9. Lighting Programs
9.1. Introduction
CFLs are currently the mainstay of the LIEE lighting program; all of the large electric IOUs include CFLs as part of their standard treatment of an LIEE-enrolled home. Indeed, they collectively plan to install over three million bulbs over the period 2009-11.
We have expressed concern about the extent to which IOU energy efficiency programs rely heavily on light bulbs to meet energy savings and cost effectiveness requirements.65 However, close examination of the IOU 2009-11 LIEE application cycle reveals that CFLs continue to provide low income customers the opportunity for significant energy savings in a cost effective manner. The reason is obvious: CFLs are relatively inexpensive, all low income households use and need lighting, and we can still capture major energy savings by switching low income customers from high energy use incandescent bulbs to CFLs.
There is a second reason why we should continue to allow the IOUs to offer large numbers of CFLs to low income households in this three-year budget cycle. Significant state and federal legislation66 will mandate energy efficient and non-toxic lighting fixtures starting in 2011, as we discuss in detail below. We need to prepare low income customers to meet these mandates by installing CFLs now so that customers are familiar with new kinds of lighting when such lighting becomes mandatory. We cannot expect our low income customers to make an easy switch to energy efficient lighting if we do not prepare them in advance. However, we are not convinced the LIEE program should subsidize CFLs to the low income community beyond 2011.
Further, while we allow the IOUs to continue their CFL LIEE programs for the 2009-11 cycle to facilitate transition to new legislative requirements, we do so with six provisos. First, we will require the IOUs (or their agents) to install the CFLs. While this step may seem superfluous and costly, the KEMA Report tells us that 20%-30% of customers who receive the bulbs do not install them.67 SCE also cites an APPRISE study that states that uninstalled CFLs amount to approximately 30%.68 A customer will not capture energy and bill savings until someone installs the measure. Second, the IOUs shall include information with CFLs explaining how to dispose of them safely, as the new legislation requires safe disposal. Third, today's decision does not establish any presumption for ratepayer CFL funding in the pending general Energy Efficiency applications. Fourth, we will be giving direction in the general Energy Efficiency application docket on lighting programs for the 2009-2011 cycle. We direct the IOUs low income program managers to participate in that effort to ensure the general and low income lighting programs are coordinated - even if different strategies are used - during the 2009-2011 period.
Fifth, we set a $6.90 per installed bulb cost that is the same across IOUs, although IOUs shall install bulbs at a lower cost if they can negotiate the costs downward. Data we received from the IOUs69 shows that the three electric utilities (SDG&E, PG&E and SCE) have very different per installed bulb costs, with almost a $5 per bulb difference. PG&E's cost is the highest at $11.82 per installed bulb. The $6.90 bulb cost includes approximately $1.90 for the bulb itself; the rest is overhead (transportation, warehousing and installation). To the extent it reduces bulb costs, the IOUs should be procuring lightbulbs jointly, through bulk purchasing agreements or other arrangements designed to achieve the lowest possible per-bulb costs.
Sixth, we are concerned that there may be a worldwide shortage of CFLs as demand for them increases in developing nations (particularly China, where CFLs are manufactured). The IOUs shall begin monitoring this situation given the millions of bulbs they install as part of the Energy Efficiency and LIEE programs, and begin contingency planning if shortages or bulb price increases appear possible.
9.2. Parties' Positions
In considering Assembly Bill (AB) 1109 (Ch. 534, 2007) and general lighting strategy for LIEE during the 2009-2011 budget cycle, the parties set forth the following positions:
Since AB 1109 will not ban the sale of incandescent bulbs during the 2009-11 program period, PG&E believes that its LIEE program should continue to distribute CFLs at least through 2011. PG&E argues that CFLs provide cost effective energy savings, and as long as less expensive incandescent choices are widely available, low income customers will continue to purchase and use these less energy efficient measures. Furthermore, PG&E believes that if IOUs provide education about the energy efficiency benefits of CFLs before the new laws take effect, customers will be more aware of available options and ready to make the transition when incandescent bulbs disappear from store shelves.
SCE proposes to continue distribution and promotion of standard CFLs throughout the 2009-11 period. SCE believes continued delivery and installation of CFLs is an effective way of increasing the use of CFL technology in low income communities while achieving significant electric energy savings. In addition, SCE claims promotion of CFLs will enhance public awareness of this new technology and help ease the transition when incandescent bulbs are no longer available.
SCE believes it is unclear when the Legislature will adopt policies that promote the safe disposal of CFLs. Therefore, SCE plans in 2009-11 to inform LIEE customers about the proper disposal of CFLs throughout many disposal sites across Southern California and to include information on disposal in its home energy education program and other CFL promotions.
