13. Integration of LIEE with Other Utility Demand-Side Programs
13.1. Introduction
In their budget applications, the utilities presented a variety of proposals on integration. We approve those proposals, with some important conditions. Simply listing proposals is insufficient and may not ensure that the IOUs meet the Commission's requirement of pursuing successful integration and coordination. Therefore, we use this decision to present a clear definition of integration and a set of objective metrics to be used to track and report integration proposals. Moreover, we require the IOUs to conduct additional efforts to achieve greater integration and coordination above and beyond the utilities' own proposals.
On October 19, 2007, the Commission issued D.07-10-032 which promotes the objective of achieving maximum savings by providing integrated customer demand-side programs. The Commission also outlined policy and program guidance for the LIEE program in D.07-12-052, including the following integration goal:
LIEE programs should be integrated with other energy efficiency programs to allow the utilities and customers to take advantage of the resources and experience of energy efficiency programs, promote economies of scale and scope, and improve program effectiveness.89
Specifically, we directed the utilities in their LIEE programs to "emphasize long term energy savings that ... are, to the extent cost effective and practical, integrated with other demand-side programs, such as energy efficiency programs, solar installations, demand response and other programs."90
13.2. Discussion
The IOUs' proposals demonstrate some confusion regarding the difference between "integration" and "leveraging"; thus, a definition is in order. We define integration in the context of LIEE programs as follows:
Integration constitutes an organization's internal efforts among its various departments and programs to identify, develop, and enact cooperative relationships that increase the effectiveness of customer demand side management programs and resources. Integration should result in more economic efficiency and energy savings than would have occurred in the absence of integration efforts.91
Certain standards or metrics are needed in order to measure and thereby promote integration within each IOU. Though the utilities agreed at the July 17, 2008 workshop that such metrics are appropriate, they state that the assessment of these metrics is difficult without sound data or input from impacted stakeholders who need compatible databases to track such metrics. We disagree; integration is an internal effort conducted by the IOU itself. Incompatibility of databases therefore should not pose a concern, as the IOU will be tracking data internally. Utilities are likely to track this information as a part of regulatory reporting requirements and good business practices.
The utilities also suggest conducting a study on potential metrics and using quarterly public meetings92 as a venue to discuss this strategy. It would be imprudent to wait for a study to be completed. Instead, we move the integration process forward in this decision by adopting working integration metrics to be used in the context of the LIEE program.
To be considered a successful integration effort, integration should meet certain criteria and achieve certain results. The metrics for evaluating the results of integration should be replicable in other demand side management programs. Therefore, the Commission establishes certain metrics to be used in the context of the LIEE program. We may change these metrics in future program cycles, but they serve as a good first step in giving the utilities a clear set of criteria and results to work toward meeting over the upcoming cycle.
In order to be counted as successful, an integration effort must accomplish at least two of the following four goals:
(i) Interdepartmental Coordination: Increased coordination in work efforts between departments within the utility. This type of integration results in cost and/or resource savings as well as one or both of the following:
a. Consolidation of work efforts,
b. Elimination of overlapping and/or repetitive tasks.
(ii) Program Coordination: Increased coordination between multiple programs managed by the utility. This type of integration results in cost and/or resource savings as well as one or both of the following:
a. Increased services provided to customers,
b. Greater number of customers served by a program.
(iii) Data Sharing: Increased information and data sharing between departments within the utility and/or multiple programs managed by the utility. This type of integration results in cost and/or resource savings as well as one or both of the following:
a. Greater number of customers served,
b. Consolidation of work efforts.
(iv) ME&O Coordination: Consolidation of marketing, education and outreach for multiple programs managed by the utility. This type of integration results in cost and/or resource savings as well as any or all of the following:
a. Greater number of customers reached,
b. More cost effective marketing, education and/or outreach to customers,
c. Elimination of customer confusion.
We will require that the IOUs track and report the status of each of the integration efforts listed in their applications. The utilities also should track additional integration efforts, using the guidance set forth in this decision to devise such efforts. They shall present the results in their annual report submitted to the Commission each May. In cases where the integration effort does not meet at least two of the above goals, the IOUs shall provide a reasonable explanation. We direct Energy Division to review the reports and work with IOUs to enhance integration during the 2009-11 cycle if our metrics are not met; the IOUs likewise are directed to work with Energy Division as appropriate. Energy Division shall make recommendations to the Commission if the IOUs' integration efforts are failing to meet the above metrics, and the IOUs shall cooperate with the Energy Division, as necessary, to follow through with the Division's recommendations.
The IOUs have made certain integration proposals in their budget applications. We approve all proposals, using the above definition to distinguish between integration and leveraging, where appropriate. Some utilities have gone to greater lengths than others to outline efforts designed to achieve integration and coordination. We require the utilities to pursue additional efforts in certain cases, as outlined below.
The IOUs propose various means of integration of LIEE with CARE. This is an obvious strategy for integration, given that the programs serve the same eligible population. We direct the utilities to coordinate all LIEE outreach with CARE. This form of integration utilizes the pre-existing CARE infrastructure and results in targeting the same customer segment at an incrementally low cost to the LIEE program. The IOUs shall also pursue integration in other program functions such as income verification. Overall, we require that all utilities integrate CARE and LIEE functions to the greatest extent possible to reduce costs.
DRA recommends that the Commission require utilities to offer CARE and LIEE enrollment during customer service calls. We will not require all IOU service/customer representatives to inform all customers about CARE and LIEE on any service call. However, we agree that a customer should be informed of CARE when calling specifically about LIEE and should be informed of LIEE when calling specifically about CARE. We also agree that a customer should be informed of CARE when it is likely a customer needs program assistance, and at the time of a customer's service initiation or change of service address, as will be discussed in the section on CARE Administrative Costs. This change will achieve greater integration between LIEE and CARE as well as coordination with the IOUs' call centers. Because we expect integration to reduce rather than increase cost, we do not allocate additional funding to the IOUs for this purpose.
