5. Discussion
The importance to California of developing far-sighted, robust energy efficiency programs cannot be understated. The draft Plan - which built upon the many efforts leading up to the joint Utility CEESP -- articulated our ongoing commitment to a long-lasting vision of continuous improvement, whether through utility programs we authorize, partnerships with other governmental agencies, or other important public initiatives. The draft Plan showed that we intend to lead the way to achieve the next generation of energy efficiency through all possible means at our disposal. To accomplish this, the draft Plan discussed our intent to undertake and engage actions by leaders and stakeholders both within our regulatory jurisdiction and beyond, recognizing that the various actors must work collaboratively over the long term to leverage all of the available resources to change the way Californians use energy at home and at work.
We adopt the modified California Long-Term Energy Efficiency Strategic Plan (Plan), which is Attachment A to this decision, and embrace it as our own on behalf of the state of California. The Plan is, as the name suggests, a planning document. The Plan is not intended as a means for the Commission to broaden its reach inappropriately into the design or implementation of energy efficiency program activities
Based on comments of parties, a number of changes have been made from the draft Plan to the Plan we adopt today. These changes include:
· Market Transformation: A number of parties called for more language on the topic of market transformation. NRDC, Community Environmental Council, TURN and DRA commented that the Commission should establish a schedule for adopting definitions and metrics for evaluating progress toward the market transformation goals envisioned by the Plan. While, due to time constraints, a schedule was not developed, the discussion on market transformation in the Plan has been substantially expanded. The Plan recognizes that work remains in developing rules and guidelines for tracking market-transformation but it also presents a clear definition of the term and affirms market transformation as a unifying objective of the Plan itself. The Commission will take action by the end of 2009, or when the IOU 2009-2011 portfolio's are approved, whichever is sooner, on the remaining issues that need to be addressed in market transformations. This includes, at a minimum, identifying the process to track progress towards defined end points for program efforts and progress metrics.
· Lighting: DRA and NRDC called for greater attention to lighting measures within the Plan. In particular they suggest the Plan should call out a holistic approach to lighting measures to maximize long-term savings, and move utility programs into step with market changes. Accordingly we have added a discussion of the lighting market, emerging lighting technologies, and have defined new strategies within both the Residential and Commercial chapters to engage the next generation of lighting programs. In addition we respond to party comments (DRA, TURN) on the importance of proper compact fluorescent light (CFL) disposal, and suggest strategies to address the management of toxics in lighting disposal.
· California Alliance: A number of parties, including CCSF, Community Environmental Council, DRA, and the Municipal Utilities, emphasized that the objectives of the plan would be particularly well-served in later stages by coordination under a broader alliance. A dedicated California Energy Efficiency organization with membership and mandate to match the scope of the goals presented in the Plan could be organized on a non-profit or quasi-governmental basis. While the Commission has limited authority to unilaterally implement this recommendation, we generally agree that the scope of the Plan demands a broad-based alliance which invites participation by all stakeholders. The Plan now reflects this aspiration. However, until such an entity is formed, the Commission will continue to take the lead in moving the Plan's directives forward, with increasing participation by non-Commission and non-IOU entities.
· Demand-Side Management Coordination: Several parties suggested ways in which the chapter on Demand-Side Integration and Coordination could be strengthened. We have incorporated DRA's suggestion that conservation and behavioral impacts is a critical component of demand side management. We have also recognized that new technologies associated with the advanced metering initiative and Smart Grid can and should result in energy savings due to conservation. In response to IOU comments, we have also added discussion on the need to better integrate Commission proceedings in the area of demand side management, in order to enable offerings of integrated packages and maximize savings opportunities, and hopefully reduce overhead costs of delivering those services.
· Financing: The IOUs and others suggest that the topic of financing receive greater emphasis within the Plan. We agree that innovative financing mechanisms will be a critical component in achieving the Plan's vision. Accordingly, we have expanded discussion of financing throughout the strategies in the Plan.
