The California Public Utilities Commission (CPUC) rejected Southern California Edison’s plan to increase customer fees to pay for 250,000 heat pumps and associated electrical upgrades for 65,000 low-income homes. In 2021, the utility proposed to recover $677 million by charging customers an average of less than $1 per month.
Heat pumps use electricity to heat and cool buildings by transferring heat from a cool space to a warm space. They are generally more efficient than air conditioners and furnaces. The mass installation of heat pumps is a key part of the California Air Resources Board’s (CARB) 2022 Scoping Plan, which set the plan to reduce greenhouse gas (GHG) emissions by 85% below 1990 levels by 2045. The California Energy Commission (CEC) set the state’s goal of 6 million pumps installed by 2030.
In a proposed decision in October 2023, Administrative Law Judge Zhen Zhang recommended that the CPUC reject the proposal, finding that it failed to “sufficiently show clear customer benefits in the face of certain costs.” The proposed decision stated that the programs “(1) fail to avoid duplication and incorporate lessons learned relative to already authorized ratepayer-funded building electrification programs; (2) fail to estimate and incorporate the impacts of federal and state funding; and (3) are based on unreliable estimates of GHG emissions reductions and marginal GHG abatement costs.”