 Hi everyone, I'm Diane Grunick and I'm here at Stanford and our panel is Advanced Energy Efficiency. That would be great. And we have an awful lot we're going to cover so I'm not doing introductions other than to say our first person is going to be Greg Wickler who's at Navigant and has done the world's most comprehensive study, it just came out last week, this week, on what is the potential for energy efficiency and while it's focused on California it is applicable certainly throughout the United States and in developed countries and it really breaks ground in terms of thinking about how we can understand areas of energy efficiency. Then we're going to move to Lauren who was a long time senior management at Clear Results, one of our premier consulting energy efficiency companies and now has her own company and she's going to be talking about some of the innovations that she's bringing in as a practitioner implementer in the field and then last but not least is Kirk who is the executive director of the Global Cool Roots Alliance which is white and other cool surfaces. So do we have the ability to get started? Not with the slides, I'm trying to get it to work. Greg, can you without slides at least introduce your potential study? Sit down, I kind of need to move. When it comes on, let me know if I'm blocking the screen. Yeah, I can help so I can move over here. I can also down there. I've learned why don't you get started talking about it and then we'll worry about it later on. Okay, good afternoon everybody, it's great to be here. I'm so glad it's Friday. This has been one heck of a week. He's given not one but two, three workshops. Three workshops, every day there was something going on. But certainly happy that it's Friday and happy to be talking about a really great topic which is energy efficiency potential. An area that I've been working on for many years is thank you Diane for mentioning such wonderful accolades about the potential study that I'm going to talk about today. If we get the slides up, that would be great but It would be good. But I'm just going to start speaking and then I will just get into the slide that appears at that point. So what I wanted to speak about was initially just give you a sense about where California is in terms of energy efficiency. Number one we've shared, so we've been, there's a ranking that the American Council for Energy Efficiency Economy AC Tripoli does every year. And California actually was ranked number one for many, many years. Then we kind of lost the ranking to I think Massachusetts for a while. But we're back at number one. I think one of the things and folks may have heard about the Rosenfeld effect which is this curve of per capita energy use. California has maintained a flat curve of per capita energy use relative to the rest of the country and we credit that to our pioneer in the field, Art Rosenfeld who sadly passed away earlier this year. And much of that success of energy efficiency in California can be attributed to programs that utilities have been implementing for 30 plus years. So energy efficiency accomplishments largely credited from the utility program efforts that PG&E, so Cal Edison and San Diego Gas Electro and the other utilities have implemented over those years. So one of the things that is also really worth noting is that there's legislation there's policies in place that are really strong and supportive of energy efficiency. One of those policies is SB350, Senate Bill 350 that the governor signed about a year plus ago that is essentially among other things aimed at doubling the efficiency that we do pretty much now by 2030. So we are on the path to doubling our energy efficiency activities in 2030. So how are we going to get there? That's a big question. I just wanted to note that nationally energy efficiency has also been on the rise and this is kind of an interesting statement to make in light of where we're at in terms of our politics right now with climate change and energy efficiency hasn't necessarily been a priority of the current administration. Not quite, but we've located you. There you are. So page three, please. And once you get it, why don't you move over to the lecture. So transition time. Thank you Jim. Okay. A master of many talents. This works too. You can use it to that. I am going to move it. Alright, so this is where I'm at in terms of nationally energy efficiency has played an important role. Spending is an indicator. In 2015, nationwide utilities and states have spent about $6 billion and achieved about 0.7% of total sales reduction which is a pretty impressive amount that amounts to 26 billion kilowatt hours of savings in that year. But the message, I think the important message is even in spite of where the political situation is right now, there's room to improve on that number in that amount. We see signs of that. There's several states that have very aggressive energy efficiency policies in place. I say the states because the states are going to continue down that path. California is one of them, New York. Some of the other states here in the west, Oregon, Washington and several others that are going to continue to enhance and expand their energy efficiency efforts. So as Diane mentioned, we have been doing energy efficiency potential work. This is for the state of California, the California Public Utilities Commission. It's actually been doing this study for the CPUC for several years now, about six years. What the CPUC uses those studies for is to essentially set goals for the utilities to accomplish savings in the next program cycle. So as Diane mentioned, last week the CPUC released our latest draft of the potential estimates and what we found is that if we just kind of go with the existing policies that are in place at the CPUC, we're not going to actually see any more potential. In fact, we're going to see less potential than what we have seen in previous years. And we realized as we were doing our study that, gosh, that's not consistent with current policies. So we really have to think about some other scenarios of our analysis to increase the projections for savings. So we went down this path of doing some scenarios, saying what if we were to really be aggressive in our policies? How much potential could we extract? So I wanted to talk about that a little bit, at least set the stage for some discussion. So here's the result of a little bit small print for you all to read in the back there. I will provide a link to