7. Reducing the Number and Complexity of Programs

The 2010-2012 energy efficiency portfolio consists of 247 programs, of which 53 are sub-programs of 12 statewide programs. There are 194 non-statewide programs for the current program cycle, compared to 157 programs implemented in the 2006-2009 period. Reducing the number of programs is not a new concept, and it was re-iterated in the Phase IV Scoping Memo, which asked parties if there were too many energy efficiency programs. The Scoping Memo solicited concrete suggestions on how to construct a portfolio that reduces the number and complexity of energy efficiency programs.

7.1. Positions of Parties

Almost all parties concur that energy efficiency programs should be reduced and simplified. All of the IOUs support decreasing the number and complexity of energy efficiency programs. SDG&E/SoCalGas suggest consolidation of related programs that are within different program categories and recommend that all programs:

1. Include comprehensive marketing campaigns;

2. Address all market barriers;

3. Provide equipment and information that enables full energy management; and

4. Integrate program delivery.¹⁹⁴

SCE suggests a market-based portfolio structure as the most customer-focused delivery mechanism for energy efficiency programs, and comments that a "simplified portfolio structure would allow more agility to respond to ever changing market signals."¹⁹⁵ SCE points out that the current IOU programmatic structure is a mixture of market and technology-based sectors. Finally, SCE recommends, "that the Commission consider modifying the Staff Proposal to focus on market sectors as the program delivery channels (Residential, Commercial, Industrial, Agricultural and New Construction), with end-use, technology-based approaches, Codes & Standards, WE&T, ME&O, Heating, Ventilating, and Air Conditioning (HVAC) System, Emerging Technologies, and other program segments inserted into those channels to promote deeper savings and greater comprehensiveness of customer offerings."¹⁹⁶

NRDC recommends that the Commission focus on consolidating programs, rather than eliminating programs, and focus on streamlining and standardizing delivery. NRDC suggests that less confusion amongst programs could encourage new entry into the market for program delivery.¹⁹⁷ TURN supports a general direction of reducing the number of programs, but asserts this should equate to smaller budgets. In PG&E's reply comments, it disagrees that a simplified approach should signify less funding for programs, and asserts instead that simplification should focus on structure and organization while maintaining a comprehensive set of offerings.¹⁹⁸

Joint Committee on Energy and Environmental Policy (JCEEP) supports simplifying the portfolio, stating that evaluation for all of these programs is costly. It suggests a whole building approach, as opposed to a widget based program design, as a way to streamline programs, along with quality standards.¹⁹⁹ Consumer Federation of California (CFC) suggests consolidation of programs through a categorization process based on the goals different programs achieve, and then budgets can be allocated to the varying "goals achievement" categories.²⁰⁰ CFC is concerned that, if consolidation is not done with a clear plan, transparency will suffer and program inadequacies may be harder to decipher. Many parties warn that the desire to simplify programs should not stifle innovation.

In reply comments, DRA states that few parties made concrete suggestions for reducing the number and complexity of programs, and recommends that programs be reduced into three categories based on the duration of program savings.²⁰¹ In reply comments NRDC states that programs should not be eliminated based on length of savings.

7.2. Discussion

While reducing the number and complexity of energy efficiency programs is not a new proposal, there were few concrete suggestions on the specific details of this proposal. NRDC's suggestion to focus on consolidating, rather than eliminating, programs has merit. We agree with NRDC that streamlining and standardizing delivery of programs could create less confusion among programs and possibly encourage new entry into the market. This new entry could achieve additional energy efficiency savings.

SCE's recommendation to realign programs based on market channels is compelling, and may represent the "natural evolution from the current portfolio's statewide program 'buckets'." While we agree with the spirit and direction of SCE's approach, we are wary of doing "too much too fast" in the energy efficiency markets. The 2013-2014 portfolio is intended to be a transitional portfolio, and we require several changes in this transition portfolio, some of which may be at cross-purposes with the goal of reducing the number of utility programs. Therefore, we decline to adopt SCE's suggested changes for the transition portfolio. Rather, we take a first step in this direction with a limited number of program reductions for the transition portfolio. Specifically, we direct the IOUs to split and/or incorporate the HVAC Residential and Commercial Quality Maintenance, Residential Quality Installation, and Commercial Quality Installation sub-programs into the respective Residential and Commercial statewide programs. The IOUs shall consider moving the HVAC Technology and System Diagnostics and WE&T sub-programs into the statewide Emerging Technologies and WE&T Programs, respectively. Finally, the IOUs should consolidate the existing Residential and Commercial New Construction programs within their respective market segments, the Statewide Residential and Commercial Programs.

We believe the separate statewide HVAC and new construction programs are examples of programs that can be absorbed within the broader market sector programs (residential, commercial, etc.), and we instruct the utilities to exclude these stand-alone statewide programs from their transition portfolio applications. The cross-sector collaborative activities and information-sharing tools that have been developed through these programs need not be discontinued. Instead, we direct the utilities to identify in their applications the elements of the existing statewide HVAC and new construction programs they recommend maintaining, and through which remaining programs those activities and tools will be "housed" and funded.

We encourage the utilities to suggest further program cuts or consolidations in their applications, using a "best bang-for-the-buck" screen (excluding those that this Decision directs be continued or that are generally consistent with the other guidance provided herein).