In 1854, the streets of San Francisco were illuminated for the first time by gas lamps. Over a hundred years later, California and the world are struggling with energy challenges in the face of global warming.

And the original lamplighter of 1854 - the San Francisco Gas Company, which ultimately became the mega-utilities corporation PG&E - is now seeing the light on the need for sustainable power.

PG&E - and California - are already ahead of the game in many ways. Over the past 30 years, while the nation's energy per capita consumption jumped 50 percent, California's remained flat.

How? In the 1990's, California took unprecedented action by "decoupling" utilities' profits from their sale of energy, setting the stage for energy efficiency to become a source of energy and money.

"PG&E does not make money from selling more energy. It profits from how much energy it saves," explained Jennifer Zerwer, PG&E spokesperson. "PG&E treats energy efficiency as its top resource."

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So, how does saving energy create profit?

"Utilities aren't like other companies," explained sustainability expert Alan Durning in his blog "The Daily Score". "Their profits are dictated by state utility regulators, based on complicated formulas. 'Decoupling' means writing those formulas to yield larger utility profits for every unit of energy they help their customers save."

In 2007, PG&E exceeded the energy efficiency targets set by the California Public Utilities Commission (CPUC) , preventing 1,044,884 tons of carbon dioxide from being released into the atmosphere, noted Kathy Romans, PG&E spokesperson.

California leads the nation in energy policy. The state's innovative energy efficiency programs have helped prevent the construction of 24 new power plants.

And PG&E is becoming one of the industry leaders in energy efficiency programs.

PG&E now supports 85 residential and commercial energy efficiency programs that collectively have saved 118 million megawatt hours of electricity. That's enough electricity to power over 18 million homes.

Their campaign to give away 1 million free CFLs (compact fluorescent bulbs) is an example of a simple but powerful program: The potential energy savings from 1 million CFL bulbs could power almost 60,000 homes in central and northern California for a year.

The company has come a long way since their 1978 battle with the Environmental Defense Fund over PG&E's rate increases. The company was ultimately fined $50 million by the CPUC for failing to adequately implement energy efficiency programs.

Now, PG&E is aggressively promoting energy efficiency and investing in R&D on clean energy technology, particularly for transportation - an important step, considering that transportation is responsible for 57% of California's 399 million metric ton CO2 footprint.

"We are particularly excited about our Vehicle to Grid Program (VTG)", said Zerwer. "The U.S. electric grid currently in use was designed 100 years ago. It involves a power plant that distributes energy through transmission lines and then through a house....one-way distribution of energy. VTG allows for bi-directional sharing of energy."

PG&E is advocating for a "smart grid" to replaced the current antiquated system - to allow for programs such as VTG that promote low-emission electric cars and energy efficiency. VTG customers would be able to plug in their hybrid cars, drawing power from and feeding power into the grid.

"Essentially your car would become a mini power plant and PG&E would pay you for supplying that power to the grid," Romans explained.

Even though updating the US electric grid to a smart grid could take at least another ten to twenty years, PG&E leaders are already playing prominent roles in advocating for energy efficiency and investing in new technologies.

Peter Darbee, the CEO of PG&E Corporation (the multi-billion dollar holding company of PG&E Company), publicly supported AB32, a California measure passed in 2006 that caps statewide greenhouse gas emissions and requires a 25% reduction in emissions by 2025.

Under Darbee's leadership, PG&E was the first utility to support the bill and was a founding member of the California Climate Registry in 2004, in which companies signed up to voluntarily track their carbon dioxide emissions.

In his previous role as PG&E's CFO, Darbee clearly recognized the profitability of energy efficiency. After becoming CEO in January 2005, Darbee realized that he needed a clear view on climate change in order to

to lead successful and profitable energy programs.

After consulting with various experts on global warming, Darbee was convinced of the urgency of the issue - a realization that has fueled PG&E's outspoken commitment to being an industry leader for climate change solutions.

"If you had asked me five years ago, this wouldn't have occurred to me," Darbee acknowledged in an October 2006 interview with the San Francisco Chronicle. "Somewhere in this process [of becoming CEO], I developed a point of view...The Earth is warming. Mankind appears to be responsible. The need to take action is now."

The facts about our contribution to global warming are indeed sobering.

The average Californian produces 12.2 metric tons of carbon dioxide per year. That's nearly 27,000 pounds. And electric power generators in California are responsible for 12 percent of the total CO2 emissions in the state.

Fortunately, there are many solutions available - for both individuals and businesses.

Something as simple as replacing an incandescent light bulb with a CFL immediately reduces energy consumption by 74 percent.

Need help figuring out how to best conserve energy? Check out PG&E's "Save Energy and Money" page, which features an Energy Analyzer for your home, a list of available rebates and energy saving tips.

For their part, PG&E is enthusiastically pursuing energy efficiency and clean energy programs. They've awarded contracts to purchase 2000 megawatts of renewable energy in recent years.

“In 2007, PG&E purchased nearly a gigawatt of renewable energy," says Romans. "For perspective, that means 18% of PGE’s total power mix is renewable energy under contract or delivered.”

The renewable energy sources are varied:

• 177 megawatts of solar thermal energy from Ausra.
• Two megawatts of wave energy from Finavera Renewables.
• An estimated 66 megawatts produced from biomethane - natural gas made from California cow manure - enough to power 50,000 homes.

The company is also developing community-based education campaigns representing partnerships with the city and the community. Check out Let's Green This City (a partnership with San Francisco) and We Can Do This for more information on green efforts and resources for energy consumers and corporations.

With a commitment to stemming global warming through energy efficiency, clean energy and public education, PG&E is demonstrating that corporations can make a profit while sustaining the planet.