Assembly Utilities And Energy Committee

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Thank you. Good afternoon Chair Pichy-Norris and Assembly members. I'm Carrie Fleischer, Director of Distributed Energy Resources, Natural Gas and Retail Rates at the California Public Utilities Commission, known as the CPUC. Our slides gonna be up on the screen soon. Okay, great. Thank you The CPUC regulates the investor owned utilities in California regulating 75% of the electric load in the state I would like to begin with a brief overview of the CPUC's role in the energy efficiency landscape in California next slide I'm just waiting. I was there a little lag First, the statute that guides the CPUC's work in energy efficiency can be found in public utilities code 454.55 and 454.56. I highlight a central tenant of our work, which is to identify all cost-effective achievable energy efficiency savings. We also established goals for both electric and gas investor and utilities. The portfolios we will talk about today stem from this authority. Energy efficiency is defined as a system or appliance upgrade that allows customers to reduce their energy use while maintaining a comparable level of service. In other words, you can cool your home, heat your water, cook your food, but you do so with less energy with more efficient equipment. This slide shows some examples of equipment, we call them measures, that have rebates available if delivered through an approved program. The photo showed two electrification measures on the left, an electric heat pump water heater and an induction oven, as well as a smart thermostat and a chiller for a commercial building. commercial building. And energy efficiency we call electrification measures fuel substitution because they substitute one fuel source like gas to an electric source and they are designed to use the electric energy source more efficiently than they used gas. In California, there are three different entities that may request ratepayer funding. As administrators of efficiency programs, we often refer to these groups as program administrators or PAs. There are the four large investor-owned utilities on the left. In addition the CPC allows local government entities to create regional energy networks to plan and administer energy efficiency programs independent of the investor and utilities Finally California allows a community choice aggregator to apply to administer ratepayer funded energy efficiency programs. Currently there is one CCA administering ratepayer EE funding, Marin Clean Energy. Westlight Energy, formerly Peninsula Clean Energy, has applied to administer ratepayer funded energy efficiency as well. To utilize ratepayer-funded energy efficiency, each program administrator must submit a detailed budget application. Currently, the CPC reviews energy efficiency budget applications every four years. Starting from the left, the process typically starts almost a year before applications are submitted when we deliver either formal or staff guidance to the portfolio administrators containing their application requirements. Next, the PAs submit their applications. In 2026, 13 program administrators filed budget applications for their 2028 to 2031 portfolios. The CPUC just issued the scoping memo for this budget application proceeding on July 24th. Finally, we review the applications to assess whether each application is just and reasonable, compliant with state law and CPC policy, and well-suited to deliver on key strategic objectives. Next, I would like to go over some recent spending figures for the energy efficiency portfolios. First, I would like to show a chart from the CPC's response to Governor Newsom's executive order to mitigate the rising costs of electricity service in California. This chart shows the electric revenue requirements from the three large investor and utilities after subtracting the climate credit. This chart groups large areas of electric revenue, which is another word for electric system costs, into generation, distribution, transmission, public purpose programs, and other. Other comprises smaller costs like the Department of Water Resources, power charge, nuclear decommissioning, and regulatory fees. The point that I want to highlight here is that energy efficiency program costs fall into the thin slice at the top of this chart that represents public purpose programs. The public purpose program category represents various costs, some of which relate to energy efficiency and some of which do not. Besides costs related to energy efficiency programs we are discussing today, it also includes costs related to electric procurement investment charge known as EPIC and the California Alternate Rate for Energy program known as CARE. Last year, our program administrators invested $795 million in energy efficiency with Edison spending the most with $254 million of spend in 2025. This chart rank orders all the program administrators from largest to smallest spending and groups the RENs together and all the CCAs together. The $117 million figure in yellow represents seven RENs covering the entire state, including remote corners of California. The 12.5 million bar marked all CCA includes Marine Clean Energy and two other CCAs that are not yet administering programs but electing to administer programs, AVA Energy and Westlight. So let's show how the program administrators spent the $795 million across various market segments in California, which you can see on the horizontal axis. Energy efficiency opportunities exist in all sectors of the economy, from the agricultural, commercial, industrial, public, and residential sectors. The other segments here that are represented here, like the cross-cutting one, capture costs that apply to multiple sectors, and the segment portfolio support bar generally means cost to run the portfolio. This chart also shows how much of the energy efficiency spending goes to providing rebates to customers in the medium blue and implementing the programs in dark blue You can see these two are typically where most of the money goes Other costs like administration cost to market the programs and cost to study the programs are the smaller cost categories The two biggest sectors in terms of spending are the residential and commercial sectors, making up 58% of the total spending in 2025. So what is gained from spending ratepayer funds on energy efficiency? We'll go over these at a high level in the next few slides. But first, I would like to go over an important term called total system benefit, or TSB. In the past, California's energy efficiency portfolios only looked at first-year savings. In other words, you install some equipment, and we valued it if it saved energy that year. To advance the energy efficiency portfolio from there, we adopted the total system benefit as our goal metric called TSB. TSB values the energy savings when it happens and encourages longer-term savings. Since it is a dollar number and not a kilowatt hour or therms number, this allows us to value and encourage fuel substitution of natural gas equipment for electric heat pumps. To make sure the program administrator's goals are current, the CPC adopts these new TSP goals every two years. The program administrators then design their programs to reach the goals over a four-year period. This chart shows the CPC adopted 2025 goals in blue and the utility reported total system benefits in gold. Last year, each utility managed their portfolio to generate more total system benefits than the goals set for them by the CPUC. The total system benefit number includes any total system benefits achieved by the regional energy networks, the RENs, or community choice aggregators in their service territory as well. This chart is an illustrative example of how the energy efficiency portfolio changes in response to the regulatory landscape. This shows the benefits from various equipment from 2016 to 2024 for the resource acquisition segment of the energy efficiency portfolio, which acts similar to a direct procurement tool for grid reliability. Starting at the left of the chart, we can see that LED lighting made up the bulk of these energy efficiency portfolio benefits in 2017. Then when LEDs became code in 2020, we can see the savings from LEDs are removed for the standard process by which EE programs may not offer rebates for measures that have become code. In 2021, the CPC, as I was discussing, adopted the total system benefit metric that values when savings happen and how long that saving lasts. Looking to the right, we can see how the portfolio has evolved and more of the benefits are now coming from water heaters, including electric heat pump water heaters. This is my last slide. I have so far discussed energy efficiency portfolio spending and how we measure energy efficiency goals using total system benefit. And for this slide, I'll go over some important concepts related to how energy efficiency views cost effectiveness. The slide came down, but I'll continue to read. The CPUC uses the total resource cost test to quantify cost effectiveness of energy efficiency as well as other distributed energy resources. The total resource cost test is a longstanding test used in many contexts, and cost effectiveness tests are a ratio of benefits divided by costs. A ratio of 1.0 means that for every dollar of cost, there is an equal amount of benefit delivered. The CPC requires the resource acquisition portion of the portfolio to meet cost effectiveness. Some other programs in California address equity objectives by targeting underserved communities or by supporting the market by providing training or identifying new technologies to offer in future portfolios These type of programs are exempt from cost effectiveness Finally the CPC requires cost effectiveness at the resource acquisition portfolio level not at the individual program level. This is to encourage innovation and to allow new measures into the portfolio. That concludes my presentation. Thank you for the time.

