18. Pilots and Studies
18.1. Introduction
The Commission encourages thoughtfulness and innovation in the design and delivery of LIEE/CARE programs. Past decisions have allowed each utility to fund new pilots and studies when the IOUs have demonstrated the pilots have a reasonable likelihood of success. We are concerned, however, that once completed, the results of the pilots and studies are not communicated across all IOUs. Therefore, for all pilots and studies we approve here, we will require the IOUs to meet with staff, the other IOUs, and other stakeholders to review the results of pilots and studies. Especially as to pilots, we expect the IOUs to make clear recommendations as to whether the pilots should be expanded statewide.
With this proviso, we authorize most of the IOUs' proposed pilots and studies, but reject some proposals. The following are the budgets we approve for pilots and studies for 2009-11:
For 2009-11, the utilities proposed a combined total of 12 pilot projects totaling approximately $4.1 million. They also propose a combined seven studies totaling $1.8 million. This decision authorizes, in total, approximately $3 million for authorized pilots, and $1.6 million in authorized studies. During the 2009-11 funding cycle, the Commission is intent on improving the IOUs' accountability for outcomes of their authorized pilots and studies so that the LIEE and CARE programs benefit directly from these initiatives. This section reviews the positions of the parties on this issue, approves or disapproves individual and/or
joint pilot programs and studies, and provides general guidance for the implementation, reporting, and assessment of these activities.
18.2. Comments Regarding Pilots and Studies
DRA recommends that the Commission require the IOUs to have a publicly reviewed evaluation plan in place before commencing any pilot or study. DRA also recommends that the Commission require the IOUs to demonstrate that they know whom, how, and what will be evaluated and what knowledge they will gain from their studies and pilots.131
The Commission held a workshop on July 17, 2008 during which time parties discussed this issue at length. There appeared to be general agreement among the parties that further reporting requirements and more detailed evaluation plans would be appropriate for pilots that would be authorized in 2009-11, and the utilities acknowledged that this was a reasonable request.132
A W.I.S.H. believes the value of Non Energy Benefits to LIEE participants, other ratepayers, and society as a whole has not been adequately captured in California. PG&E and others propose pilots during this funding cycle to explore Non Energy Benefits further, but unless those studies or pilots have significant input from a broad stakeholder constituency, A W.I.S.H. feels they may lack the breadth or depth to adequately inform the issue.
18.3. Discussion - Pilots
This section discusses the proposed pilots for each utility and specifies those that the Commission authorizes and denies for 2009-11. We discuss reporting requirements and evaluation mechanisms after delineating each pilot.
The Commission authorizes the following pilots:
PG&E proposes to partner with local community Meals on Wheels programs to identify eligible customers from its program, including elderly, homebound, frail or at-risk populations, to receive microwave ovens to use in lieu of conventional ovens when heating up the frozen meals they receive each week. Stating that microwaves use up to 80% less energy than conventional ovens,133 PG&E proposes to spend $285,000 giving 5,000 microwaves to eligible customers over the 2009-11 period.
18.3.1.2. Online (Off-Site) PG&E LIEE/Energy Partners
Training Pilot
PG&E's LIEE program faces the growing challenge of training enough personnel (whom PG&E calls "Energy Specialists") to effectively reach the proposed goal of providing all eligible and willing low income households with energy efficiency measures by 2020. As a part of streamlining the training process for Energy Specialist certification, PG&E proposes to study which elements of its current training program, currently conducted onsite at the PG&E Energy Training Center (ETC) in Stockton, California, can be moved to a web-based training module. PG&E believes this pilot has the potential for cost savings through a more individualized training regimen as well as added capacity in the ETC schedule for training activities that must take place onsite. PG&E proposes to spend $450,000 from 2009-11 on this pilot, which may lead to further syllabus and curriculum development for the training certification program.
