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Sempra seeks to block shift from gas appliances

Electric heat pump is more efficient that even a tankless gas heater

Environmental activists at the Sierra Club and elsewhere say an outdated rule from the California Public Utilities Commission is preventing consumers from accessing incentive funds to replace old gas appliances with newer, more efficient electric models. They're petitioning for a change in the guidelines, but San Diego-based Sempra Energy, parent of San Diego Gas & Electric and SoCalGas, which supplies natural gas service (but not electricity) to a large swath of Southern California, is leading the opposition.

"The issue is that, say you have a natural gas water heater in your home and you want to get a more efficient heater when your existing one dies," the Sierra Club's Rachel Golden explained. "You want to get the most efficient one, which would be an electric heat pump that's much more efficient than a gas tankless or any other type of gas product on the market. Even though it's more efficient, you can't get an incentive for that.

"Right now the Home Energy Upgrade program is pretty outdated, and it's not allowing for fuel switching, so we're trying to update the policy to help California achieve its climate and air quality goals," she continues. "The 1990s were when the public utilities commission really formed their energy efficiency policies. Back then, they were concerned about "fuel wars" between [So Cal Edison, an independent supplier of electricity] and SoCalGas – that the utilities would use energy efficiency incentive funds to poach customers from one another. So they created a policy called the three-prong fuel substitution test, which makes it very difficult, basically impossible, to use efficiency funds for any upgrades that involve fuel switching.

"Maybe that made sense in the nineties, but fast forward to today when the electric grid is a lot different — it's not based on coal, and we're phasing out of gas use. And we have incredibly efficient electric technology like those heat pumps that weren't around back then."

According to Energy Upgrade California's website, owners of homes built prior to 2001 can qualify for up to $5500 in rebates on efficiency upgrades — the average rebate is about $2300, or 15 percent of the cost of improvements which can include things like insulation and duct replacement in addition to appliance replacement.

Last month the Sierra Club, in partnership with the Natural Resources Defense Council and the California Energy Efficiency Industry Council, submitted their request to consider changes to the substitution test. So Cal Edison and Pacific Gas & Electric, which provides both gas and electric service to a bulk of Northern California, also offered support for the change.

"San Diego Gas & Electric has remained silent — Sempra's their parent company – and So Cal Gas has come out in opposition, saying we shouldn't change the test," Golden continued. "I'm not sure how SDG&E feels internally, but externally they're certainly not supporting any changes to the test."

Sempra's SoCalGas responded with an opposition statement that Golden described as "very antagonistic and aggressive."

The utility's position is that while potentially more efficient, electrifying formerly gas-fueled devices is neither cost effective nor necessary to meet climate goals as currently laid out by the state legislature.

After SoCalGas mounted an opposition to the change, supporters started to fall away. The Industry Council has since withdrawn its support for review of the three-prong test.

"They're going after potential supporters and trying to intimidate or weaken supporters of policy change," Golden says.

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Environmental activists at the Sierra Club and elsewhere say an outdated rule from the California Public Utilities Commission is preventing consumers from accessing incentive funds to replace old gas appliances with newer, more efficient electric models. They're petitioning for a change in the guidelines, but San Diego-based Sempra Energy, parent of San Diego Gas & Electric and SoCalGas, which supplies natural gas service (but not electricity) to a large swath of Southern California, is leading the opposition.

"The issue is that, say you have a natural gas water heater in your home and you want to get a more efficient heater when your existing one dies," the Sierra Club's Rachel Golden explained. "You want to get the most efficient one, which would be an electric heat pump that's much more efficient than a gas tankless or any other type of gas product on the market. Even though it's more efficient, you can't get an incentive for that.

"Right now the Home Energy Upgrade program is pretty outdated, and it's not allowing for fuel switching, so we're trying to update the policy to help California achieve its climate and air quality goals," she continues. "The 1990s were when the public utilities commission really formed their energy efficiency policies. Back then, they were concerned about "fuel wars" between [So Cal Edison, an independent supplier of electricity] and SoCalGas – that the utilities would use energy efficiency incentive funds to poach customers from one another. So they created a policy called the three-prong fuel substitution test, which makes it very difficult, basically impossible, to use efficiency funds for any upgrades that involve fuel switching.

