Dan Walters: Economist questions California's energy conservation claims

dwalters@sacbee.comJuly 29, 2013 

It's right there on the California Energy Commission's website – the oft-ballyhooed boast that the state's tight energy conservation standards have saved countless billions of kilowatts of power and "more than $74 billion in reduced electricity bills since 1975."

"These standards conserve electricity and natural gas and prevent the state from having to build more power plants," the Energy Commission claims, adding, "The success of standards and other energy efficiency efforts is a significant factor in California's per-capita electricity use remaining flat over the last 40 years while the rest of the country's use continues to rise."

But is it true, or merely hyperbole?

A new paper published by the prestigious National Bureau of Economic Research and authored by Georgetown University economist Arik Levinson tests the claim that's existed for decades and finds it to be way overblown.

Levinson doesn't question that California's per-capita power use has remained flat, but he concludes that the state's energy conservation rules governing appliances and building construction had relatively little to do with it.

Nearly all of the syndrome, he says, can be attributed to other factors, such as the state's relatively mild climate, the growth of population in Western and Southern states with hot summers and rising energy demands, and the expansion of household size in California.

"Together," Levinson writes, "these trends account for around 90 percent of California's apparent residential electricity savings, thus providing no lessons for other states or countries considering adopting or tightening their energy efficiency standards."

Levinson also notes that California's trend toward flattening of power demand began "long before the state's regulations took effect" in the mid-1970s because of those other non-regulatory factors.

Levinson's exhaustive analysis is useful not only as a counterweight to adoption of California's energy rules elsewhere, but as a general caution against the claims of government officials, including those we elect, about the supposedly beneficial effects of their actions.

We are told constantly that if we adopt a law or regulation, wonderful things will result. In fact, the Energy Commission is now planning to set energy standards for 15 more products, claiming more energy savings will result.

However, policymakers are often blissfully ignorant of alternative scenarios or choose to ignore them.

Ironically, the most devastating example of the faulty cause-and-effect syndrome also involved electric power.

In 1996, the Legislature voted unanimously for an overhaul of electric power its advocates said would lower power costs for everyone, but wound up inflating those power bills massively, causing blackouts and driving utilities to the brink of – and one into – insolvency.

Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters. Follow him on Twitter @WaltersBee.

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