Santa Barbara Clean Energy Submits a Proposal to Create a Decarbonization Incentive Rate to the California Public Utilities Commission

SBCE and CPUC DIR program informationIn partnership with the Local Government Sustainable Coalition (LGSEC), Santa Barbara Clean Energy (SBCE) has submitted a proposal to the California Public Utilities Commission (CPUC) to create a decarbonization incentive rate (DIR) pilot program as part of its Clean Energy Financing Proceeding.

“Santa Barbara’s goal is to reach carbon neutrality by 2035 and building electrification is a critical piece of reaching that target,” said Alelia Parenteau, Santa Barbara’s Sustainability and Resilience Director. “Creating innovative rate structures as proposed in our DIR proposal would help significantly to make building electrification affordable on an ongoing basis.”

The DIR program would allow SBCE to offer customers who trade their natural gas, fossil methane, or propane-powered heating, ventilation and air conditioning or other appliances for electric models a discounted rate for the incremental electricity consumed. The pilot proposes to install electrification measures, such as heat pump water heaters or air source heat pumps at a limited number of residences so that it can model cost impacts of the electric transition and create an incremental rate that would help keep energy costs low.

In its pilot lifecycle, SBCE estimates the program would offer 13,275 metric tons of carbon dioxide equivalent in greenhouse gas reductions, 17,750 megawatt-hours in electricity savings, 2,800 therms in gas savings and $3,146,120 in customer energy bill savings.

Eligible participants would include single-family residential customers who receive electric service at a location with a meter and who have maintained an active utility account for the previous 24 months. Renters may participate with agreement from property owners to permit SBCE to install upgrades. Eligible customers must be in good payment standing.

The pilot program’s success would be measured by its ability to keep customer costs neutral or offer savings on monthly energy bills, demonstrated and quantified customer benefits that attract third party capital and projected annual and lifetime emissions and utility bill savings.

“SBCE’s proposal would offer long term rate relief for electrification,” continued Alelia. “As the state moves towards electrification, it’s imperative to offer customers an affordable way to move away from natural gas.”

The CPUC is continuing to assess the Clean Energy Financing Proposals and has delays its decision to early 2024. Entities interested in seeing a DIR pilot such as this one can comment on the proceeding at the CPUS website under Proceeding number R-20-08-022.

Learn more about Santa Barbara Clean Energy at