SCE’S BUILDING ELECTRIFICATION
APPLICATION | A.21-12-009
On Dec. 20, 2021, SCE filed a $677 million Building
Electrification Application with the California Public
Utilities Commission for approval of its 2024-2027
programs. The objective of the application is to support California’s climate goals by helping to maximize the
greenhouse gas reduction from buildings and rapidly
accelerate the adoption of electric heat pumps in an
equitable manner. The portfolio adoption targets include installing 250,000 electric heat pumps and providing
65,000 households in Southern California Edison’s service area with electrical upgrades. Recognizing that current efforts are too slow and need to accelerate to meet
the state’s 2030 GHG reduction goals, this self-initiated application takes a needed step toward large-scale
building electrification with a market transformation
approach. The actions laid out in the application will
have broad benefits, including reduced GHG emissions,
downward pressure on rates and less energy usage due
to increased efficiency of electrical equipment.
• Building electrification is critical
to meeting California’s GHG
targets of a 40% reduction
below 1990 levels by 2030 and
carbon neutrality by 2045
• SCE’s Pathway 2045, a strategic
plan for carbon reduction,
demonstrates the need for 30%
penetration of electric heat
pumps for water and space
heating in California by 2030
and 70% by 2045
• Even with existing building
electrification programs,
California will fall short of
its goals unless programs
and policies are accelerated,
as discussed in Edison
International’s Mind the Gap
analysis
• The CPUC and investor-owned
utilities can once again play a
critical role to facilitate nascent
markets through a temporary,
market-transforming program
to narrow the building
electrification gap and help
those least able to afford the
transition
SUMMARY
WHY DID SCE FILE
AN APPLICATION?
• Equity to Vulnerable Populations: Ensure
environmental and social justice-designated customers
have access to the benefits of building electrification by enhancing access to programs with targeted outreach
to ESJ communities. About one-third of incentive funds, equaling about 81,000 electric heat pumps, and at least 40% of funding for electrical upgrades are specifically designated for income-qualified customers and ESJ
communities
• Ready the Market: Incentivizing customers to electrify appliances will help address 15% of the heat pump
gap in SCE’s service area, scale the market, enable
stronger codes and standards and enable a maturation
of the regional market for the design, manufacture and
installation of electrified appliances
• Reduction in Local and Indoor Air Pollution: Reduce
nitrogen oxides and fine particulate matter air pollution from gas-burning technologies and enable in-home
electrification health benefits
• Consumer Savings: Increased electrification improves
overall affordability by 2030 as installations accumulate, resulting in an estimated $3 per year decrease for
residential customers following the end of the program.
Over the lifetime of the equipment, participating
customers will save a combined estimated $510 million
on energy bills because of the increased efficiency of
electrical equipment
• Economic Development: Create incremental
electrification jobs, with a significant amount in
disadvantaged communities, according to California
Energy Commission estimates
• Climate: Reduce GHG emissions toward mitigating
climate change — estimated 3.5 million metric tons
from this program
• Energy System: Reduce electric peak demand by 18
megawatts, overall energy use by 54 million million British thermal units and 665 million therms of natural gas usage SCE’s analysis indicates that California
will fall short of reaching the heat pump
targets needed to meet the goals in SCE’s
Pathway 2045 if the state stays on its
current trajectory:
WHAT IS THE GAP? BENEFITS OF BE
AND THIS APPLICATION
Volume Targets
and Breakdown
BE Ready Home & BE Ready Catalina BE Business
Incentives
and Offerings
• 200,000 heat pumps
• 65,000 panel/circuit upgrades
• 88% of funding
• 50,000 heat pumps
• 12% of funding
Offer free “BE Ready” retrofit assessments
(including other technology, like EVs and batteries)
• Energy bill and rate analysis
• Technical/design assistance
• Layering and coordination with other
programs (e.g., Energy Savings Assistance,
Technology and Equipment for Clean Heating,
Self-Generation Incentive Program)
Fund future-proof panel and circuit upgrades
via rate-smoothing reg asset treatment
• Low to no-cost for upgrades for low-income
customers
• 50% of costs covered for market rate customers
Incentivize heat pump water heater and
heat pump HVAC appliances for normal
replacement
• Up to $1,500 per HPWH and $600 per ton for
HP HVAC for customers in ESJ communities
• Up to $1,000 per HPWH and $400 per ton for
non-ESJ Customers
Includes Rule 15/16 line extension allowance
budgets
Catalina Island program addressing
geographical barriers and offering additional
appliances
• Offer technical assistance
and support for installers and
customers
PROPOSED PROGRAM
• Simple prescriptive incentives
for high-efficiency heat pump
HVAC, amounts based on unit
type and capacity
• Streamlined, scalable, upfront
HVAC distributor incentives
• Provide higher incentives for
businesses that reside in ESJ
communities
$69
BE Ready Home & BE Ready Catalina
Line Item Notes
BE Business
Marketing,
Education
and Outreach
Mid-Cycle
Review
$199.8
$408.2
$677
million
million
million
million
• Utility-side infrastructure (meter, service,
line extensions, civil work)
Capital
Regulatory
Asset
O&M
Total
Request
• Customer-side infrastructure (home
electric panels, circuits and wiring)
• 68% HP HVAC and HPWH appliance incentives
• 32% implementation, marketing, evaluation and labor
2021 US dollars
• Allow SCE to adjust the building electrification portfolio at mid-cycle, if necessary, via a tier 2 advice letter process
• Energy bill and rate analysis
• Technical/design assistance
• Layering and coordination with other
programs (e.g., ESA, TECH, SGIP)
• Program-specific marketing
• Outreach and guidance
• Energy bill and rate analysis
• Technical/design assistance
• Coordination with other
midstream programs (e.g., energy
efficiency)
• Program-specific marketing
REVENUE REQUEST