Although it is one of the best- kept secrets in Sacramento, the Public Interest Energy Research Program has been the driving force behind California's blitz to accelerate the generation of clean energy and to continue our ranking as the nation's most energy-efficient state.

Since its inception in 1996, more than $700 million from the program has been directed into energy research, development and demonstration projects in the state. It is widely credited for helping these projects produce tangible ratepayer benefits, cushioning our state from wild swings in the cost of petroleum and natural gas, which supplies 80 percent of California's energy.

Unfortunately, this job-creating engine is at risk of grinding to a sudden halt. A provision in the law requires the program to sunset in 2012 unless two-thirds of the Legislature votes to extend it. Which is why it is imperative for the Legislature to act in the next month to approve an extension of this program to 2020.

The reasoning for this program is straightforward: U.S. energy companies spend just one-quarter of 1 percent of revenue on energy research. Publicly funded research is critical to complement and support private sector investment – not substitute for it – and to leverage federal dollars. Just three other states have such a program, with only New York's coming close to the scope of California's. Statistics show that states with public energy research programs attract four times as much clean technology venture capital funding as states without.

Funded by a small charge on utility bills, PIER's $21 million in grants last year spurred more than $500 million in additional federal stimulus funding and another $900 million in funding from private ventures – bringing in $70 for every $1 invested in California's energy future. What's more, this research is all publicly available and can be shared, allowing multiple companies and industries to benefit.

By focusing on public interest research, PIER explores new ideas that generate benefits for ratepayers, which is not always the case in private sector investments. In addition, the program has been essential in helping the state meet the reduction in emissions required in AB 32, the state's pioneering law to limit greenhouse gases.

This research directs high-wage jobs and paves the way for the creation of new companies and new products within existing companies. For example, the Energy Innovation Small Grants program – which makes up 5 percent of PIER funding – has created more than 10,000 clean-tech jobs and spun off an estimated 20,000 related jobs.

One of those companies that has benefited locally is Rancho Cordova-based Clean Energy Systems. The firm received startup funding from PIER and an additional $30 million in federal funds to build and test a zero-emission, fuel-flexible power plant. The turbine uses oxy-combustion technology. The company expects to create 150 direct jobs and thousands more indirect jobs over the next several years.

Other success stories include Hayward-based Primus Power, which used a $95,000 PIER grant to parlay a garage-developed technology into a successful venture that has installed a 25 megawatt grid storage system in Northern California. And there's the CHA Corp., which relocated from Wyoming to Sacramento after receiving a PIER grant to partner with the Sacramento Municipal Utility District to showcase a microwave technology that removes nitrous oxide and sulfur dioxide from the exhaust of a biogas engine. On the agriculture front, PIER funds helped Gill's Onions, the nation's largest onion producer, construct a system to produce biogas from onion waste to produce heat and power – saving 112,000 standard cubic feet of natural gas a year and eliminating 40,000 gallons of diesel fuel per year from trucks used to haul the biowaste to landfills.

PIER's innovation in its first 15 years of existence has been an overwhelming success that helped to make California America's leader in clean-energy research. The program has brought sorely needed jobs to Sacramento and across the state. Extending the program's life is essential for the state to continue moving toward a sustainable energy future.

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Tom Steyer, senior managing member of San Francisco-based Farallon Capital, is co-chairman of Californians for Clean Energy and Jobs.

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