13. Workforce Education and Training
The Strategic Plan calls for a Workforce Education and Training Needs Assessment (Needs Assessment) as a first step toward the plan's ultimate goal of "developing the human capital necessary to achieve California's energy efficiency and demand-side management potential."371 In D.09-09-047, the Commission approved funding to complete the Needs Assessment and ordered the utilities to propose adjustments to the statewide Workforce Education and Training program that address the recommendations in the report.372 In March 2011, the Don Vial Labor Center at the University of California at Berkeley completed an in-depth study of clean energy workforce training needs for California.373
Because the study focused on the state of California's workforce needs, it was oriented towards achieving both the state's clean energy goals and improving job opportunities. With these dual goals in mind, the study promotes a "high-road" economic development approach, which "consists of a market environment that favors business strategies built on quality work and innovation, resulting from investments in a workforce that is both highly skilled and rewarded for those skills."374 The study found that public resources should only be allocated to job training programs when there is a documented need for training. If there is a choice, public funds should be allocated to job creation strategies rather than training strategies when there are limited job prospects due to the substantial number of experienced, unemployed workers.375
In furtherance of this "high-road" vision, the study made recommendations with implications for the Commission, the California Energy Commission, utilities, and the broader universe of workforce development policy-makers, funders and practitioners. A key recommendation is to pursue "sector strategies," which are training initiatives built on partnerships among business, labor, post-secondary education institutions (including apprenticeships), and other stakeholders. Sector strategies involve intermediaries that organize multiple employers in a specific sector for the purposes of planning and executing training initiatives based on employers' commitments to consider hiring training program graduates and/or train incumbent workers.376
The recommendations addressed in this decision are:377
· Support "sector strategies." Initiate, help fund, and partner with other organizations to develop robust "sector strategies" in key energy efficiency sectors.378
· Collaborations. Expand collaborations between the utilities' Energy Training Centers and high-road associations demonstrating commitment to investments in ongoing workforce training, such as participating in apprenticeship programs.379
· Incentive programs. Require contractors who participate in energy efficiency rebate and incentive programs to have third-party certifications, licenses, building permits, and/or meet other relevant standards and certifications.380
Pursuant to D.09-09-047, the IOUs submitted a joint advice letter responding to the Needs Assessment.381 The advice letter established a process and timeline to develop and implement a workforce "sector strategy" approach in 2012, with a goal to identify specific activities and partnerships for implementation in 2013-2014. We acknowledge the utilities' current efforts to pursue these "sector strategy" approaches via their existing Centergies, Connections, and WE&T Strategic Planning programs and provide additional guidance herein to address parties' input on workforce issues.
13.1. Positions of Parties
Greenlining, Ella Baker Center for Human Rights, and NRDC support inclusion of workforce strategies that promote a high-road approach to training and energy program requirements. These parties emphasize the importance of apprenticeships and pre-apprenticeship partnerships as a model for long-term career pathways that lead to more energy efficiency via quality installations, better job placement, and higher wages.382 Greenlining contends that this will ensure ratepayer-funded programs achieve the greatest energy efficiency return on ratepayer investments.383 CILMT supports implementation of the sector strategies approach set forth in the utilities' joint advice letter.384 Greenlining and CILMT point out the importance of continued efforts during the 2013-2014 transition period to support the Needs Assessment recommendations.
CILMT urges the Commission to "support the replication of existing programs for early workforce planning such as the CALCTP to support transitioning of emerging technologies into the market" and highlights the California Advanced Lighting Controls Training Partnership (CALCTP) as a good example of an existing workforce program.385 Greenlining and CILMT also identify the HVAC sector as an area needing targeted training strategies to improve quality installations in both the residential and commercial sectors that promote high-road quality installation.386 JCEEP argues that, for various market-driven reasons (e.g., access to capital,), program mandates for high-quality installation standards are more likely to be cost-effective when located in the commercial and industrial sectors rather than the residential sector.387
With regard to utility incentive program requirements, Greenlining supports skill standards and certifications for ratepayer-funded technologies and energy efficiency measures, since quality installations are viewed as key to reaching energy efficiency goals, fewer power plants, and quality jobs.388 CILMT claims that development of guidelines for skill standards and certification will help identify appropriate workforce education and training investments minimizing the development of training programs of varying standards, inefficient duplication, and lack of coordinated training efforts.389
13.2. Discussion
The Needs Assessment provides a comprehensive set of recommendations for the state of California to grow and sustain a clean energy workforce capable of meeting the Strategic Plan goals. The "high-road" vision promoted in the study will require coordinated efforts by multiple stakeholders, including state and local agencies, utilities, educational institutions, labor organizations - each according to their individual roles and capabilities.
