Why Californians use so much less electricity

Californians use 40% less electricity than average Americans! Can other states copy this energy efficiency?

Fri, Sep 25 2009 at 1:00 PM

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solar panels on roof Did you know that “The average Californian today uses about 40 percent less electricity per year than the average American”?

That’s just one of the nice eco-stats cited in Ronald Brownstein’s article, “The California Experiment,” for The Atlantic. If you’ve never quite understood why California’s considered an environmental leader in spite of flunking grades when it comes to air and water pollution, annual forest fires, and the worst gridlock in the nation -- well then this article’s a must-read.

True, California's moderate weather probably just naturally helps us conserve electricity, too. But California's also pushed national standards when it comes to energy efficiency for everything from refrigerators to, now, televisions. In addition, Cali’s “decoupling” strategy for its utilities is what’s really made a huge difference:

Utilities traditionally make more money when they sell more electricity…. As a result, their natural inclination is to encourage their customers to use more. With the state trying to save energy through its efficiency standards, that incentive seemed increasingly perverse….

The solution was a policy known as “decoupling” because it severed the link between consumption and profits. Here’s how it worked: the commission first set a revenue target for utilities by calculating how much money they needed to make to recover their fixed costs, plus an approved profit rate. Next, the commission estimated how much power it expected the utility to sell. Then, it established an energy price that would allow the utility to meet its revenue target at the expected level of sales. If the utility sold more power than it needed to meet its target, the difference was returned to consumers. If it sold less, rates were increased to make up the difference. Applied to natural-gas sales in 1978 and electricity in 1982, decoupling had a profound effect.

No, most states haven’t followed suit. That’s a big reason why our per-capita energy comsumption rates are so impressively low in comparison to other states. So if you’ve been feeling low, here’s something to feel proud about. Read the entire article in The Atlantic to learn about what California's done right -- and what other states could do too.

Photo: richardmasoner

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