Good afternoon. Thank you, Madam Chair and members of the committee for this opportunity to speak here. My name is Claire Braco, and I'm with the Pacific Gas and Electric Company. My team support the policy and engineering of PG&E's EE programs. PG&E has been implementing EE programs since the 70s. And over those years, although programs and policies have evolved, we continue to offer designs and offer portfolio that is a diverse offering to our customers. Our current portfolio operates with over 45 programs across all segments and sectors. While our resource acquisition segment, which is primarily responsible for the delivery of energy savings benefits, is required to be cost effective, our overall portfolio has still been cost effective across all segments since 2022. As Kerry stated and shared, every four years PG&E files an EE application, which includes a four-year portfolio plan and an eight-year business plan. This sets the four-year cumulative budget cap for the four-year cycles within that business plan period. And every two years, portfolio administrators have the opportunity to update that portfolio forecast that makes up that budget amount based on new measure information from policy updates. Although the authorized cap remains the same, the details of that makeup of the forecast can be updated. PG&E reviews these updated forecasts to ensure they're realistic, achievable, and defensible before updating its budgets and associated forecasts. Customer affordability remains focus of our portfolio, and as such, our requested budget year-over-year has reduced since 2016. When looking at portfolio design, there are several compliance and regulatory directives which is here, too. PG&E and all the IOUs have to forecast a cost-effective resource acquisition segment and achieve the goals, or TSB, directed by the CPC's potential and goals study. While also ensuring the following, at least 60% of our total portfolio is outsourced to third-party implementers. No more than 30% of the total portfolio is allocated to market support and equity offerings. At least 20% of the total portfolio budget is allocated to statewide program offerings, and no more than 10% of the total portfolio budget goes towards PG&E administrative costs. PG&E accomplishes this by having a few cornerstone programs which deliver a large amount of cost-effective TSB and can help balance the portfolio of programs which may still be launching or have other primary purpose and other cost-effective system benefits. Some portfolio examples include our nationally recognized Home Energy Reports program, which reaches over 3 million PG&E residential customers annually and is one of the largest in the U.S. Each year it expands, providing monthly energy savings tips and suggestions as to how customers can reduce their energy uses and bring awareness to energy use and behaviors. Business Energy Reports has seen three successful years of growth, with over 100,000 small and medium business customers now receiving them. Focus primarily on agricultural, food service, and retail. These reports provide dual fuel suggestions for energy history, tips, and personalized energy usage for information to the small, medium business customers participating. And lastly, our Strategic Energy Management Program has been supporting the industrial and manufacturing sectors for nearly 10 years and has been recognized nationwide as well as internationally. Over 100 large industrial customers participate in this program, receiving large savings in their energy usage. customers commit to participating in a two-year cycle and can stay in the program for up to eight years. SEM has seen a high retention rate and customer satisfaction for a sector of customers which historically have challenges participating in EE programs. I mentioned these programs in particular for their stability and maturity as we have come to recognize in our portfolio. And for the past several years, PG&E has a cost-effective portfolio overall and intends to continue as such with our most recent application. SEM in particular is an extremely cost-effective program, and in combination with other cost-effective programs, allows PG&E to also offer newer, less cost-effective programs and building electrification pilots to support customers while maintaining an overall cost-effectiveness. PG&E continues to advocate for the cost-effectiveness requirements and should remain at the portfolio segment level and not at the program level to allow the space for the variability in multi-year program life cycles and multi-sector offerings. Although PG&E continues to forecast and intends to deliver a cost-effective portfolio to support customer affordability. Program and portfolio overlap is something which PG&E diligently works to mitigate, requiring constant communication with our other PAs and planning to limit duplication. Program overlap can occur when a third-party program is offered by multiple PAs or a program offering targets the same customer segment, even with different measures. PG&E is aware of other PAs' programs when scoping new offerings and continues to seek out the best use of customer funds where possible. Portfolio overlap can also occur when multiple PAs are operating in the same geographic space and can cause customer confusion. For example, where I'm based in San Luis Obispo County, there's five PAs offering EE programs in that same region. Same region of customers, but offering different programs and potentially different measures. Both examples of program overlap and portfolio overlap can introduce that confusion we mentioned. In addition to designing and forecasting our portfolio, PG&E is also regularly monitoring existing program performance. Our resource acquisition program implementers meet with their PG&E program implementers weekly, monthly, and quarterly to provide an update on their program pipeline, development, and delivery. delivery. If project volume reduces or performance metrics are not being met, the PG&E program manager and portfolio manager meet with the implementer to collaborate on opportunities to improve, such as additional marketing measures or opportunities to discuss with customers. If there's still no substantial improvement, a performance improvement plan is initiated. PG&E has closed over 20 programs since 2021. Usually in these cases, it's not the implementer's technical aptitude that's causing the issue, but rather the program design no longer meeting the customer segment needs anymore. An example of this would be our industrial custom program, business energy performance program, which the savings methodology was too onerous and the baseline methodology presented too many challenges for customers to commit to participation and the program seemed to fail. As part of the agenda, there was an ask about potential suggestions and changes to cost effectiveness and metrics associated with the EE portfolios. PGE suggests these conversations continue in the various CPC proceedings, which have been elevated to maintain robust stakeholders' discussion with the right technical resources. Cost effectiveness, for example, for programs focused on energy system benefits should continue to be addressed in the proceeding that covers valuation of demand-side programs as supply-side alternative resources to ensure the compliance of the statutory requirements. Market support and equity segment metrics are an active discussion in the CPUCE proceeding with the fulfillment of ordering paragraph 25 of D2306055, and as part of PG&E's most recent application, a stakeholder process for discussions on portfolio cost controls for regional energy network PAs was proposed, and because RENs currently don't have any cost effectiveness requirements, budget caps, or other budgetary requirements for rationalizing budget level with their unique portfolio objectives to primarily fill the gaps in the IOU portfolio offerings and serve hard-to-reach customers. The CPUC identified this topic of REN cost control as in scope for the E proceeding, but not part of the E application itself. Thank you for the opportunity to present today to you all and to share PG perspective on our energy efficiency portfolio Thank you Thank you All right next we going to hear from Ms Medina from the County of Los Angeles Thank you so much Madam Chair and members of the committee First I want to just

We won't be able to hear you.

That's so true.

Thank you. All right. Next up, Ms. Rothschild from the Energy Coalition.

Thank you. Mr. Lipp.

