4. Comments on the Alternate Proposed Decision

Comments on the Alternate Proposed Decision (APD) were filed jointly by PG&E, SCE, SDG&E and SoCalGas (Joint Petitioners), as well as by NRDC, TURN and DRA. Reply comments were filed by PG&E, SCE, SDG&E, SoCalGas, DRA, TURN, and NRDC.

Joint Petitioners support the APD but suggest certain modifications. These include the following: eliminating ex ante updates and, in particular, adoption of NRDC's proposal that the NTG ratios remain fixed for the duration of a given program cycle; application of a 50% holdback across all IOUs for purposes of determining interim claim amounts for the 2006-2007 program period, and establishment of a more specific schedule for vetting the methodology and data used for evaluating all future claims.

NRDC supports the APD, but also suggests modifications including language changes to ensure that the process established applies irrespective of whether the IOU's earn incentives or are subject to penalties, and adoption of NRDC's proposal to not update the NTG ratios for purposes of evaluating IOU program performance. NRDC also explains that its analysis and conclusion regarding the relatively greater risk of overpayment associated with SDG&E's claim is predicated on including only 2006 and 2007 savings. NRDC further notes that were the analysis to include savings realized in 2004 and 2005, SDG&E's performance may be sufficiently conservative to justify similar treatment to the other IOUs.

DRA opposes the APD arguing the following: basing interim payments on unverified, utility-submitted data is not a reasonable basis to evaluate performance and award incentives; in light of the draft verification report issued by Energy Division which indicates that the IOUs may not be owed anything or may be subject to penalties, the increase in the holdback amount does nothing to protect ratepayers from overpayment; the importance ascribed to timely issuance of incentives is overstated and unsupported, and ignores the more fundamental issue of whether or not performance is being accurately measured; the APD incorrectly characterizes the intent of the RRIM as being to create supply side equivalence for investments in energy efficiency; the APD's statement regarding whether savings should be assessed on a cumulative basis including savings from 2004-2005 are erroneous inasmuch as they imply this is an open question; failure to definitively resolve the utilities' request regarding updates to the ex ante values invites future litigation; and granting the relief requested would violate Rule 16.4 of the Commission's Rules of Practice and Procedure. Lastly DRA points out various clerical errors.

TURN also opposes the APD. The arguments presented by TURN include a reiteration and expansion of the argument that the petition for modification, and by extension the APD, fails to meet the evidentiary standard established in rule 16.4 of the Commission's rules of practice and procedure and therefore cannot be granted; the APD's emphasis on timely issuance of incentives exposes ratepayers to an unacceptable level of overpayment risk; the APD commits legal error by inappropriately second-guessing how the Commission dealt with the issue of delays in the verification process in prior decisions without making the necessary showing that the factual circumstances have changed; the resolution process established in the APD will create further delays increasing the likelihood that interim claims will be based on unverified utility submitted data.