Findings of Fact

1. While direct energy efficiency savings can be easily generalized (a certain more efficient light bulb would save the same amount of energy in Arcata as it would in Del Mar), the indirect savings from conserving water cannot.

2. There is considerable question about whether investments in water savings are cost effective solely from an energy perspective.

3. The current available information concerning embedded energy in water is inadequate to develop mature energy efficiency programs.

4. Because this is a new area of investigation, we do not have the benefit of an established body of knowledge on the issue of energy embedded in water to use as a foundation

5. While it is important to understand all of the savings resulting from a given initiative, those savings may provide little comfort to utility customers who are paying for a water conservation effort, but not seeing a direct benefit in the form of reduced energy use in their own service territory.

6. When the pilots are completed, we want to be in a position to determine whether water conservation and less energy intensive water measures should be allowed to compete for utility energy efficiency dollars. In order to do this, the pilot program results must demonstrate that saving and using less energy intensive water, in fact, saves energy - not in the abstract, but in application.

7. The objectives suggested in the February 16, 2007 assigned Commissioner's ruling accurately describe our interests as we consider the merits of approving the pilot programs, and are the criteria we will apply in making that assessment.

8. A simple statement that the utilities would undertake a study that calculates and analyzes cost-effectiveness does not provide sufficient assurance that the pilot process will get us where we need to go.

9. We are not at a point where we can say, with confidence, what the avoided water source is for a given water agency.

10. Ultimately, it would be logical to rely on extra-marginal supply assumptions for long term planning (more than one to two years in the future) and intra-marginal assumptions for the short term (one to two years ahead).

11. Based on the cost-effectiveness calculations submitted by all four utilities in their July 11, 2007 Additional Supplemental Testimony, all utility portfolios have ex-ante cost-effectiveness ratios of less than one.

12. In D.04-09-060 the Commission instructed the utilities to exclude "savings by customers not included in the calculation of savings potential" when "documenting program accomplishments ... in order to ensure consistency between the basis for establishing the goals and the assessment of whether those goals have been met." (D.04-09-060, mimeo. at p. 32, see also Finding of Fact 9.)

13. Since one of the purposes of the pilots is to enhance our methods of accounting for and tracking embedded energy savings and to clarify many of the disagreements over what the appropriate avoided energy metric should be with regard to embedded energy savings, it would be inappropriate to count embedded energy savings from the pilot programs towards our 2006-2008 energy efficiency goals.

14. Taken together, the utilities' study proposals do not provide a clear plan for understanding how energy is used in the California water system.

15. The relative lack of diversity in the proposed programs, both in terms of measures offered and customer classes to be served, reduces the likelihood that the utilities would emerge from the pilots with a comprehensive understanding of which strategies will work.

16. We want to know whether it makes sense to use standard water savings assumptions for high efficiency toilets in low-income sectors, as some low-income families may be larger and have fewer toilets available to the family than higher income families might. If true, both of these factors might result in greater water savings from a more water-efficient toilet.

17. We are not persuaded that an educational program such as SCE's proposed Green Schools program will produce meaningful results within the constraints of a pilot program and, therefore, do not approve it.

18. SCE's proposed industrial water efficiency program is duplicative of a program offered by SDG&E.

19. While the weather based irrigation controls offered by SCE are duplicative of the SDG&E managed landscape program, there is considerable logic supporting the efficiency of offering both advanced pH controllers and irrigation controllers to the customer simultaneously.

20. SCE considers Lake Arrowhead to be one of the highest water embedded energy districts in its service area, so its program has the highest likelihood of being cost-effective.

21. A more general large commercial customer program than that proposed by PG&E would allow it to focus on combined commercial and water audits and retrofits.

22. The landscape and industrial sectors are extremely important sectors for water use.

23. Recycled water is one important option for switching to less energy intensive water.

24. It would not be prudent to approve a marketing-only program as part of a short-term pilot program.

25. Since SoCalGas' Lake Arrowhead water conservation proposal complements the SCE Lake Arrowhead water conservation program, it is it is reasonable to approve it.

26. The electric utilities in the state currently provide a very valuable electric pump testing program. There is no comparable testing program for natural gas-driven pumps. By proposing to test the efficiency of natural gas pumps and engines, SoCalGas offers a very useful program in a neglected sector of the water community.

27. PG&E's Commercial and Industrial Pilot Program study would develop data by metering commercial and industrial processes and measuring their water consumption before and after the conservation intervention.

28. SDG&E's Industrial Water Audits study would develop data by metering industrial processes and measuring their water consumption before and after the conservation intervention.

29. There is a need to determine if toilet replacements in low-income homes are used more frequently and save more water (and thus more energy) than toilets in the average residential home. The study in this area needs to determine: (1) the vintage (efficiency) of toilets in low-income (single- and multi-family) as compared with average income families in California, (2) the number of toilets in low-income houses in contrast with the number in average California residence, (3) number of occupants in low-income homes as compared to average income homes, and (4) the frequency of use of low-income toilets as compared with average residential installations.

30. We are skeptical that billing analysis and weather data will provide meaningful assessment of SDG&E's landscaping pilot program and would prefer focusing on one test case in which landscaping water use is directly measured in an area without the landscape efficiency program, and another with the landscape efficiency program to allow for a comparison of the water savings.

31. PG&E proposes to investigate emerging technologies in water system operating efficiency (specifically in monitoring and telecommunications) as a means to improve water efficiency and reduce water use.

32. Since it is the utility's responsibility to conduct program process evaluations of the programs it oversees, the Commission will neither approve nor disapprove the methods of these evaluations. We will, however, permit the energy utilities to spend up to 2% above and beyond the total budget for programs and studies on these activities. The utilities will retain the discretion to allocate those process evaluation funds as appropriate among the various pilot programs.

33. The proposed land profile study is a means to provide all participants with end-user water use profiles.

34. Since there is not much research on the subject of toilet flappers and few water utilities are offering such a program, a study in this area would help determine whether there is a large potential for cost-effective flapper replacement.

35. It is unclear why water/energy savings alternatives for low-income customers would be any different from those for any other water/energy customer.

36. We see no reason that the existing water embedded energy calculator cannot be modified to incorporate issues that are of concern. There is no apparent need for the utilities to undertake a parallel effort.

37. In order to speed the day when the utilities can implement longer-term water conservation programs, we need to ensure that the pilot studies are comprehensive.