6. 2009-2011 Energy Efficiency Portfolio Design and Rules
In this section we provide direction to the utilities on the content and process for development of their 2009-2011 portfolios plans.
6.1. Policy Direction
The existing Policy Rules adopted in D.05-04-051 require the utilities' energy efficiency program portfolios to be diverse from the standpoint of program type, long- and short-term savings, reduction of peak loads and geography. We agree. We expect the utilities to review closely all provisions of the Policy Rules and in particular Rules II.1 through Rule II.6 as they develop their upcoming portfolio plan applications to ensure full compliance with the Policy Rules. We also direct utilities to demonstrate compliance with Rule II.6 regarding linkages between R&D, emerging technologies, and program commercialization.
We are committed to more aggressive, comprehensive and long-term program strategies and have thus established in this decision both the preparation of the Strategic Plan and the three programmatic initiatives. We are convinced these can be cornerstones for future energy efficiency efforts, not just in California, but also nationally and internationally, and for assisting in the achievement of the AB 32 greenhouse gas reduction goals.
6.2. Portfolio Content Criteria, Process and Schedule for 2009-2011 Energy Efficiency Portfolio Applications
The Strategic Plan, our decisions, and our Policy Rules will form the foundation for the 2009-2011 energy efficiency portfolio plan applications to be filed in Spring 2008. We expect that some of the utilities' program proposals from the current program cycle will continue and others will be added or expanded, including activities targeted to achieve our three programmatic goals.
In D.04-09-060 and D.05-01-055, we established a schedule for the utilities' 2006-2008 portfolio applications and provided general direction for the type of information to be included in those filings.72
D.05-09-043 established criteria by which we would review the utilities' 2006-2008 program planning applications in consideration of their energy efficiency portfolios. In this decision, we identify several additional objectives such as adherence to a strategic plan, longer-term energy savings, and leveraging of other stakeholders' actions and resources. Here we list a combined set of criteria that we will use in reviewing the utilities' 2009-2011 applications:
1. Are the proposed portfolios cost-effective on a prospective basis taking reasonable account of uncertainty with respect to key cost-effectiveness input parameters?
2. Are the portfolios designed such that it will be feasible for the utilities to meet or exceed the Commission's energy savings goals? If each of the annual goals cannot be met in light of the accounting and ramping up transition issues described in D.04-09-060 and D.05-04-051, will the proposed portfolio plans meet or exceed the 2011 cumulative energy savings goal?
3. Are the portfolios and associated funding levels appropriately balanced between activities that address short-term and long-term savings?
4. Do the portfolio plans provide sufficient strategies and funding to address opportunities to reduce critical peak loads and improve system load factors?
5. Do the plans reasonably allocate funds among market sectors and applications with respect to the savings potential that has been identified in the potential studies?
6. Do the plans adequately describe strategies to minimize lost opportunities, per Rule 5?
7. Do the plans provide for adequate statewide coordination of similar program offerings?
8. Do the plans reflect a long-term strategic plan that exhibits well-integrated planning along the following four dimensions?:
a) Coordination across stages of technology and program developments, such as research and development, emerging technology promotion, public outreach, upstream distributor marketing, utility customer-focused programs, codes and standards advocacy, and other activities that can take advantage of statewide, regional, and national leverage?
b) Leveraging the involvement and contributions from a variety of actors and financial resources, e.g. federal government, national manufacturers and distributors, national and regional building industry organizations and professionals, contractors, and educational institutions?
c) Program designs and implementation strategies that explicitly seek to overcome identified market barriers to increased efficiency adoption? and
d) Identifying an "end game" for each technology or practice that transforms building, purchasing, and use decisions to become either "standard practice" (sometimes referred to as "market transformation"), or incorporated into minimum codes and standards?
9. Are there reasonable proposals for any fund shifting and program flexibility rules that should be adopted for these program plans?
10. Are the overall funding levels proposed for the portfolio plans reasonable?
11. Is there evidence of program continuity across types of programs, or implementers, for those programs which have proven successful and cost-effective?
