California: A Leader in Energy Efficiency

1. Robert Marcial, PG&E Pacific Energy Center BioForum – Adapting to Climate Change April 17, 2010 California: A Leader in Energy Efficiency

2. World and Energy Statistics • Which countries have highest percentage of population? • China (20%) • India (18%) • United States (5%) • Indonesia (3%) • Brazil (3%)

3. World and Energy Statistics • Which countries have highest primary fuel consumption? • United States (22%) • China (14%) • Russia (7%) • Japan (5%) • India (4%)

4. World and Energy Statistics • Which are the leading energy sources by type consumed in U.S. for all end uses? • Petroleum (39%) • Natural Gas (24%) • Coal (23%) • Nuclear (8%) • Biofuels (4%) • Hydroelectric (2%)

5. World and Energy Statistics • Which are the top end uses for primary fuel energy in U.S. buildings (Comm & Res)? • Space Heating (25%) • Lighting (14%) • Water Heating (12%) • Space Cooling (11%) • Refrigeration (6%) • Electronics (5%)

6. World and Energy Statistics • How is energy used in the U.S. by sectors? • Industry • Transportation • Residential • Commercial (35%) (27%) (21%) (17%)

7. Buildings and People 17% 35% 21% 27% 48% 25% 27%

8. Buildings and People

9. California Energy Leadership • Legacy of energy innovation • Decoupling • Loading order • Energy efficiency • Demand response • Progressive state energy policy • California Long Term Strategic Plan • Go Solar California • Renewable Portfolio Standard (RPS)

10. California Energy Leadership Arthur Rosenfeld

11. California Energy Leadership • An 18 cubic foot refrigerator consumed approximately 2,000 kWh/yr in 1970. How much does a high-quality refrigerator of similar size consume today? • ~1,000 kWh/yr • ~ 500 kWh/yr • ~ 400 kWh/yr • ~ 250 kWh/yr

12. California Energy Leadership 2,000 kWh 18 ft3 (0.51 m3) frost-free refrigerator Energy Usage per year 700 kWh 490 kWh 390 kWh 2009 1970 1993 2001

13. 14,000 12,000 10,000 8,000 KWh 6,000 4,000 2,000 - 2000 1995 1960 1965 1970 1975 1980 1985 1990 US CA Western Europe 30+ Years of Energy Efficiency Success Courtesy Art Rosenfeld, California Energy CommissionNote: 2005 – 2008 are forecast data.

14. Energy EfficiencyFirst resource in our energy mix

15. About PG&E and Our Business • What we do: • Deliver safe, reliable, and environmentally responsible gas and electricity to approximately 15 million Californians

16. PG&E’s 2008 Electric Power Mix

17. 1,329 U.S. Average (1) California’s Average 724 PG&E (2) 2008 641 2007 636 2006 456 2005 489 2004 566 2003 620 Greenhouse Gas Emissions (pounds of CO2 per MWh) • (1) Source: U.S. EPA eGRID 2007 Version 1.1 (updated Dec. 2008 and based on 2005 data). • (2) PG&E’s emissions rates for delivered electricity were independently verified and registered with the California Climate Action Registry. Given that a portion of the electricity that PG&E delivers comes from unspecified generation sources, the company’s total emissions, and associated emissions rates, may vary from registered figures.

18. Energy EfficiencyFirst to reduce CO2 emissions CO2 in electricity: 1.32 lb/kWh (USA) 0.88 lb/kWh (Cal) Consumption: 12.7 MWh/cap. (USA) 7.7 MWh/cap. (Cal) Source: EPA, Inventory of U.S. Green House Gas Emissions and Sinks 1990-2006 February, 2008 CARB, Climate Change Proposed Scoping Plan, a framework for change October, 2008

19. McKinsey Potential Study • U.S. can reduce energy demand by 23% by 2020 • U.S. can save $1.2 Trillion • $520 Million investment • 1.1 GTons CO2 reduction per year • Re-think how we legislate • Re-think how we do business

20. McKinsey Potential Study

21. McKinsey Potential Study

22. McKinsey Potential Study

23. Decoupling in CA • Gas in 1978, electric in 1982 • Revenues and earnings are independent of sales. • California’s IOUs collect the revenues authorized to run the business and provide a return to investors. • If sales rise above forecast levels, extra revenues go back to customers. • If sales fall below forecast levels, utilities are assured they can recover the shortfall. • Decoupling offers the benefits of more consistent revenues, and it helps promote broad, long-term environmental goals.

