California first enacted efficiency standards for major types of appliances, as well as for new residential and commercial buildings, in the mid-1970s. These standards have been updated many times since then and have been extended to additional appliances.
California also adopted a number of policies intended to stimulate utility energy efficiency programs. They included the decoupling of utility profits from sales, the inclusion of efficiency as part of integrated resource planning, and the creation of performance incentives to meet or exceed efficiency targets. California’s investor-owned utilities spent in excess of $600 million per year to promote more efficient electricity use by their customers as of 2007.26 They can now earn a profit on these expenditures through the performance-based incentive program.
The combination of appliance standards, building energy codes, and utility efficiency incentives has resulted in considerable electricity savings in California. It is estimated that these initiatives have saved a total of some 40,000 GWh per year as of 2003, equivalent to about 15 percent of actual electricity use in the state that year (CEC, 2007).
New York State has a long history of implementing policy actions to encourage more efficient use of energy across all sectors. They have included adoption and continual updating of building codes and appliance standards, for example, and well-funded research and development programs. Consequently, New York has maintained a relatively flat level of total energy use per capita (about 36 percent lower than the national average in 2005) for the past 30 years (see Figure 4.8).
New York’s energy efficiency programs targeting energy consumers are designed to promote behavioral changes that favor adoption of a greater number of energy efficiency technologies, appliances, and services. Programs directed at electric utilities include the implementation of utility-run DSM efforts and a revenue-decoupling mechanism to allow utilities to recover revenues lost from reductions in energy demand due to efficiency measures. As a result of its energy efficiency initiatives since 1990, New York has lowered its annual electricity use by nearly 12,000 GWh, or about 8 percent (New York Energy $mart Annual Evaluation and Status Report, 2008).