12. Are there appropriate strategies and program designs proposed for the three targeted programmatic initiatives?
We modify the process we adopted in D.05-01-055 for the review of the portfolio plans to make the development process more efficient and specifically, so that our review of third-party proposals and utility proposals is conducted concurrently. We conducted the 2006-2008 portfolio review process in two parts: we approved utility core program portfolios as presented to us in formal applications and we subsequently approved third-party programs in an advice letter process. For 2009-2011 portfolios, we adopt a single review process that will require the utilities to conduct third-party solicitations in time for inclusion in their energy efficiency portfolio plan applications.
This streamlining will require the utilities to begin the third-party solicitations almost immediately. It also means the solicitations will be conducted in advance of the completion of the utilities' Strategic Plan. While this timing is not optimal, this decision provides the utilities with enough guidance to conduct the solicitations in advance and the simpler, timelier, and better coordinated review process is a worthwhile tradeoff.
We also modify the third-party solicitation process and structure. For 2006-2008 solicitations, the utilities needed Commission approval for the criteria they used to evaluate third-party proposals and for the program areas upon which the third-party solicitations would focus.73 We eliminate this review and approval process, and instead direct the utilities to apply the criteria they used in the last round of solicitations and grant the utilities discretion in how they determine program focus for the third-party solicitations. The utilities may use a combination of previously approved criteria based on their experience in the 2006-2008 solicitations, upon review and concurrence by their Peer Review Groups (PRGs).
Finally, we address the requirement in D.05-01-055 that utilities spend at least 20% of their portfolio funding on third-party programs that were subject to the competitive bidding process. In seeking to promote good competitive third-party proposals, D.05-01-055 did not permit the utilities to count expenditures on bilateral third-party program contracts as part of this 20%.74 However, we want the utilities to extend the best of the 2006-2008 competitively bid programs into the next program cycle and we do not believe ratepayer interests will be compromised if those programs are extended by way of bilateral contract rather than a more complex bidding process. In order to encourage the utilities to extend high quality programs into the next program cycle, we will permit the utilities to count the costs of bilateral contracts as part of the 20% set aside for competitively bid contracts if those bilateral contracts are extensions of existing programs that won competitive bids in 2006-2008. The Commission will review whether the utilities' solicitation processes followed the directives in D.05-01-055, as modified by this decision, and the Energy Efficiency Policy Rules.
For the 2009-2011 program cycle, Commission staff, in consultation with the utilities, and after obtaining input from interested stakeholders and the PRGs, should develop a proposed schedule and information requirements for these upcoming portfolio applications. The proposed schedule for the portfolio applications should include workshops held by each of the utilities prior to the submittal of their applications, as well as possible workshops afterwards to gather and address concerns of the parties about their specific 2009-2011 applications. The information requirements should build upon the information we required for the 2006-2008 program cycle and, in addition, include a description of how each program or strategy reflects the Strategic Plan during the short term and longer term. These documents shall also include guidance to the utilities on the use of multiple funding sources for the marketing and/or delivery of integrated energy services programs as directed herein, such as reporting requirements by source and proportional share of funds directed toward a given program.
Within 90 days from the effective date of this decision, Commission staff shall present its recommendations to the assigned Commissioner and assigned ALJ, with a summary of the input received from the utilities and interested stakeholders. The proposed schedule should ensure that a final Commission decision can be issued no later than September, 2008. In consultation with Commission staff and the assigned Commissioner, the assigned ALJ shall issue a ruling adopting a final schedule and information requirements for the 2009-2011 program cycle as soon as practical thereafter.
As in the past years, the applications should include electronic workbooks describing energy savings and program expenditures. The program categories and descriptions shall be consistent across the utilities to ensure comparability and efficient review of the portfolios.
6.3. Cost-Effectiveness and Savings Goal Calculations
In this section, we consider recommendations to change our adopted cost-effectiveness and savings goal calculations.
