LRB/k47 10/25/2000

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) for Approval of Program Year 2000 and 2001 Energy Efficiency Program Plans, Budgets, and Performance Award Mechanism.	Application 99-09-049 (Filed September 27, 1999)
Application of Pacific Gas and Electric Company for Approval of Program Years 2000 and 2001 Energy Efficiency Programs (U 39 M).	Application 99-09-050 (Filed September 27, 1999)
Compliance Application of San Diego Gas & Electric Company (U 902-M) for Approval of 2000 and 2001 Energy Efficiency Programs, Budgets, Performance Incentive Structure.	Application 99-09-057 (Filed September 27, 1999)
Compliance Application of Southern California Gas Company (U 904-G) for Approval of 2000 and 2001 Energy Efficiency Programs, Budgets, Performance Incentive Mechanism.	Application 99-09-058 (Filed September 27, 1999)

RULING ON COST EFFECTIVENESS ISSUES FOR PY 2001 PROGRAMS

This ruling sets forth direction on the cost-effectiveness values to be used in the planning of Program Year (PY) 2001 programs, subject to confirmation by the Commission in its decision on PY 2001 program applications.

Background

Decision (D.) 00-07-017 requires the utility administrators of energy efficiency programs to submit new applications for PY 2001 energy efficiency programs by November 15, 2000, after having conducted an extensive public process. The ordering paragraphs in D.00-07-017 set forth the nature of the information to be gathered, the procedures to be used, and the issues to be addressed during the PY 2001 planning process. Governance over the process was delegated to the Assigned Commissioner and Assigned Administrative Law Judge (ALJ).

After a planning workshop with the parties, the assigned ALJ issued a ruling on August 15, 2000 establishing the schedule and process for PY 2001 energy efficiency planning.¹ The ruling established a process for compliance with the requirements set forth in the various ordering paragraphs of D.00-07-017.

In this ruling, the parties were ordered to meet and confer, conduct workshops, and, by September 25, 2000, file and serve a report with recommendations of the appropriate values to be used for various inputs in calculating the cost-effectiveness of PY 2001 programs. The parties were directed to use their best efforts to standardize the values used among the utility administrators and encouraged to reach consensus recommendations for use in PY 2001 if at all possible, recognizing that the structure and administration of energy efficiency programs may change in 2002. By Ruling dated September 14, 2000, the parties were ordered to further study and consider methods to address the system value of reduced load on "reducing market clearing prices and volatility" in the cost-effectiveness test, pursuant to the directives of newly passed Assembly Bill (AB) 970.² The parties were ordered to file a supplemental report with their recommendations on October 2, 2000.

The parties used the California Measurement Advisory Council (CALMAC) as a public forum to discuss the cost-effectiveness issues identified in the August 15, 2000 ruling, which included those set forth in D.00-07-017, Ordering Paragraphs 7, 8, 12, 14, 51, 54, 72, and 73. They filed a workshop report on September 25, 2000 addressing these issues (Workshop Report). On October 2, 2000, the parties filed a supplemental workshop report (Supplemental Workshop Report) addressing the issues set forth in D.00-07-017, Ordering Paragraph 9, as supplemented by the September 14, 2000 ruling. Having fully reviewed and considered the workshop reports and the Ordering Paragraphs of D.00-07-017, I direct the utility administrators to use the input values set forth below in the PY 2001 energy efficiency program cost-effectiveness analyses.