Efficiency:

CPUC's Grueneich discusses allocation of allowances under cap and trade

With the Obama administration focusing on addressing some of the low-hanging fruit like conservation and energy efficiency to tackle our energy and climate challenges, energy efficiency has become a key issue in policy discussions in the United States. E&ETV traveled to Paris for the annual Energy Efficiency Global Forum and Exposition, hosted by the Alliance to Save Energy, for a series of interviews and panel discussions about the challenges to and potential of energy efficiency. Today's segment features E&ETV's interview with California Public Utilities Commissioner Dian Grueneich. Grueneich discusses the potential for energy efficiency to help solve the United States' climate and energy challenges. She also gives her take on the push to create a national energy efficiency standard.

Transcript

Monica Trauzzi: Commissioner Grueneich, thank you for joining me today.

Dian Grueneich: I'm happy to be here.

Monica Trauzzi: We are at the EE Global Conference in Paris talking about energy efficiency and back in the states there is currently a discussion in the Senate about creating a national energy efficiency resource standard. Can utilities really be expected to have an impact and some would say control how consumers use energy and how much energy consumers use?

Dian Grueneich: Absolutely, in fact, I testified before Congress last Wednesday and one of the questions that I recall that I was asked was did I think it was feasible to have the national energy efficiency performance standard that would apply to all the utilities in the United States and I think not only is it feasible, I think it's absolutely the way to go.

Monica Trauzzi: What do you think some are of the key holdups are currently in the United States in implementing energy efficiency programs? I mean it seems that they're not really being used to their full potential.

Dian Grueneich: That's true and one of the saddest things is that energy efficiency is what we call the lowest hanging fruit. We know that if you unscrew an incandescent light bulb and put in a compact fluorescent light bulb, you will save energy. But here are the barriers to it. I may know that because I live and breathe energy, but my neighbor next door may not know that. The local store may not stock them. The price of it might be five dollars instead of an incandescent one dollar and all of those are just concrete examples of why don't we have efficient lighting? And it's everywhere, why don't we have efficient windows? Why don't we have efficient motors? And it's all these complex factors that we can address but we've got to have government programs and policies and utilities and everybody working together.

Monica Trauzzi: It sounds like it would take a lot of federal funding though. I mean does the money exist to help consumers purchase these products and refurbish their homes in a way that would be more energy efficient? Is the money there?

Dian Grueneich: I actually think with the new administration, with President Obama, we've made a terrific down payment on energy efficiency. In our recent economic stimulus package there's billions of dollars that we never had before on federal funding. But it's the down payment. We have a huge job to do. We have a huge opportunity in energy efficiency and we need to think about where is going to be the funding after the stimulus runs out?

Monica Trauzzi: How far can energy efficiency actually take us in solving our climate change issues? Without a cap and trade on the books how far can energy efficiency go?

Dian Grueneich: It can take us a lot of the way there. It's not going to be the whole way. In California we have our own global warming law and I'm proud to say that energy efficiency is the number one foundation of what we're using and I can think of it as basically three pieces. Energy efficiency is a huge foundation, maybe about 30 to 40 percent of your emission reductions. A renewable portfolio standard where you're increasing the renewable energy, wind and solar and biomass and geothermal, that's maybe another third combined with thinking about transportation. And then you layer on top of it a sensible policy which I think is cap and trade. So you're not saying it's either one or the other, but that you do use the market mechanisms that we think will occur under cap and trade.

Monica Trauzzi: Often renewable energy technologies receive greater policy support and attention than energy-efficient technologies. Is enough attention being paid in the U.S. Congress currently to energy efficiency or is renewable energy sort of taking the cake?

Dian Grueneich: I don't think enough attention is paid to energy efficiency anywhere and it's still a mystery to me that people will think of spending 10 or $20,000 on solar panels for their home, but try and say why don't you spend $1000 on energy efficiency? So collectively we all need to do a much better job of explaining what is energy efficiency, why do we do it, and what do we do? And we all have a stake in doing that.

Monica Trauzzi: Final question here. Back in the states one of the big issues up for debate relating to a cap and trade is the allocation of allowances. Should a certain percentage of cap-and-trade allowances be set aside for free distribution to utilities?

Dian Grueneich: This is going to be probably one of the central questions that Congress itself is going to have to answer. In California, because we have our own global warming law, my agent see the California Public Utilities Commission has actually made recommendations where we do not believe all of the allowances should be given away for free. And we do talk about them coming back to be funding a host of very important programs as well as to help in any additional costs that consumers may incur. I can't speak for how Congress is going to act other than I think in the overall scheme of things we do need to think about how are we going to have adequate funding for the very important steps that we need to take to address global warming of which, in my mind and I hope a lot of people's mind, first and foremost it needs to be energy-efficiency and making that just as broad and as comprehensive as we can.

Monica Trauzzi: Okay, we'll end it there. Thank you for joining me today.

Dian Grueneich: Sure, absolutely happy to.

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