PG&E proposes to work with the City of San Joaquin on a leveraging-oriented pilot project that models the "local government/utility" partnership that the Commission is interested in promoting for energy efficiency efforts in California. PG&E's LIEE team will work closely with the municipality's grant-funded "City Rehabilitation Project" to help implement the residential direct install program. In addition to direct installation activities, this pilot will incorporate workforce education and training (WE&T) activities by working with contractors to identify local residents interested in energy efficiency apprenticeships. This pilot will develop ME&O activities using the variety of untapped channels that the local government and its associated agencies have to the community. The budget of $410,000 from 2009-11 is estimated to provide 314,000 kWh and 11,437 therms in energy savings.
We note, however, that there is a Community Choice Aggregator (CCA) in the area near San Joaquin. PG&E recently settled a case with the San Joaquin Valley Power Authority regarding its marketing in that area of California. PG&E shall not use the San Joaquin pilot in an attempt to persuade customers eligible to join the CCA to retain their business with PG&E.
High efficiency clothes washers, in comparison to standard models, are estimated to save 259 kWh, 117 therms, and 7,000 gallons of water per year per machine.134 PG&E proposes to target low income households of five (5) or more residents and provide them with a free, high-efficiency washer that is expected to provide a decrease in both energy and water costs for the customer as well as energy savings for the LIEE program. This pilot has a budget of $750,000 for 1,000 units, with implementation scheduled to occur fully within 2009.
Smart AC is a PG&E demand response program that gives customers incentives to install devices on their central air conditioning units that PG&E can utilize to lower power usage when demand for electricity nears capacity. There are rules in place to maintain customer safety and comfort, and customers receive a one-time cash reward of $25 for each installed unit. PG&E plans to work with the Smart AC program and offer marketing and outreach channels for this program to its low income customers. All costs for this pilot are borne fully by the Smart AC program.
The following pilots are not authorized for 2009-11:
PG&E proposes to partner with Habitat for Humanity in the East Bay Area with a budget of $300,000 dollars over the 2009-11 period. The Commission recognizes that this represents a good opportunity to leverage the resources of the LIEE program with a well-known and respected institution serving the low income community. However, the details in Attachment A.10-02 of Appendix D of PG&E's application, including the expected number of homes to be treated and/or estimated energy savings from each year's activities, are insufficient. Without such details, the funding for this pilot cannot be approved at this time.
This pilot proposes to conduct a community awareness and education initiative in partnership with the City of San Jose's "Strong Neighborhood Initiative." Over three years, the pilot would focus on a comprehensive approach to environmental sustainability, and the role energy efficiency plays in this action. While the impetus behind this pilot is laudable, ratepayer funded low income energy efficiency education henceforth will be funded only in association with tangible energy efficiency measures, as discussed above. Therefore, we do not authorize this pilot for 2009-11.
In its 2007-2008 budget application, PG&E asked for authorization of an Energy Education Workshop pilot working with CBOs in more rural areas of its territory to provide outreach and education to consumers who might not be eligible for LIEE measures.135 D.06-12-038 granted $400,000 per year for these workshops in 2007-2008,136 but denied PG&E's request for $50,000 to perform an evaluation of the program.137
PG&E briefly reported this pilot in its 2007 LIEE annual report. In that report it states "in 2007, the education curriculum was developed and training classes were set up. Training classes were held during the first quarter of 2008, and Group Energy Education workshops will be conducted beginning in the second quarter of 2008."138 What is not clear in this report is why only 1.6% or $6,230, of the $400,000 available for the year 2007 was used. Similarly, as of June 2008, only 3.5% or $13,826 of $400,000 available for the year was used.139
As discussed elsewhere in this decision, the Commission will generally authorize only low income education that is conducted with near-term energy efficiency measure installation. The energy education workshops do not guarantee immediate energy savings from installed measures, and as we attempt to increase the cost effectiveness of the low income program, these activities do not provide clear proof of their effectiveness. The Commission does not authorize this pilot for 2009-11.
This pilot proposes to educate PG&E's low income customers about PG&E's Advanced Metering Infrastructure (AMI) technology, called SmartMeter. AMI technology will have application to the LIEE program, but PG&E has not presented enough information to authorize this pilot.