Parties' Positions. TURN, the CE Council, and DRA propose that we change our adopted approach to establishing savings goals based on "life-cycle savings" rather than annual and cumulative savings accomplishments. The term "life-cycle" refers to the expected trajectory of savings from an energy efficiency measure (or portfolio of measures) over the EUL of the measure(s), taking account of any natural decay or persistence in performance over time. These parties also recommend that we augment our reporting requirements, establish minimum requirements before rebates can be offered for the portfolio or for specific measures (e.g., based on a minimum EUL of the measure), or consider developing additional metrics outside the risk/reward incentive mechanism to encourage long-term energy savings. NEEA also recommends that the Commission change its current methodology for calculating cost-effectiveness and instead look at cost-effectiveness "over a five to ten year period after market response has ramped up and economies of scale have been achieved."75 These parties suggest that our current approach to energy efficiency will not adequately motivate the utilities to pursue energy efficiency savings that persist over time, unless such changes are implemented.
Discussion. The parties raise a fundamental concern that our current rules motivate utilities to pursue programs to install measures with short payback periods and EULs at the expense of programs that offer longer-term savings. They believe ratepayers will ultimately spend more than necessary in the long run, even if overall the portfolios remain cost-effective. The parties argue that the current approach to calculating energy savings does not adequately motivate the utilities to pursue measures with longer useful lives and greater savings persistence.
This concern is illustrated in Figure I, which displays a conceptual year-by-year profile of how blocks of energy efficiency savings are added in successor years' programs. As the figure shows, the savings from a particular year's portfolio diminishes through time as the measures installed in earlier years decay in performance or reach the end of their lives. Comparing cumulative savings accomplishments to the cumulative savings goals reveals a potential shortfall in the outer years.76
Figure I
Illustration of Impact of Lifecycle Savings on Cumulative Savings Goals
We are not persuaded that the wholesale changes recommended by parties are warranted at this time, particularly in light of our recently issued decision on a risk/reward incentive mechanism for energy efficiency.77 Under that mechanism, utilities only earn rewards if they meet or exceed a minimum performance standard (MPS) tied to our cumulative savings goals.
As we stated in D.04-09-060, our annual goal numbers represent the "annual gigawatt hour (GWh) and megawatt (MW) savings achieved by the set of programs and measures implemented in that specific program year." The cumulative goal numbers represent the "annual savings from energy efficiency programs efforts up to and including that program year."78 Here, we clarify that the cumulative goals numbers and MPS are calculated in a manner analogous to Figure 1 above. For any given year, cumulative savings represents the savings in that year from all previous measure installations (and reflecting any persistence decay that has occurred since the measures were installed) plus the first-year savings of the measures installed in that program year.
In other words, in any given year, the IOUs are responsible for implementing additional energy efficiency measures that deliver savings in that year equal to the Total Annual Electricity Savings goal established for that year. In addition, the utilities remain responsible for ensuring the total savings available in a given year are equal to the cumulative savings goal for that year. If measures implemented in an earlier year to achieve that earlier year's annual electricity savings goal are no longer in service (e.g., reached their full expected useful life), then in order to achieve their Total Cumulative Savings goal the IOUs will have to undertake additional actions to maintain the target efficiency resource. Thus, contrary to the assertions of DRA and TURN, even absent the risk/reward framework the utilities are held accountable for any non-persistence in energy savings in the performance of energy efficiency measures deployed as this non-persistence in energy savings directly and adversely impacts their progress against the ten-year cumulative goals established in D.04-09-060. This is equally true for the Commission's adopted GWh, MW and Therm goals.
Under the risk/reward mechanism's MPS, the utilities are further motivated to avoid excessive reliance on short-lived measures. Therefore, it does not work to the utilities' advantage to focus exclusively on measures with short lives (or low persistence of savings over time) because doing so creates the savings shortfall illustrated above, making it harder to meet the MPS. For example, if an energy efficient light with an expected life of five years was installed in 2004, it will remain in service producing savings throughout 2006-2008, after which it will reach the end of its life and need to be replaced with like-savings in 2009. A utility's 2009-2011 portfolio then can reflect one or more options as to how to "maintain" this level of equivalent savings, such as by repeating the equivalent measure delivery and incentive again, promoting measures with much longer expected lives that will endure over many years ahead and not have to be replaced so soon, and/or achieving market transformation strategies that ensure only like-kind efficiency lamps can be purchased in 2009.