In broad terms, we see two roles utility programs can play in carrying out the high road vision: (1) "supply-push" strategies, such as training and certification programs, which produce the high-road workforce needed to meet our clean energy goals; and (2) "demand-pull" strategies, such as skills standards and certification requirements for utility incentive programs, which create demand for and sustain high-road jobs and companies. The utilities are actively involved in "supply-push" strategies through their workforce education and training programs. More recently, the IOUs have begun requiring contractors participating in programs such as HVAC quality installation and maintenance and Energy Upgrade California to receive certain training. New legislation should help to create more demand for high-road services, particularly in the HVAC sector. SB 454 (Pavley, 2011) requires recipients of utility incentive dollars to warrant that they have complied with building permit requirements and utilized licensed contractors. While we expect the "sector strategies" advice letter process to provide a comprehensive assessment of appropriate "supply-push" and "demand-pull" strategies to implement through utility programs, we take decisive action herein to direct specific initiatives on both fronts.
The Needs Assessment cites CALCTP as a highly acclaimed example of a sector strategy.390 The utilities have accumulated some experience with the sector strategy approach through their participation in the CALCTP initiative. SCE provided seed funding to develop the training curriculum and offer training courses. The other IOUs have contributed funding as well. Through a partnership between SCE, labor unions, educational institutions, and others, CALCTP developed a certification - "CALCTP-certified" - and a training curriculum to ensure quality work and maximize energy savings when installing advanced lighting controls.
We agree with party comments and the recommendation of the Needs Assessment that the CALCTP program should be continued. We direct the utilities to propose continued support of this sector strategy in the 2013-2014 transition period. Accordingly, the utilities shall submit, as part of their 2013-2014 applications, a plan to continue support for CALCTP as a defined sector strategy. When developing this plan, the utilities should explore partnership opportunities resulting in shared resources and/or co-funding and describe these arrangements in their program implementation plan as it applies to CALCTP program. To ensure program continuity, the IOUs should address any potential funding shortfalls that may adversely impact the CALCTP's viability during 2012 according to the fund-shifting rules clarified in the December 22, 2011 Assigned Commissioner Ruling.
The Needs Assessment identified an abundance of poor quality HVAC installations, particularly in the residential sector. The Needs Assessment attributes this to high turn-over due to low pay and lack of training and experience among industry workers. As a result, 30 - 50% of new HVAC systems and 85% of replacement systems are installed incorrectly.391 Therefore, the Needs Assessment specifically identifies the HVAC sector as needing a sector initiative similar to that pursued for CALCTP:392
The HVAC sector is the single largest contributor to peak load demand, with residential and small commercial HVAC comprising up to 30 percent of peak load demand in summer months. The Strategic Plan targets a 50 percent improvement in efficiency in the HVAC sector by 2020, and a 75 percent improvement by 2030. The statewide IOU budget for the HVAC sector in 2010−2012 is approximately $127 million.393
With such a large emphasis on HVAC for meeting the State's energy goals, we recognize the potential benefits of a sector strategy approach for HVAC.
We agree the HVAC market is a prime target for testing the expansion of a sector strategies approach to a larger and more complex market (than, for example, the advanced lighting controls market addressed by CALCTP). However, we acknowledge that unforeseen challenges may arise in applying this approach to HVAC. Therefore, we agree with JCEEP that it is reasonable to pursue high-road strategies in the non-residential markets first, before embarking on the tougher challenges of transforming the residential market with this method.
The utilities shall submit in their 2013-2014 applications a plan to test the sector strategy approach for HVAC, beginning with the non-residential sectors. Toward this end, the IOUs should develop a HVAC sector strategy pilot in concert with the statewide HVAC Commercial Quality Installation program. We expect it will be necessary to work with the industry to develop and establish contractor accreditation and technician certifications, which could be based on mandatory or voluntary incentive-based skills standards. Development of this sector strategy plan should commence during 2012 as part of the aforementioned advice letter process. Further, we encourage the utilities to coordinate their mainstream energy efficiency sector strategies development with the Energy Services Assistance Program in order to develop data and knowledge regarding how increased training and skill standards may impact quality installations, customer participation and program budgets across similar programs.
Pursuant to D.09-09-047, the IOUs' workforce education and training program plans should address any applicable Needs Assessment recommendations not discussed herein. The utilities shall explore partnership opportunities resulting in shared resources and/or co-funding and describe these arrangements in their program implementation plan. The utilities shall include a list of workforce training courses and programs they propose to offer in the 2013-2014 program period using the template provided in Appendix C of this decision. In order to support coordination between energy efficiency core programs and Energy Savings Assistance Program training efforts, the utilities shall include training programs related to Energy Savings Assistance Program when populating this table.
The utilities should submit proposed budgets in their 2013-2014 applications that are commensurate with statewide workforce education and training program goals and objectives.