SDG&E believes that since incandescent lights will be available through 2011, AB 1109 should not change SDG&E's 2009-11 LIEE program. SDG&E claims it is premature at this time to try and develop a strategy to inform and educate customers on the changes the laws will bring. SDG&E proposes trialing light emitting diode (LED) nightlights, which costs pennies per bulb per year.
DRA states in its August 1, 2008 brief that low income households still need the savings generated from exchanging incandescent bulbs with CFLs. DRA notes that across all low income households, just over one third (35%) already use CFLs and about 8% use CFL porch lights. According to DRA, most low income households that already have CFLs have between one and four of them, while only 9% of all low income households have five or more. Although CFLs provide some of the shortest-term savings, removing CFLs as a LIEE measure would save only a small fraction of overall costs. For this reason, DRA supports permitting contractors to install CFLs as proposed by the utilities. DRA also recommends that IOUs leverage with other programs to educate low income customers on proper disposal of CFLs.
DRA opposes SCE's proposal to hand out CFLs without installing them. (SCE proposes to deliver but not install CFLs to 13,000 customers each year.)
A W.I.S.H. believes that CFLs alone will not carry the day, and that enduring measures are needed. A W.I.S.H. urges the Commission to reject the concept that small users such as senior households or the disabled should receive only CFLs or energy education rather than enduring and comprehensive measures.
9.3. Discussion
Energy efficient lighting is currently undergoing a major shift towards newer, more efficient bulb technologies running the gamut from outdoor lights to bulbs used inside appliances like refrigerators and ovens. As we collectively move away from the common incandescent bulbs we find on store shelves today, there will not be a "one bulb" solution that takes their place. Instead, we anticipate that customers will be offered with a selection of new lighting technologies.
For the 2009-11 LIEE budget cycle, the utilities' programs may continue to install CFLs as part of their standard measures, because they still have potential for cost effective energy savings in low income households, when installed. The table below, provided in the KEMA Report,70 shows that installed CFLs continue to be beneficial to a substantial portion of the low income population71:
Number of CFLs Needed |
Percent of All Low Income Households1 |
0 |
17% |
1 |
4% |
2 |
6% |
3 |
9% |
4 |
64% |
1Sample Size: n=1,531 | |
However, the high performance lighting market is no longer focused solely on CFLs; rather, the shift is to performance based, technology-neutral standards based on lumens per watt (brightness per watt of electricity used). The Commission advises the utilities to pay close attention to these developments over the next few years and to institute new lighting technologies and approaches into their LIEE portfolios no later than 2012.
Further, a decision on lighting in the broader Energy Efficiency proceeding may impact the LIEE program. Should the Commission in its general Energy Efficiency decision expected in 2009 develop a major shift in lighting policy for the state, the IOUs' may need to readjust their lighting portfolios midcourse to reflect these changes.
A major prerequisite to increased energy efficiency in both California and the United States involves research, development, and deployment of energy efficient lighting. Last year, in the Energy Independence and Security Act of 2007 (EISA 2007),72 the federal government set energy efficiency standards for general purpose lighting. Its modified standards for lighting efficiency are set to begin phase-in from 2012-14 (Tier 1), with a second round of updated standards to begin phase-in from 2018-20 (Tier 2).
In 2007, California adopted its own standard for general purpose lighting in Assembly Bill (AB) 1109 (Huffman). The law requires the California Energy Commission (CEC) to adopt regulations (in combination with other programs and activities affecting lighting use) that will reduce the average indoor residential lighting consumption by 50% and average indoor commercial and outdoor lighting levels by 25% relative to 2007 levels, by 2018. New energy efficiency standards for CFLs and other types of general purpose lighting in California are to be developed by CEC by December 31, 2008, and to come into full affect by January 1, 2011.
AB 1109 updates California Health and Safety Code § 25210.11(a) and requires the Department of Toxic Substances Control (DTSC), in cooperation with the California Integrated Waste Management Board (CIWMB), to develop the following:
(1) The most effective, cost efficient, and convenient method for the consumer to provide for the proper collection and recycling of any end-of-life general purpose lights generated in this state.
(2) Methods to educate consumers about the proper management and collection opportunities for end-of-life general purpose lights.
(3) Designations on the general purpose light and light packaging regarding the proper recycling of the light and compliance of the light with this article.
AB 1109 also requires that general purpose lights meet specific standards for hazardous materials (particularly mercury) and that the CIWMB consider methods for the safe disposal of general purpose lights. Recommendations for the collection and recycling plan of CFLs, through a task force convened by DTSC and the CIWMB, were filed on September 1, 2008.
