US PacifiCorp Agrees to Suspend California Energy Efficiency Programs, Rates to Drop 0.7%

en.Wedoany.com Reported - PacifiCorp has agreed to suspend all of its ratepayer-funded energy efficiency programs in California, citing their current lack of cost-effectiveness. According to documents filed with the California Public Utilities Commission (CPUC) on Friday, customer rates will decrease by 0.7% as a result.

PacifiCorp serves approximately 46,000 customers in northern California through its subsidiary Pacific Power. The company had attempted to retain and redesign these programs but ultimately reached a proposed settlement with the CPUC's Public Advocates Office (Cal Advocates), agreeing to phase them out by January 1.

In a November filing, Cal Advocates stated that PacifiCorp's energy efficiency programs "have historically failed to provide cost-effective benefits to ratepayers, and performance has shown a declining trend in recent years"; the cost-effectiveness projections for PacifiCorp's proposed redesigned portfolio showed "minimal improvement, failing to deliver benefits to ratepayers exceeding program costs." The filing also noted that PacifiCorp had acknowledged "failing to meet overall portfolio metrics or cost-effectiveness standards, and struggling to maintain energy savings from existing programs." For example, energy savings from the Wattsmart Business program declined by approximately 75% between 2022 and 2024, and savings across the entire portfolio fell by 40% in 2024 alone.

Pacific Power spokesperson Simon Gutierrez stated that the California service territory is largely rural, "with an average of only 4 customers per square mile and a high proportion of low-income customers"; "there are few large commercial projects to offset smaller ones, and program delivery costs continue to rise." He said that due to these factors, Pacific Power's energy efficiency programs in California are no longer cost-effective.

The settlement is subject to CPUC approval before taking effect. In the joint filing, Cal Advocates and PacifiCorp requested that the Commission waive the comment and reply comment periods to resolve the case before the end of the year.

The agreement requires PacifiCorp to continue fulfilling existing and pending customer incentive commitments and to lower its California Schedule 191 surcharge. This surcharge funds public purpose and energy efficiency programs, and the adjusted rate will reflect the termination of these programs. The current surcharge is $1.37 per month for residential customers and 0.101 to 0.315 cents per kilowatt-hour for non-residential customers by category.

The company may continue to collect a smaller amount for marketing, education, and outreach efforts in 2027 to inform customers in the California service territory about available state, federal, and other non-investor-owned utility (non-IOU) funded energy efficiency, weatherization, and electrification programs and services.

The suspended energy efficiency programs involve Wattsmart Homes and Wattsmart Business, each with separate rate schedules that have also been suspended. The settlement preserves PacifiCorp's ability to reactivate such programs in the future if they are determined to be cost-effective, and clarifies that its exit from administration does not constitute a permanent waiver of its authority or ability to administer Commission-authorized energy efficiency programs. If "cost-effective program opportunities" are identified in the future, PacifiCorp is obligated to notify Cal Advocates "as soon as practicable"; if both parties jointly determine that these programs are expected to be cost-effective, they agree to cooperate in good faith to seek Commission approval through an application. If the CPUC later changes its cost-effectiveness methodology or modifies the "Avoided Cost Calculator" such that these programs meet its cost-effectiveness criteria, the settlement stipulates that PacifiCorp and the CPUC will meet to discuss whether to reinstate these programs.

The agreement also requires that, over the next year, PacifiCorp make all reasonable efforts to provide its customers with information on all known applicable energy efficiency programs, including state or federally funded programs available within PacifiCorp's California service territory that are not funded by ratepayers.