the potential study in case anybody's interested in diving into the details. In our reference case, that's the case where we're about, I'd say 20% lower than the potential that we've estimated in the previous cycles. That equates to about 2600 gigawatt hours per year. I have megawatt hours there, that's actually a typo. And if you think about the aggressive scenario, we would get up to about 3500 gigawatt hours per year. So a significant bump up in the, if we just assume or imagine, well what if we were to change the policies? Some of those changes include, let's look at a different way for measuring the economic value of the energy efficiency. So changing the economic test perspective, looking at carbon as, avoided carbon as a benefit, whereas in the current methodology we don't look at that. Looking at increasing incentives and whatever opportunities we can get to incentivize and motivate customers to participate at greater levels of energy efficiency. And you know, I think the bulk of the savings that we see come from two different areas. One is utility based programs. This chart here just shows what is the sort of the possible potential areas of savings. So one of them is utility based programs. I think those are the the dark gray bars. And then the second area is what's called behavior retro commissioning and operational efficiency. What is referred to as BROS and California parlance. So those two areas, those two upper areas are really where the greatest opportunities lie for expansion. The lower bars you'll see are consistent across the different scenarios. Those are for codes and standards and for low income programs, which are fairly consistently predictable in terms of how much impact could be achieved through those different mechanisms. Looking at the savings from a percent of total sales perspective, so you recall from a previous slide I had that 0.7% reduction in 2015 nationwide. So that comparable number is illustrated in this chart here for the different scenarios. So looking at savings as a percent of the electric sales under the aggressive scenario, we get up to 1.2% of reduction relative to total electric sales by 2030. So the question is that's under the aggressive scenarios. The question is, well, is that enough? Is that enough to reach our goals, our aggressive targets to essentially meet the SB350 reduction goals? And the answer is no, it's actually not. We're still quite a bit short. In fact we should be at 1.5%, 1.6%, 1.7%. And so the questions that I kind of posed to our discussion today is well, how are we going to reach that doubling goal? What is it going to take to kind of get us to a point in the state where we actually could see the savings or realize the savings that are essentially stipulated in this legislation? And what's really going to have to happen from a market and policy standpoint to get us to that level? So I have some ideas. I'll just throw out a few ideas here. From a policy perspective, we have a lot of rules in terms of how energy efficiency is essentially governed by the policies that are put into place. So we really have to revisit a lot of policies that I would argue kind of inhibit customers to participate in energy efficiency programs. Some of you may have heard of the notion of free ridership, dean baseline. So there's a lot of things that the Public Utilities Commission rules have been put into place to say, well you can't claim those savings because people would have done it anyway. Well how do you determine that? That's kind of a subjective question. You could allow more energy efficiency measures to be counted than what we were allowed to look at in our study. So that could be more behavior based measures. It could be industrial measures that are really now considered to be industry standard practice. And then we could look at additional benefits or different test perspectives like using a societal cost test or at least capturing the added benefit of a reduced kilowatt hour in terms of carbon savings. We should also think about delivery of the energy efficiency programs and really try to get more innovative in terms of our delivery approaches. So one of the things that the PUC has been looking at in the current proceeding is whether it's better to have third parties to have the value of the industry actually help harvest more of those savings. So third party performance approaches that are not necessarily as well embraced right now. There might be some other models around end use services. So thinking about how to change the nature of how it's not delivering kilowatt hours but maybe it's delivering services like lighting HVAC service that might remove some barriers that are currently in place. Looking at where are the locations for better value for energy efficiency are as opposed to just doing a statewide approach. Might even involve local private investment and financing mechanisms that aren't as widely embraced currently. So those are just some of the delivery approaches that we have been thinking about and that we want to try to have some conversation about today. So I'll leave it at that. Okay, great. Thank you very much. Good afternoon and I know it's Friday afternoon so we'll try to keep the conversation moving and somewhat lively. While he is getting that out I wanted to just talk about business. I actually started my career as a PDD so I also bring the intelligence perspective and working in a regulated environment for quite a while and have a lot of experience representing the business voice. I was also co-founder of a group in California called the Energy Efficiency Industry Council that just changed its name. Greg, you have to help me. California Efficiency Demand Management Council and that is in recognition that the world is changing which is a bit what I want to talk about. But just from a business perspective, can I just get a quick show of hands how many of you have been involved in energy efficiency for the past couple of decades? Okay. Fast couple of years. Okay, under a decade. Let me see under a decade. So I just didn't want to put the full 35 years on everybody. But as Greg said, it's been about 35 years of really a robust industry growing in California. But if you, so those of you that said they had been in the business for a couple decades, one of the reasons I ask that is if you think back 20 years ago or so, it was very different than it is if you think back over the past decade in efficiency. And one of the things that's happened in this