Prior to the ETRM, each utility was doing independent engineering analysis, resulting in different approaches, data sources, and values for the same measure. So you had four different utilities potentially doing duplicative work. In the Central Valley, where PG&E and SoCal Gas and SCE kind of combine in there, you could have somebody across the street having a different savings value for the exact same measure. The ETRM eliminated that overlap and inconsistency and now has broad use access across the world. So let's talk a little bit about why the metrics matter. The metrics help us to define the investment decisions of energy and around energy efficiency programs. So that's the measures offered, programs offered, customers served. It defines for the ratepayers who are paying into this, what is a good program? There are multiple options to do this. We're going to talk about them today. Each one really aims to answer different questions. It's not that one may be better in one situation and another one better in another situation. And it's really important to understand what the objective that you're trying to get out of the energy efficiency programs in order to find the appropriate mechanism. The National Standard Practice Manual, which identifies a process for determining cost effectiveness, the first step in there is to identify your intended outcome for the metric. Now might be the time to reflect on what we need from EE programs. We've been using TRC for a long time. Things have changed. Maybe TRC is not the right metric at this point to move us forward to the grid that we want to have. So TRC is the most common primary metric across the United States. 16 states use TRC as the primary metric. But an equal – actually, 17 use other tests, such as the PAC and other tests, as their primary metric. So while it is certainly the most common, it doesn't – it's not isolated as the metric to use. You see the chart there that tries to simplify a very complicated calculation in inputs. And it's meant to try to show a little bit of the differences. The supply side benefits, while it's shown to be equal, there are some nuances and differences that we can talk about here as to what is, is not, and should be included in there. But the main difference between those two metrics is the bottom row, which TRC includes those customer costs. So that where as Laurel was talking about a higher efficiency equipment that may cost more may often result in a lower TRC than a lower efficiency equipment There's some slides in the appendix I'm not going to go through that have more detail on that aspect. But the PAC also includes the utility incentives on that side. So there is a balance. There is a balance. Okay, we've touched a little bit on total system benefits. It really provides an equivalency for gas and electric fuels and different DER strategies. So it's that monetary value that was referenced earlier. It allows us to claim savings for grid flexibility, which is critically important. We have more and more equipment that is mixing these different DER strategies with load shifting included with efficiency. And so being able to categorize those and claim savings in a common way is critically important. Customers don't see the difference. They don't see the difference between that heat pump water heater and those controls that take it off the peak, the four to nine period. They don't know the difference. Right now, we bifurcate those into different programs, but the TSB does allow us to combine those together. But there are other policies and perhaps outdated policies that hinder the use of TSB. An example of that is just the definition of energy efficiency, which requires a reduction in electric or gas usage. But when we go to TSB, you may have a really great project that has positive TSB, but it may consume a little bit more energy at that two to six period when energy is cheap. That currently would not be eligible under today's policy. The final metric is net to gross ratio that I'm going to talk about, and it attempts to define how influential was the program on the actual grid savings. There are issues with the way that this ratio is, this metric is used in terms of inconsistency, and applicability that may warrant consideration of changes. I'm not going to go into the details in this opening. We certainly can talk about those details. But we do have two possible considerations to help, and this involves increasing the benefits that programs are able to claim. Currently, we heard about codes and standards and the programs, and the programs are limited by what is above the Title 24, the codes and standards. That's what they claim. Despite maybe doing all that work to influence the customer to do that project, some of those savings automatically go to a different program. And perhaps that is a mechanism to reward the program for all the savings that they're actually that they're actually impacting on the grid. The other is just how we use the net to gross ratio. It's used to to. to fractionally reduce those benefits that the programs claim, and perhaps shifting the use of net-to-gross as some other jurisdictions do to only inform improvements to the program and identify places for improvement and inform those improvements. So, just to recap, modification to cost-effectiveness is a high priority in the community, and really we need to define our objectives to drive the cost-effectiveness metric, not the other way around. We shouldn't have a cost effective metric that we're asking the implementers and the customers to find a program that meets that, especially since the grid has changed so much. And those programs getting credit for all the savings, that's really a discount of the benefits that are able to be claimed for the program. So for all that work that they do, there's no increase in program costs in order to do that. It's how we count the savings for the different programs that matters, and that could greatly increase cost effectiveness. Thank you. I won't go through the appendix, but certainly open to questions and comments. And thank you.

Good afternoon, Chair Petrie-Norrison, members of the committee. My name is Shelley Leisser. I'm the program manager over the Electricity Pricing and Customer Programs branch for the Public Advocates Office. Our office represents utility customers across electricity, natural gas, communications and water, and with a focus on affordability, safety, and reliability. Thank you for the opportunity to present today. I see my slides are up. Great. remains an important part of California's energy and climate strategy. Effective programs can reduce energy use, lower demand on the grid, and help avoid other system costs. At the same time, these programs are primarily funded through charges paid for by utility customers. That funding comes at a time of real affordability pressure for customers. California's electricity rates have nearly doubled over the past decade, well beyond inflation. rising rates also hinder progress towards the state's climate goals. For these reasons, ratepayer funding for energy efficiency programs should be guided by one basic principle. Programs funded by ratepayers should produce greater ratepayer benefits than costs. In other words, they should help affordability and not drive rates higher or have a return on their investment. So next slide. All right. So we've done some analysis on the budgets that are associated with the current energy efficiency programs that did not meet these cost-effectiveness thresholds. In other words, these programs cost more to achieve energy savings than procuring other clean energy resources. The dark bars on the chart show the annual budgets authorized for programs that have not been proven to be cost-effective. And the yellow trend line there shows their share, their percentage, of the total energy efficiency budgets. So you can see those budgets rose from approximately million in 2021 to million in 2027 or a 107 increase over the seven period So important context here as we looking at this data is that California strengthened building codes and standards have delivered incredible dividends For example, we have more efficient building designs, broad availability of highly efficient lighting technologies, and this means that California has the ability to improve its overall energy efficiency without requiring ratepayer-funded programs. Our point is not that every program below a particular cost-effectiveness threshold should automatically be discontinued, as a program may serve a legitimate public purpose. The question is whether utility customers should be required to fund it through their bills. All right, so looking at where the funding goes, this is overall energy efficiency budgets for 2026. And as you can see, there's 87% program costs, roughly, if you're grouping together implementation and incentives. And then if you group together the kind of overhead categories, it's 17%. But looking at a simple administrative cost percentage may not tell the whole story. So some of these costs that are categorized as direct implementation will not support activities that are designed to produce energy savings or reduce demand. For example, career development programs currently funded through energy efficiency budgets have implementation costs, but they don't necessarily directly result in quantifiable savings in a given program year. So this leads me to four high-level opportunities for reform that we wanted to present to the committee today. So from the ratepayer perspective, here are four options that could help. So first, apply consistent performance standards across programs that are paid for with ratepayer dollars to measure whether the benefits to ratepayers equals or exceeds the costs of a program. Second, projected benefits should be compared with quantifiable results so that future ratepayer funding reflects demonstrated program performance. Three, energy efficiency and other demand-side programs should be coordinated to deliver increased savings, decarbonization, and grid reliability benefits. For example, a heat pump water heater can be programmed to reduce energy use during times of grid stress. This can also help reduce duplicative administrative costs across different programs. And finally, before approving ratepayer funding for a program that repeatedly fails to produce measurable benefits for ratepayers, it should be determined whether ratepayer funding should be phased out or the program can instead be supported through a more appropriate funding source. So, overall, different administrators can serve different customers and use different delivery models, but all ratepayer-funded programs should be subject to a common expectation of performance. Where a program serves a worthwhile purpose but does not provide sufficient benefits to utility customers, it should be supported through a more appropriate funding source, not through a customer's utility bills. California does not need to choose between energy efficiency and rate affordability. Well-designed, effective energy efficiency programs can advance both. Thank you for your time.