· Marketing, Education and Outreach: DRA commented that the creation of a respected and trusted California brand providing credibility to efficiency programs was among the most important priorities within the Plan. It suggested, additionally, that this branding effort would best be managed by the State. Accordingly, we have re-emphasized the urgency of a single branding and outreach strategy to the Plan. IOUs also comment that the plan should distinguish between the functions of a single brand and specific program marketing strategies which can be tailored to regional and consumer differences. We agree that this is an important distinction to make, and do so in the Plan.
· LIEE: A number of parties (A W.I.S.H., CCSF, DRA, the Community Action Agency of San Mateo County, the IOUs, NRDC, the Local Government Sustainable Energy Coalition, and California Center for Sustainable Energy) filed comments on the LIEE aspects of the Plan. Comments focused on (1) the definition of "cost effective" in the LIEE context; (2) workforce training in low income communities; (3) customer segmentation for targeted outreach efforts; (4) improved IOU coordination with local government and other organizations working with low income communities; and (5) the provision of LIEE measures that improve low income customers' quality of life. The upcoming decision on the IOUs' low-income energy efficiency programs and budget applications (A.08-05-022 et. seq.) will address these issues in detail. We anticipate that as we gain experience with a LIEE program that reaches 25% of eligible customers every three years, we may have modifications to the Plan. We disagree, however, that the Plan requires significant modification with regard to LIEE issues. However, we have made several wording changes to the Plan that take into account the foregoing issues.
We now answer some of the remaining questions we posed in the OIR:7
· What strategic roles should the Commission take in working with other governmental agencies and other non-jurisdictional stakeholders in support of a Commission Strategic Plan?
The Commission is committed to a proactive effort in coordinating with other governmental agencies and non-jurisdictional stakeholders. We will continue to work with the California Air Resources Board (CARB) and its process as CARB develops the final Assembly Bill (AB) 32 scoping plan this year. We will work with CARB to see that the adopted Plan and the final AB 32 scoping plan are consistent and cross-referenced, and we are hopeful that CARB will utilize the Plan in its development of a cost-effective pathway to statewide greenhouse gas reductions. We will continue to work with the CEC, especially in areas of the Plan where the CEC logically will take a lead role, such as zero net energy (ZNE) buildings and heating, ventilation, and air-conditioning (HVAC). We will work with local and regional governments both on a policy basis and in ensuring that funds in the utility energy efficiency programs we approve assist in implementing Plan strategies. We will also direct our Energy Division to take the steps necessary to implement the Plan, including development of a statewide energy efficiency brand and integrated marketing education and outreach (ME&O) strategy and forming the task forces and working groups identified in the Plan, in order to facilitate working with the CEC, local governments, publicly-owned utilities (POUs), other state and federal agencies, and the myriad of energy efficiency market players and organizations active in the development of this Plan. We further direct the CPUC Executive Director to consult with CEC, CARB and other agencies to identify Plan areas for which non-CPUC agencies may take a lead role.
At this time, we do not commit to setting up a California Energy Efficiency Alliance (CEEA), as suggested by several parties. Our first priority now is to review and approve energy efficiency portfolios for the energy utilities, while at the same time working with other agencies to implement the Plan. Nevertheless, we recognize that California would benefit from establishment of a broadly based neutral and independent statewide group, to help guide energy efficiency policy recommendations and market transformation activities across the state. An organized statewide group would assist this Commission, ratepayers, and the IOUs in achieving our energy efficiency goals. Such an organization likely would be similar to other market transformation groups already established elsewhere in the country, including the Northeast Energy Efficiency Partnership and the Northwest Energy Efficiency Alliance. As discussed in the Plan, we will set up working groups that will pursue specific goals and sector strategies; out of that effort, a statewide group or organization may well develop. We are cognizant that we cannot lawfully delegate our jurisdictional responsibilities to another entity.
· How should the Commission define market transformation and what standards should be used to determine when market transformation has occurred?
As early as 1998, the Commission defined market transformation as "Long-lasting sustainable changes in the structure or functioning of a market achieved by reducing barriers to the adoption of energy efficiency measures to the point where further publicly-funded intervention is no longer appropriate in that specific market."8 D.07-10-032, p. 33, directed that "a key element of the Plan would be that it articulates how energy efficiency programs are or will be designed with the goal of transitioning to either the marketplace without ratepayer subsidies, or codes and standards." These statements continue to encompass our definition of market transformation. D.07-10-032 also stated that the forthcoming Plan would incorporate the market transformation goal described above and "develop milestones to measure progress towards that goal," including the development of a "targeted timeframe for such market transition and the process for tracking progress so that it is clear at what point a program has made a successful transition or conversely, is having problems."