past decade is the example of how many states have mandates now. If you think back 2005 there were about six states that have mandates. Now, or as of 2016, there were about 25 states that have mandates. So it went from this cottage industry, a lot of the businesses can you all hear me? Okay, by the way, I realize I'm kind of far away from the mic. A lot of the businesses that were involved, thinking back two decades ago, really small cottage industry, but there's been tremendous growth. And what has happened is that businesses have really thrived. So what was once this cottage industry grew up. A lot of us that have been in the industry a while talk about it that way about how we really have gone mainstream. And through that process there's been companies lots of acquisitions. And Diane mentioned in the introduction that I was a part of that acquisition. I started a co-founder of a company that was acquired in 2011 by ClearResult. And I can talk a little bit about that journey. What happened was ClearResult again was a cottage industry coming out of some players that were involved a couple decades ago. And private equity saw what was happening in this industry. And so they approached ClearResult and said, you know, what do you think about doing a roll-up model? And anyone that's worked in private equity knows what a roll-up model is where you bring a lot of companies together. What happened, my company was about the second in that roll-up model. And it was amazing education. As I joined, my company made the total unit about 700 people. And we acquired eight companies in about four years and grew that to about 3,000 people doing work all over the country. And really rode that wave of small business up to mainstream ClearResult is now I think the largest energy efficiency company in the country doing pure just energy efficiency. So what happened is that we went not just from a business side, but in terms of creating real impacts. I think it was looked at more like social welfare type programs. Going back a couple decades ago, energy efficiency was like nobody really counted it. Nobody really believed that the savings were going to be there. And over this past decade, there was recognition that energy efficiency was creating meaningful impacts. Companies, the COOs, were beginning to look at the return on investment and realizing that it was impactful in their bottom line. So huge, huge decade of change. So now, you know, there are many changes on the horizon. And, you know, love this sort of foggy, you know, where is, we actually have been talking about like bridge to the future. Well, where is this leading? And those of us that have been in the pure energy efficiency business, some companies have demand response and they are sort of on a different place in the curve. But for pure energy efficiency companies, there are a lot of changes at play in the energy market and the market in general that are really making that future a bit unclear. But on the flip side of that, it's really exciting to watch energy efficiency, you know, move from that past, you know, social welfare type program to one that really is looked at and challenged to be a real supply side resource. So I think the industry, as you think about, I think about my colleagues, you know, everybody is very excited about that. But, you know, on the flip side, you know, there's this potential of being really a valued resource. But there's a lot of you know, devil in the details, if you will, about how is energy efficiency really playing in this new arena and how does it really become a valued resource. So let me just talk a little bit about what I see in this next decade of what I really call next decade of transition. So one of the things that my colleague Greg talked about is the regulatory process. And right now there's a proceeding, has several different phases that is taking energy efficiency into what we're calling rolling portfolios. Because one of the criticisms with energy efficiency over the past is it was sort of start-stop, start-stop, that's one of the reasons it really couldn't be relied on. And there has been significant delays in the regulatory process. And to give you some example, when I founded my last company, not this company, prior one, in 2006 I bid on a lot of programs in California and I think just about all those programs, maybe with the exception of one is still operating because it's been that long since the regulatory process has really gone out to bid and brought sort of new innovative programs. So this proceeding that's been going on for the past couple of years has been to really change that dynamic, think more market based, but the reality is that there are significant delays. One of the really huge upsides for business is that there used to be a 20% mandate so the utilities implementing energy efficiency portfolios had to put 20% of that out to the open market to bid. In this proceeding it's now been increased to 60%. So that's huge. I mean the market in California under the utility programs is about a billion dollars. Greg mentioned that the national market for energy efficiency programs, utility funded energy efficiency programs, about a billion of that is in California. And so 60% is a huge opportunity so a lot of the businesses that have been around for a while are very much looking at that and trying to determine how they're going to play in that. But there have been significant delays and what happens with some of the hoops Greg talked about with free riders, etc., is that big industry decides they just don't want to bother with the programs. It's just too much work and so they don't necessarily participate. And so there's lost opportunities created in that process. So as we, and I'm running out of time, to fast forward a little bit but as we look to the future energy efficiency is moving from a sort of siloed resource advocacy program to one that really is thought of as a supply side resource. And so with that comes very different ways of looking at energy efficiency rather than just resource advocacy which is the way a lot of these companies design the programs. Now they have to think about location, time dependent energy efficiency. These are very different skill sets. And so while the businesses, you know, there's probably about 70 really active businesses that do implement energy efficiency programs in California, a lot of them weren't designed to operate in this way. It's a very different business model, solicitation