9. Comments on Proposed Decision (PD)

The proposed decision of the assigned ALJ in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Comments were filed on October 18, 2010. Reply comments were filed on October 25, 2010. In this section we address the major issues addressed by the parties.

DRA and TURN reiterated arguments previously raised in their protests to the application, including their concern that PG&E will use A&M funds for self-promoting marketing rather than for increasing customer enrollment, that extending ClimateSmart will not produce any incremental benefits to ratepayers, and that ClimateSmart is not a cost-effective means to procure GHG emission reductions. These arguments were previously addressed by the proposed decision.

DRA and TURN also contend that updated enrollment information, provided after the record in this matter was closed, shows a continued decline in customer enrollment over the past 12 months and that this trend is unlikely to reverse itself before expiration of the program. Although we agree that information appears to show that customer enrollment has declined in the last 12 months, we cannot use this information as a basis for a conclusion that PG&E cannot change enrollment trends or that extension of ClimateSmart is not warranted. PG&E's use of A&M funds was limited to only to essential program administration. PG&E was prohibited from using A&M funds for marketing activities during the last 12 months. Thus, no correlation can be made between PG&E's marketing activities and customer enrollment over the last 12 months.

DRA and TURN are also particularly concerned by PG&E's use of its Facebook page to promote its desired public relations messaging on an unrelated aspect of its operations. Given the spate of negative publicity in 2010 around Smart Meters, Proposition 16 and the San Bruno explosion, DRA and TURN urge the Commission not allow PG&E to use ratepayer funds to launch public campaigns to promote a positive corporate image in the midst of widespread public criticism associated with PG&E. PG&E must limit use of ClimateSmart Demonstration program A&M funds to the marketing and administration of the ClimateSmart Demonstration program.

PG&E supports the PD and requests certain modifications. First, PG&E requests that the PD be revised to combine the independent external evaluation of the program with the marketing plan development process. PG&E states that both should be done by the end of 2011 so that the findings and conclusions can be available to the Commission and stakeholders to evaluate any successor or replacement of the ClimateSmart program. Although PG&E agrees both evaluations should be performed, they also believe that the evaluations should be combined and scheduled consistent with the wind-down of the existing program and consideration of any proposal to replace the program in 2012.

We decline to modify the PD to combine the external evaluation of the program with the requirement to solicit input into the development of any ClimateSmart marketing plan. Each serves a different function. In order to develop the most effective marketing strategy utilizing the knowledge of all stakeholders, the PD requires PG&E seek input into its marketing plan. It is important that this information be obtained prior to launching the next round of ClimateSmart advertising/marketing campaigns. The PD only requires PG&E to solicit the advice and input from EAG and other stakeholders but does not mandate any formal process, report or Commission approval because of the limited time available before the end of the program. However, the value of such input is greater if PG&E can utilize the information prior to beginning a new marketing or advertising campaign. The success of the ClimateSmart Demonstration program's ability to enroll new customers and retain exiting customers could be positively influenced by an effective strategy.

With respect to the timing of the final evaluation of the program, PG&E may submit the comprehensive evaluation before the June 30, 2012 date set by the PD but such a report shall be submitted no later than June 30, 2012.

Second, PG&E requests that the PD clarify that the date for calculating the amount of unspent A&M funds available to be spent on marketing is the end of the month in which the Commission issues a final decision in this matter. We agree. The PD estimated the amount of A&M funds available based on the record. The actual amount of A&M funds remaining will depend on when the Commission issues a final decision in this case.