By Janet Stephens

If you’re a PG&E customer, like me, you recently received a discount of about $17.40 on a recent bill for something called the California Climate Credit. So what’s the story behind this twice-yearly credit?

What Is the California Climate Credit?

I recently wrote about California’s cap-and-trade program, a program designed to help the state meet its aggressive carbon reduction goals by 2020. In this program, the state collects revenue for permits that allow polluters, including energy generators such as utilities, to emit carbon dioxide, the most common greenhouse gas. If a utility emits less carbon, it needs fewer permits and thus saves money.

But here’s the rub for us: the utility passes this extra cost onto its customers, proportionally. If you use more energy than other customers, you’ll be paying more towards this cost. Yet for various reasons, the California Public Utilities Commission wanted to soften the blow for utility customers (who, after all, aren’t the ones choosing the kind of energy to generate), especially for low-income utility customers. So the state returns some of the proceeds from the carbon allowance auctions to customers, proportional to the number of allowances the utility had to buy. The money is distributed as a credit on your utility bill, twice a year for residents and monthly for small businesses. The climate credit is the same amount for every customer; it is not proportional to the amount of energy the customer uses throughout the year. (The credit is given only to customers of investor-owned utilities and nonprofit utilities, not to customers of municipal utilities.)

Besides softening the blow of increased costs for customers, the California Climate Credit can help pay for energy-efficiency measures that residents may wish to make in order to save energy and money. The official word is that “Households and small businesses are receiving the Climate Credit to protect them from cost increases and to give people additional opportunities to take advantage of energy and money-saving upgrades that also help fight climate change.”

Ideas for Spending Your California Climate Credit

$17.40. That’s not very much money, especially if I was dreaming about re-doing my attic insulation, switching to an electric heat pump, or purchasing all new LEDs for the house.

Yet many energy-efficiency improvements don’t take very much money at all; they can even be free. As we head into the cold season here in the Bay Area, here’s my top five list of low-cost energy-efficiency improvements you can make for $17.40 or under:

5) Insulate your water heater. It takes quite a bit of energy to heat thirty (or more) gallons of water. A water heater insulation blanket helps the water tank retain the heat, saving you energy and money, and it’s easy to install. I found one online for about $20. According to, the blanket should pay for itself in less than one year.

4) Turn the thermostat down (called in the industry a “setback”) to 62 degrees at night while you sleep or while you are away at work. I recently wrote about programmable thermostats that can help you remember to do this. claims that using a programmable thermostat can help you save up to $180 per year. Turning the heat down or off manually when you’re not going to need it is absolutely free. Simple programmable thermostats start at about $25, while newer “smart” thermostats are about four times that much. Note that PG&E is offering rebates of $50 if you install a qualifying model of smart thermostat and have a HVAC system.

3) If you heat your home with a forced-air furnace, clean or replace the intake filter. Forced-air furnaces draw in air from your living area (through the intake), heat it, and then push it back into your living area. Although the primary purpose of the intake filter is to “protect the blower fan from all the dust, hair and other gunk the return duct pulls in,” a clogged air filter means  the furnace has to work harder, and may cause it to break altogether. Disposable filters cost under $20. Higher-quality filters have the added benefit of improving the air quality in your home.

2) Brush or vacuum the dust bunnies off your refrigerator’s condenser coils. You can actually buy a brush called a “condenser coil brush” for as low as $10.00 (on Amazon). The coils under (or at the back) of your refrigerator release heat from inside the appliance. Dust on the coils slows this process down, and so your fridge begins to use more energy. I found lots of instructions for how to dust the coils, and even a YouTube video. Knock yourself out.

And announcing  . . . my number one favorite way to spend my California Climate Credit:

1) Buy a few LEDs. While $17.40 won’t pay for all the bulbs in the house, it will pay for at least one, and maybe even up to six (some LEDs bulbs are now sold in packs of six). If you replace a single 60-watt incandescent light bulb with a 9-watt LED bulb, you would save about $20 per year, depending how long the bulb is in use each day. That bulb could pay for itself within less than a year. If you have previously converted to compact fluorescent (CFL) bulbs, you’re already saving a good amount of energy. So save that $17.40 for the time when you need to replace those, and you can upgrade then to LEDs!

Do you want to get help from a professional to identify and repair energy bloopers? CESC offers energy audits through its Smart Energy Services and Residential Energy Efficiency Services, both at a low cost. Depending on your income, these services may even be free.