This strategy would also make it harder for the utilities to meet the threshold we established for a "step up" (from 9% to 12%) in the shared-savings rate under the incentive mechanism, which occurs when they attain 100% of the goals or higher. Both the trigger for the start of earnings in the proposed risk/reward mechanism and the performance threshold for the higher earnings rate provide the utilities with a financial incentive to develop portfolios with long-life, high persistence measures.
In addition, our requirement that the utilities prepare a long-term Strategic Plan and pursue three long-term programmatic initiatives provides clear direction to the utilities to emphasize long-term energy saving measures as part of the appropriate portfolio mix. Our intent is for the utilities to meet or exceed the cumulative savings goals we have established (and that are relied upon on in the utilities' long-term procurement plans) in a way that maximizes net benefits over the long term. Doing so encourages the utilities to minimize ratepayer funding for "replenishing" energy savings that are lost from efficiency measures that have relatively short EULs. Future program cycles need to create additional savings, rather than require the expenditure of additional funds to replace energy savings realized in previous years and that have eroded due to the short useful lives of particular measures. The IOUs may propose the optimal portfolio plan with the recognition that any programs with short EULs must be made up (and any expenses for doing so revealed) over the long term in order to attain adopted cumulative goals.
We direct the utilities to report in their applications for 2009-2011 energy efficiency portfolio approvals the expected cumulative savings (as described above) of their portfolio plans over the long-term (i.e., at least 20 years). Using 2004 as the base year, we also expect to see the cumulative effect of these savings across program cycles in their annual reporting, commencing with the 2004-2005 portfolio when we established the cumulative goals. Utilities shall include this information in the Strategic Plan and 2009-2011 portfolio plan applications. Cumulative savings as clarified herein also should be included in Commission staff's Verification and Performance Earnings Basis reports that are required under our EM&V protocols.79
6.3.2. Comprehensiveness/Cream Skimming/Lost Opportunities80
The utilities' focus on maximizing net benefits in the short term, in the absence of a method to quantify and encourage more diverse portfolios and discourage "cream skimming," may create lost opportunities and impede progress toward acquisition of all cost-effective energy efficiency.81
Parties' Positions. Parties suggest several options for addressing this issue. One option involves attempting to quantify lost opportunities created by IOU programs and then deducting this amount from the net benefits of the portfolio. Marin Energy Watch (Marin) suggests we develop the tools to account for lost opportunities in the portfolio development and EM&V processes, and in cost-effectiveness tests. TURN/CE Council recommends that we modify the current cost-effectiveness methodologies to subtract the net benefits lost due to cream-skimming from the benefits actually achieved when computing the Total Resource Cost (TRC) for the portfolios. An alternative is to adopt an avoided cost premium for cost-effectiveness, similar to what the utilities currently do for Standard Performance Contracting comprehensiveness. The Commission could additionally explore other approaches, such as requiring that the TRC hover around 1.0, with a demonstration of comprehensive savings. Likewise, the Commission might take the approach used in Texas and disallow rebates for EE measures with EULs under ten years, or another threshold.
Discussion. Although we appreciate the problem we identify as "cream skimming," we decline to modify our cost-effectiveness tests at this time. Our protocols are currently not configured to quantify lost opportunities or portfolio comprehensiveness for the purpose of including them in cost-effectiveness tests. However, we take note of CBPCA's suggestion for comprehensive programs (e.g., Home Performance with ENERGY STAR) to utilize workpapers to exclude non-energy benefits and costs from cost-effectiveness tests. In addition, actions in this decision are likely to help discourage cream skimming and promote comprehensiveness (i.e., allowing the utilities to commit funds for projects with long lead times, paying more attention to lifecycle savings, developing the Strategic Plan and the three programmatic initiatives).
