20. Next Steps and the Process for 2013-2014
Utility Portfolio Applications and Review
20.1. Inclusion of Spillover in Cost-Effectiveness Calculations
In comments on the proposed decision, several parties emphasize their support for inclusion of potential "spillover effects" in cost-effectiveness calculations. We agree that inclusion of such impacts, to the extent they may be quantified or estimated, may more accurately reflect the broader market impacts of the programmatic activities. Several analytical activities are underway in this transition period which may allow valuation of the portfolios from such perspectives in the future.
An example of one potential type of spillover effect is when a customer who participates in a utility energy efficiency program may also reduce energy use in other ways. Another example is when the existence and dissemination of information about a utility's energy efficiency programs may cause customers who do not participate in the programs themselves to modify their behavior. Past impact studies provide some historical indication of these impacts and may be useful in developing appropriate estimates. Market effects analysis has been conducted in the 2006-2008 program cycle and is underway in the 2010-2012 program cycle to quantify the market effects of IOU programs.
Commission Staff should continue to explore methods to quantify these impacts and consider their inclusion in cost-effectiveness methodologies in the course of the cost-effectiveness "track II" analysis to inform future portfolios.
In the interim, the IOUs may be able to reasonably quantify spillover impacts in the portfolio projections for the 2013-2014 portfolio cycle, and could help us improve estimates over time. Consequently, for their 2013-2014 portfolio applications, the utilities may present estimates of spillover that may result from the proposed programmatic activities, and may propose the inclusion of spillover effects in their cost-effectiveness analyses and results. This may be provided at either the program or portfolio level. Any such proposals should be vetted with stakeholders and Commission Staff (via workshops or some other transparent process led by the utilities) prior to the application filing. Estimates should be based upon available research and analysis on spillover from programs within the state and possibly from other jurisdictions. We would consider these values during the application approval process.
20.2. Program Implementation Plans
Program Implementation Plans were filed in the previous 2010-2012 efficiency program A.08-07-021. The PIP template was derived through various rulings, workshops, party comments, and coordination between Commission Staff and the IOUs in 2008-2009. The PIP format was further revised after the Strategic Plan was adopted in September 2008. After an October 30, 2008 Ruling,506 the IOUs were directed to demonstrate how their energy efficiency programs reflected the short-term milestones and programmatic initiatives identified in the Strategic Plan.507 At that time, PIP templates solicited market transformation planning estimates, and program logic models, so that Commission Staff could understand the programs' linkages to the short- and long-term objectives in the Strategic Plan goals. In addition to the format for statewide programs, D.09-09-047 also adopted a format and process for pilot programs.
This Decision directs the IOUs to file specific information for market transformation programs in their upcoming applications for 2013-2014. In an effort to streamline reporting efforts and the review process for Commission Staff, the PIP template for statewide, local and third-party programs may be revised and simplified based on revised PIP templates that Commission Staff shall provide to the service list of this proceedings as soon as feasible, but no later than 30 days after the issuance of this decision.
20.3. Application Structure and Contents
The time available for submission and review of the utilities' applications and for the Commission to adopt 2013-2014 plans and budgets in response to those applications is limited. This requires that the applications contain all information required for the review without the need for supplemental filings. To facilitate the review and approval process, we direct the utilities' in their applications and supporting documentation to follow a common format. We direct Commission Staff to provide a common application outline to the utilities as soon as feasible, for the utilities to use in developing their applications. The application outline will contain both general and specific topics which must be addressed by the utilities in their applications as well as page limit guidelines. The utilities must include discussions of each topic; however, these discussions should be precise yet direct in addressing the topic.508 In order that the review of applications is able to proceed in a timely manner, the utilities should avoid repetitive discussions in multiple sections but be clear in addressing all direction in this decision relative to proposed activities and application content.
20.4. High-Level Application Budget and
Cost-Effectiveness Summary Tables
As discussed above, the utilities are required to submit with their applications a prospective cost-effectiveness showing. The showing must provide sufficient detail so that a review can be undertaken of all cost elements of all areas of activities as well as the dollar value benefits arising from the estimated energy savings impacts of those activities. In developing their portfolio budgets and cost-effectiveness showing for their proposed portfolios, the utilities are directed to adhere to applicable Decisions and Rulings and not propose alternative portfolio scenarios based on their preferred changes to existing policy or direction. The aforementioned common application outline (which shall be provided to the utilities by Commission Staff) will provide a list of budget, cost-effectiveness, energy savings and emissions reductions tables that are required to be submitted with each application. These tables shall be completed and provided with each utility's application. Any alterations to the table contents and format must be agreed to by Commission Staff in advance and any such changes must be common to all utilities' submissions.
20.5. Detailed Application Cost-Effectiveness Showing
To support the summary budget and cost-effectiveness tables required above for the utilities' applications, the utilities shall also submit a more detailed cost-effectiveness showing that provides additional information on the energy savings assumptions and costs that were used to derive the values in those summary tables. This submission will consist of cost-effectiveness calculator input-output files; the contents of this submission requirement will also be included in the aforementioned common application outline to be provided by Commission Staff. The cost-effectiveness calculations shall utilize the electric and gas avoided costs, and the DEER values and methods, adopted in this decision. The non-DEER and custom project assumptions utilized in the required cost-effectiveness submission shall utilize DEER values and methods, when available, and be otherwise based upon the non-DEER workpapers also submitted with the utility applications. The utilities shall supply supporting documentation on the assumptions used to develop the contents of their cost-effectiveness calculator submission to facilitate review by Commission Staff and parties.
20.6. Programs Advisory Groups
In comments on the Phase IV Scoping Memo, SDG&E and NAESCO support restoring the Programs Advisory Groups which had been used in the 2006-2008 program cycle.509 SDG&E/SoCalGas state that the Programs Advisory Group was "an effective way to include key stakeholders in the design and implementation of programs, and more importantly, foster trust between these stakeholders." SDG&E/SoCalGas go on to propose a specific Programs Advisory Group structure which would include local and statewide Programs Advisory Groups and subcommittees to address specific issues.
In D.07-10-032, we eliminated the Programs Advisory Groups due to concerns that they were "more often forums for the utilities to present decisions already made rather than to seek input in a collaborative manner."510 The Programs Advisory Groups were eliminated "in favor of the more inclusive and comprehensive strategic planning approach" adopted in D.07-10-032. Today, our strategic planning collaborations continue primarily through the action plans discussed earlier in this decision. However, we see merit in considering proposals to reinstitute the Programs Advisory Groups. Therefore, we direct the IOUs to include proposals in their 2013-2014 applications to potentially utilize Programs Advisory Groups as a consultative resource for mid-cycle program changes or additions or for post-2014 portfolio planning. The IOUs should include discussion of a possible Programs Advisory Group role in their proposals to improve the competitive solicitation for third-party programs, as discussed above in this decision.
506 http://docs.cpuc.ca.gov/efile/RULINGS/92972.pdf.
507 Decision 09-09-047 at 89.
508 We require that the utilities' portfolios demonstrate cost-effectiveness when including Codes and Standards advocacy savings and program costs.
509 SDG&E/SoCalGas Comments on Phase IV Scoping Memo at 5; NAESCO Reply Comments on Phase IV Scoping Memo at 3.
510 D.07-10-032 at 105.