So I just want to be clear. The energy efficiency programs, like everybody agrees that it's 1.5% of the bill, right, with this slide? Yes, I believe. Does anyone disagree? Roughly, it's the revenue requirement. So it's a good proxy, but not quite the bill. Okay, I just wanted to clarify that. So I think that the chart that I guess it was from the PUC it still kind of disturbing when you look at the and I know there's all sorts of explanations for implementation, but when you are, let's say, for residential, only a third of the cost is going to an actual rebate, and so maybe there's a lot of money that needs to be spent on implementation. But wouldn't it be better to look at programs that have much lower implementation costs? Because most folks would look at that and say that's not very cost effective to have that much going to administration and outreach and evaluation and implementation. Let me just ask a clarifying question. Did that include direct install? Or is that just incentives? The rebate incentives were separate. Okay. So let me speak to that, Jackie, because I think, you know. Yeah. This chart, yes. Because what we see in energy efficiency, it's not just rebates. You know, if you want a cost-effective portfolio that you just do single rebates and we're giving, let's say, all Californians the all fixed standard rebates, then sure. That would work great on a homogeneous type of state. We are not that. Californians are not homogeneous, right? Now, what isn't included in there is all those equity direct install measures. So what we do is also provide no-cost upgrades to, let's say, customers who could not even afford a project with a rebate, right? So let's say I need a new refrigeration, and I'm going to be a little bit, you know, tell you a little bit about some studies and some examples of customers that we've worked with. You know, one of the things we do find, especially for small commercial businesses, is that these small bodegas or local grocers, what they do on replace on burnout, maybe they have a refrigeration equipment that hasn't been working. they will go out into the third-party market and buy an old refrigeration equipment that's cheap and easy and replace it. And what they're doing essentially is contributing to their energy burden. So what we come and do as local governments, regional energy networks, utility providers of energy efficiency for those type of customers in low-income or DAC or rural communities like City of Lindsay, even Mammoth Lakes. I can go into that, but we provide them these incentives to help them replace them into new refrigeration equipment. So that equipment upgrade will go to them at no cost and can have significant impacts on their bills. I'm talking about cutting their bills in half, because what we do know about refrigeration, what we do know about HVAC usage, is those type of measures contribute significantly to the energy burden. So what you might not see is it's not just rebates. It's other things. In addition, what you probably don't see on the residential, and I'm a single mom with two kids. I live in a deck. I have a home that was built in 1920. I have a beautiful big window that I refuse to replace. But, you know, I don't know a lot about retrofitting or upgrading my home. And so I seek programs to help me. And that technical assistance that provided and may not be captured in there I would otherwise not know like okay well what windows do I need to apply to my home What type of measures like a tankless water heater Or if I did get a mini split heat pump how do I know where to go Or who do I know to find it? What rebates are available? All of these support activities help to contribute to get me to actually install that project. Or if not, I would just otherwise be like, okay, well, let's hope and pray for the best and turn off your lights and, you know, keep as is. or status quo. So I don't think all of our data captures all of that in one particular graph, but I do believe there are metrics out there that we need to convey more regularly, not only to the CPUC, but to the state about these, you know, performance metrics that are actually contributing to the community's growth and well-being and combating energy affordability. And they exist. There are data points, and we need to provide them. Yeah. Oh, and thanks, Luana. I did want to also say that I'm assuming for that rebates, it's beyond that there's what we call direct implementation costs. And that goes to what Luana was saying around these services that are really essential to get to the replacement. Also, you know, I mentioned earlier things like financing, technical assistance, et cetera. But I just want to highlight a program Claire raised earlier, the Home Energy Report. That doesn't provide a single incentive or rebate, and it's one of your most cost-effective programs and of value. So just to show that balance, programs to provide value and have a high TRC in this case don't even need to provide rebates. That support can come in other ways. So I want to highlight that. And so it's about the services that the customer receives, whether it's financial or other. Does anybody else have any comments?

Let's just talk about the cost piece and then let's talk about how do we calculate the benefit piece. Yes, thanks for the question. So, you know, there are different metrics here that we've been talking about today. I think if we're, we've been talking about cost effectiveness and that's measured by the total resource cost test. And that is a test that's from the standard practice manuals, Mr. Luke was saying earlier, and that lays out very clearly, you know, what are, what's in the numerator, where are all the benefits, and then what are all the costs. And so I don't think there's any disagreement as to the categories of costs that go in the. nominator of the TRC test. I think maybe the question at hand is some folks are saying there might be a different metric or different test that could be the primary test instead of the TRC test. But the costs that go into that are both the participant cost test, so like the cost to the customer, cost to the grid, cost in terms of program administration. The TRC is a macroeconomic test that looks globally at, you know, what are the benefits to the grid, taking into account a wide set of factors, but they're very well defined.

is our rulemaking looking to a different set of policy issues. And these issues are scoped into the proceedings, so cost effectiveness generally. And if we want to relook at that and how we apply the test to our energy efficiency programs, that is scoped into the proceeding. Parties have put some ideas already in the record in the application proceeding. And so I think that we welcome a lot of party comments and a diverse array of perspectives on this because it is really complicated and it is very much worth our time looking to see if it's worth refining anything.

CPUC is possible. Yeah, go ahead.

And you can see that the spend in 2025 for energy efficiency, not the budget, but the spend, was $794 million. The total system benefit, which is that complicated piece you just highlighted, was $921 million. million. Yet the ratio TRC was just over one. But we all know if we were to put those over each other, it would be much more than one. So that just highlights the imbalance you can see. And that's because the costs right now include participant costs. That's what the person spent to install a measure, for example. That's being included. But those benefits experienced from that participant is not on the benefit side So it an imbalance if that makes sense Okay So all right so let can we dig in a little bit then to like what is

but like, so I think, yes, so total system benefit, dollar figure that represents the life cycle, energy capacity, and GHG benefits of energy efficiency activity in California using avoided cost values. So help us understand, like, what does that mean in terms of, like, actual, how do you calculate that? And then where do you see areas where that's not accurate? Bill, to get into the calculations, I defer to the technical expert, but I could speak to some recommendations. But you start. I apologize. Yeah, no problem. So, you know, that metric, I'll try to just boil it down and simplify it. It's complicated. But that metric attempts to understand the cost to maintain the grid. And so there's TMD costs. There's avoided capacity costs. There's some environmental costs. There's things like that. And so that's a dollars per KWH or Therm's value. The imbalance happens with the TRC when you include that measure cost, the participant cost that they're paying for that widget, and not including all of the benefits from that in the numerator from that energy efficiency. And so that's where the imbalance happens, and that same National Standard Practice Manual indicates that you should find that balance so that it's a ratio that you can come on. Right, so you either need to include both the participant benefit in the numerator and the participant cost in the denominator or exclude it from both the numerator. Yes, but those participant benefits are very complicated and change based on regionality, types of customers, the type of measure. So like you could see production benefits. That's one of them. You could see health benefits. That's another. And so trying to actually quantify those will take another 10 years in a proceeding. and we might get it right or we might get it close, right? Like, so, you know, to me, and this is just my opinion, the easiest way is to just exclude the customer side altogether.

I was just going to add one more thing to help with the total system benefit side, and when I explain this to folks, I say it's the energy use, like Loana's example. So it's the energy savings of that device over however many years we agree it can remain in service, the effective, useful life, and then where and when on the grid those savings will occur. So it's more than just, we'd say, like the gross savings of that. So it really accompanies this more than just I saved this many KWH It like the net present value of those savings over time Yeah Right Yeah So it can be quite large for certain measures that are going to be in place for 20 years and see those savings Got it.

Public Advocates Office supports use of the TRC, including the participant costs. Okay, so tell us why. So if you take out, so there's the alternative, there's the total resource cost test, comparing costs and benefits, or you can use other types of tests like the PAC. And if you exclude the participant costs, I mean, there's a lot of ripple effects from that. One that we see, which concerns us, is that you could be steering the portfolio towards the most expensive options. Like if there's a $1,000 rebate for a $50,000 appliance that could get just marginally better energy efficiency compared to like, you know, hopefully appliances don't cost $30,000, But a $30,000 appliance, the PAC just wouldn't show the difference between the two costs. So it masks a lot. And so we don't, we've historically been supportive of the CPC's approved TRC. Can I just make a couple of comments on the TRC? And, you know, we're, I just want to say this is a SoCal REN position and not necessarily my fellow REN physicians. But, you know, one thing we we have advocated, Madam Chair, is that, you know, we do believe in accountability. The TRC has been and I'm going to age myself. Nobody laughs has been around for longer than I've been in the industry. And I've been in the industry 21 years. It's utilized across multiple type of distributed energy resources. So, you know, solar demand response, so different. And I understand, you know, the position that the California Public Utilities Commission, as an oversight public agency, they need a tool in which they can provide oversight and accountability metric right down to the administration. As a local government, that is their fiduciary duty. And so, you know, I think as the CPC has in the past advocated that the TRC be utilized for specific programs, which is resource acquisition, that means programs that actual claim savings, and that's their primary objective, like rebate programs, should continue. But what we do need to understand is that TRC cannot be applied to equity and DAC type of programs because it inherently or regressively appears that they are not beneficial to, one, the industry, the system as a whole when they are, right? So I think that is really the difference, right? We really need to understand that programs serving low income or disadvantaged communities may have a higher per unit cost. And thus, if you apply the TRC to them, this, you know, metric will disproportionately not look well, but still have the same benefits that we can't capture. Like we can't capture all the time. Actually, we're trying to work to capture data and quantify, but it's going to take a long time. Like Spencer said, health, comfort and safety. But those things actually do occur when energy efficiency is applied especially those hardest hit by energy affordability So we looking at let say multifamily residents who are struggling with rent increases And so really thinking about how do we drive down their unit so it's a high performance unit, meaning most efficient, and those type of benefits. And then additionally, you know, as we face climate risk ongoing, meaning higher and higher temperatures, you know, we're going to see more and more HVAC systems installed. What do we do with that? How do we ensure that those equity and customers are installing energy efficiency equipment? We need these programs. And if you apply the TRC onto those type of programs, what you will see is that they look ineffective or non-performing because their TRC is so low, because we have to provide so much assistance to those type of participants. So I don't think that there is a one solution, and unfortunately I wish we did have that for you all, but I do think under the CPC guidance they have provided avenues in which, one, TRC applies to resource acquisition programs, meaning programs that are rebate-based and really for affluential or moderate income constituents, and then there are a proportion of programs that are equity and focused on those most under-resourced. And those are not obligated under the TRC requirement, but they still need to be held accountable. And working with the CPC, we are identifying what metric we can utilize to identify is that equity program performing and affecting that community. And we should be held accountable for that. We should be held accountable for are our market support programs actually supporting the market? And we need a metric tied to that that says that. And so we're working together collaboratively with the utilities, CalPA, implementers, and other stakeholders. And I think the PAO wanted to comment. Yeah, I'll just directly underscore something really important that Ms. Medina said. So seconding her point about the TRC being a consistent metric to compare across demand-side programs, I think that's a really important point, so I'm grateful that she raised it. It's when you're comparing the benefits of demand response versus energy efficiency versus other types of procurement, like procuring more solar or more wind. That's the common metric that tells you which is the cheapest for the system to reach those clean energy goals. So using TRC for energy efficiency and used in other demand-side programs really helps get that comparison and that consistency. Yes.