Parties' Positions. SCE, NRDC and PG&E comment that our existing method of calculating program benefits accurately reflects the value of on-peak energy savings. SDG&E/SoCalGas and TURN/CE Council suggest that the Commission change the value of peak energy savings in the cost-effectiveness calculation if the Commission wishes to promote more savings of peak energy. TURN/CE Council identifies several changes that it believes would promote more on-peak savings: (1) updating the avoided cost for a combined cycle gas turbine (CCGT); (2) increasing the environmental adder to reflect the value of reducing greenhouse gasses; (3) updating the existing heat rates and generation mix used to develop the carbon emission values; and (4) prioritizing certain high efficiency measures that currently do not have load shapes during the update to the DEER.
Discussion. It appears that the utilities have not pursued peak reduction programs, as the Policy Rules require. To promote the utilities' pursuit of such programs, the parties propose changes to avoided costs, reiterating many arguments that they have presented in our avoided cost proceeding, our demand response proceeding, as well as Phase 1 of this proceeding (the shareholder incentive phase). We have previously indicated that the methodology for avoided costs, which we recently updated in D.06-06-043, may be modified in the future to address the concerns expressed by the parties, including TURN.
In the meantime, we reiterate the need for the utilities to comply with Policy Rule II.5 quoted below. Specifically, the utilities shall in their 2009 - 2011 portfolio demonstrate compliance with this Policy Rule.
... In addition, the Program Administrators should demonstrate in their program planning applications for the PY2006-PY2008 [PY2009-2011] how their proposed portfolio will aggressively increase overall capacity utilization and lower peak loads through the deployment of low load factor/high critical peak savings measures
6.4. Best Practices, Portfolio Diversity and Innovation
Parties addressed the need to modify the Policy Rules or policies to encourage the application of best practices, diversity of portfolio programs and innovation.
Parties' Positions. The utilities and NRDC generally believe the existing rules adequately promote these outcomes. DRA suggests best practices could be encouraged with the development of a manual, using a collaborative process that is informed by the Energy Efficiency Best Practices Study.82 TURN/CE Council proposes that the Commission motivate the utilities to reduce the number of program offerings in their energy efficiency portfolios to improve program delivery and reduce overhead costs. TURN/CE Council believes that the utilities' independent administration of programs that are "statewide" in nature has caused duplication of effort and disparate administrative requirements (such as third-party contract terms). TURN/CE Council recommends the utilities coordinate these efforts by, for example, expanding utility-specific programs to make them statewide or region-wide, renaming programs with statewide applicability, and developing comparable administrative processes. TURN/CE Council would accomplish this effort by way of a PRG or PAG.
Discussion. We reaffirm our support for innovative programs, program diversity and program management that takes advantage of industry best practices and economies of scale afforded by state-wide programs. The policies and strategic planning we have articulated in this decision, along with identified modifications in the Policy Rules, will promote these aspects of energy efficiency programs. For example, the portfolios will be guided by a more focused planning process that will be informed by the contributions of other private and public organizations. This process will promote innovation and good program management. We expect the utilities to incorporate best practices of program design and implementation in their development of energy efficiency portfolios.
6.5. Third-Party Contracting and Partnership Programs
Our prior decisions encourage third-party contracting and local government partnerships.83 Currently, the utilities employ third-party contractors and develop partnerships with local governments and other government entities to design and deliver energy efficiency programs. The April 13 Assigned Commissioner's Ruling asked parties to comment on whether the Commission should modify existing rules or policies to encourage or require expanded use of these relationships for program delivery, including changes to the 20% minimum third-party contract requirement.