process, financing is required, there are acceptance fees. As you start to look at energy efficiency if it plays out as a real supply side resource, the whole procurement process is significantly different. And these companies are trying to figure out how exactly they're going to play in that arena. Incrementality was another on there I didn't mention, but one of the ideas there that's getting a lot of conversation is if energy efficiency is being funded through utility programs but it's also been out as a supply side resource, how do you decide where the incremental savings are? And those are really important to discern but really challenging as well. So thinking about the future, again, I think energy efficiency has an amazing place to play in the future. But there's going to be different companies that I think are going to surface or a lot of the existing companies are really going to need to look at playing in this market in a very different way. The traditional programs that have been around are still going to be really important, but as Greg pointed out, they're going to have to be much more innovative. They're going to have to be designed differently if we really want to meet the 2030 goals that we're all talking about meeting. Some of the things I'm doing in other places in the country, not necessarily here in California yet, because there is such stall in the new efficiency programs, but looking at full community programs. And so there's a real transition going from the siloed market, we're going to do different programs for each market to thinking holistically. How does the market work anyway? How does energy efficiency play into that market and thinking about aggregating through these broader markets or thinking about approaching there's that overused term that you hear about the customer journey but really energy efficiency is just one stop along the way. Companies are not going to implement energy efficiency just because it's the right thing to do. It needs to be a valued resource to them and we have to integrate that into the way things normally happen in the market. So that is a really big shift that we see talked about. Data analytics is going to be really important. These partnerships that are going to need to come together for the programs of the future I think are going to take real financing companies coming to the table, data analytics coming, and this idea of like efficient or joint ventures I think is going to be critically important for energy efficiency to really be able to be valued and to play in this new arena. So maybe during discussion. Love to talk about that more. So thanks for your time and with that I think Kurt is up next. Thanks for staying late and I'll go through this pretty quickly so we can get to the good stuff. I'm Kurt Schickman. I'm with a group called the Global Cool Cities Alliance. We're a non-profit organization that was founded about six years ago by Art Rosenfeld and our mission really is to work with cities and national governments to promote the use of cool reflective services. So roofs and roads in an urban context to help reduce urban heat island and access urban heat. So this is just some of the cities we work with. We do that through a combination of different methods. We do a lot of peer to peer discussions with cities talking to each other. We do a lot of linking of cities to experts along a wide variety of different disciplines that are affected by heat. That's actually sort of the purpose of my talk today. We do a lot of tool development to help cities develop and implement policies and programs as easily and successfully as possible. Some codes of advocacy and then obviously just general outreach and that sort of thing. And the reason I'm on a panel called Advanced Energy Efficiency talking about a technology that's thousands of years old is that it's a little awkward. But the issue for us is not so much the technology that's advanced. It's really how we have to talk about it. How we have to promote the idea of energy efficiency through a larger set of co-benefits and a conversation about a larger set of urban practitioners' interests. I'll skip this slide and move it along. So when we first started this we really came at this from a building perspective looking at the traditional levers of changing behaviors on the building level. So things like energy codes and green codes. We still do that. And that was partially because we saw this as a major heat as a major energy issue. And this graph is from Washington DC. It just looks at maximum daily temperature against daily load, electricity load. This is DC. I could have showed you a graph from New York, LA, Miami, New Orleans. Any AC dominated city has a graph that looks like this. And basically after about 80 degrees you see an exponential increase in energy demand as people flip their ACs on. Cool rules allow you to save about 20% on average on your cooling energy demand. We see that it actually increases as the temperature goes up. And there's obviously a peak demand reduction benefit there. So that was really our first entree into this. In addition to the global climate benefits which were depending on who you're talking to, the thing you either lead with or sort of keep in the back pocket. Once you kind of extrapolate a little bit further back from the building and start thinking about what happens when you do this on multiple buildings in a community, or you start talking about city scale deployment, you can actually start talking about this in a much more robust way and start getting to benefits and obstacles that are much more important to a city's leadership and much bigger impact on their economy. So this is a similar graph looking at air quality. So again it's maximum daily temperature across the bottom and then ozone concentrations. The red line on the horizontal is EPA compliance levels at that time. You can see 80 degrees pretty much every day in this location. This is actually Baltimore airport but again this graph looks similar in most places we go. Almost every day is a clean air day. It's a in compliance day. But within 10 degrees getting up to 90, almost every day is out of compliance. So all of a sudden you're talking about bad air quality, you're talking about all kinds of ancillary health problems that people have with that, cardiopulmonary renal disease, diabetes that are both related to heat and air quality. So now you're also talking about a social equity problem because the communities that are