"Maybe that made sense in the nineties, but fast forward to today when the electric grid is a lot different — it's not based on coal, and we're phasing out of gas use. And we have incredibly efficient electric technology like those heat pumps that weren't around back then."

According to Energy Upgrade California's website, owners of homes built prior to 2001 can qualify for up to $5500 in rebates on efficiency upgrades — the average rebate is about $2300, or 15 percent of the cost of improvements which can include things like insulation and duct replacement in addition to appliance replacement.

Last month the Sierra Club, in partnership with the Natural Resources Defense Council and the California Energy Efficiency Industry Council, submitted their request to consider changes to the substitution test. So Cal Edison and Pacific Gas & Electric, which provides both gas and electric service to a bulk of Northern California, also offered support for the change.

"San Diego Gas & Electric has remained silent — Sempra's their parent company – and So Cal Gas has come out in opposition, saying we shouldn't change the test," Golden continued. "I'm not sure how SDG&E feels internally, but externally they're certainly not supporting any changes to the test."

Sempra's SoCalGas responded with an opposition statement that Golden described as "very antagonistic and aggressive."

The utility's position is that while potentially more efficient, electrifying formerly gas-fueled devices is neither cost effective nor necessary to meet climate goals as currently laid out by the state legislature.

After SoCalGas mounted an opposition to the change, supporters started to fall away. The Industry Council has since withdrawn its support for review of the three-prong test.

"They're going after potential supporters and trying to intimidate or weaken supporters of policy change," Golden says.

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Comments
2

If SDG&E wants to block me from personal choice of appliances it makes me want to switch from those gas appliances to electric even more! Makes sense for me with my Solar Panels. AND BEWARE of the 6/30/17 letter sent out to existing solar power owners! Those weasels were trying to force me with a misleading letter to switch from my Daily Rate to Time of Use.

July 30, 2017

You have the choice just not the access to the Home Energy Upgrade funds. Even the funds at 15% of cost of upgrades will keep most people from getting any energy upgrades.

July 31, 2017

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4S Ranch Allied Gardens Alpine Baja Balboa Park Bankers Hill Barrio Logan Bay Ho Bay Park Black Mountain Ranch Blossom Valley Bonita Bonsall Borrego Springs Boulevard Campo Cardiff-by-the-Sea Carlsbad Carmel Mountain Carmel Valley Chollas View Chula Vista City College City Heights Clairemont College Area Coronado CSU San Marcos Cuyamaca College Del Cerro Del Mar Descanso Downtown San Diego Eastlake East Village El Cajon Emerald Hills Encanto Encinitas Escondido Fallbrook Fletcher Hills Golden Hill Grant Hill Grantville Grossmont College Guatay Harbor Island Hillcrest Imperial Beach Imperial Valley Jacumba Jamacha-Lomita Jamul Julian Kearny Mesa Kensington La Jolla Lakeside La Mesa Lemon Grove Leucadia Liberty Station Lincoln Acres Lincoln Park Linda Vista Little Italy Logan Heights Mesa College Midway District MiraCosta College Miramar Miramar College Mira Mesa Mission Beach Mission Hills Mission Valley Mountain View Mount Hope Mount Laguna National City Nestor Normal Heights North Park Oak Park Ocean Beach Oceanside Old Town Otay Mesa Pacific Beach Pala Palomar College Palomar Mountain Paradise Hills Pauma Valley Pine Valley Point Loma Point Loma Nazarene Potrero Poway Rainbow Ramona Rancho Bernardo Rancho Penasquitos Rancho San Diego Rancho Santa Fe Rolando San Carlos San Marcos San Onofre Santa Ysabel Santee San Ysidro Scripps Ranch SDSU Serra Mesa Shelltown Shelter Island Sherman Heights Skyline Solana Beach Sorrento Valley Southcrest South Park Southwestern College Spring Valley Stockton Talmadge Temecula Tierrasanta Tijuana UCSD University City University Heights USD Valencia Park Valley Center Vista Warner Springs
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