Understanding the response of commercial and institutional organizations to the California energy crisis

Beginning in the summer of 2000, California experienced serious energy supply problems, sharp increases in wholesale (and retail) electricity and natural gas prices, and isolated blackouts. In response to the rapidly worsening electricity situation in California in late 2000, the state set, as an initial goal, the reduction of the state's peak demand for the summer of 2001 by 5,000 megawatts. To meet this goal, the governor and legislature took a variety of steps to enhance supply, encourage rapid voluntary reductions in demand, and provide incentives for actions that would result in load reductions. Three bills-Assembly Bill 970, Senate Bill X1 5 and Assembly Bill X1 29-allocated roughly $950 million for consumption and demand reduction programs. The governor also enacted a variety of additional measures, including the "Flex Your Power" (media awareness and direct business involvement) campaign, requirements for retail sector outdoor lighting reductions, and toughening of energy efficiency building codes. There were, in fact, significant reductions in electricity demand in California during the summer of 2001 and the large number of expected supply disruptions was avoided. To understand the nature of these demand reductions and the motivations for consumer response, Washington State University (WSU) undertook a study for the California Energy Commission (CEC) focusing on conservation behavior in the residential, commercial, and agricultural sectors. The research presented in this report represents an exploration of the response of commercial and institutional organizations to the California energy situation and the unique set of influences that existed during this time. These influences included informational messages and media attention, program interventions, price changes, and external triggering events (e.g., blackouts). To better understand the effects of these influences on organizational response to the energy situation, we conducted 84 semi-structured interviews with members of commercial and institutional organizations (many of which participated in three different California Energy Commission Programs) and with 21 key informants representing program managers, administrators, and aggregators as well as a small number of energy service providers and utilities. Separate reports examine the consumer response in the residential and agricultural sectors.