So if you think about it, it's the benefits over the costs. Right. So this is making the point that you were making earlier where the additional cost is calculated, but the benefit is not being fully reflected. The benefit is reflected. It's just the benefit isn't as high as the extra cost. The incremental benefit is lower than the incremental cost. You don't have that same situation with the PAC and likely some other cost tests. All right. Does anyone – I have a couple other follow-up questions, but I'm going to allow Ms. Calderon to jump in.

Yes. I've been in the industry for 20 years. I'm still learning things every day. And so I sympathize with you on that one. It's tough. And when I talk to people and try to explain this in my life, I hear the same thing. So I did want to kind of tie it back, though. I think it's just you can explain that it's imbalanced right now, and I think that's the simplest way to think about it. And I do want to kind of tie together a couple points made here because we kind of jumped into a lot of things through this discussion. So first of all, EE is treated differently than other demand-side management programs. The math is different for different programs. It would be great to have, say, math across, so we've got to get there. There are two proceedings working addressing this where it's scoped right now in the regulatory process. And just right here talking through and recognizing how complicated it is, I would recommend that going to something like PAC, for example, is not legislatively mandated because of all the nuance and recognizing it's scoped. Instead, I would recommend something like a timeline to get to an end state where we do have shared math and integration because that's where we can get into all the nuance and try to clear that up. But I don't know if that's going to happen through moving just to PAC because the reason I'm not going to sit here and say I think PAC is absolutely the solution is partly because what, you know, Shelley and the Slizer said about why she was talking about TRC and making those selections. Well, going to TRC does keep into account from the customer perspective that cost, but the customer is not seeing necessarily all the benefits and being able to really emphasize some of those other benefits that the customer is seeing. So I just want to highlight there's, I think, arguments and value to thinking of adjusting both sides of the equation. But I don't think that's going to happen. We're going to solve that today, unfortunately. But there are two proceedings. I think a timeline could be set. We've been talking about it for years, years. Let's just get the timeline and force people to make it happen.

I appreciate it, Chair. Originally, I was going to ask some questions about inputs into the equation, like stranded assets and other things. I'm watching this discussion thinking that that's probably not actually a good use of our time given some of the disagreements. So I think I going to kind of just make a statement about how this discussion comes across to me and open it up for you all to disagree with me Tell me where I wrong or to help guide it a little bit But it feels like part of the challenge in understanding this equation is that we have different objectives or goals that we are trying to accomplish that are sometimes very different that we're trying to capture in one analysis or one equation. where if you think that the energy efficiency programs should be used to drive innovation and create emerging markets that might lead to more reduction that could potentially score on this scale better in the future but need some upfront costs, then you might think that it's unfair the way that we're currently analyzing it. If you're looking at how to the most quickly decarbonize, you'd put many of these programs in wealthier communities, but then you leave behind the equity conversation and in particular rural communities and the assistance part of the equation. But it seems like we have an equation that's trying to capture what amounts to a split brain from the legislature, frankly, on what our primary goal is and how best to evaluate these programs. So I'll pause there and see if anybody wants to tell me I'm wrong.

Yeah, thanks for that. I just want to point out that I agree. I think the CPC has actually recognized over a series of many decisions, you know, from the early 2000s up to today, that energy efficiency really is about having a diverse portfolio. Just take the fact that the cost effectiveness we've been talking about, the TRC, that's applied at the resource acquisition. So it's the part of the portfolio that's designed to generate savings. It's applied at that portfolio level to encourage innovation and new technologies to be experimented with. So it's not program by program, but it's across that portfolio. And so you can have one objective and goal, but different routes to get there. And I think that there are a number of steps we've taken to really emphasize that diversity is important in the energy efficiency space. We're not sure what's happening. The robots have taken over.

And I say the other part of this conversation that was very palpable for me as well is the interplay between policy development and these incentives And so I think the PAO I think mentioned the interplay between the question of should the efficiency programs be on the bill for everybody when you also seen corresponding building code adjustments that have been perhaps more effective It's worth noting the legislature just paused building code adoption for five years because of the affordability side of the equation around home creation for housing production. So the affordability conversation and that interplay in different policies is impacting whether this program is viewed as effective in some ways. There was a slide that showed that the switch to the LEDs was a huge chunk of the incentive up until the policy change of we're no longer going to have these LEDs. So it can lead in a way I guess I'm trying to get to where even less efficient programs can lead towards policy acceptance that then can further the ultimate goals from the legislature as well. So not sure if anybody wanted to comment on that.

Yeah, and actually that's how I see many of these incentive programs is they should reach an inevitable point where the market has caught up to what we are trying to accomplish. And perhaps that calculation is then skewed because the overall effectiveness of the program is not nearly what it was at the beginning because we've done such a good job of adoption. The last thing that I'll mention, just kind of defending a little bit some of the programmatic budgets, and I know Sonoma Clean Power is not one of the CCAs that utilizes them or was not listed as one of them. But one thing that we did do on that CCA board was create the Advanced Energy Center, which if none of you have had an opportunity to see it yet, go see it. It's in downtown Santa Rosa. It's literally a building you can walk through. So if you know nothing about energy efficiency or kind of emerging technologies, and you can see an induction stove that is being used, you can see what a heat pump is. You get a list of what your incentive programs are. So even if you know nothing about energy efficiency, you have experts and people who are available to help you in being a part of climate solutions without having to do a whole bunch of research. They have it as a one-stop shop. So sometimes the actual implementation of these strategies is, in effect, the most effective part of these strategies. So I just want to put out a little bit of a defense for that as well. I'll just add to that that it's true we haven't been talking about any of the elect to administer CCAs today. There would be a whole other category of PAs that do offer portfolios and have program offerings for their customers that weren't captured. In these slides, I don't believe. But can I make one last comment? But to your example, like if we applied the TRC to that type of program, it would probably be zero because there's no claimable savings. But walking into that center, it's going to drive change, right? If I was a Sonoma County resident, it would drive me to say, I know what I can do to my home and how I can make it high performance. So with otherwise, without that investment, right? It's making change. And so I appreciate that example. Even just shifting the mindset, right? Watching professional chefs cook on an induction stove without having to outlay the capital to put one in your own home and see if you like it really is an effective way to sell the technology. Yeah, yeah.

