PacifiCorp has reached an agreement to shut down all of its ratepayer-funded energy efficiency programs in California because they're no longer delivering value that exceeds their cost, according to a Friday filing with the California Public Utilities Commission. The utility, which provides power to roughly 46,000 customers in Northern California through its Pacific Power subsidiary, will reduce rates by 0.7% as a result of winding down the programs by Jan. 1. While the company had originally tried to keep the initiatives running and redesign them, it ultimately struck a proposed settlement with the commission's Public Advocates Office to discontinue the efforts.
The programs have been struggling for years, with performance declining sharply in recent periods. The Wattsmart Business program saw savings plummet by approximately 75% between 2022 and 2024, while overall portfolio savings dropped by 40% in 2024 alone. Cost-effectiveness projections for PacifiCorp's proposed redesigned portfolio showed only modest improvement and failed to deliver benefits to ratepayers that would surpass program costs. The settlement agreement stipulates that PacifiCorp will reduce its California Schedule 191 surcharge, which bankrolls public purpose and energy efficiency programs, to $1.37 per month for residential customers and 0.101–0.315 cents per kilowatt-hour for non-residential customers by class.
Cal Advocates stated in a November filing that "PacifiCorp's EE programs have historically not provided cost-effectiveness benefits to ratepayers and, indeed, show a decline in performance in recent years." Simon Gutierrez, spokesperson for Pacific Power, said that "delivering these programs in our California service area presents unique challenges" because the territory is largely rural, "averaging four customers per square mile, and includes a high proportion of low-income customers." He added that "there are few large business projects to help offset smaller projects, and program delivery costs continue to rise."
The settlement doesn't permanently strip PacifiCorp of its ability to run energy efficiency programs in California in the future. If the company later finds opportunities for cost-effective offerings, it's required to notify Cal Advocates "as soon as practicable," and the two parties have agreed to work together in good faith to seek commission approval if they both determine the programs would be cost-effective. The agreement also preserves PacifiCorp's ability to reactivate suspended programs like Wattsmart Homes and Wattsmart Business if they're determined to be cost-effective down the line. The utility may continue collecting a reduced amount to cover marketing, education, and outreach efforts in 2027 to inform customers about available state, federal, and other non-utility-funded energy efficiency, weatherization, and electrification programs.
Throughout 2025, PacifiCorp must make all reasonable efforts to provide its customers with information on all known energy efficiency programs available in its California service territory, including non-ratepayer funded state or federal initiatives. If the CPUC later changes its methods for determining cost-effectiveness or modifies its Avoided Cost Calculator in ways that would make these programs cost-effective by their standards, the settlement requires PacifiCorp and the commission to meet and discuss whether the programs should be brought back. The agreement must still be approved by the CPUC to take effect, with the parties asking the commission to waive the comment and reply comment period to resolve the case before year's end.