Further, we have approved Demand Response pilots in the various IOUs' Demand Response proceedings. We approved a programmable thermostat pilot for SDG&E in connection with its most recent Demand Response decision, and are considering one for SCE at this time. We are concerned that the IOUs are seeking to carry similar pilots in different proceedings, with no integration/coordination among the requests or the pilots themselves. We do not approve this pilot.
SCE does not propose any pilots for 2009-11.
The Commission authorizes the following pilot:
18.3.3.1. Natural Gas High-Efficiency Forced Air Unit
Furnace Pilot
SoCalGas proposes a pilot to begin after the 2008-2009 winter season that would install 250 high-efficiency natural gas Forced Air Units in low income customers' homes whose space heating needs are at or above 300 therms for the winter season. The total cost for the pilot is $725,000. Focus on long term and enduring measures is one of the keys to increased energy efficiency in California, and we thus authorize this pilot.
The Commission authorizes the following pilots:
SDG&E proposes a pilot in 2010 that will offer an In-Home Display - a digital display that gives real-time energy use and billing information - to qualified low income customers. The budget for this pilot is $145,000 and is expected to reach 300 customers. SDG&E estimates that participating customers will save approximately 10%-15% off their monthly energy consumption.
This type of technology, and the benefits to low income customers that receive proper training in its use, embodies the direction we are moving in for the future of energy efficiency in California. In authorizing this pilot, the Commission encourages SDG&E to follow DRA's recommendations in its protest of June 19, 2008, especially those that establish sub-groups for the studied population.140
SDG&E proposes a pilot for 2011 offering a Programmable Controllable Thermostat (PCT) to 250 low income customers. The pilot will test the impact of appliances that are linked via a network device (the PCT) in the homes of customers with both electric consumption above 500 kWh per month and electric appliances that the PCT can control. This pilot will help SDG&E in evaluating demand response and energy efficiency whole-house solutions by providing customers with the technology to reduce both electric energy consumption and peak demand. The cost for this pilot is set at $230,000. This pilot provides education for a measure that will be installed in the near term and has the potential for enduring energy savings. We therefore authorize this pilot.
The Commission believes that the pilots should be accompanied by reporting and evaluation requirements. We held a workshop on July 17, 2008141 for parties to discuss these activities. This section sets forth implementation, reporting, and assessment requirements for the authorized pilots discussed in the previous section.
We group the pilots roughly under three categories: measure, non-measure, or combined pilots. Measure pilots involve trials of new technology and/or energy efficiency hardware on a small scale, with the intention of expanding the measure to the entire utility and/or sharing results with other utilities if proven successful. Non-measure pilots consist of partnership, leveraging, education, training and/or other types of trial initiatives that involve increased leveraging or more efficient use of utility resources in execution of its low income programs. Combined pilots have elements of both measure and non-measure pilots.
With 60 days of this decision's mailing, all utilities will be required to submit a compliance Tier 2 Advice Letter meeting the requirements of this section of the decision. The Advice Letters shall expand upon Program Implementation Plans (PIPs) provided in attachments to the IOUs' budget applications and be submitted to the Commission's Energy Division staff for approval prior to the start of each pilot. These materials shall include:
· A timeline: Projected start and finish dates, report dates, assessment timeline and final assessment date;
· Projected breakdown of budgets: Categories displaying material costs, administration, data collection and analysis, reporting costs, etc., should be included along with a brief paragraph explaining the breakdown;
· Estimated Energy Savings - (Measure Pilots);
· Estimated Resources Leveraged/Saved142 (Non-Measure Pilots);
· Combined estimation of Energy Savings/Shared Resources (Combined Pilots);
· Overview of Pilot Evaluation Plan (PEP): The PEP should identify target data for capture, specify data capture activities, state how the IOU will provide results for estimated energy savings or resources leveraged/saved, give relevant dates and deadlines, and set forth a definition of success for the pilot.
The IOUs shall submit these materials to the Energy Division within 60 days in aggregate in the form of a Tier 2 Advice Letter for all pilots approved in this decision, regardless of when they are set to start.