Parties' Positions. SDG&E/SoCalGas, NRDC and PG&E comment that generally they have adequate incentives to use third parties and local governments for program delivery when their participation is cost-effective. No party proposed changing the current rule that requires the utilities to engage third-party contractors for at least 20% of their portfolio budgets. SDG&E/SoCalGas recommends, however, that the Commission permit the utilities to begin the competitive bidding process prior to the start of the funding cycle so that programs are ready to be implemented shortly after the Commission approves the utility portfolio plans and budget, thus avoiding delays in program implementation. SCE makes similar points with regard to third-party implementers, suggesting that the Commission permit the utilities to "ramp up" for the subsequent budget cycle in the current cycle.
TURN and CE Council recommend that the Commission modify its rules to require comparisons between utility programs and third-party programs from the standpoint of cost-effectiveness and other policy objectives, in the program selection process. TURN proposes that the Commission require that programs for utilities and third parties be subject to the same selection criteria before funding is authorized and require independent third parties to conduct these comparisons. PG&E objects to TURN's recommendation, believing it would remove program administration from the utilities. PG&E states there are logistical problems with comparing utility programs, which are comprised of the efforts of many types of contractors, with third-party programs.
With regard to local government partnerships, TURN would change the emphasis. TURN claims the utilities have relied on local governments primarily to identify and serve hard-to-reach populations and recommends that the utilities employ local governments as representatives of the broader interests of local communities, just as they hire their own account representatives for large commercial and industrial customers. DRA urges the utilities to be more active in leveraging local government programs and collaborating with such organizations as the League of California Cities and the Local Government Commission. SDG&E/SoCalGas state utilities are missing opportunities with local governments because of "non-coincident" funding cycles between the utility and the government agency. They request changes to Commission policies and rules so as to allow the utilities to fund programs with local governments through overlapping utility budget cycles.
The Local Government Sustainable Energy Coalition (LGSEC) describes benefits of local government partnerships, including producing significant energy savings, capturing lost opportunities, providing accountability, and offering a regional approach to energy efficiency. LGSEC comments that cities of all sizes are able to leverage opportunities with other programs such as C&S, green building initiatives, DR, information exchange, and emerging technologies. LGSEC recommends we modify our rules to guarantee funding to local government partnerships and assess financial penalties against a utility that fails to meet partnership targets. LGSEC would also change the EM&V process to provide additional counting of savings from local government. PG&E opposes virtually all of LGSEC's proposals as either unnecessary or unwarranted. It opposes funding guarantees, penalties of any kind, and local government branding.
Discussion. Successful energy efficiency programs have always relied to some extent on third-party contractors and local government partnerships. These entities may provide expertise the utilities do not have or better access to target groups and local communities. Local governments may be able to combine utility programs with their own complementary, more comprehensive energy strategies. The parties identify some barriers to maximizing opportunities provided by relationships with third parties and local governments, and also provide ideas for overcoming them.
The utilities, DRA, LGSEC, and TURN address ways the Commission's current funding cycle constrains the utilities' working relationships with local governments and third-party contractors. We are convinced that the problems parties have identified warrant permitting more flexibility in our fund shifting rules adopted in D.05-09-043. In the section on Fund Shifting, we adopt several changes to help assure our portfolio planning and funding cycles do not stand in the way of good programs. These changes move the regulatory process in the direction of a more continuous and fluid budgeting process, which DRA and other parties strongly recommend.
We agree with the suggestions of TURN, LGSEC, and DRA that additional utility coordination with local governments and their associations, such as the Local Government Commission, is likely to present additional opportunities for cooperative energy efficiency work. The strategic planning approach we establish today should assist greatly in enhancing those relationships. We also direct the utilities to conduct at least one statewide meeting annually with local agencies, as LGSEC suggests, and to extend invitations to the publicly owned utilities (POUs). This meeting will provide a forum for identifying opportunities, problem-solving, and information sharing.
We are not prepared to adopt LGSEC's proposals to impose penalties for the utilities' failure to meet partnership targets or contract deadlines. We will consider penalties or other program modifications in the future if we have significant evidence of problems that impede progress toward satisfying energy efficiency program goals or policies.
