7. Evaluation

Staff recommends ongoing program evaluation and a formal biennial independent evaluation. The Program Manager would be required to report on program progress on a regular basis. In addition, Energy Division would select an independent evaluator every two years to review both the Program Manager and the incentive program, using Staff's proposed milestones and evaluation criteria. Staff proposes program milestones such as program implementation within the service territories of PG&E, SCE, and SDG&E within 12 months, 1,000 PV systems installed by 2010, and contacts to 100% of the eligible population by 2010.

SDG&E recommends that rather than milestones, the Commission should establish knowledge goals for the program. For example, the Commission should set a deadline for the Program Manager to determine how many qualifying customers exist at various income levels, rather than a system installation milestone. SCE maintains that because so many aspects of this program are uncertain, adoption of strict milestones would be premature. A WISH states that it is more realistic to expect implementation to take 18 months, rather than 12. Grid Alternatives supports the staff's proposed milestones as appropriate and feasible.

We adopt a modified version of the Staff recommendations for evaluation criteria and milestones for the program. The target date for the Program Manager to reach the milestones will now be the end of 2010, which allows approximately two and half years to reach the milestones assuming the program begins by mid-2008. In comments on the proposed decision, several parties suggest the milestones are too aggressive and unrealistic. We make minor modifications to the milestones, but we will leave the target goal of 1,000 PV installations by the end of 2010. We consider this a reach goal that will provide a useful benchmark and a basis to evaluate the program design and outreach efforts. Appendix A contains the evaluation criteria and milestones for the Single-Family Low-Income Incentive Program.

We adopt the Staff Proposal that every two years, Energy Division will select an independent evaluator to review both the Program Manager and the low-income incentive program. The Energy Division will select the evaluator through an RFP process and will direct one of the utilities to enter into contract with the evaluator. The co-funding agreement described in Section 5 shall also address arrangements between the contracting utility and the other utilities to pay for these evaluation contracts from each utility's CSI Low-Income funds.

In addition, we agree with the Staff Proposal that the Commission needs regular reporting by the Program Manager to the Commission's Energy Division. Thus, we will direct the Program Manager to deliver quarterly reports on progress of the program to the Energy Division. Details on the quarterly reports are set forth in Appendix A of this order.

Finally, we will require the Program Manager to agree to submit to an annual audit of program expenditures. The purpose of the audit is to ensure program funds are paid to legitimate and verified installations of solar energy systems on qualifying homes and that administrative funds are spent in a reasonable and appropriate manner. Energy Division should ensure this audit requirement is part of the Program Manager's contract.