· Adoption of aggressive annual and ten-year cumulative goals for measured and verified electricity and natural gas savings by megawatt hour, megawatt, and therm;

· Allowing the utilities to develop their own programs and portfolios. Commission oversight of portfolio design was limited generally to determining whether each portfolio as a whole was cost-effective according to the Total Resource Cost and Program Administrator tests and achieved the utilities' numerical savings goals; and

· Requiring the Commission Staff to develop, launch and implement an extensive evaluation, measurement and verification (EM&V) program to ensure that the utility programs actually produced electricity and natural gas savings that could be relied on to offset the utility's electricity and natural gas purchases. The EM&V program is unprecedented both in the scope and scale of the undertaking and in the nature of the responsibilities placed on this Commission's regulatory Staff.

Assuring a more comprehensive, integrated model for energy efficiency will require a significant shift in the utilities' approach to program design, development and implementation. Although we have consistently encouraged the utilities to think and act strategically in designing and delivering energy efficiency programs, the utilities and indeed other leaders in business and government must adopt a conceptual framework that is more comprehensive and forward looking.

2 Public Utilities Code Section 454.5(b)(9)(c) states: "The electrical corporation will first meet its unmet resource needs through all available energy efficiency and demand reduction resources that are cost effective, reliable, and feasible."

3 D.04-09-060, Ordering Paragraph 6.

4 http://www.californiaenergyefficiency.com.

5 In this decision, we changed the timeframe of this portfolio from 2009-2011 to 2010-2012.

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