D.07-12-051 directed the utilities to integrate the LIEE and Energy Efficiency programs through complementary approaches with the intent of eventually managing both as a single program. All utilities should increase coordination between LIEE and Energy Efficiency departments, thereby achieving greater interdepartmental coordination. With each utility's differing internal structures, we do not wish to be overly prescriptive in outlining how integration should occur. What we are looking for are efforts that save costs and resources, consolidate internal work efforts, and eliminate tasks that overlap between respective departments.
Certain IOUs propose low-cost and clearly defined plans for integrating components of the LIEE program with Energy Efficiency programs. The residential Energy Efficiency programs are especially obvious areas to pursue programmatic coordination. We commend the utilities' intentions to integrate at the programmatic level. We especially applaud the proposals that do not include an additional budget request, given that integration should be about reducing costs, not increasing costs. We require all utilities to increase programmatic coordination between LIEE and Energy Efficiency programs, thereby increasing the availability of energy efficiency services to a greater number of customers.
Local Government Partnerships (LGPs) are an obvious and ideal place to pursue integration between LIEE and Energy Efficiency at the programmatic level. LGPs are managed by the general Energy Efficiency program and involve local governments as a third-party administrator in carrying out an array of projects. By coordinating LGPs with the LIEE programs, the IOUs can use the pre-established working relationships between the utility and the local government to pursue leveraging opportunities. Additionally, the LIEE infrastructure can be used for the benefit of other programs. The utilities shall examine current and future LGPs and pursue any potential synergies that exist with the LIEE program to ultimately reduce costs. This form of integration can be achieved without additional budget requests.
D.07-12-051 also encourages the IOUs to pursue integration between their LIEE and Demand Response programs. Both PG&E and SDG&E propose pilots involving the Demand Response program, each with a pilot specifically geared to prepare low income customers for the implementation of Advanced Metering Infrastructure (AMI). The IOUs shall make sure that what they learn in their Demand Response proceedings is leveraged with the LIEE program.
The Commission has committed 10% of overall funds available through the California Solar Initiative (CSI) for low income customers and affordable housing projects. As part of the CSI, the Commission approved D.07-11-045 on November 16, 2007, adopting the Single Family Low Income (SFLI) program. Designed to provide incentives for solar photovoltaic systems to single-family, owner-occupied, low income homes, the program offers incentives ranging from $4.75 to $7.00 per watt. Approximately 5,000 households are expected to receive incentives through the SFLI program. The Multifamily Affordable Solar Housing (MASH) program is currently under development in R.08-03-008.
D.07-11-045 set certain parameters for integrating the SFLI Program and the LIEE Program, specifically stating, "[l]ow income incentive applicants should obtain an energy efficiency audit and enroll in LIEE, if eligible, and have all feasible LIEE measures installed or be on the waiting list for installation prior to receiving solar incentives." The decision requires the system size eligible for low income incentives to be based upon an estimate of household load with all feasible LIEE measures installed. We also directed the Energy Division in D.07-11-045 to explore methods for expediting low income solar incentive applicants' receipt of LIEE benefits.
D.07-12-051 directed the utilities to consider how the low income element of the CSI program will be coordinated with the LIEE program. A follow-up ruling issued by the assigned Commissioner on July 13, 2008 requested further details on this issue. In their responses, the utilities claimed they could not fully comment on their plans to coordinate given that the SFLI program implementation plan had not yet been devised. Moreover, the utilities point out that a final decision on the MASH program remained pending.
As the SFLI program and the MASH program have not yet been implemented, we direct the utilities to prepare for this process by giving full consideration as to how coordination with LIEE will occur. Though we do not wish to be overly prescriptive at this point, both interdepartmental coordination and programmatic coordination between LIEE program administrators and the CSI low income program manager(s) will be required. In addition, in accordance with D.07-11-045, the Commission directs the utilities to remove any barriers to LIEE participation for eligible customers who wish to participate in the CSI low income programs. Solar applicants should be fast-tracked through the LIEE program in the event that a waiting list for LIEE measure installation exists.
The eligibility criteria for LIEE and the CSI low income programs are not exactly the same. For example, only those households that meet definition of "low income residential housing" in Pub. Util. Code § 2852 can participate in SFLI and MASH. This may not overlap 100% with those who qualify for LIEE programs.
Nevertheless, certain synergies and cost savings opportunities for coordinated marketing and outreach between LIEE and the CSI low income programs may exist, given the overlap in the programs' customer bases. Subsequently, the Commission directs the utilities to pursue coordinated marketing and outreach in areas where residences are likely to qualify for the SFLI and MASH programs. If appropriate, the program manager, Energy Division and the IOUs may agree to modify LIEE outreach materials to include information on customers' potential eligibility for CSI installations and CSI contact information.
89 D.07-12-051, p. 11.
90 Id. p. 88.
91 We have made minor changes to the proposed decision's definition so that the definition has potential application to our demand response and Energy Efficiency programs. Depending on the outcomes of the demand response and EE proceedings, in which we are also examining utilities' integration efforts, we may further modify the definition.
92 DRA asks us to discontinue quarterly public meetings, which supplanted a process known as Standardization Teams that worked on standardizing measures and procedures in the LIEE program. We decline this proposal, as we believe public input into the LIEE program is vital to the program's credibility and relevance.