The IOUs 2009-11 IOU budget applications generally assume that the energy efficiency, toxicity, and recycling/collection requirements for lighting under the new state and federal laws are still undecided and have little or no impact on the 2009-11 cycle. This assumption is erroneous. While the CEC, DTSC and CIWMB must still resolve the finer details of AB 1109, we already know the key dates for implementation. The new law will drastically alter the marketplace for lighting, and it is imperative that we and the IOUs begin to prepare customers for the transition. Given the timelines in the legislation, such preparation must begin now.
In D.07-12-051, we directed the utilities to provide information in their 2009-11 budget applications about how they plan to implement the changes proposed by AB 1109. We set forth their positions73 and other parties' responses below. There is much to be done in the next three years to prepare for the significant changes that take effect on January 1, 2012. The IOUs must now begin to ready themselves - and especially the low income customers they serve - for the many changes to come.
The IOUs should be aware of the following upcoming dates, and be prepared to comply with the requirements put in place thereafter:
· September 1, 2008 - Recycling/collection plan for CFLs developed by DTSC/CIWMB;
· December 31, 2008 - CEC to release efficiency standards for general purpose lighting in California; and
· January 1, 2010 - All models of CFLs used shall comply with Europe RoHS74 standards on toxicity (including mercury);
· December 31, 2010 - All models of CFLs used shall comply with CEC standards.
As new technologies in lighting come into play between 2009 and 2011, the IOUs shall both adhere to the new legal standards and, more importantly, modify lighting measures and program strategies, as needed. They shall report in their annual reports how they are prepared to meet the new legal requirements and changing markets.
The utilities' budget applications displayed a large discrepancy in the cost per bulb from 2009-11 as well as the percentage increase in the cost per CFL bulb between the 2007-2008 program and the new 2009-11 program. The figures they initially submitted display this difference.
The IOUs updated their numbers slightly in September 2008. SCE and SDG&E submitted certain its numbers under seal, while PG&E submitted all of its numbers publicly. We know from the public numbers that SCE spends $5.00 per bulb on overhead/warehousing/installation/transportation, and that PG&E spends $1.92 per bulb, which we round to $1.90 for ease of application. This combined figure results in $6.90 per bulb, the lowest figure supported by the data.
We approve a budget of $1.90 per bulb for each IOU. We also deny all requests for overhead/warehousing/installation/transportation for each bulb is more than $5.00. Thus, we approve budgets of $6.90 per bulb (installed) for each IOU. We order the IOUs immediately to coordinate their lightbulb purchasing (through bulk purchases or other similar low cost arrangements), warehousing and transportation so that all receive the lowest possible price per bulb, unless such action raises the price above $1.90 per bulb price and $5.00 for other costs. We do not approve any CFL budget for bulbs that IOUs do not install, as discussed below.
We will require the IOUs, as of January 1, 2009, to install all CFLs they give to LIEE customers. We acknowledge that this requirement will add cost to the program, but since more than 30% of CFLs given away to customers are not installed, we cannot continue to allow giveaways. Neither customers nor Californians as a whole will benefit from the energy savings light bulbs contribute to the program if they are never installed. We expect the IOUs to remove old bulbs after installing CFLs, unless a customer asks to keep the old bulbs.
Since we are requiring the IOUs to install all feasible measures for which a home qualifies (see Tiering/Segmentation discussion above), CFLs will be but one measure among others. Indeed, while we are changing the 3 Measure Minimum, we are only doing so where a home needs at least one large measure, so CFLs will never be the only measure installed in any home.
65 D.07-12-051, pp. 38, 78.
66 See Section 9.4 below.
67 KEMA Report, p. 7-23 (footnote).
68 Response Of Southern California Edison Company To The Administrative Law Judge's Ruling Seeking Further Information On Large Investor-Owned Utilities' 2009-11 Low Income Energy Efficiency/CARE Applications, filed June 27, 2008, p. 3, citing Jackie Berger, "Impacts of Consumer Based Education Based Programs," Applied Public Policy Research Institute for Study and Evaluation, June 17, 2008, p. 47.
69 These data appear in the Responses to Administrative Law Judge's Fifth Data Request, filed by each of the three IOUs on September 5, 2008.
70 KEMA Report, p. 5-51.
71 The "number of CFLs needed" refers to the fact that KEMA Report found during its surveys that nearly 64% of low income homes could use an additional 4 bulbs in their home. In other words, while some already had these types of bulbs, on average 64% of low income homes have an additional 4 fixtures that could hold CFLs.
72 42 U.S.C. § 17001 et seq. (H.R.6, Pub. L. 110-140 (2007)).
73 The IOUs gave us information about their plans in response to the ALJ's third ruling, filed July 16, 2008.
74 European Union Reduction of Hazardous Substances standards, described at http://www.ul-europe.com/en/solutions/services/rscs.php.