24. Decoupling in U.S.

25. CA Energy Action Plan Loading Order • Energy Efficiency & Conservation • Demand Response • Renewable Resources • Distributed Generation • Traditional Generation

26. Why Do Utilities Support Demand-Side Management? • California customers want it • Helps mitigate the impact of demand growth on infrastructure • Less expensive than new generation • Allows allocation of capital to other needed infrastructure projects • It decreases CO2 emissions and impact on the environment

27. Energy Efficiency Numbers • Since mid 70’s, California’s energy efficiency programs have: • Saved customers over $56 billion • 30% reduction in per capita CO2 emissions • California avoided building 24 power plants • What if California had not acted?

28. CFLs use up to 75% less energy and last up to 10 times longer than traditional incandescent lamps. California Invests in Energy Efficiency • California is investing $3.13 billion in energy efficiency programs between 2010-2012: • Savings Goals: • 6,965 GWh (House: 0.006 GWh/yr) • 1,537 MW • 150.3 MMTherms (House: 500 Therms/yr) • 3.07 MMTons of CO2

29. How it works • Funded explicitly from our customers’ bill (Public Goods Charge for Public Purpose Programs) • De-coupling in place • Share-holder incentive to generate profit from energy efficiency success • Goals and budgets are defined for a 3 year period (program cycle)

30. CPUC Long Term Plan • All new residential construction in California will be zero net energy by 2020 • All new commercial construction in California will be zero net energy by 2030 • HVAC will be transformed to ensure that its energy performance is optimal for California’s climate • 100% Low income participation • Major emphasis on workforce education and training • www.californiaenergyefficiency.com

31. Go Solar California • 10 year program (2007 – 2016) • 3,000 MW, $3.3B • California Solar Initiative (940 MW, $2.17B) • New Solar Homes Partnership (360 MW, $0.4B) • Other (700 MW, $0.78B) • Customers must perform energy efficiency audit to be eligible for CSI incentives • www.gosolarcalifornia.org

32. California’s Electricity Need 2008 System Load (CAISO / PG&E) MW Electric demand is highly variable, with peaks that require higher capacity during short periods. 32

33. California’s Electricity Need System Load Duration Curve California uses 5% of capacity for less than 50 hours per year! Capacity used to support peak demand is expensive, inefficient and environmentally unfriendly. Last 25% of capacity needed less than 10% of the time MW 33 % Time per Year Source: California Independent System Operator Corporation

34. Demand Response Benefits • Reduces electrical demand during “critical peak” periods • Rewards customers contributing to demand reduction • Enables: • Reduced need for excess generation capacity to serve peak loads: DR is a “virtual peaking plant” • Enhanced electric grid reliability • Lower average electric procurement costs • Lower environmental impact

35. DR for Home Air Conditioning • Professionally installed and maintained at zero cost • Web-programmable thermostat & switch • 15 / 15 minute compressor on/off cycles during power emergencies • Opt out any time – owner is in control • May 1 – October 31 • Benefits: reduced outages, lower utility bills, environmental benefits, sustained comfort

36. California’s Renewable Portfolio Standard (RPS) California’s mandate of 20% renewable energy by 2010 is the most aggressive renewable energy goal in the U.S. California’s Governor recently signed an Executive Order calling for 33% by 2020. Implementers are pursuing a diverse portfolio that includes both traditional and emerging renewable technologies.