most affected by higher energy bills and lower air quality and health problems tend to be lower income communities of color. You can start talking about grid resiliency when you're talking about this scale because you can, if you're reducing peak demand during the summer days, you're actually improving the resiliency of the grid. So it's a whole, and then across the string running through all those is it's now an economic question. It's much bigger than just saving energy at a building scale. What we know now based on some studies that recently been published in the journal Nature Climate Change, it's just how big this is when you think of it from a negative side. If we did nothing on heat, by 2100 the average city will be spending 5.6% of their annual economic output, their GDP, dealing with urban heat. And the worst hit cities will be close to 11%. So more than one out of every $10 is sucked out of the economy to deal with this problem if it's not dealt with. So that starts to become something that gets mayoral and council members' attention when you start talking about it. So for us, extrapolating from the building to look at what the opportunities are to impact those sort of community and city level benefits, cool roofs were also a good fit for that. Because once you start thinking about deployment in the sort of 20% range, 20% of your roofs with a cool roof, you're looking at about a half degree reduction in average temperature and about a 1.6 degree reduction in peak temperature. And while that may not sound like much, if you consider that since the industrial revolution we've had a full degree of global change, that's a half degree, it actually starts to sound like a big number. When you consider some of those transition zones on the previous slides in energy and air quality, a little change in temperature at the right sort of ambient-outdoor temperature can be the difference between millions of dollars in live-state. So it sounds small, but it actually makes a big difference. So I guess the question then is, back up again, I guess, this also translates into dollars as you think about the solution. So I talked about the sort of negative, the cudgel of the 5.6% of your GDP going away if you do nothing. What that similar study also found was that if you invest in a modest cool roof and cool pavement program, that's again about that 20% penetration on roofs, about 50% on roads, you actually can every dollar invested in that type of program will return $12. That's huge. So why isn't everyone doing this? Well, so that's where we get into our big challenge, which is this is actually from a study that Greg Katz from the previous, oh, he's in the back here, that we worked on with him looking at DC. And the problem is with heat, we have a situation of the split incentive on steroids. You can see, and besides that it tells you, besides my sort of elementary school level design aesthetic, what this is telling you is, you can make the case to a building owner between the red and the blue bars there. That's the energy savings to the the building owner. So this case can be made, but it won't move the market as fast as the urgency requires. So we have to start looking at how we recognize the benefits in that green bar. That's a full 75% of the benefits sit in that green bar and they're hidden from the building owner. So a lot of what we try to do is help cities quantify what's in that green bar for them in a credible way so that they can take it to their decision makers, the policy makers that are looking at a whole slate of different policies that are important, and figure out either how to internalize that in their policy making through regulation ordinances or shift it to that blue bar through incentives and that sort of thing. So we started to do that with some of our cities in just a few examples if I've got some time, I think I do. Okay. On the sort of incentive side, there have been utility incentives for cool rooms in the past that have not really moved the market very well because they're only focused on energy savings. But in cities where we've seen them adopt incentives like in Toronto and now in Louisville, Kentucky, they're significantly higher in terms of the dollars per square foot that they can offer and they're almost immediately subscribed in both cities. The Toronto program's been around for six years and I think they've oversubscribed in as little as a week in those programs. So we're really seeing that play both on the residential side and the commercial side. Louisville's just started and they were subscribed completely within two weeks. We also have folks that are out there doing more of the regulation and ordinance side of things which if you want to move and transform this market, that's really the best way to do it besides how hard it is to actually get to that point. Because we have roofs that basically turn over 5% to 7% every year not including new buildings but just replacement roofs, you can actually get to a substantial cool roof deployment in terms of building timescale pretty quickly. If you're trying to get to 20%, 5% to 7% a year actually gets you there fairly quickly. So we've seen cities like Los Angeles which is already operating under the pretty good Title 24 cool roof requirements go a step further and add it for residential roofs and then of course Chicago, New York, Paris and other cities have also done this as well. So we're really starting to see that pick up. But one other area of interest that I've seen is outside of this sort of natural sort of building energy policy mechanism, cities that have really picked up and looked at this from a completely different perspective. In New York last week they just announced $106 million investment in their urban heat island mitigation programs. They've been around for a while, they've actually thought they're going to be amping them up to a huge degree. None of the decision making process has been made around energy. It was social equity issues in South Bronx and other communities. It was health opportunities and it was expanding an existing jobs program that's graduating over 100 people a year who weren't employable before but are now working in the city with good jobs. That's what generated $106 million in the venture capital Silicon Valley world. It's maybe not that much but first those of us working in city policy that's a tremendous amount of money. And so those types of programs that are justifying energy efficiency, what are at their