9. Other Issues

9.1. Stakeholder Consultation

The staff proposal included a recommendation that the EPIC administrator(s) be required to conduct scoping workshops and consult with key stakeholders to provide strategic and technical advice and feedback on the investment plans and their implementation, and any other aspects of the program. More specifically, staff recommended that stakeholder consultation be convened by the administrator(s) periodically, no less than twice a year.

The staff proposal listed a number of key stakeholders, including:

· Members of the Legislature, to the extent their participation is not incompatible with their Legislative positions;

· Government, including state and local agency representatives;

· Utilities;

· Investors;

· California Independent System Operator;

· Consumer groups;

· Environmental organizations; and

· Academics

9.1.1. Parties' Comments

Many parties included additional suggestions, in their comments, for types of stakeholders who should be specifically consulted. AEE suggests consultation with the clean energy industry, university research institutions, industry associations, and the investor community. They also recommend the Commission designate a formal advisory committee.

The Efficiency Council supports formal and informal stakeholder consultation, and would like to have the energy efficiency industry included in the list of stakeholders. CEU suggests including members of the business community. CCEJ and CALSTART also suggest including clean energy businesses and/or associations.

The utilities all reiterate their desire to control the EPIC funds and emphasize that the IOUs and their customers need to have a strong voice in selecting and overseeing the program. SCE believes that any program administered by a third party should include an authoritative governing board. SDG&E, on the other hand, suggests a coordinating council made up of IOU members and CEC members. They also suggest technical program area committees.

CFBF and CBD are concerned that there is not enough emphasis on public involvement and transparency in the investment plan process and that it is not clear if there will be opportunities for stakeholders to make formal comments on the investment plans.

9.1.2. Discussion

Some parties' comments indicated confusion about the type of stakeholder consultation and structure suggested by the staff proposal. We clarify that we expect the investment plan consideration by the Commission will be conducted in an application process and will include all of the opportunities for stakeholder input that a normal Commission proceeding would entail. This may include workshops and comments, and any other options deemed necessary by the presiding commissioner and administrative law judge at the time the investment plans are under consideration.

The list of stakeholders to be consulted that was included in the staff proposal was intended as an illustrative list of input during the informal consultation process to be conducted by the administrators. We agree with many parties' comments that input should be sought from a wide variety of perspectives, including all of those listed in the staff proposal plus those suggested by commenters. In comments on the proposed decision, Sustainable Conservation requests that we add agricultural interests to the list; we agree.

To ensure that our intent is clear, we include here again the list of the types of stakeholders whom we expect to be consulted by the administrators:

a. Members of the Legislature, to the extent their participation is not incompatible with their legislative positions;

b. Government, including state and local agency representatives;

c. Utilities;

d. Investors;

e. The California Independent System Operator;

f. Consumer groups;

g. Environmental organizations;

h. Agricultural organizations;

i. Academics;

j. The business community;

k. The energy efficiency community;

l. The clean energy industry and/or associations; and

m. Other industry associations.

However, we are not ordering a formal stakeholder governance structure because to do so would risk delegating the Commission's authority over the EPIC funds and the investment plan process. Instead, that authority will be retained with the Commission, to seek input from stakeholders during a formal proceeding. However, we do require the administrators to establish processes, formal or informal, for seeking stakeholder input and expertise at least twice a year, during the process of developing the investment plans, as well as while the plans are in operation.

In joint comments on the proposed decision, the Black Economic Council, Latino Business Chamber of Greater LA, and the National Asian American Coalition suggested that biennial stakeholder consultation may not be enough. We note that this is a minimum requirement, and we encourage the administrators to consult with stakeholders meaningfully and as frequently as possible with emphasis on active two-way engagement and not simply email service of documents, as the commenters fear.

9.2. Intellectual Property Issues

The staff proposal recommended that intellectual property rights be held by the entities that develop the intellectual property, except in the case of research that is not related to product development. In that case, the intellectual property would be in the public domain. In addition, the staff proposal recommended that royalties not be required from technologies that are funded through EPIC that ultimately become commercialized.

9.2.1. Parties Comments

Only the University of California supported the recommendations in the staff proposal, agreeing that requiring royalties is extremely problematic and may discourage participation. They request clarification on the idea of publicly disclosing "new knowledge" and suggest that it could be legally problematic. They also recommend utilizing the current contract terms between the CEC and DOE for the EPIC program.

SCE argues that the approach in the staff proposal is inconsistent with the purpose of providing tangible electricity ratepayer benefits. They recommend that intellectual property rights be determined on a case-by-case basis.

PG&E and SDG&E argue that intellectual property developed with the support of ratepayer funds is a "utility asset" within the meaning of § 851, and that the Commission must approve transfer of any such assets. In any case, all utilities argue that the intellectual property rights should not be automatically granted to the funding recipients under EPIC.

TURN also opposes the staff recommendation and recommends that the Commission ensure that ratepayer-funded awards are tied to at least some upside financial potential.

The Joint Environmental Groups recommend that the Commission structure its intellectual property policies to ensure that important research funded by EPIC is shared in an open and transparent manner.

9.2.2. Discussion

Intellectual property policy is a complex issue area with legal and practical implications. Retaining ownership of intellectual property by the administrators of EPIC, as well as requiring royalty payments from any technologies that are supported by EPIC funds and are ultimately commercialized, may serve to discourage private entities from participating in the EPIC program in the first place. On the other hand, the opposite policies may result in a loss of ratepayer value for contributions made to technology development or other research areas.

It is also the case that intellectual property policy may appropriately differ depending on whether the administrator of the funds is the CEC, conducting public interest RD&D, or whether it is a utility, investing in a technology to serve its customers' needs.

Rather than decide this policy for EPIC overall in this decision, we instead suggest that intellectual property rules are best designed when applied to particular areas of investment. Thus, we ask the administrators to propose, in each investment plan, the treatment of intellectual property rights either in the investment plan as a whole, or for particular areas of investment within the investment plan. The administrators should include a rationale for the intellectual property treatment they propose. They should also strive to be consistent with the current statutory requirements regarding intellectual property treatment for other state RD&D programs, as suggested by the Joint Environmental Groups.⁴⁰ Other parties will have an opportunity to comment on those proposals prior to the Commission adopting further policy in this area.

⁴⁰ Joint Environmental Groups' opening comments on proposed decision, May 14, 2012, at 14.