Utilities shall submit "budget used" against "budget authorized" calculations in their monthly reports. The utilities must also submit in their annual reports, in the years a pilot is active, updates on each pilot that include the following information:
· A narrative overview discussing activities undertaken in the pilot since its inception; description of pilot progress, problems encountered, ideas on solutions, and description of activities anticipated in the next quarter and the next year;
· Status of Pilot Evaluation Plan (PEP).
Within 180 days of a pilot's completion, the relevant IOU(s) shall submit, upon completion of the pilot and the subsequent evaluation, a Final Pilot Report that includes the following:
· Overview of pilot;
· Description of Pilot Evaluation Plan (PEP);
· Budget spent vs. authorized budget;
· Final results of pilot; including energy savings (for measure pilots and/or resources leveraged/saved (for non-measure pilots) and
· Recommendations, including whether the pilot should be expanded to all eligible customers and/or expanded to other partners as well as reasons for or against this action; solutions to problems that were encountered, and changes proposed for expanding successful pilots to the larger LIEE program.
The Commission realizes and expects that each pilot will have a unique set of questions and problems it is seeking to understand, and thus a final report for any of these shall have distinct sections and characteristics that may not be applicable to other final pilot reports. The above guidelines represent a bare minimum that must be covered in the scope of these final reports.
18.4. Discussion - Studies
This section discusses the proposed studies for each utility, including joint utility studies. No IOU shall commence any of the approved studies without first coordinating with the Energy Division.
For 2009-11, the Commission authorizes the following studies:
18.4.1.1. 2010 CARE Recertification and Post-Enrollment Verification Non-Response Study
Working with the CARE Program, PG&E proposes a study in 2010 that looks at (1) customer non-response to multiple recertification and post-enrollment income verification requests, (2) why customers do not recertify or provide requested income documentation, and (3) how PG&E can overcome these barriers in its delivery of the CARE program. The budget for this study is $75,000. In view of our discussion elsewhere in this decision of the IOUs' post-enrollment CARE recertification activities, this is an important issue to investigate and we therefore authorize this study.
SCE proposes a study which will seek to identify causes of high-tier CARE customer energy use in mild climate zones. The study will also help assess and identify energy inefficient practices, evaluate appliances, and recommend best energy efficient practices to this group of customers. This study has a budget of $200,000. This research may provide useful insight into the future delivery of the CARE/LIEE program and therefore authorizes this study.
PG&E and SCE propose a joint study that will look at better ways of identifying eligible customers willing to participate in LIEE programs. The utilities will investigate what messaging "drives energy efficiency awareness and behavior" for low- income customers and will attempt to use this information to tailor messages, products, and services to low income customers more effectively. The joint utility cost for this study is $200,000 ($120,000 for PG&E and $80,000 for SCE). Household segmentation continues to be an important issue for many of the parties, and that this study will provide further guidance on the issue. We therefore authorize this study.
However, this study must occur in the first part of 2009, in order for its results to be coordinated into the single statewide ME&O program. Before commencing the study, the IOUs shall coordinate the study's development with IOU and Commission staff developing the ME&O program. After the study is completed, the IOUs shall communicate and discuss the results with the same individuals.
The joint electric utilities (PG&E, SCE and SDG&E) propose a Refrigerator Degradation Study for 2009 with a budget of $200,000. The current LIEE program allows for refrigerator replacement if the unit was manufactured before 1993, the year efficiency standards for refrigerator appliances rose substantially. The Database for Energy Efficient Resources (DEER) estimates that the effective useful life (EUL) of most refrigerators is 10-15 years.143
Based on this EUL, in 2009-11, we may start to see energy efficiency losses in refrigerators that the LIEE program replaced back in the mid-1990s. For this reason, the joint electric utilities wish to study and determine an appropriate age at which to replace older refrigerators in the program in order to achieve maximum energy savings. It may be that refrigerator energy savings diminish over time - e.g., as freon in the unit deteriorates or evaporates - and that more frequent refrigerator replacement is warranted that the current program allows.