The utilities are directed to work with Commission Staff on the workforce education and training taskforce to develop a data request template to be submitted by Staff as needed for periodic updates on the status of the utility's Sector Strategy activities. In their applications, the IOUs shall indicate how they currently address safety concerns regarding energy efficiency installations (e.g., lead paint and asbestos removal and natural gas combustion safety) through training, education, certification, participating contractor requirements, or other appropriate measures, and how they plan to address these issues in 2013-2014. The IOUs should also provide data to characterize the current state of installation contractor safety qualifications associated with their energy efficiency programs. Lastly, the utilities shall include additional information related to their 2013-2014 WE&T program plans in response to an upcoming Staff guidance transmittal to the service list discussed in the "Next Steps and the Process for 2013-2014 Utility Portfolio Applications and Review" section of this decision.
In Greenlining et. al.'s comments on the proposed decision surrounding the guidance on workforce, education, and training, they raised questions concerning the requirements, such as criminal background checks, that utilities may impose on contractors participating in their programs that conduct work within and surrounding customer premises. These are issues common across all of the Commission's demand-side programs, not specific to energy efficiency program guidance. In addition, there was no record in this proceeding developed that would allow us to give additional guidance on these issues at this time. However, these are important questions and we will consider addressing these issues across all the demand-side programs we supervise in an appropriate venue in the future.
We acknowledge the potential need to mandate skill standards and certifications for specific energy efficiency measures or services offered through utility programs. However, at this time we find that there is insufficient evidence to make this determination at this time. While high-level market research cited in the Strategic Plan and the Needs Assessment indicates significant savings potential from quality installation, additional comparative information on the specific effects of increasing standards for energy efficiency programs should be gathered and assessed before adopting these recommendations on a broad scale. Specifically, questions remain regarding the potential impacts on customer costs and benefits of requiring high-road skill standards, and the potential impacts on program participation rates as a result of costs, benefits, or other factors. There is also a lack of information on how such impacts compare with the potential benefits of increased energy savings, lower costs over the lifecycle of the equipment, and the creation of higher quality jobs. Therefore, we direct the utilities to include in their applications the following information regarding HVAC quality installation, CALCTP-certified installations, and any other sector strategy-induced skill standards identified by then: (1) data or estimation of the incremental customer cost, if any, of requiring skill standards; (2) data or estimation of the average and range of permitting/compliance costs across permitting jurisdictions in the IOUs' service territories; (3) data or estimation of impacts, if any, mandatory skill standards would have on program participation rates; (4) data or estimates of the incremental energy savings and customer cost savings over the life of the equipment; and (5) any other potential benefits associated with higher standards, such as fewer call-backs, lower frequency of customers over-riding control systems, lower life-cycle costs, and increased consumer uptake of measures based on higher quality and certainty. We encourage other parties to present this information, as well, in their testimony in the application proceeding, so that the Commission may more thoroughly consider this issue. In the CALCTP and HVAC pilot initiatives addressed herein, we expect the utilities to explore and, if appropriate, pilot mandatory and/or voluntary incentive-based approaches to promote high-road skill standards through utility programs in the 2013-2014 program period.
371 Strategic Plan at 70-71.
372 D.09-09-047 at 220-221.
373 Available at: http://www.irle.berkeley.edu/vial/publications/WE&T_Part1.pdf.
374 Needs Assessment at vii.
375 Needs Assessment at 292.
376 Needs Assessment at xvi.
377 As discussed further below, the utilities are addressing the full range of recommendations directed at their Workforce Education and Training programs in the process for program adjustments set forth in joint advice letter SDG&E 2260-E-B/2041-G-B, approved October 28, 2011.
378 Needs Assessment at xxvii.
379 Id.
380 Needs Assessment at xxv.
381 SDG&E 2260-E-B/2041-G-B, SoCalGas 4249-B, SCE 2588-E, and PG&E 3212-G-B/3852-E-B, filed October 24, 2011, and approved by Commission Staff on October 28, 2011.
382 Greenling, Ella Baker Center, and NRDC Comments on Programmatic Guidance Ruling (December 23, 2011).
383 Greenlining Comments on Programmatic Guidance Ruling at 6.
384 CILMT Comments on Programmatic Guidance Ruling at 14.
385 CALCTP is a statewide initiative aimed at increasing the use of lighting controls in commercial buildings and industrial facilities through education, training, and certification of licensed electrical contractors, and state certified general electricians in the proper design, installation and commissioning of advanced lighting control systems. The program was initially funded by SCE, U.S. Department of Labor, CEC American Recovery and Reinvestment Act funds, and other partners. More information is available at http://www.calctp.org.
386 CILMT Comments on Programmatic Guidance Ruling at 12; and Greenlining Comments on Programmatic Guidance Ruling at 2- 3.
387 JCEEP Comments on Phase IV Scoping Memo at 2.
388 Greenlining Comments on Programmatic Guidance Ruling at 5.
389 CILMT Comments on Programmatic Guidance Ruling (December 23, 2011), at 11.
390 Needs Assessment at 116-117 and 195-196.
391 Needs Assessment at xiv.
392 Ibid. at 117.
393 Ibid. at xiii.
