Organizing for Market Transformation: Institutional Issues in the Creation of a New Energy Efficiency Policy Framework in California

Recently there have been movements in a number of states and regions, as well as nationally, to establish public benefits mechanisms that use funding from universal ratepayer charges to attempt to transform energy-efficiency markets. However, most of these campaigns appear to still be in the planning stages. This paper reports on several key issues that have been faced in implementing one of the largest and furthest advanced energy efficiency public benefits mechanisms, the Public Goods Charge (PGC) mechanism in California being overseen by the California Public Utilities Commission (CPUC) and the California Board for Energy Efficiency (CBEE). The paper is written primarily from the perspective of the consultants commissioned by the CBEE to advise it in carrying out its mission of implementing the PGC mechanism in California, and does not purport to represent the views of either the CBEE or the CPUC. The main focus is on issues pertaining to institutional structure, including the number and organization of administrators selected to develop and oversee energy efficiency programs and budgets and the allocation of responsibilities for various functions between program administrators and other entities. The authors also discuss implications of California's experience for other energy efficiency public benefits planning efforts.