core energy efficiency investments through completely different means I think is really critical for us. And so we're really trying to work on how we can get the benefits in the green more recognized by cities and accepted by cities so that we can really move this urban heat island mitigation activity at the rate of urgency that it requires. Thanks very much. I've got one general question that I'm going to pose to the panel and then we're going to open it up for questions if you all don't have questions. I've got many more up my sleeve. But this panel is about innovation and we probably should have given the caveat at the beginning. It's not necessarily innovation in technology for energy efficiency. I mean that's very, very important but we're trying to think about in order to move the needle on energy efficiency which all studies on climate change say we've got to do. How can we think more about innovation in terms of delivery of programs in terms of who's involved, what type of partnerships we have even literally what do we think about when we think about programs and how can we couple it with what Kurt just talked so eloquently about as well maybe it's not just dollars savings. Maybe that's not really going to move the market if we can think about who's interested in these areas like local cities and a broader perspective of interest beyond just sort of our traditional energy savings. So my question to each of you is I've now magically appointed with my magic wand your czar of your particular world and you heard a bit about how constraints are for energy efficiency a lot of it has operated within a very strict regulatory structure because the original concept when we first started it 40 years ago was it would be delivered by utilities because the concept was you would do energy efficiency instead of building power plants and so we still have this construct that developed 40 years ago about sort of it's our utilities our major deliverers of energy efficiency and because a lot of it comes from charges on their customer bills we have to be very very precise about where the money is spent and not waste it which makes sense but it's a very different paradigm for example from what we've done on the renewable side which is we've set a goal of we're going to have 20% an RPS renewable portfolio standard or we're going to have some level of distributed generation and while the payments for that may come through charges on the bill we haven't made it utility centric we've said we want to embrace the private sector and when I say the private sector I do include local government we want to you know have something outside of a monopoly construct so my question to you is okay you have become supreme decision maker in your area unlimited by this sort of 40 year history of very stringent regulatory requirements what do you think are the one maybe two most significant things that you would undertake now that you've got freedom to start to move in a direction you think and how would that change things whoever wants to start first I'll be happy to start that's a that's a fun question so I'll stick with my little world right now which is energy efficiency policy in California so my my wish is to be the czar over at Van Ness and the Callister Street in San Francisco is to go to the CPUC and basically tell them you guys are going to adopt the aggressive scenario for energy efficiency that was laid out in the potential study as a starting point and so that's a that's a pretty tall order for the CPUC to handle I think it could be done in fact we can do this we have proven that we've been able to meet significant challenges in our past in terms of bringing energy efficiency up to a high level of performance and I know we can actually increase it but we're going to have to change policies as I sort of alluded to in my presentation we have barriers in place right now that are very policy centric so as as as the czar I'm going to basically identify several areas where the the PUC could remove barriers and thus in open up the floodgates if you will of more efficiency and it's say that aggressive scenario of 1.2% reduction by 2030 I'd say that that would be our starting point that we should really be targeting a bit of a higher standard that would essentially put us in line to meet our commitments our goals as part of SB 350 so that's my that's my wish great well I have to jump on that I'm very excited about this new world that Greg is creating and from a business perspective one of the things that's been so frustrating is how siloed all the various pots of funding are so as an example when you are on site as a business implementing a program I remember we had a school energy efficiency program we were implementing for example and that was all we could do was focus on the energy efficiency improvements of the school we couldn't look at the water savings with all the urinals and you know so renewables at that time and you know again it had to do with the policies so you know we actually did get a pilot approved once to go out and look at everything together and what a tremendous difference it made not just from the standpoint of the various resources out there but also from the standpoint of the market players there were teachers there were facility managers there were kids that went home to the residents at home and there were barriers to the various services we could provide there was this chance to holistically do it all hit all these markets hit all these resources and the policy barriers and the siloed way that money flows impeded that so I guess my you know being the czar I would love to see barriers removed for us to see what could we really do if we could think about this the way that business looks at challenges without the policy barriers and having been fairly involved in the private equity arena and seeing how that world works over the past five to ten years there is a way to make things happen just different resources different energy comes and people blow goals out of the water like the kind that Greg's talking about so that's my happy moment I guess I would say just in keeping with my kind of basic comments that we need to be better about capturing co-benefits I would probably compel the insurance and reinsurance industries to come to the table to help develop a credible set of ways to measure this because they're the industry in my mind that is a globally available the issues we have in Dar es Salaam and Auckland are going to be the