5. Assignment of Proceeding

This proceeding was categorized as ratesetting. The assigned Commissioner is Dian M. Grueneich and the assigned ALJ is David M. Gamson.

1. The Commission's directive in D.07-12-050 to the energy utilities to meet with certain regulated water utilities and file a report has been fulfilled.

2. On April 30, 2008 CWA filed a "Request" seeking approval of an operational energy efficiency program.

3. On June 27, 2008, ALJ Gamson rejected CWA's "Request" as procedurally improper and instead directed CWA to file a Petition for Modification of D.07-12-050.

4. Rule 16.4(b) requires that a Petition for Modification must propose specific wording to carry out all requested modifications to the decision.

5. The CWA Petition does not propose specific wording to include each of the operational energy efficiency programs as part of D.07-12-050.

6. D.07-12-050 set forth a three-prong energy efficiency strategy; (1) conserve water, (2) use less energy-intensive water and (3) make delivery and treatment systems more efficient.

7. None of the programs approved by D.07-12-050 involve the third strategic category of making delivery and treatment systems more efficient.

8. The Petition's programs fit into the third strategic category.

9. D.07-12-050 found that the adopted programs would not produce cost-effective savings.

10. D.07-12-050 waived the cost effectiveness hurdle for the adopted programs.

11. The CWA Petition provides estimated energy savings for each of the proposed programs, but no cost-effectiveness information.

12. The Petition's programs generally meet the nine criteria set forth for evaluating the merits of the pilot programs.

13. A.07-01-024 et al. was focused on more than just water conservation measures.

14. CWA's Petition is solely focused on water pump programs to improve operational efficiency of water utilities.

15. CWA's goal is to demonstrate 10% energy savings in accordance with the Water Action Plan.

16. Not every program adopted by D.07-12-050 had a joint funding component.

17. CWA's proposed programs request full electric IOU funding.

18. Plant retirements due to the programs contained in the Petition will reduce revenues to water companies.

19. New equipment funded by the electric utilities would not be eligible to earn a return for the water utilities.

20. CWA's Petition does not request any funding for evaluations.

21. The Commission on its own accord may evaluate the Petition's programs and modify the original decision accordingly.

22. The Petition's pilot programs have merit and are consistent with our energy efficiency objectives.

23. The Petition's pilot programs move us significantly forward in our goal of determining whether less energy intensive water measures should be funded with electric utility energy efficiency dollars.

24. The Commission's Water Action Plan emphasizes the importance of reducing the amount of energy needed by water utilities for various purposes, as well as reducing energy waste.

25. The energy efficiency goals of the Water Action Plan and the Strategic Plan are consistent.

26. The LAWCP is no longer viable because (a) the water partner for this program can no longer support the program, (b) LACSD recently adopted an ordinance which significantly affects the program, and (c) no viable alternative exists.

27. SCE/SoCalGas proposed specific modifications to D.07-12-050.

1. The Petition does not meet the requirements of Rule 16.4(b) and should be denied.

2. The Petition's programs have merit and are consistent with (a) the criteria established by D.07-12-050 and (b) the strategic goals of A.07-01-024 et al.

3. The Commission finds the Petition's programs reasonable and in the public interest.

4. Pursuant to Pub. Code 1708, the Commission should approve the Petition's programs.

5. The Lake Arrowhead Water Conservation Partnership should be cancelled.

6. SCE/SoCalGas' proposed modifications to D.07-12-050 are reasonable.

ORDER

IT IS ORDERED that:

1. The July 9, 2008 Petition for Modification of Decision (D.) 07-12-050 filed by the California Water Association (CWA) is denied.

2. On its own motion the Commission amends D.07-12-050 to include the programs contained in Petition for Modification. D.07-12-050 is modified as follows:

1. Modify the text in Table (sic) 1, 6 and 7 on page 5, 85 and 101 respectively in the following manner:

Add: Under the SCE category, 2nd column "Operational Energy Efficiency - California Water Service" and 3rd column "$110,000"

Add: Under the SCE category, 2nd column "Operational Energy Efficiency - Golden State Water Company" and 3rd column "$160,000"

Add: Under the SCE category, 2nd column "Operational Energy Efficiency - East Pasadena Water Company" and 3rd column "$214,500"

Add: Under the PG&E category, 2nd column "Operational Energy Efficiency - Alco Water Service" and 3rd column "$247,000"

Add: Under the PG&E category, 2nd column "Operational Energy Efficiency - Del Oro Water Company" and 3rd column "$100,000"

Add: Under the PG&E category, 2nd column "Operational Energy Efficiency - California Water Service" and 3rd column "$205,000"

Add: Under the PG&E category, 2nd column "Operational Energy Efficiency - Golden State Water Company" and 3rd column "$100,000"

Add: Under the PG&E category, 2nd column "Operational Energy Efficiency - San Jose Water Company" and 3rd column "$195,000"

2. Add: Appendix C describing the Petition's operational energy efficiency programs.

3. Modify Ordering Paragraph 2 by including the following sentence at the end of the paragraph: "The Division of Water and Audits, the energy utilities and the California Water Association and its utility members shall work together to implement one-year pilot operational energy efficiency programs commencing March 1, 2009 or sooner, as described in Appendix C."