In the LIEE program, refrigerator replacement provides significant, cost effective energy savings, and we strongly endorse a continued focus on this measure. Further study of this long term and enduring energy savings measure will prove itself useful to better program delivery and therefore approve this pilot. If more frequent refrigerator replacement would garner new, significant and cost effective energy savings, we may decide to allow such replacement in the future.
18.4.5. Joint Utilities' Programmatic Measurement and Evaluation (M&E) Studies (PG&E / SCE / SoCalGas / SDG&E)
The joint utilities propose a Process Evaluation - a study of the effectiveness of the overall program that will make recommendations for improved program design and delivery - in 2009, with a budget of $250,000. The Commission agrees with the utilities that a Process Evaluation is necessary, and authorizes this request. In addition, the Commission also instructs the utilities to complete this Process Evaluation in a time frame so as to inform the next budget applications and decisions (2012-14), meaning that a final report will be due no later than the end of 2010. However, because such studies must be independent of the IOUs, Energy Division shall oversee the study. The IOUs shall pay for the contract, but otherwise shall involve the Energy Division at the earliest possible time in the RFP and bid evaluation process so that independence is assured. The Commission, not the IOUs, will choose the contractor, and the IOUs shall have no involvement in directing the contractor's work.
The joint utility-proposed 2010 Impact Evaluation - a study to determine the electric and gas energy savings impacts of the LIEE program - should occur in 2009. Given that past Impact Evaluations have typically fallen behind or shifted schedules to consistently miss the "every two year" evaluation goal, a cycle of every three years would better preserve continuity, as well as parallel the new three-year cycle for budget applications. The utilities are planning on a 2008 Impact Evaluation of the LIEE program; the last one was performed in 2005. We modify this request to specify a 2009 evaluation, since we change so many program details in this decision and because 2009 is the first year of the 2020 Plan goal period. Additionally, the proposed 2010 Impact Evaluation may not be completed prior to the next budget cycle. By conducting an Impact Evaluation for 2009, we can ensure that the results are available prior to the submission of the 2012-2014 budget applications.
As with the Process Evaluation study, the Energy Division shall oversee the Impact Evaluation, select the contractor and coordinate with the IOUs on all duties. The IOUs shall pay for the contract, but otherwise shall involve the Energy Division at the earliest possible time in the RFP and bid evaluation process so that independence is assured. The Commission, not the IOUs, will choose the contractor, and the IOUs shall have no involvement in directing the contractor's work.
Lastly, the $600,000 requested in the current applications by the IOUs to conduct the Impact Evaluation is denied. The Commission instead directs the IOUs to utilize the $600,000 authorized in D.06-12-038 for this same purpose and carry it forward to the 2009 program year.
The joint utilities propose a Non Energy Benefits study with a budget of $300,000 for 2009-11. They note that the last Non Energy Benefits study was done in 2001 and that the numbers developed from that research are no longer applicable to the low income program. Since we rely on cost effectiveness criteria in setting the approved LIEE measure list, and cost-effectiveness in the LIEE context depends in part on Non Energy Benefits, we agree that the study should take place.
For 2009-11, the Commission does not authorize the following study:
18.4.7. LIEE Group Energy Education - 2007-08
Program Evaluation
This study by PG&E would have investigated the success of energy education that occurs farther from direct installation of measures, and could lead to reinstitution of the pilot, possibly on a wide scale, if it is deemed successful. This evaluative study would have allowed a one-time shift of $50,000 from the Energy Efficiency category (Energy Workshops) through to the 2009-11 M&E category. Because we deny energy education only programs, we disapprove funding for this study.
Similar to the section on pilots, this section lays out a framework of implementation, reporting, and assessment guidelines for the authorized studies discussed in the previous section.
