Parties' Comments

CCSE and PG&E support the petition. In voicing its support, PG&E notes that assignment of incentives is allowed in the general market CSI program, without restriction. Thus, PG&E urges that assignment be allowed without restriction to a list of approved third parties, as suggested by GRID.

CSD expresses support for the petition as well, but urges the Commission to clarify, if the petition is granted, that any assignment of incentive payments must be to third parties providing equipment or installation services, and not to the Program Manager. CSD contends that assignment of incentives to the Program Manager creates a conflict between the financial interests of the equipment or installation provider and the Program Manager role, namely to administer LISF in compliance with Commission rules. According to CSD, the Program Manager cannot do its job of ensuring the adequacy and integrity of the program if it also receives assignments of incentive payments under the program.

SCE does not support the petition, and claims there is no new evidence demonstrating the need for assignment of incentive payments. According to SCE, it is premature to make modifications to the LISF program design. Instead, SCE suggests a workshop within a year, after the Commission has some experience with the LISF program, to determine the necessity for the petition. Moreover, SCE claims that assignment of payments could bring many of the same problems and concerns related to third-party ownership of solar installations that were discussed in D.07-11-045.

In response to these comments, GRID acknowledges it was selected as the Program Manager by the Commission's Energy Division after this petition was filed. GRID contends that prohibiting assignment of incentive payments to the Program Manager is unnecessary and excessive because it believes the Program Manager should have the flexibility to play a variety of roles, including solar system installer. GRID supplies a declaration by its Executive Director, Erica Mackie, stating that GRID is able to install solar energy systems at a significantly lower cost per watt due to its non-profit business model based on volunteer labor and discounted solar equipment. (GRID Reply, 8/18/08, Declaration of Erica Mackie, p. 3.) Therefore, GRID suggests the Commission address conflict of interest concerns raised by CSD by requiring GRID, as the LISF Program Manager, to implement appropriate safeguards, such as third-party monitoring of incentive payments and random spot checks to verify payments. Such safeguards could be incorporated into GRID's Program Manager contract.

In response to SCE's claim there is no evidence supporting the petition, Mackie states that based on her experience with incentive assignment in the general market CSI program, the petition is necessary to overcome barriers to low-income families' financing of solar systems. (Id., p. 3.) The option of assigning incentive payments in the CSI program has been an effective means of reducing the up-front debt or capital needed to purchase a solar system. GRID further contends that SCE's concerns over third-party ownership are not applicable to the more narrow issue of assigning an incentive payment to an installer. With assignment, the system ownership remains with the low-income homeowner. Thus, GRID suggests that SCE's concerns about third-party ownership are misplaced.

In the final round of pleadings, CSD and SCE reject GRID's suggestions that independent monitoring and oversight can overcome the conflict of interest arising from the GRID playing the dual roles of Program Manager and system installer. CSD and SCE allege that independent monitoring and oversight of the Program Manager will increase administrative costs for the program, will create the potential for misuse of program funds, and they question whether a third-party monitoring the Program Manager will be truly independent of the Program Manager. SCE recommends that each utility, in its respective service territory, perform the function of verifying proper installation before making incentive payments.