4. Modify Ordering Paragraph 6 by including the following sentence at the end of the paragraph: "We direct the Division of Water and Audits to develop an Evaluation Program to collect both efficiency and cost-effectiveness data for these pilot programs. DWA shall report back the results to the Commission by April 1, 2010.

3. The September 5, 2008 Petition for Modification of D.07-12-050 filed by Southern California Edison Company and Southern California Gas Company is approved. D.07-12-050 is modified as follows:

1. Modify section 6.9.1.2. on page 67 as follows:

"6.9.1.2 Lake Arrowhead Water Conservation - SCE proposes working with Lake Arrowhead to deliver indoor water-conserving devises to year-round residents and outdoor retrofits to the largest residential water consumers.

Delete the following language: SCE considers Lake Arrowhead to be one of the highest water embedded energy districts in its service area, so this program has the highest likelihood of being cost-effective. This program has the added advantage of having the utility collaborate directly with a retail water provider in a physically constrained area. We approve this program along with a rigorous impact analysis of its effect."

Add the following language: The Commission is canceling this pilot program because of changes in the law, resource constraints of the water partner, and time constraints imposed by the pilot."

2. Modify section 6.9.2.3. on page 70 as follows:

"Lake Arrowhead/SCE/SoCal Gas Water Conservation - SoCalGas proposes an Indoor/Outdoor Retrofit Program for residential homes in Lake Arrowhead, California with SCE and Lake Arrowhead.

Delete the following language: In the proposed decision, the assigned ALJ found that SoCalGas' involvement in this program would be duplicative of SCE's Lake Arrowhead water conservation program, and that it would be unlikely to provide us with further useful information. On this basis, he recommended not approving it. In comments on the proposed decision, SoCalGas, SCE, DRA, and TURN strongly disagreed, arguing that SoCalGas' involvement is consistent with SCE's and certainly complementary, but that it is in no way duplicative. Since the approved evaluation process will include measurement of gas savings resulting from this program, we can see merit to allowing the gas utility to participate. Thus, we approve this portion of SoCalGas' proposed program."

Add the following language: "The Commission is canceling this pilot because of changes in law ,resource constraints of the water partner, and time constraints imposed by the pilot."

3. Modify the text of section 6.9.2.1. Evaluations on page 73 of D.07-12-050 by deleting the paragraph entitled "Residential Indoor/Outdoor for Lake Arrowhead" in its entirety:

"Residential Indoor/Outdoor for Lake Arrowhead (SCE). This evaluation study would use billing data to determine if the residential retrofits in this area do result in water savings. For reasons stated earlier, we approve this study."

4. Modify the text of the Findings of Fact section on page 92 of D.07-12-050 by deleting paragraph 20 in its entirety:

"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."

5. Modify the text of the Findings of Fact section on page 92 of D.07-12-050 by deleting paragraph 24 in its entirety:

"24. Since SoCalGas' Lake Arrowhead water conservation proposal complements the SCE Lake Arrowhead water conservation program, it is it is (sic) reasonable to approve it."

6. Modify the text of the Findings of Fact section on pages 92, 93, and 94 of D.07-12-050 by consecutively renumbering all numbered paragraphs after paragraph 19.

7. Modify the text in Table (sic) 1, 6 and 7 on page 5, 85 and 101 respectively in the following manner:

Delete: Lake Arrowhead Water Conservation $176,500 on line 3;

Change: the "CPUC Adopted $" for SCE's "Water Leakage" program from $300,000 to $476,500 on line 4;

Delete: LASCD/SCE/SoCalGas Water Water (sic) Conservation $150,000 on line 12;

Change: the total "CPUC Adopted $" from $3,632,907 to $4,814,407 on line 13;

Delete: Residential Indoor/Outdoor for Lake Arrowhead (SCE and SCG) $91,000 on lines 24 and 25;

Change: the total "CPUC Adopted $" from $967,000 to $876,000 on line 29;

Change: the "total evaluation and studies (EM&V)" from $2,737,300 to $2,646,300 on line 36; and

Change: the "Total Pilot (Pilot + Evals + Studies)" from $6,370,207 to$7,551,707.

8. Modify the text in Table 8 under Ordering Paragraph 5 on Page 103 in the following manner:

Change: SCG "Program Funding" from $586,407 to $436,407;

Change: SCE "Program Funding" from $809,500 to $1,294,000;

Change: PG&E "Program Funding" from $1,241,000 to $2,088,000;

Change: total "All IOUs" "Program Funding" from $3,632,907 to $4,814,407;

Change: total "All IOUs" "% of Evaluations and Studies" from $2,737,300 to$2,646,300 and adjust the IOUs contributions accordingly; and

Change: "Total IOU $" for "All IOUs" from $6,370,207 to $7,551,707 and adjust the IOUs contributions accordingly.

4. Application (A.) 07-01-024, A.07-01-026, A.07-01-029, A.07-01-030, are closed.

This order is effective today.

Dated November 21, 2008, at San Francisco, California.

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