PacifiCorp has agreed to suspend all of its ratepayer-funded energy efficiency programs in California due to their current lack of cost-effectiveness, resulting in a 0.7% rate decrease for customers, according to a Friday filing at the California Public Utilities Commission.
PacifiCorp, which serves around 46,000 customers in Northern California through its Pacific Power subsidiary, sought to keep the programs running and redesign them, but ultimately entered into a proposed settlement agreement with the Public Advocates Office at the CPUC to wind the programs down by Jan. 1.
“PacifiCorp’s EE programs have historically not provided cost-effectiveness benefits to ratepayers and, indeed, show a decline in performance in recent years,” Cal Advocates said in a November filing. “Additionally, cost-effectiveness projections for PacifiCorp’s proposed redesigned portfolio show meager improvement and fail to deliver benefits to ratepayers that exceed program costs.”
Cal Advocates wrote that PacifiCorp had conceded “that it has not met overall portfolio metrics or cost-effectiveness standards and has struggled to maintain savings levels in its existing programs. For example, savings from the Wattsmart Business program have declined by roughly 75 percent between 2022 and 2024, while total portfolio savings fell by 40 percent in 2024 alone.”
Simon Gutierrez, spokesperson for Pacific Power, said that “delivering these programs in our California service area presents unique challenges” as the service area is largely rural, “averaging four customers per square mile, and includes a high proportion of low-income customers.”
“In addition, there are few large business projects to help offset smaller projects, and program delivery costs continue to rise,” Gutierrez said. “Due to these factors, Pacific Power’s energy efficiency programs in California are no longer cost effective.”
The CPUC must approve the agreement for it to take effect. In their joint filing, Cal Advocates and PacifiCorp asked the commission to waive the comment and reply comment period in the interest of resolving the case before the end of the year.
The agreement stipulates that PacifiCorp will continue to honor existing and pending customer incentive commitments and reduce its California Schedule 191 surcharge, which funds public purpose and energy efficiency programs, to reflect the discontinuation of these programs.
It may continue to collect a lesser amount that covers marketing, education and outreach efforts in 2027 to inform customers in its California service territory “of available state, federal, and other non-IOU-funded energy efficiency, weatherization, and electrification programs and services.”
The Schedule 191 surcharge is set to $1.37/month for residential customers and 0.101–0.315 ¢/kWh for non-residential customers by class.
Two of those energy efficiency programs — Wattsmart Homes and Wattsmart Business — have their own tariffs, which have been suspended, but the settlement preserves PacifiCorp's “ability to reactivate such programs in the future if determined to be cost-effective,” the filing said.
The settlement also notes that PacifiCorp’s withdrawal from administering these programs does not “constitute a permanent relinquishment of its authority or ability to administer Commission-authorized energy efficiency programs.”
PacifiCorp is mandated to notify Cal Advocates “as soon as practicable” if, in the future, it identifies “opportunities for cost-effective program offerings,” the settlement said. In that case, “the Settling Parties agree to work in good faith to seek Commission approval through an application filing for those programs if the Settling Parties mutually agree the programs are projected to be cost-effective.”
If the CPUC later changes the methods it uses to determine cost-effectiveness, or makes changes to its Avoided Cost Calculator, in a way that makes these programs cost-effective by their standards, the settlement stipulates that PacifiCorp and the CPUC will meet to discuss whether they should be reinstated.
Over the course of next year, PacifiCorp is mandated to “make all reasonable efforts to provide its customers with information on all known applicable energy efficiency programs, including non-ratepayer funded state- or federally funded programs, available within PacifiCorp’s California service territory,” the settlement said.
