COM/MP1/jt2 Date of Issuance 1/2/2009
Decision 08-12-059 December 18, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to examine the Commission's post-2005 energy efficiency policies, programs, evaluation, measurement, and verification, and related issues. |
Rulemaking 06-04-010 (Filed April 13, 2006) |
DECISION GRANTING IN PART AND DENYING IN PART
THE PETITION FOR MODIFICATION
Table of Contents
Title Page
DECISION GRANTING IN PART AND DENYING IN PART
THE PETITION FOR MODIFICATION 11
4. Comments on the Alternate Proposed Decision 2222
5. Assignment of Proceeding 2424
DECISION GRANTING IN PART AND DENYING IN PART
THE PETITION FOR MODIFICATION
1. Summary
On August 15, 2008 Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E), and Southern California Gas Company (SoCalGas) (collectively Petitioners), filed a joint Petition for Modification to Decision (D.) 07-09-043 and D.08-01-042, seeking changes to the Energy Efficiency Risk Reward Incentive Mechanism. Specifically, Petitioners ask that in instances where Energy Division has not met the established schedule for the completion of the verification reports used to validate interim claims, the Commission authorize interim incentive payments based on utility submitted savings reports. To that end Petitioners ask that for the first interim claim covering the 2006 and 2007 period the Commission authorize payments of $77.1 million, $45.9 million, $20.1 million, and $9.6 million for PG&E, SCE, SDG&E and SoCalGas, respectively. In addition, Petitioners ask the Commission to modify D.08-01-042 to eliminate the requirement that the ex ante savings parameters, used in calculating interim claims, be updated. Lastly, Petitioners ask that the evaluation, measurement and verification reports developed by Energy Division be subject to review by the Commission rather than left to the discretion of Energy Division, as is current policy.
This decision grants in part and denies in part the petition for modification. With respect to the request to allow interim payments to be based on the Investor-Owned Utilities' (IOUs) quarterly savings reports in light of the delays encountered in the completion of Energy Division's verification reports and ongoing concerns with respect to the process by which these reports and the underlying assumptions are developed, we will authorize payments in the amounts of $41.5 million, $24.7 million, $10.8 million, and $5.2 million for PG&E, SCE, SDG&E and SoCalGas, respectively for the 2006 and 2007 periods. This reflects the amounts Petitioners' request adjusted to include a higher holdback of 65% to address the increased risk of overpayment ratepayers bear as a result of relying on utility submitted reports. Similarly, for the second interim claim (covering 2008 program performance), should Energy Division's verification reports be delayed such that any interim claims that may be owed cannot be authorized in 2009 pursuant to the schedule established in D.07-09-043, interim claims will be based on the IOUs' submitted quarterly savings reports subject to a holdback amount of at least 65% with the specific holdback amount determined at the discretion of the assigned Commissioner based on the risk of overpayment. To further reduce the risk of overpayment, for the 2006-2008 period, we will adjust the framework to "reinstate" the deadband, such that if the ex post review indicates that utility performance falls between 65% and 85% of the adopted goals, rather then continuing to earn incentive payments at the 9% shared savings rate, as is current policy, no additional incentives will be earned beyond what they IOUs have already received in interim claims. We deny Petitioners' request to eliminate the existing requirement under which the ex ante values used to calculate interim claims are updated. We grant Petitioners' request regarding Commission review of earnings-related issues by requiring the verification and final true-up reports developed by Energy Division to be issued by resolution, including the current draft verification report that was issued on November 18, 2008.
