California's Energy Policy: Conservation Works

Abstract

Conservation is the foundation of California's energy policy and the largest single source of the state's 'new energy supply'. Our goal is to use economic market forces and government programs to direct energy Investments away from our current dependence on oil. In making our investments, we have given energy efficiency the highest preference, followed by cogeneration and renewable energy supplies. Conventional power supplies come last, and only when absolutely necessary because they are costly, they pose environmental risks, and require long lead times.

These priorities guide investment decisions by utilities, state and local governments, and the state's business community. Their combined efforts have cooled energy demand significantly, shattering the conventional wisdom that economic growth and energy demand are inextricably linked. While the Gross State Product has grown 35% faster than the national average in the past five years, there has been a 10% drop in natural gas use in California. Today, growth in electricity demand in the state has dropped to less than 1/3 the rate anticipated in 1974, eliminating the need for $60 billion in new plant expenditures by the strapped utility industry.