Within 60 days of the effective date of this decision, all utilities are required to submit compliance Tier 2 Advice Letters meeting the requirements listed in this section. The Advice Letters shall expand upon each study's PIP provided in the attachments to the IOUs' budget applications and be submitted to the Commission's Energy Division staff for approval prior to the start of each study. The Advice Letter materials shall include:
· A timeline: Projected start and finish dates, reporting dates, and tentative final report date;
· Projected breakdown of budgets: Categories displaying material costs, administration, data collection and analysis, reporting costs, contractor fees (when applicable), should be included along with a brief narrative paragraph explaining the breakdown; and
· Specification of Contractor: For Programmatic M&E Studies -provide a brief narrative of selection process for the chosen contractor.
The IOUs may submit these materials to the Energy Division in aggregate in a single Tier 2 Advice Letter, or in individual Tier 2 Advice Letters no later than 60 days after the effective date of this decision.
D.03-10-041 contains guidelines that the utilities must follow in contracting for and administration of the Impact Evaluation.144 These guidelines are a good template for the Process Evaluation as well, and the Commission directs the utilities to follow this template in any contract and administration activities associated with the Process Evaluation.
D.06-12-038 specifies in ordering paragraph 6 that "The IOUs shall also comply with D.06-12-038 in carrying out any pilot or study approved in this decision: "SCE, PG&E, SoCalGas and SDG&E shall receive written approval from the Commission's Energy Division Director or his designee prior to issuing any request for proposal, awarding any contract to any consultant or issuing any report for LIEE or CARE programs." We reiterate this policy and direct the utilities to closely cooperate with Energy Division staff in meeting these critical support activities.
For studies, utilities shall submit "budget used" against "budget authorized" calculations in their monthly reports. The utilities shall also submit in their annual reports, in the years a study is active, updates on the study that include the following information:
· A narrative overview discussing activities undertaken in the study since its inception; description of study progress, problems encountered, ideas on solutions, and description of activities anticipated in the next quarter and the next year; and
· Spent vs. total budget, broken down into categories as set forth in the compliance Advice Letter.
Utilities shall submit, upon completion of the study and the subsequent evaluation, a Final Study Report that includes the following:
· Overview of study;
· Budget spent vs. authorized budget;
· Final results of study; and
· Recommendations, including whether the study has implications for all eligible customers, can be expanded to other partners as well as reasons for or against this action; solutions to problems that were encountered, and changes to the larger LIEE program that may come from the increased understanding delivered by the study.
The Commission realizes and expects that each study will have a unique set of questions and problems it is seeking to understand, and thus a final report for any of these will have distinct sections and characteristics that may not be applicable in other final study reports. The above guidelines represent a bare minimum that must be covered in the scope of these final reports.
131 Protest of DRA, filed June 19, 2006, p. 9.
132 Transcript of July 18, 2008 LIEE/CARE Budget Application Workshop, pp. 77-97.
133 PG&E Testimony in Support of Application for the 2009 - 2011 Low income Energy Efficiency Program and the California Alternative Rates for Energy Program, Appendix D, Attachment A.10-01.
134 Id., Attachment A.10-07.
135 PG&E Testimony In Support Of Application For The 2007-2008 Low Income Energy Efficiency Program And The California Alternate Rates For Energy Program, June 30, 2006, p. 2-6.
136 D.06-12-038, Appendix, Table 3.
137 Id., p. 39.
138 PG&E Low Income Energy Efficiency Program Annual Report for 2007, pp. 2-6 and 2-7.
139 PG&E Low Income Programs Monthly Report for June 2008, Table 1L, p. 6.
140 Protest of the Division Of Ratepayer Advocates to the Applications of Pacific Gas and Electric Company, Southern California Edison Company, Southern California Gas Company, and San Diego Gas and Electric Company for Approval of their 2009-11 Low income Assistance Programs and Funding, filed June 19, 2008, p. 35.
141 The July 18, 2008 workshop included discussion of pilots as well as studies, which is discussed in the next section.
142 Refer to the section on Leveraging to incorporate possible metrics.
143 PG&E Testimony In Support Of Application For The 2007-2008 Low Income Energy Efficiency Program And The California Alternate Rates For Energy Program, June 30, 2006, Appendix D, Attachment A.10-13.
144 D.03-10-041, OPs 1-5.
