California Public Utilities Commission Initiates Rulemaking to Explore Clean Energy Financing Options

Strategic Insights -

The California Public Utilities Commission (CPUC) has launched an investigation to design clean energy financing options for electricity and natural gas customers. This effort is aimed at reducing the financial burden on low-income and vulnerable populations who pay a disproportionate share of their income for energy. The CPUC is seeking to identify innovative financing mechanisms that can help address the challenges of climate change, energy affordability, and grid resilience.

Key Takeaways:

  • The CPUC has initiated Rulemaking 20-08-022 to investigate and design clean energy financing options for electricity and natural gas customers.
  • The investigation aims to reduce the financial burden on low-income and vulnerable populations who spend a significant portion of their income on energy.
  • The CPUC will examine innovative financing mechanisms, including on-bill financing, community solar programs, and energy efficiency retrofits.
  • The rulemaking process will involve extensive stakeholder engagement, including from utilities, consumer groups, and industry experts.
  • The CPUC has identified six parties that have been granted party status in the proceeding: FuelCell Energy, Inc., National Consumer Law Center, Mitsubishi Electric US, Southern California Gas Company, Utility Consumers' Action Network, and The Energy Coalition.
  • The CPUC received numerous party interventions, including from organizations such as the California Efficiency + Demand Management Council, the Energy Independence Now, and the Environmental Defense Fund.

Statistics:

  • The CPUC estimates that nearly 25% of California's households spend more than 10% of their income on energy, with low-income households facing even greater burdens.
  • The energy affordability gap is estimated to be around $3.5 billion annually for low-income households in California.
  • The CPUC aims to reduce the energy affordability gap by 50% by 2025, through the implementation of innovative financing mechanisms and energy efficiency programs.

Sources:

  • CPUC. (September 14, 2020). Motion for party status of the California Efficiency + Demand Management Council. Rulemaking 20-08-022. Retrieved from
  • CPUC. (September 14, 2020). Order instituting rulemaking to investigate and design clean energy financing options for electricity and natural gas customers. Rulemaking 20-08-022. Retrieved from