmental Quality Act (CEQA)review process] for housing projects that are consistent with plans to meet regional greenhouse gas reduction goals and ensures adequate inter-agency cooperation in the development of the regional plans.

VMT Targets: ARB adopted final targets, expressed as percent per capita changes in emissions for each region, in September, 2010.

Complete Streets: California also adopted AB 1358 in 2008, a bill that mandates municipalities to create long-term plans that incorporate “complete streets” goals for the physical development of their respective communities. From January 2011 onwards, city or county legislative bodies must “plan for a balanced, multimodal transportation network that meets the needs of all users of streets, roads, and highways, defined to include motorists, pedestrians, bicyclists, children, persons with disabilities, seniors, movers of commercial goods, and users of public transportation, in a manner that is suitable to the rural, suburban, or urban context of the general plan.” A major objective of complete streets requirements is to expand the use of non-auto modes of transportation and thereby help to reduce vehicle miles traveled.

MAP 21 Freight Plans and Goals: California is also one of the first states to have a freight transportation plan in place in acordance with MAP-21 guidelines. The plan establishes an aggressive goal for the freight industry of near zero emissions status by 2050. 

Last Updated: July 2015

Transit Funding List All

Finally, the state has identified a steady stream of funding for public transit expenditures. California’s Transportation Development Act provides two sources of funding for public transit: the Location Transportation Fund and the State Transit Assistance Fund. Monies are allocated to each county based on population, taxable sales, and transit performance and are used for the development and maintenance of transit infrastructure.

Last Updated: July 2015


Incentives for High-Efficiency Vehicles List All

AB 118 funds a voucher program, targeted at medium- and heavy-duty trucks, whose goal is to reduce the upfront incremental cost of purchasing a hybrid vehicle. Vouchers range from $6,000 to $45,000, depending on vehicle specifications, and will be paid directly to fleets that purchase hybrid trucks for use within the state.

California also offers tax rebates of up to $2,500 for light-duty zero emission electric vehicles and plug-in hybrid electric vehicles on a first come, first served basis, effective until 2023.

Last Updated: July 2015

Appliance Standards
Score: 2 out of 2
Appliance Standards Summary List All

Policy: California Code of Regulations, Title 20, Sections 1601 - 1609

Description: California was the first state in the country to adopt appliance and equipment efficiency standards. The authority to adopt appliance and equipment efficiency standards was bestowed upon the California Energy Commission as stipulated under the Warren-Alquist Act, which was enacted in 1974. Over the years, California has adopted standards on more than 50 products, many of which have subsequently become federal standards. California has collaborated with other countries to set harmonized standards for products that have a worldwide market, beginning with external power supplies in 2007.  

On September 2, 2010, California's Office of Administrative Law approved the introduction of efficiency standards for televisions, making California the first state to adopt standards for televisions, effective 2011 with an updated standard becoming effective in 2013. In 2012 California adopted standards for battery chargers. In 2013 the Energy Commission began information collection and the “pre-rulemaking” phase of standards development for 15 categories of appliances. 

In April 2015, Governor Brown issued Executive Order B-29-15, establishing the first ever statewide mandatory water reductions to address California’s ongoing drought. One week later the Energy Commission adopted by emergency it’s proposed standards to reduce the water use of faucets, toilets and urinals. 

In May 2015, the Energy Commission adopted efficiency standards for fluorescent dimming ballasts, labeling requirements for HVAC air filters,and test and list requirements for heat pump water-chilling packages, all of which take effect July 1, 2016. In September 2015, under the emergency Executive Order B-29-15, the Energy Commission adopted two-tiered standards for showerheads, and amended its standards for lavatory faucets. Finally, in January 2016, the Energy Commission adopted standards for general service LED lamps and small-diameter directional lamps, which will take effect beginning January 1, 2018. During 2015 and 2016, the Energy Commission conducted pre-rulemaking workshops on standards for computers, computer monitors, and signage displays, as well as for pool pump motors and portable electric spas.

In August 2015, the Energy Commission launched its Modernized Appliance Efficiency Database System, which allows manufacturers to certify their products online and which has greatly improved the efficiency and utility of the state certification process."

Last Updated: July 2016