Yeah. And so I didn't put it in my bio, but I'm the chair of the Sonoma Clean Power Community Advisory Committee. And the Advanced Energy Center is fantastic. And they're right. You're not able to claim savings unless you do a bunch of surveys and figure out what people did, which is probably not a very good use of people's money. But back to the Title 24, it's fantastic. It creates a floor. It doesn't say when we talk about LEDs in 2020 or 2021, it doesn't say that all LEDs are off the table. I designed programs that specifically had LED measures in there to go above and beyond Title 24. And to my point in the opening, when I do that and I get somebody to make that investment to go above and beyond Title 24, I only get those incremental savings above Title 24, even though I influence them to do something that they wouldn't have done. So there's an aspect of Title 24 that is curtailing some of the benefits that some of these programs are able to claim. There is a, without getting too complicated, there is a mechanism to claim partial benefits there, but it's still not giving adequate credit for that program work that was done. And then my last comment and I kick it back to you Chairs I just wanted to appreciate Ms Rothschild chart on page seven I think it was IPCC I think that put out a report about a month and a half ago saying that even still today the most efficient use of dollars for addressing climate change is energy efficiency So that what this chart ends up showing So thank you for that And I actually want to dig into your slide number nine.

Mr. Lip and then Ms. Leiser.

Okay, thank you. And then I guess coming back to the PUC, a lot of this conversation is focused around apparently the proceedings that you have underway. So what is the anticipated timeline for those to be concluded Thanks for that question So the business application proceeding we recently had a PHC put out a scoping memo

Okay. But from this first proceeding that's expected to be concluded, Q2 or Q3, you're digging into this, the question of, you know, is TRC the right measure as well as are we effectively incorporating the full benefit assessment in the calculation?

OK. And sorry. So then when is that part of the rulemaking going to be complete?

Okay. So we don't know.

Okay. Yes. All right. Okay. And I think that was, yes, that was, I think, Ms. Rothschild, some of your additional recommendation not written on here. Okay. Thank you for that. So just I want to look, I want to dig into a couple of the other recommendations. So Mr. Lip, let's see. I kind of want to know if other people agree with these recommendations. So clearly established state policy objectives. So DEREE portfolio and program objectives are clearly aligned to support affordability, grid resilience, reliability, and decarbonization. Yes. Does everyone agree? Thumbs up on that. Okay. Programs should get credit for all savings that they are influencing. Yes. Okay. Anyone want to comment differently on that? All right. And now I'm going to turn us to the recommendations from our PAO. And I think that some of the disagreement on whether we should be applying the cost effectiveness standard to EE programs has been rooted in the fact you don't think the cost effectiveness assessment is accurate, right? So if we get to a place where we have an effective cost evaluation do you agree that we should apply consistent performance standards across all programs paid for with ratepayer dollars And if not why not

And then you could almost structure it because I understand some of what a lot of folks have commented that there are some programs, Mr. Rogers gave an example, you've given a number of examples where you're never going to look at it and say, oh, I'm getting dollar for dollar, it's quote-unquote cost-effective, but you still think that that's worthwhile. And perhaps this is how you structure your portfolio approach, but you could say, all right, for 75% of the dollars, those are going to go into programs that we can actually look at and say, yep, check the box. These are the most cost-effective things we could do and then 25% of the dollars are some of these kind of you know enablers and I know that our you know our low-income equity programs are subject to a different kind of assessment but I think you you have said everyone has said we do need to have kind of clear standards that we're trying to deliver on for those programs as well yeah and And I think, you know, Rogers, you said it well, where it's, you know, perhaps a couple, just maybe two metrics and thinking about those programs that are really truly designed to deliver for the grid. And then what are, you know, one or two other metrics for those other programs is actually where my recommendation would go. And something that translates to the public. So, Madam Chair, I think, you know, to Assemblymember Calderon and everybody on this committee, you know, you have the fiduciary duty to the public and to advocate or not so much advocate, but inform them about where dollars are being spent. Now, these are not public dollars because they're right.

Go ahead.

And I actually have a follow-up question, Ms. Medita. So you said you're an LADWP customer. So are your neighbors. So how do you think your neighbors would feel if you went knocking on their door and said, you know what? I'm going to set up a program with LADWP, and everybody needs to kick in $100 extra of their utility bill to set up this program. What do you think you'd need to show them to get your neighbors to say, yeah, I'm in. I'll give you my hundred bucks.

Did you want to comment? Yeah.

Yeah, thank you. And I guess my question, yes, I do hear our other panelists saying that for most programs, everyone agrees there should be a performance standard, correct? And that these programs should be delivering a bang for their buck, correct? I think that the discrepancy is related to the current metric that's being utilized, if I understand. Okay.

I think it's really important to just get that figured out. And I would hope that it doesn't, even if it needs to kind of come out of some other proceeding that has 400 other things in it, and then it's going to take us five years. That just seems nuts to me. While this is a complicated subject matter, you could stick five smart people in a room and we could have an answer by next week. So that would be an approach I would respectfully suggest to our commissioners. All right, before we wrap up, any closing thoughts or comments or reflections from any of our panelists? All right. Go for it.

but we could be so much better. So thank you. Well, thank you. And I want to thank each of our panelists for being here, for spending the time with us today, for all the work that you've done to prepare in the work that you're doing on this issue and certainly look forward to continuing the conversation as we move forward. And I also want to say a huge thank you to Alexa. So Alexa has been a science fellow. She's a science fellow with the Utilities and Energy Committee all year. She's been absolutely amazing and she has worked very closely with all of you and all of our panelists to pull together this hearing. So thank you, Alexa. Okay, I think that we can go ahead and say thank you to our panelists, let you all get on with your afternoons, and we will go ahead and turn now to public comment. So if anyone is with us and wants to provide public comment, you can go ahead and form a line at this microphone. Go ahead and when you begin, please first state your name and organization, and each of our commenters will be given two minutes to share your perspectives. Thank you. Great. Thank you. Good afternoon, Madam Chair.

And we've been implementing energy efficiency for over 30 years and programs in California. And I've been part of the team for half that time. And I'm heartworn by the title of this hearing. The savings you don't see, amen to that. Thank you for shining a light on this invisible asset that we have that I've been fortunate to be part of. And in the case, you know, this is ultimately a case of a well-planned public policy, as you have laid out. And I'm really grateful for, you know, this comprehensive review. So, yes, energy bills are rising, and EE is not the cost, you know, the primary cost and the reason for that. And we all agree on that. And I think it's, as you've noted, a really good, important time to take a look closely at streamlining processes and expediting where possible and just support all that effort to do that. And especially replacing TRC with balanced cost-effective disk tests. We'll follow up with some ideas about that, sharing the math, the things that Laurel shared. So I'd say invest more in this asset, not less. So thank you.

Good afternoon, Madam Chair. Thank you, Madam Chair and the committee staff for holding this hearing today. I'm here on behalf of a San Diego community power, a community choice aggregator that administers the San Diego Regional Energy Network, SD-RAN, in participation with the County of San Diego. Through SD-RAN, we provide 10 energy efficiency and demand management programs rooted in the communities that we serve. I wanted to highlight three key points for your consideration today. First, energy efficiency programs provide cost-effective bill and system savings. The American Council of Energy Efficient Economy recently found that energy efficiency and the load flexibility programs are among the lowest cost options for reducing electricity consumption and peak demand when compared with the new generation resources. Second, energy efficiency programs are foundational to California's world-leading reliable clean energy transition. Energy efficiency programs avoid clean house gas emissions while offsetting rising electric demand from data centers and electrification. Finally, successful EE programs depend on reliable, foreseeable, and multi-year funding that would allow the program administrators to plan ahead with some more confidence.