Likewise, we are not prepared to adopt at this time TURN's recommendation that the program proposals of utilities and third parties be subject to the same standard of review before funding is authorized. The new processes we establish today - long-term strategic planning, more focus on innovation and exchange of best practice information, changes in our fund shifting rules - should all improve the likelihood of increased third-party contracting in the next round of utility portfolio programs. We direct the utilities to include in their portfolio applications an explanation of the efforts they have made to expand their third-party and partnership relationships.
6.6. On-bill Financing
A June 27 ALJ Ruling asked parties to comment on the design, and costs and benefits of "on-bill financing" programs. "On-bill financing" programs allow customers to finance energy efficiency measures through their energy bills at low interest or no interest. In D.05-09-043 we directed the utilities to analyze on-bill financing as part of a larger effort to remove barriers to rapid deployment of energy efficiency measures. SCE, SDG&E, and SoCalGas have instituted pilot programs which are currently under evaluation in our EM&V process.
Parties' Positions. SCE, SoCalGas and SDG&E have offered on-bill financing as part of their 2006-2008 programs. SDG&E and SoCalGas currently offer on-bill financing for non-owner occupied multi-family units, small businesses and local governments. SDG&E reports that its programs are increasingly successful and that it is optimistic about the potential for on-bill financing to achieve additional energy efficiency.84 SDG&E states that it is considering ways to expand the program to residential customers but has not yet determined whether California's consumer lending laws present significant barriers. SCE reports that it also offers on-bill financing to small commercial customers as a pilot program. It states that before expanding this program it would need to assess the cost of loan defaults based on its pilot program and improve its customer billing system.
D.05-09-043 observed that PG&E stated that it could not initiate an on-bill financing pilot because of limitations posed by its billing system. Here, PG&E expresses concerns that on-bill financing may present unacceptable risks to ratepayers who fund the program. It comments that large customers do not need access to financing and prior on-bill financing programs for small commercial customers have been too costly. PG&E believes on-bill financing opportunities for residential customers is very limited because of lending law restrictions and possible constraints in its billing system.
TURN, DRA and Small Business California support expanded use of on-bill financing as a way to motivate energy efficiency investments by small companies. DRA states that on-bill financing is critical to realizing the market potential for energy efficiency investments.85 TURN would reduce funding for cash rebates in favor of on-bill financing and extend on-bill financing to residential customers. Small Business CA also advocates in favor of on-bill financing for small to medium sized businesses, observing that it would facilitate more comprehensive energy efficiency offerings by contractors. Conservation Services Group makes similar comments, noting the need for on-bill financing to promote investments in more efficient air conditioning equipment.
Discussion. On-bill financing allows entities who have limited access to financing to purchase energy efficiency measures provided by utility programs. While it may present some liabilities for ratepayers and additional program costs, more aggressive on-bill financing programs may eventually be cost-effective and motivate investments that would not otherwise be made.
We direct the utilities to create or continue on-bill financing pilot programs for small commercial customers. In addition, we agree with Small Business California that institutional customers, such as cities, counties and other taxpayer funded institutions may provide a low-risk opportunity to increase on-bill financing because such customers have a very low probability of defaulting on loans. We therefore direct PG&E, SDG&E, SoCalGas and SCE to propose on-bill financing programs for institutional customers for the 2009-2011 cycle and to continue to investigate programs for other sectors such as residential customers. In addition, we direct SDG&E and SCE to share the results of their programs to date with Commission staff and other interested parties as part of the Strategic Plan and 2009-2011 portfolio development processes.
