November 29, 2001 PUC: 132 Docket #: R.01-08-028

Media Contact: PUC Press Office - 415.703.1366 - news@cpuc.ca.gov

PUC ADOPTS NEW RULES ON ENERGY EFFICIENCY PROGRAM GOALS AND CRITERIA

The California Public Utilities Commission (PUC) today established new energy efficiency policy rules and set forth the evaluation criteria the PUC will use in awarding energy efficiency funding for 2002-2003. The new rules advance the Commission's goals for energy efficiency in California in a number of ways:

· Prioritize statewide programs with a proven track record

· Encourage utilities and non-utilities to propose their best program ideas

· Leverage programs and funding offered by other state agencies

· Provide potential for local government initiatives to leverage local organizational contacts and small business outreach, and tailor measures to meet the needs of particular communities

The decision adopted today recommends that the Commission choose proposals based mainly on the following criteria:

· Electric Peak Demand Savings: Programs should emphasize long-term and permanent peak demand savings

· Innovation: Programs should present new ideas, new delivery mechanisms, and emerging technologies

· Coordination with Programs Run by Other Entities: Programs should take advantage of synergies with other existing programs

· Long-Term Annual Energy Savings: Programs should have a clear, logical, and verifiable link between proposed activities and eventual energy savings

· Cost Effectiveness: Programs should be cost effective so that it does not cost more to save energy than it would to use it

· Addressing Market Failures or Barriers: Programs should address barriers such as lack of consumer information on energy efficiency; higher start-up expense for high-efficiency measures relative to standard-efficiency measures; lack of financing for energy efficiency improvements

· Equitable Distribution of Program Opportunities: Programs should provide access to energy efficiency alternatives for underserved or hard-to-reach markets

Unlike prior years' energy efficiency funding, non-utility parties - local governments, community-based and non-governmental organizations, and for-profit energy service providers, for example - will be allowed to make proposals directly to the Commission for a portion of the funding. Some programs will be funded for the two-year period 2002-2003. Statewide programs will be funded at $160 million and local programs will be funded at $75 million; third parties will be eligible for approximately 65 percent of the local program funding. The goal is for California to have a balanced portfolio of programs in all sectors, with particular emphasis on residential and small businesses.

Utilities' program proposals for statewide and local program funding, and utilities' and non-utilities' proposals for statewide marketing/outreach funding, under new criteria will be due at Commission offices no later than 5 p.m. (PST) on December 14, 2001. Non-utilities' local program funding proposals will be due no later than 5 p.m. (PST) on January 15, 2002, although such parties are encouraged to submit their proposals between December 14, 2001 through January 15, 2002, to take advantage of the Commission's plan to review proposals as it receives them. The Commission will hold a workshop for parties interested in assistance with their proposals on December 19, 2001, at 10 a.m., at the following location:

Hiram W. Johnson State Office Building

455 Golden Gate Ave.

Hearing Room 9

San Francisco, CA 94102

The decision adopted today provides a detailed Policy Manual that defines Commission policy rules; provides a standard set of definitions and assumptions; and assists parties in preparing proposals in a standard format.

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