Three Prongs Don't Make a Right

California PUC Addresses Barrier to Electrification

Hercules and Cerberus (courtesy of LACMA and Wikemedia Commons)
Pictured: Sierra Club Senior Campaign Representative Rachel Golden strikes a Herculean blow to bureaucratic barriers to building electrification.

Yesterday, the California Public Utility Commission (CPUC) took a quietly revolutionary step toward phasing gas out of our homes and buildings: It agreed to consider updating the dreaded Three-Prong Test, the bureaucratic Cerberus striking fear into the hearts of even the staunchest energy efficiency professionals.  

A bit of background: My colleague Rachel Golden has previously written about her justifiably dogmatic conviction that, in order to meet our climate goals, Californians must stop burning methane in our homes and buildings. Unfortunately, the transition from gas appliances is not as simple as it should be. A recent article on Greentech Media detailed the obstacles one climate-conscious family encountered when they tried to electrify their home. They were surprised to learn that if they replaced their old gas appliances with efficient electric options, they were not eligible for energy-efficiency rebates or incentives. What stands in the way? The Three-Prong Test.

The Three-Prong Test is a set of requirements for energy efficiency programs that allow “fuel switching” -- replacing a gas appliance with an electric version, or vice versa. For example, if a utility wants to provide rebates to customers who replace old gas water heaters with super-efficient electric heat pumps, it must demonstrate to the CPUC that its program will truly reduce energy use, benefit the environment, and be cost-effective. The motives of the test are sensible. However, the test’s confusing structure and lack of clarity regarding what exactly it takes to “pass” has meant that utilities choose to stay far away from any fuel-switching programs.

On April 2017, the Sierra Club, the Natural Resources Defense Council, and the California Energy Efficiency Council filed a joint motion asking the Commission to reevaluate the Three-Prong Test and make its requirements more clear, so that beneficial fuel-switching programs could receive funding. Our request was supported by 24 other organizations, plus the CPUC’s Office of Ratepayer Advocates, Pacific Gas and Electric, and Southern California Edison.

Only one party to the proceeding opposed the motion: SoCalGas. Just the other day, an opinion piece by a SoCalGas executive was published in the Sacramento Bee claiming, among other dubious things, that replacing gas appliances with electric versions is too expensive. Without getting into the merits of that claim (in short: we disagree), it bears mentioning that by opposing reform of the Three-Prong Test, SoCalGas is actively workeing to maintain electric appliances’ ineligibility for rebates, making them more costly for customers who want more-efficient, healthier appliances.

But despite SoCalGas’s dogged opposition, and after a year-long wait, the the CPUC ruled yesterday that the Three-Prong Test should be reevaluated to make sure it authorizes all energy efficiency programs that are consistent with California’s climate goals. Over the summer, CPUC staff will draft a proposal on how to reform the test so that it accurately represents the greenhouse gas benefits, energy efficiency, and cost savings from fuel switching. While nothing has changed yet, we are heartened that the CPUC has agreed to reassess the problem, and we're confident that long-awaited changes to the test will help more Californians access beneficial building electrification.

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