In Energy Conservation, Calif. Sees Light

"We have to break the link between their financial health and their electricity and natural gas sales," says Cavanagh. "If their financial health is tied to increasing sales, they're unlikely to be efficiency partners."

Energy-efficiency targets are also built into California's solar promotion program. To qualify for a $2,000 rebate, homeowners must show that their homes beat building standards for energy efficiency by 15 percent or more. Often, a change in the color of a home's roof from black to white can save as much electricity as the new solar panels generate, Rosenfeld says.

Many of these techniques grow out of work Rosenfeld did at the Center for Building Science at the Lawrence Berkeley National Laboratory, which he founded in 1975. Over 20 years, the lab developed a variety of energy-efficiency technologies, including electronic ballasts that led to compact fluorescent lamps and a coating for glass that allows light in but blocks heat from either entering (during summer) or escaping (during winter).

But much of the motivation remains economic. The state's disastrous experiment in electricity deregulation -- deregulating supplies while capping retail prices -- led to a supply crisis and rolling blackouts in 2001. Soon, prices rose; PG&E sought bankruptcy protection.

Many manufacturers complain that the high electricity prices make the state an unappealing place to do business. Since 2001, California has lost 375,000 manufacturing jobs, a 19.9 percent drop that slightly exceeded the nationwide decline of 17 percent. Some firms -- such as Buck Knives, with 250 jobs, or bottle manufacturer Bomatic, with 100 jobs -- moved to states such as Idaho or Utah, where they said expenses, including energy, were lower.

Gino DiCaro, a spokesman for the California Manufacturers and Technology Association, says manufacturing investment is also "stalled" because of uncertainty about how the new legislation authorizing limits on greenhouse gases will affect energy costs.

"We've lost a lot of manufacturing jobs and we can't replace them," says DiCaro. While it's hard to blame the state's high energy costs alone, he says, "we know that . . . energy is one of the largest portions of a manufacturer's operating budget."

But for those homeowners and businesses staying in California, the high prices have provided a big incentive for greater efficiency.

Laura Scher, chief executive of Working Assets, a wireless, long distance and credit card company that donates part of its revenue to socially progressive organizations, said she checked her home's meter every week during the electricity crisis in the summer of 2001 and unplugged her family's second refrigerator. "Part of it is our prices got really high," she said. But she added that California's habits go back much further. "It's sort of a culture to be an energy conserver here," she said.