Thank you. Of course, I follow the tallest people here. Good afternoon. My name is Becky Menton with the Building Decarbonization Coalition Action Fund. I want to echo comments made by others that energy efficiency portfolio is across the board extremely cost effective while presenting only pennies on customer bills. By reducing demand, these programs help us avoid costly investment in expensive infrastructure projects like transmission distribution and new power plants. These programs have shown incredible success in California, driving four dollars in benefits for every ratepayer dollar invested. I also want to note that the energy system we have today has changed dramatically from when these portfolios first launched, and the goals of our ratepayer programs should correspondingly shift as well. For example, building decarbonization, which places downward pressure on utility rates and helps households transition to zero emission appliances. performances perform very well according to the total system benefit metric, showing that they provide net value and affordability for our electric system. These same measures often score very poorly on existing metrics such as the total resource cost test, the TRC. Meanwhile, we continue to subsidize nearly tens of millions of dollars every year and new gas appliances, investments which commit Californians to the enormous future-stranded asset of our natural gas system. We both recognize the incredible value that our existing portfolio has provided to rate payers, while acknowledging that there are smart reforms we can make to align these investments with both our climate goals and long-term grid and affordability benefits. Thank you very much for your time today. Thank you. Thank you, Madam Chair, for the opportunity to comment. Alicia Priego on behalf of San Jose Clean Energy. At San Jose Clean Energy, our PPP-funded programs have delivered more than $13 million in customer savings and reduced GHG emissions, helping households and small businesses lower their energy bills while reducing demand on the grid and avoiding more costly energy investments. Reliable funding is essential to keeping energy efficiency programs operational. operational. As California modernizes its energy systems, we should strengthen these programs to better align incentives with energy market conditions and unlock greater electrification opportunities without increasing costs. Thank you and happy to follow up with San Jose Clean Energy specifics at another time. Thank you. Good afternoon. I'm Caitlin McGee, Senior Key Accounts Program Manager here on behalf of Clean Energy Alliance or CEA. We are a community choice aggregator serving approximately 255,000 customers across the cities of Carlsbad, Del Mar, Solana Beach, Oceanside, Vista, Escondido, and San Marcos in the San Diego area. In addition to providing residents and businesses with renewable energy at competitive rates, CEA is committed to developing local energy programs that reflect community needs. Our customers have expressed a strong desire for meaningful energy efficiency program in programming. In April 2025, a survey of CEA customers showed 83% of respondents identified improving the energy efficiency of buildings to reduce energy bills as a priority. In light of this customer feedback, energy efficiency is a critical pillar of CEA's current Energy Programs Plan, which was developed to help reduce energy costs at a time when promoting affordability is more important than ever. CEA is actively engaging with the CPUC to advocate for improvements to the current framework for CCAs like CEA to elect to administer energy efficiency programs and strongly believes that energy efficiency must remain a key strategy in making California's clean energy transition affordable and cost-effective. Thank you. Thank you. Hi, thank you. My name is Julia Hatton. I'm the CEO of Rising Sun Center for Opportunity, which is a workforce-focused nonprofit in Oakland and Stockton and serving the greater Bay Area and Central California. And a whole thing I was going to say, but mostly I just agree with everything that folks just said. And we are one of the implementers of some of these energy efficiency funds. And we use these dollars to employ local low-income youth from Sonoma to Fresno to provide free energy efficiency services to local homes in underserved and disadvantaged communities And we been doing this since 2020 I sorry since 2000 And it's everything that people are talking about. It's the workforce development. It's the preparation for a clean energy future. It's preparing the next generation for clean energy careers. And it's also delivering direct energy savings to local homes. We've served over 2,000 households. I'm sorry, we've served over 68,000 households and employed over 2,000 young people, and they've been able to save $36 million on people's utility bills. So, you know, we have teams of two. You know, people have never had a job before going into folks' homes and their own communities and helping them actively save energy and reduce their bills. and the transformation that you see both at the household level, the community level, and that individual youth level is sort of a piece of all of this that I think does not get talked about enough. And what is really special and rare and unique about this funding source is that it is stable and reliable, and that is rare and crucial. So, yes, there are tons of things that we could do a lot better with how the funding is structured and the administration and all of that, but it really is having this direct impact on the communities you care about. Thank you. Good afternoon, Madam Chair. Clifton Wilson, on behalf of the Marin County Board of Supervisors, in support of energy efficiency programs overall because they empower the community to lower greenhouse gas emissions, save on utility bills, and improve comfort and indoor air quality in homes and businesses. Marin has been focused on directing these resources to their older adult population. many of whom live on fixed incomes and would not be able to accomplish these same goals without these energy efficiency programs. This includes programs such as the Bay Renn Multifamily Program that recently assisted 100 low-income seniors in Marin to lower their utility bills and improve air quality. And then continued support for energy efficiency programs helps ensure that the benefits of California's clean energy policies are broadly accessible and then the cost savings are available to customers across all income levels. Thank you. Thank you. Good afternoon. Dylan Hoffman on behalf of StopWaste. We're a local JPA in Almeida County that helps our partner jurisdictions and residents, as the name implies, reduce waste and improve efficiency. And we're strong supporters of the energy efficiency programs that were discussed today. We believe they're a critical affordability tool for both individual customers and the energy system as a whole. It helps support overall grid reliability by reducing demand and shaping load curves to benefit the wider grid itself. And they play a crucial role in California's strategic energy and climate plans, but significantly rely on reliable, predictable funding that they can plan around in order to continue providing these benefits. So I wanted to voice our strong support for those. Thanks. Thank you. Hi, Chair. My name is Jennifer Aguilar, and I am here on behalf of the County of San Mateo in support of California's energy efficiency programs. Energy efficiency is one of the most cost-effective tools we have to keep energy affordable while improving grid reliability and advancing the state's climate goals. These programs help residents, businesses, and local governments lower energy costs, reduce peak demand, and avoid the need for more expensive energy infrastructure. California energy efficiency portfolio delivers approximately in system benefits for every invested and supports more than 312 energy jobs and 54 small businesses across the state San Mateo County supports continued investment in these programs along with thoughtful updates to ensure they better reflect today's energy markets and support building electrification. Energy efficiency is already delivering real benefits for Californians and modernizing these programs will only make them stronger. Thank you so much. Thank you. Good afternoon, Madam Chair. My name is Ella Acker and I market Bayrun Regional Energy network or BayRen programs for Solano County. I'm currently working with our local First Five Children and Families Commission to provide in-home child care centers with access to no-cost weatherization upgrades, thanks to the funds available through our BayRen residential rebate program. With over half of our cities in CalEnviroScreen health burden zones greater than the 60th percentile, these opportunities translate to decreased childhood asthma cases, greater comfort during extreme heat events, and lower financial burden on child care providers. It isn't just energy we're saving, it's improving the quality of lives. If the decision is made to move these funds to the general fund and the fluctuating state budget is what determines whether energy programs can be delivered to our communities, we will not be able to dedicate the staff needed to maintain relationships and build the links between energy efficiency, public health, and community resilience. Keeping these funds where they are signals you trust local governments to serve our residents and continue to nurture the community networks that are fundamental pieces of making energy more affordable, accessible, and reliable. Thank you. Thank you. Afternoon, Chair. My name is Luke Wonson. I also implement Bayrun programs for Solano County. I'd like to share a quick example of the work that we do. Bayrun's business program supports hard-to-reach businesses by providing incentives for decarbonization. Recently, in Solano County, we had a small local business make upgrades that save them over 30,000 kilowatt hours annually, and that translates to about $13,000 annually on their bills. Now, for small businesses like this, these kind of savings can mean the difference between staying open and closing their doors. Projects like this are also only possible because of Bayrun's deeply integrated community-driven networks. Moving energy efficiency funding to the general fund at a time when GGRF auction proceeds are unstable could be catastrophic for our programs. We've long led the nation on energy efficiency and decarbonization, And right now we are at risk of backsliding on our goals. So I urge you to keep finding where it's at. Thank you. Thank you. Hello, my name is Annette Beidel. I am president and founder of a woman-owned clean energy consultancy, Future Energy Enterprises. We are not in California either a program administrator or an implementer, but we did found and run the California Technical Forum and also developed and implement the electronic TRM, which Spencer spoke about earlier today. First of all, I want to say thank you for the questions that you're asking. From my perspective, I'm not sure that you got very clear answers, but I do believe you're asking the right questions. I should mention that I started my career in energy efficiency at PG&E as an attorney in 1994. So I've really seen the evolution of energy efficiency over time. We also work in other states, which I'm going to get to in a moment. So number one, it was painful to hear you say the math is really complicated. You can't get a straight answer. And I'd like to just give you a simple answer on the math. So number one, we talked about two cost-effectiveness tests, the PAC and the TRC. I don't think there's dispute about the math. I think there's a dispute about which is the right test. And the answer really depends on what are the policy objectives. So number one on the costs, you are absolutely right from the perspective of a rate payer. The costs are how much the utility is spending And that the denominator of the PAC What are rate payers spending okay And then for the TRC it both what the rate payers are spending and then what the customers are spending. And I like to share a perspective, even though I respect many of the points that the Public Advocates Office is making about costs being too high and looking at them carefully. So one of the concerns they raised, or she raised, was that you might get more expensive appliances if you don't take into account customer costs. I'll give an example from my old life. So I purchased an induction stove, and there are cheaper induction stoves on the market. I chose to get a fancy-schmancy induction stove. It costs a lot more money. I spent a lot more. Sorry, should I finish up?

