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Thursday, Feb. 15, 2007 | San Diego Gas & Electric fell far short of its energy efficiency goals last year, putting the company behind schedule to meet a state-mandated 2008 target.

SDG&E’s performance ranked last among the state’s three electricity utilities. It achieved less than one-third of its targeted reductions in peak summer electricity demand and about half of its annual savings goal. The failure will force the company to more aggressively pursue energy efficiency programs this year, while highlighting the role the ratepayer-funded conservation programs play in SDG&E’s power portfolio.

SDG&E has budgeted $250 million of its ratepayers’ money to reduce energy use by 2008, a goal set by the California Public Utilities Commission, a state regulator. In the first year of the three-year efficiency program, SDG&E spent $44 million.

A company representative said some efficiency programs had not been well-received by the public, while the overarching effort started late because it was the first year in a three-year cycle targeting longer-term savings that will take time to happen.

“I’m equally concerned on it. It’s not acceptable to us in the long run to be behind goal,” said Mark Gaines, SDG&E’s director of customer programs. “We’ve had a 10-year track record of meeting our goal and we intend to continue to meet our goal into the future.”

The California Public Utilities Commission, which regulates utility companies, adopted the energy efficiency goals in 2004, calling for a $2 billion investment in technology to cut electricity and natural gas consumption. State estimates projected the goals would prevent the need for three large power plants, cut statewide carbon-dioxide emissions by the equivalent of 650,000 cars annually and save customers $2.7 billion.

SDG&E has been criticized in the past for ignoring harder, long-term efficiency gains — the type that would come from replacing high-energy appliances or office buildings’ air conditioning systems — in favor of easier, less productive efficiency programs such as light-bulb replacement.

With its latest efficiency plan, the company says it has responded to that criticism. One of SDG&E’s 43 programs aimed to reduce the hours that pool pumps operate, but Gaines said it had not been received well. Pool maintenance employees had argued that it didn’t allow for proper cleaning. That will push the company back toward light-bulb replacement.

Gaines said the company would trim its pool budget in favor of working cooperatively with retailers such as Wal-Mart, who are marketing high-efficiency fluorescent light bulbs.

“The company took on some ambitious projects and they felt they needed more time for them to ramp up,” said Michael Shames, executive director of the Utility Consumers’ Action Network, a ratepayer advocate. “Ultimately, this three-year experiment will be the test to see whether SDG&E has the necessary commitment to making this happen. It’s an extreme makeover, rather than just going in and putting makeup on people. The potential long-term benefits are rather substantial.”

None of the state’s other electricity providers have met their 2006 goals, though both performed better than SDG&E. Pacific Gas & Electric achieved 90 percent of its goal; Southern California Edison achieved 70 percent of its goal.

Conservation is SDG&E’s top priority for managing long-term energy demand, as outlined in its state-approved resource plan. Following behind are increased renewable energy resources, then large-scale power plants. Increased transmission capacity, which would come from SDG&E’s $1.4 billion Sunrise Powerlink, is listed as the lowest priority.

The company’s campaign aims to save power equal to that consumed in one year by 20,000 residential customers. The company touts its goals and programs through press releases, sometimes patting itself on the back for funding programs with ratepayers’ money. SDG&E estimates that 8 percent of its $250 million efficiency budget goes to marketing its programs. (Another 14 percent goes to administrative costs.)

A December 2006 press release from The Southern California Gas Company, a sister company to SDG&E says this: “The Gas Company is encouraging its business customers to apply for more than $10 million in energy-efficiency rebates and incentives reserved for them in 2007 — the highest level of funding for such programs in its 140-year history. … The funding … is at a record high because energy efficiency plays a critical role in meeting the state’s energy needs and helping the environment.”

But the company is not funding the programs — ratepayers are, through a 1 percent levy on their bills. That release does not tell consumers that they’re footing the bill until its 13th paragraph. The average residential user contributes $20 annually to the efficiency programs, which are administered by the state’s major utilities: SDG&E, The Gas Company, Southern California Edison and Pacific Gas & Electric.

Some advocates oppose the arrangement, which effectively requires utilities to reduce demand for the very products they sell — electricity and natural gas.

“It’s going to be very difficult for a company that sells energy to be enthusiastic about the notion of encouraging customers to not use their service,” Shames said.

Though the Public Utilities Commission has mandated the energy efficiency goals, it has not yet set any incentive for utilities to achieve them. Terrie Prosper, a PUC spokeswoman, said the commission is developing “a risk reward mechanism” that would give utilities an incentive to meet the savings goals. A decision on that is expected in mid-2007, she said.

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