Dive Brief:

• The California Public Utilities Commission (CPUC) last week voted unanimously to adopt frameworks for two areas of energy efficiency policy, giving support to the continued use of Regional Energy Networks (RENs) and expanding the use of market transformation initiatives (MTIs).
• The decision allows local governments to continue collaborating on RENs, invites new proposals and establishes an independent statewide market transformation administrator that will be hired by Pacific Gas and Electric through a competitive solicitation and managed by the commission. The new framework is designed to help emerging technologies build market share.
• The decision authorizes an MTI five-year budget of $250 million to advance new efficiency programs and technology. The commission also declined to set an up-front benefit-cost ratio threshold for individual MTIs.

Dive Insight:

California's first RENs were approved in 2012 and the state has long been a leader in energy efficiency market transformation. But the decision will help forge a new way for the state to explore emerging technologies, according to Lara Ettenson, director of the Natural Resources Defense Council's energy efficiency initiative and climate and clean energy program.

The state's policy rules "haven’t been set up to do this on a large scale," Ettenson told Utility Dive. "The commission adopted a comprehensive framework that sets us on a path to go farther, quicker."

Current California efficiency rules generally require technologies or programs show savings in just a few years, while transformative approaches and changes can take much longer to show results.

"The rules didn't quite match the time scale you want," Ettenson said.

She called the CPUC's Dec. 12 decision "a really big deal." 

"We've been investigating as a state how to advance market transformation for decades. We have made progress and moved certain technologies forward," Ettenson said. "This lets us open up to a number of new approaches and technologies that may have never penciled out."

The decision sets out a framework and budget for MTIs, but it could still take a year just to get the administrator in place. It is not clear what kinds of projects may come forward yet, but one possibility is a growing focus on highly-effective heat pumps for hot water or buildings.

"We have the technology, but it isn't necessarily understood," said Ettenson. The new framework will ask, "how can we make this the norm?"

As for the RENs, they are collaborations of local governments. The CPUC's decision could allow them to participate on MTIs and requires strong coordination on initiatives that might overlap.

The framework is also a good example of the progress that can be made when stakeholders come together early, said Ettenson. The California Energy Efficiency Coordinating Committee, established in 2015 to boost transparency, facilitated the public process that led to the decision.

"This decision basically followed a collaborative process that hashed out all the details before we went to the commission," she said. "It's a great model. When you bring stakeholders together, we can come up with solutions that will help us scale up faster. ... It is exciting to see where this goes."