same as we have here in terms of that market and they're the ones that are going to have to accept the way we develop those methodologies and if we're going to find any substantial funding moving into that space or any substantial sort of private sector money moving into that space to support what the governments are doing because that's obviously not always the best most consistent money in the world especially at the city level so that would be my hope and I do appreciate you embracing our new overlords by calling us ours okay so let's open it up to questions just come on up to the mic and I would ask you to give your name if you are with an organization your affiliation hi Jeff Alps I'm with Peninsula Clean Energy where the CCA provider for San Mateo County the most interesting thing one of the most interesting things I've seen recently potential things is pay for performance the pilot programs now that are coming from PGD my question is how much impact do you think that will have on energy efficiency what are the potential challenges of it from an administrative standpoint and can we can we factor social benefits into a pay for performance scheme statewide well so the pay for performance that you're talking about I think are the residential pilots that are out there right now so I did look at that solicitation and you know I also talked with several organizations that looked at that solicitation and honestly and organizations that have the software and the technical tools to deal with it and there they did not even want to play so I you know I that's not much of an answer but my initial reaction is how much is that going to change it I think that there are a lot of barriers and I think it had to do with the way that those RFPs were written as well for companies however it is the knot we have to crack so you know I guess you know again that's not much of an answer but somehow we have to get to the point where we really can show what the savings are out there and we have to be able to compare it to sort of prior and post insulation so Greg one minute before you jump in because I want to hear it but I'm now giving back that magic wand and you do get to design a pay for performance program with Greg's goal of let's think big about what we could accomplish could you do that if you were given I mean in other words can we really design a pay for performance that would work from companies viewpoints who want to be running them and making a return on it and customers viewpoints to get them to participate can it be done well so the term pay for performance also I should just stop by defining that because I think that means a lot of different people. So for example the contracts right now that utilities execute with implementers those are considered pay for performance from the standpoint of you get paid once you deliver energy savings that then go through EM&V process however there's no risk post EM&V to the implementer so there are those kind of pay for performances out there right now and those work quite well I think you can push a lot of risk onto the implementers if you allow them to operate like a real business but one of the things that has happened is that a risky contract like that will be put out and then at the same time they the utilities have tried to treat it like a time of materials they change it they want to see information that in private industry you never would ask to see so if pay for performance is put out there to businesses I think my colleagues at business would say let us compete the way private businesses compete that's one thing but back to this gentleman's question about that particular pay for performance that one was very specific to meter if I have the one you're talking about correct this was specific to you know metered savings and I think there was so much risk put on the implementers for that project it was essentially an experiment and they asked people to bid on it and to carry all the risk for it so that is what I understood about it again I've not been involved day to day but I think that you need to treat it that way invest in it so that like we as a community can figure out we have to practice not but we can't do it by asking to take all the risk I'll just add that I think the biggest issue is that the payment terms are really predicated on measured performance after a period of time and that's a problem for customers because they would have to make the initial investment somebody has to make the investment to put the equipment in and customers aren't going to wait to get any payment or reimbursement for their investments be their incentives so who takes that risk or is that policy reasonable in the current paradigm we have a foundational approach that is essentially saying we deem estimates of savings upfront and the rules should not change as you suggested Lauren over the time frame of that implementation experience if that sort of mindset comes back and we can get greater confidence in our estimated savings upfront that that should be that approach should really help pay for performance take off I think the market will respond and it has in the past yeah set clear consistent rules that's sort of our mantra and then let business play let them come to the table okay any other questions just come right up just identify yourself please yeah Bruce Nagel from Sustainable Silicon Valley and Carbon Free Silicon Valley which is the group that advocated for the CCE in Santa Clara County couple comments first off one is the benefits have got to flow back to the people who paid the bills the things that I saw that were a number of us who were in some of these groups are working to try to figure out how to get heat pumps in heat pumps are the next big thing to in order to be able to move from from gas to electricity we got to stop burning gas so one of the things that we were looking at as a program we haven't found quite the right one yet because the efficiency isn't quite there is something called pay as you say where the payments go right back to the owner now the one that I saw that was workable because the fact that it actually went back to the owner of the business was one that was done in Hayward and it was related to water savings and what they do is they because apartments are done with a central water facility there aren't separate water meters inside of them you know the savings went back to the owner which is great but we also have to figure out how to do it for the people who you know