2. Procedural Background
This phase of the proceeding finalizes the true-up of incentives (or penalties) for achievements in energy efficiency savings for the 2006-2008 cycle. Additionally it establishes the methodology and process for the determination of incentives associated with the 2009 program year. Previous interim incentive earnings for the 2006-2008 cycle were awarded in Decision (D.) 08-12-059 and D.09-12-045, respectively. Parties participating in the proceeding, in addition to the IOUs, are the Commission's Division of Ratepayer Advocates (DRA), The Utility Reform Network (TURN), Natural Resources Defense Council (NRDC), and Women's Energy Matters (WEM). The record developed for this phase of the proceeding consists of written comments by parties, together with work products produced by the Commission's Energy Division, namely, the Energy Efficiency Evaluation Report, and the Scenario Analysis Report. The record also includes the scenario analysis presented by the IOUs in filed comments. The IOUs filed supporting calculations on July 16, 2010, identifying assumptions utilized in their scenario.
As discussed in D.07-09-043, the RRIM earnings claims process was originally expected to be ministerial. Incentive earnings were to be awarded based on the Energy Division's independent evaluation of savings accomplishments. Substantive earnings claim issues were to be resolved through adopted procedures for vetting of the Energy Division Evaluation, Measurement, and Verification (EM&V) Reports. Under circumstances where disposition of EM&V issues might require more than ministerial action under General Order 96-B, Energy Division was to prepare a resolution for recommended adoption by the Commission. In D.08-12-059, the Commission revised this procedure, stating that:
Beginning with the draft verification report that was issued on November 18, 2008 and going forward, we will require that Energy Division issue these reports via draft resolution for consideration and adoption by the Commission before those reports are used to determine incentive payments or penalties under the RRIM. This direction applies to both the verification reports used to assess interim claims as well as those used for the final true-up. These resolutions should include detailed information regarding the underlying assumptions used and supporting documentation that provides the basis for those assumptions. (D.08-12-059 at p. 21.)
Pursuant to the schedule for the true-up phase of this proceeding set in D.09-12-045, the Energy Division issued its 2006-2008 draft Energy Efficiency Evaluation Report on April 15, 2010, culminating nearly three years of field-based evaluation research. The Report was issued in final form on July 9, 2010, incorporating corrections and responses to parties' comments.
The Final Energy Division Evaluation Report identified the IOUs' energy efficiency savings, but did not address the calculation of RRIM earnings. Accordingly, because RRIM earnings were not addressed, no resolution was issued in connection with the Report's issuance. The Energy Division's evaluated results are, however, in addition to parties' comments on the process and the results, a part of the record of this proceeding.
On April 8, 2010, an Assigned Commissioner's Ruling (ACR) outlined a process to develop the record for the true-up phase of incentive earnings using the Evaluation Reporting Tools/Database (ERT). 5 Parties filed comments in response to the ACR on April 20, 2010. A subsequent ACR, issued on May 4, 2010, provided for comments on the Energy Division Scenario Analysis Report which set forth incentive earnings and/or penalties calculations under a range of scenario assumptions. Parties filed comments in response to this ACR on May 18, 2010, and reply comments on June 11, 2010. The IOUs presented a separate scenario analysis in their comments and filed supporting calculations underlying their scenario proposal on July 16, 2010. DRA filed comments on these supporting calculations on July 26, 2010. The IOUs filed a response on August 2, 2010.
In D.09-12-045, the Commission also directed parties to convene a settlement conference "to enter into further settlement discussions to seek agreement on a 2010 final true-up of incentive earnings for each utility that reasonably ties incentives to actual performance consistent with the policies adopted in [D.09-12-045]."
In this regard, the Commission stated that:
...while the Final Performance Report may provide a context for settlement discussions, we encourage parties to explore the possibility of a 2010 true-up settlement based upon simplified assumptions or metrics not necessarily tied to the detailed and minute level of calculations embodied in the Final Performance Basis Report for the 2006-2008 cycle. In this manner, the schedule for comments and adoption of the Final Performance Basis Report may proceed on a separate, but related track to the schedule for a settlement, or related dispute resolution processes to determine the final 2010 true-up of incentive amounts for each utility. (D.09-12-045 at p. 72.)
A settlement conference was convened on June 27, 2010, but no settlement was reached. The parties filed a further round of comments on July 9, 2010 with reply comments on July 23, 2010.
5 The ERT is a combination of tools and processes that work in concert to calculate 2006-2008 energy efficiency portfolio performance results.
The ERT core features were used to compile and evaluate alternative scenarios and resulting RRIM earnings based upon changes to key parameters. The ERT aggregates and reports efficiency savings performance at the level of measure group, program, and total portfolio. Based on specified parameter assumptions, the ERT generated scenario runs showing corresponding RRIM earnings.