Market transformation serves as the unifying objective of the Plan, and its strategies are directed towards achieving this result in each respective sector by seeking to move utilities, the Commission, and stakeholders beyond an almost total focus on short-term energy efficiency activities and towards activities which bring about sustained market impacts. As such the Plan represents significant work towards the market transformation goal articulated in D.07-10-032. The Plan does not, however, identify the process to track progress towards defined end points, as envisioned in D.07-10-032. We will continue to make progress in this area and a key priority for the first Plan update will be to include identified timeframes, defined end points, and processes to track progress. The Plan recognizes that work remains in establishing an administrative structure for ratepayer-funded programs which encourages appropriate allocations of portfolio dollars to market transformational initiatives, in combination with governmental and private sector funds.
· How should a Commission Strategic Plan coordinate energy efficiency plans with demand response plans and solar programs?
We intend to open a new smart grid Rulemaking by the end of 2008. In addition, the assigned Commissioners and Administrative Law Judges (ALJs) tasked with handling energy efficiency, demand response and solar program proceedings will continue to coordinate the timing, filing requirements and programmatic outcomes of these proceedings. For example, on April 11, 2008, a Joint Ruling of Commissioners Grueneich and Chong in R.06-04-010 and R.07-01-041 directed the utilities to file pilot integrated demand side management programs jointly in the demand response and energy efficiency applications.
· What process should be used to update the California Strategic Plan?
We intend to update the Plan in 2010, so that it can be incorporated in utility plans for energy efficiency programs for 2012-2014. As discussed in the introduction to the Plan, along with again conducting public workshops open to all stakeholders to provide planning input and to vet planning documents as occurred with the current Plan planning cycle, the next planning cycle will include:
· Incorporating a variety of relevant information resources and initiatives, including market assessment and market potential studies, more directly in this and other planning processes, such as the CEC IEPR and the utilities' long-term procurement processes.
· Aligning this planning effort with related statewide long-term resource plans, such as those associated with air quality, water, land use, and climate mitigation.
· Evaluating the effectiveness of the goals and strategies established in the current Plan, as well as looking at relative costs and potential outcomes of new strategies.
· Consulting with and engaging more key stakeholders prior to initiating the planning cycle and cooperatively developing roles and a process that increases the information resources and participation of stakeholders. Central to this expanded process will be including additional state agencies, which may wish to co-sponsor various task forces --for example, in Workforce Education and Training or the Agricultural Sector.
· Discussing commitments with key participants identified as having responsibility for funding or implementing strategies.
Our adopted Plan includes a number of elements which can and should be initiated in the 2009-2011 timeframe. The utilities have filed applications seeking authorization for over $3.7 billion worth of energy efficiency programs for that timeframe, including a number of programs consistent with the June 2, 2008 joint utility CEESP application. Because the Plan goes beyond the joint utility application in certain ways, it is important to better integrate the Plan and the 2009-2011 program applications. The Plan includes a number of ideas, programs and concepts which can be implemented starting in the 2009-2011 timeframe. We direct the utilities to file amendments to their 2009-2011 program applications to achieve closer integration with the Plan when and as directed by the assigned Commissioner and ALJ in those proceedings. We also direct the utilities to assist staff and the Commission in our development of a statewide energy efficiency brand and an integrated ME&O strategy.
Due to time and other constraints, this Decision does not consider the cost-effectiveness of certain elements of the Plan. The Commission will take action when the IOU 2009-2011 portfolio's are approved to address cost-effectiveness of the elements in the Plan which are proposed or under consideration in the current utilities' portfolio applications consistent with the Commission's Energy Efficiency Policy Manual.
7 Other questions, such as those regarding the Joint Utility CEESP, are now moot. Low-income energy efficiency programs are addressed in Chapter 2 of the Plan.
8 D.98-04-063, Appendix A.