install things for saving electricity in their homes and so we've got to figure that one out the other part that I'm concerned about I'd love to hear maybe not this but at some side discussion about how you guys actually measured the efficiency and how much you actually got for some of these things because the challenges in some cases is the things are not there example in this mild climate you're not going to get a good return on double pane windows you know it'll be 30 years and the only thing that I've heard people say and it's a couple people that said this is the comfort improves you know I don't have these cold spots so we got to figure out how to make those tangible in order to make that work but in a lot of cases you know if we're going to meet the goals we've got to get an awful lot of energy out of this which means I don't know how we're going to make these business these things as efficient as they need to be given that we have a mild climate so I don't know how anybody can answer some of these things but I think at some point we've got to get to we've got this level of efficiency and we know we can actually reduce the the energy load by this amount and Kurt you're the only one to talk numbers okay so I'll leave it at that you want to take a stab first yeah I actually build on Kurt's one of his slides so I take exception I had numbers too but we didn't have the slides up but it you know I think it does go back to are we counting all the benefits of energy efficiency right now in the current policies you know we use what's called a total resource cost test which is really you know not reflective of what we all know is that blue at the green the green bar that you had in your chart so nicely laid out which is there are more benefits out there than just avoiding you know the construction of new power plants there's benefits to society as a result of avoided carbon which you know easily make the argument for measures that would normally not pass the economic screen like double pane windows like even wall insulation other measures that were on the margins that when we tested it out using a carbon adder $250 a ton in our models which is what is being discussed as the as sort of that representative value for carbon it really changed the landscape for a lot of energy efficiency and that's where I think we need to go policy wise and say you know we've got to change the the calculation the viewpoint of what constitutes benefits. Did either of you want to add anything? No that was great. Yeah I liked the green too I guess just my one comment about the customers contributing is that I think if we were able to implement these programs customers would pay for a lot of these things so you can invest in an overall project customers would put more money towards it I think if we designed them differently because there is value but they shouldn't necessarily go into the energy efficiency funding We may have to take that discussion offline since we're not doing the solar financing Hi I'm Yamarnath from EPRI. Let me ask two very separate questions. The first question is any comments from the panelists on pricing real time pricing and effects of that on energy efficiency question one. The second question is something very different that I've been hearing more lately and that is somebody mentioned this water efficiency you know related to water and energy efficiency what is called as the water energy nexus and the startling information that I've heard is that these are coming from the water agencies in the country saying that if we were to save water that is currently being discarded or wasted the amount of energy that would save that that saving of water would save is more than the energy efficiency programs in the country the 8 billion dollars that you're talking about so that's a very startling statement but I wonder if anybody wanted to comment on that the water energy nexus and the real time pricing I could do a quick comment on the water efficiency because I worked in water efficiency programs for quite a while and I have to say that it currently there are tremendous barriers to integrating water efficiency in many cases they're still not even fully metered as you might know and if you look at that industry what I found is it was you know about like the energy efficiency industry a decade or two ago that is a broad statement that's not 100% true but I think there is so so much potential there and I think we can apply so many lessons learned from this industry and I think it is a huge opportunity and I don't see a lot of real solutions coming so I would put that on the we need another czar for that one next year we'll be back with saws Ami I'll reply to the pricing questions that's a topic that's near and dear to my heart is you know right now we don't have good price signals that are being sent to customers we're not necessarily sending the signal to essentially be efficient and so you know the move toward real-time pricing or even I mean let's just go basic here let's talk about time of use you know if we actually got a default time of use tariff in place here in the state which is I know we're trending toward but there's going to be a lot of customer pushback but if we did that we would see a lot of energy savings right off the bat because of behavior change we tried to model some of that in our study but you know we still live in these little silos so energy efficiency proceeding is supposed to look at energy efficiency measures which now include behavior to arguably price response could fit into that but technically speaking price response goes into another proceeding at the CPUC which has demand response so if I were to put my czar hat back on I probably would say we need to look at a broad comprehensive overview that you know it encompasses energy efficiency encompasses a broad array of options including price reform tariff reform real-time pricing using these meters these smart meters that we have in place you know eight million or whatever however many we have in California that we spend a lot of money on use that functionality of those meters to set the right price and send the right price signals to encourage conservation. I have in my program that we're supposed to end at 340 which was two minutes ago nobody has stopped us but in consideration of people having time before the main next and last big session which we'll start up for I think we're going to have to wrap it up so please join me in thanking our panelists.