Thank you. Jane Elias Hi, good afternoon, Chair. I'm Jane Elias. I'm the Director of Energy Programs with the Association of Bay Area Governments and the lead for BayREN. In addition to the results of what BayREN performed through the 2025 portfolio, I also wanted to share with you another example of energy savings that you don't see. In 2025 alone, Bay Area jurisdictions leveraged BayREN resources to secure or use an additional $12.5 million from non-ratepayer-funded sources for energy projects, including securing a $1.67 million farm worker housing, rehabilitation, and electrification project. When you couple that with BayREN's 2025 expenditures of $35.5 million, what BayREN brings to the region is the ability to couple energy efficiency dollars with other funding sources to provide community members with more comprehensive and holistic improvements. We utilize our channels and resources to increase climate and energy results, helping the state reach its climate goals. That's progress. It's showing how the power of local governments running energy programs can further benefit the ratepayers. And that $12.5 million, that's another 40% of what our portfolio was of $31.5 million in 2025. So I really want to thank you for having the hearing today and asking some of these really tough questions and trying to get to the bottom of this. Appreciate it. Thank you. Good afternoon, Madam Chair. My name is Casey Daly. I serve as the Director of Energy and Environmental Programs for the Western Riverside Council of Governments. We are the lead administrative agency for the Inland Regional Energy Network, or IREN, and so our territory is exclusively focused on Riverside and San Bernardino counties. So I wanted to just touch on a couple things. First of all, thank you. I know this is a lot, And there was a lot of dense, complicated stuff. That's the life that I have to live, explaining what we do as a REN to my 24 elected officials throughout the, well, actually 52 cities throughout Riverside and San Bernardino County. But I wanted to just touch on a couple of things. One, the importance of keeping energy efficiency funding with the rate payers, because that creates, and you've heard it multiple times already, but that creates stability and certainty for us in local government to be able to stand these programs up, put the work into it. But also, we work with local governments, and so a lot of our programs are focused on helping cities, counties, school districts, special districts reduce their energy consumption across their entire jurisdiction. And as you might be able to appreciate, local government doesn't always move super fast. And so it takes time for us to help them develop a project with our technical assistance, our site audits, energy modeling, project design, all of those things we offer to help support our projects. governments in their energy efficiency journey. And that takes time. And so having that stability and certainty over four-year periods is essential for us. And it kind of ties back to something that you all were talking about earlier, as far as resource versus non-resource. So for us, we have an incentive program. And that incentive program is based on actual metered savings of your energy, net meter energy consumption and MEC. But to get to that, we have all of these other pieces of technical assistance and energy modeling and project design and helping them get to that pot of gold at the end of the rainbow. And so it's the incentive that counts as the resource. And I'm going to need to, sorry, I'm going to need to wrap it up. So if you can follow up with our team with your other recommendations, we'd really appreciate it. Thank you very much. Thank you. Good afternoon, Madam Chair. Brandon Garcia with Advanced Energy United. We are a clean energy trade association that has members that operate all around the different aspects of the energy supply chain, many of which work on energy efficiency or demand response programs. I want to hear to be here in support of energy efficiency programs and making sure that they have certain funding on a long-term basis. I think any business in California would tell you that certainty in your business is what allows you to be able to plan out for the future and see how we can do those on efficiency stop start programs don't always help. And certainly not knowing where that funding comes from is not a way for us to plan around our business models We want to really make sure we emphasize the cost savings that we think the inter efficiency programs provide In reference in our letter that we signed on to 1 percent of the revenue generated in 2024 was from energy efficiency programs which is increasingly low And I think if the legislature truly is interested in wanting to reduce rates, reduce downward pressures, this feels like we're attacking some things on the margin that do produce savings when you can address things directly at the root. And we all know that wildfire and all these other costs are biggest drivers of rates. We would argue that those are probably the more appropriate place to try to find more cost savings there. And we would certainly support a lot of those different kinds of policies and actions. I think the last thing I would say is energy efficiency and demand response are really some of the only tools available to rate payers to reduce their energy costs, given that many Californians live in the utility model construct. There's not really a way to get reduced energy costs for yourself unless you're able to get into energy efficiency programs or reduce your own energy consumption. And given where the affordability crisis is today, we feel like that is an incredible tool, and the legislature should be finding ways to promote and incentivize that rather than draw that back. And we're happy to work with you all and the other members on that. Thank you. Thank you. Hi, I'm Mark Costa from the Energy Coalition. I'm speaking today as part of the Energy Coalition, and we've heard a lot of great information there. But I've also been involved in the Cal-TF. I've been part of utility programs. I work with the RENs and I a municipal utility customer So I seen all spectrums of what going on here today And to really round off what we heard today I think it was a collection of perspectives and it really shows how you come into the situation and where you're sitting sometimes dictates how you make sense of all the numbers that are out there. And I think we're all looking at the same numbers coming at this with different conclusions at the end of the day, but I think there's enough information there to have some good takeaways. One, I think that we clearly show that there are – these are all energy programs. These all have to directly have to do something with energy. Some are direct, some are indirect. That's one thing. And the statute clearly says that we can do this, not only the cost-effective, but showing the related benefits. The Energy Commission depends on these as well. Should the stuff be on the bill? Well, I would say we at the bottom line heard today the numbers that show these. At the end of the day, we spend $794 million on all this stuff, and we have more benefit that we measure directly on that. And that's the most stringent test we have, and it passed that. I think that's the clear takeaway. Now you can chop these up into different ways. and the numbers will grow. The benefits will just grow as we measure the benefits that we don't see. So I think that's the clear takeaway that if you need to boil all this down to one thing there more value than we spending and that number will grow And I will say with that we look forward to finishing that work and showing those numbers and having a very good story to tell in the 3264 reports that are now starting to uncover this. So thank you for all that. Thank you.

Thank you. Thank you.