37. California leads the way in RPS policy 29 states & DC have an RPS; 6 additional states have goals WA: 15% by 2020* ME: 30% by 2000 New RE: 10% by 2017 VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by 2017 MN: 25% by 2025 (Xcel: 30% by 2020) MT: 15% by 2015 • NH: 23.8% by 2025 ND: 10% by 2015 MI: 10% + 1,100 MW by 2015* • MA: 15% by 2020+1% annual increase(Class I Renewables) • OR: 25% by 2025(large utilities)* 5% - 10% by 2025 (smaller utilities) SD: 10% by 2015 WI: Varies by utility; 10% by 2015 goal • NY: 24% by 2013 RI: 16% by 2020 CT: 23% by 2020 • NV: 25% by 2025* IA: 105 MW • OH: 25% by 2025† • CO: 20% by 2020(IOUs) 10% by 2020 (co-ops & large munis)* • PA: 18% by 2020† WV: 25% by 2025*† • IL: 25% by 2025 • NJ: 22.5% by 2021 CA: 20% by 2010 UT: 20% by 2025* KS: 20% by 2020 VA: 15% by 2025* • MD: 20% by 2022 • MO: 15% by 2021 • AZ: 15% by 2025 • DE: 20% by 2019* 33% by 2020 proposed • NC: 12.5% by 2021(IOUs) 10% by 2018 (co-ops & munis) • DC: 20% by 2020 • NM: 20% by 2020(IOUs) • 10% by 2020 (co-ops) TX: 5,880 MW by 2015 HI: 40% by 2030 Minimum solar or customer-sited requirement * State renewable portfolio standard Extra credit for solar or customer-sited renewables State renewable portfolio goal † Includes non-renewable alternative resources Solar water heating eligible Source: www.dsireusa.org/ September 2009

38. Solar Thermal Technologies Under Contract • Parabolic Trough • Power Tower • Compact Linear Fresnel Reflector • Dish Engine (SCE/SDG&E) • Power Tower (SCE) • Trough/Biomass Hybrid

39. Solar PV Technologies Under Contract • Fixed Thin Film (a-Si) • Tracking Crystalline Silicon • Fixed Thin Film (Cd Tel) (SCE) • Unspecified CPV (illustrative) • Concentrating PV

40. Other Renewable TechnologiesUnder Contract Biomass Energy Wind Energy Geothermal Energy Small Hydropower (<30MW) BioGas Ocean Power

41. Humboldt WaveConnect Pilot • Ocean wave energy (up to 5MW) pilot study to be conducted off the coast of Humboldt County, Calif. • Wave energy converter (WEC) manufacturers can test their devices on a common site and facilitate the development of wave energy technology • Power from the WECs for coastal community for the limited time of the pilot license. • Most effective WEC technologies will be useed for future projects

42. Utility-scale Storage • Distributed Storage • Rooftop Solar • Plug-in Electric Vehicles • Wind Farms • Solar Farms / Power Plants Building A Sustainable Electric System Electric Grid Customers Power Plants • Nuclear Power Plants • Natural Gas Generators • Transmission Lines Smart Grid functionality restores the balance • Distribution Substations • Hydro Power Plants

43. Largest AMI Deployment in North America • Automated meter reading for all customers • 10 million meter upgrades by mid-2012 • A communications network • IT systems • Frequent meter reads - daily for gas, hourly or 15 minute interval for electric • Enhanced customer benefits over time • Over 3 million meters deployed to date • Installing an average of 13,000 per day

44. Overlay with intelligence and automation Sense Communicate Compute Control A Smart Grid PowerPlants Transmission Networks Substations Distribution Networks Consumers

45. Integrated Demand-Side Resources • Automated management of energy use: • Automated demand response • Voluntary load control • Dynamic pricing On-site generation and storage Smart charging for electric vehicles

46. ClimateSmartTM

47. ClimateSmart™How It Works • Allows PG&E customers to voluntarily make their electricity and natural gas use “carbon neutral” • Around $5 per month for average residential customer • Customer payments are tax-deductible and will be invested in a range of innovative greenhouse gas emission reduction projects, such as conserving and restoring California’s forests • All projects are new with independently verified emission reductions

48. Big River and Salmon Creek Forests • The Conservation Fund • 600,000 metric tons • Arcata Community Forest • City of Arcata • 40,000 metric tons • Methane Capture from Dairy • California Bioenergy • 75,000 metric tons Methane Capture from Landfills • Recology • 90,750 metric tons Climate Smart Projects • Lompico Headwaters Forest • Sempervirens Fund • 14,000 metric tons Photo Courtesy Sempervirens Fund • Garcia River Forest • The Conservation Fund • 200,000 metric tons Photo credit: Douglas Steakley 

49. Pacific Energy Center • One of three PG&E “centers” (7 in CA) funded by public goods charge offering: • Energy efficiency classes • Tool Lending Library • Technical advice and research assistance • More than 500,000 people trained since 1979 by PG&E training centers www.pge.com/pec