ALJ/TRP/jt2 Date of Issuance 4/15/2010

Decision 10-04-004 April 8, 2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Examine the Commission's Energy Efficiency Risk/Reward Incentive Mechanism.

Rulemaking 09-01-019 (Filed January 29, 2009)

DECISION MODIFYING REQUIREMENTS FOR
VERIFICATION OF UTILITY INCREMENTAL MEASURE COSTS

1. Summary

We hereby amend Decision (D.) 09-12-045 with respect to the true-up of utility claims for earnings under the energy efficiency Risk/Reward Incentive Mechanism (RRIM). This proceeding was opened for the purpose of reviewing Commission policies related to the RRIM for energy efficiency activities administered by Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and Southern California Gas Company (the utilities). In D.09-12-045, we addressed RRIM earnings claims covering the 2006-2008 program cycle, and adopted a process for the true-up of those claims.

For the reasons discussed below, we modify D.09-12-045 to remove the requirement for an independent verification of utility-reported "incremental measure costs" values¹ With this modification, the schedule for the 2006-2008 true-up can proceed on a timely basis, while still providing a robust and reliable process for verifying RRIM earnings.

¹ These "incremental" costs represent the difference between the costs of a standard measure versus an energy-efficient measure in the utilities' portfolio.