6.7. Fund-Shifting Rules
The Commission adopted "fund-shifting" rules in D.05-09-043 to provide the utilities with flexibility in managing their energy efficiency portfolios over each program cycle, within certain parameters. Table 8 to D.05-09-043 contains the current fund-shifting rules; the table is also appended to the Appendix A of our Policy Rules.86 For example, under the Rules, utilities may carryover/ carryback funding during each year within a particular program cycle without triggering any review/approval process. We address below comments and proposals received from parties on changes to our fund-shifting rules to better support longer-term energy efficiency programs.87
Based on the changes to the fund-shifting rules we adopt today, staff shall post an updated Appendix A to our Policy Rules on the Commission's website as soon as practicable. As provided for in the Policy Rules, the assigned ALJ in consultation with the assigned Commissioner may provide necessary clarifications to the fund-shifting rules adopted today for the 2009-2011 program cycle.88
6.7.1. Start-Up and Continuity Program Funding (Carry-over/Carry-back Funding)
The Commission funds energy efficiency programs in three-year cycles (or program cycles). The Commission approves utility energy efficiency portfolio plans and related budgets before spending in the relevant program cycle can begin and those programs and budgets terminate at the end of the three year cycle unless the Commission extends them in a formal decision. At times, this process has inadvertently caused or threatened delays or interruptions in program funding or delivery, both for start-up of new programs and continuation of existing programs.
Parties' Positions. PG&E and DRA suggest allowing the utilities to fund - in the concurrent funding cycle -- start-up costs for a future program cycle. We approved this "carryback" funding practice in D.05-09-043 on a one-time basis with regard to use of 2006 funds in 2005, because of the large ramp-up in programs as of 2006.89 The Commission also approved in D.05-09-043 the utilities' use of unspent funding authorizations for 2005 and prior program years as "carryover" funding for program continuity and start-up activities authorized for 2006.
DRA and TURN/CE Council support "rolling" funding cycles in a process that would assist long-term program development while addressing budgets on a somewhat more frequent schedule or as-needed. DRA proposes this idea as a way of reducing the inefficiencies and program disruptions that occur when utilities must ramp up and then ramp down ongoing programs. DRA states that a rolling funding cycle would also have the benefit of promoting projects with long lead times and eliminating the problem SDG&E/SoCalGas identifies regarding "non-coincident" budgeting cycles affecting partnerships with local governments. Similarly, Global Energy Partners supports continuing program authorization, with a continuing three-year Commission review cycle for oversight of expenditures and program effectiveness. NEEA also believes longer term funding commitments will facilitate improved strategic delivery of energy efficiency programs.
Discussion. We agree with the parties that the current process for budgeting and approving energy efficiency portfolios has unintentionally created problems with program delivery. However, we believe that a three-year program and budget approval cycle remains the appropriate time for periodic reevaluation of the content and delivery of the programs to ensure that the portfolios achieve our goals. At the same time, the budgeting cycle need not stop and start on a single day.
We will therefore modify our fund-shifting rules to permit the utilities to spend next-cycle funds in the current budget cycle (once the next-cycle portfolio has been approved) to avoid interruptions of those programs continuing into the next cycle and for start-up costs of new programs. We authorize the utilities to borrow funding without Commission approval up to 15% of the current program cycle budget. Beyond that amount, the utilities are required to seek approval by filing an Advice Letter. The utilities should tap into the next-cycle funds only when no other energy efficiency funds (i.e. unspent, uncommitted funds from previous program years, or 2006-2008 funds that will not be needed) are available to devote to this purpose. This requirement is consistent with the Commission's treatment in D.05-09-043 of "carry back" funding from 2006 for use in 2005.90
If bridge funding is necessary to avoid interruptions in the continuity of 2006-2008 programs that will continue into 2009-2011, measures (costs and savings) installed during the 2008 should count towards the 2006-2008 goals even if the funds supporting these measures are borrowed from 2009-2011. This treatment is consistent with the Commission's directive in D.05-09-043 for 2004-2005 programs rolling over into 2006-2008.91 We also find merit in the proposal of some parties for a "rolling" budget cycle although, as DRA suggests, its success would depend on careful planning. We direct the utilities to explore this approach with parties and our staff and we authorize the utilities to include a "rolling budget" proposal for their 2009-2011 portfolio plans for encumbering funds from the next program cycle for continuing programs, not to exceed 20% of the current program cycle budget. For calculating the PEB under the adopted energy efficiency risk/reward incentive mechanism, the funds encumbered for continuing programs will be counted when those funds are actually spent. This is consistent with our decision to count only "actual" savings as they occur both towards the savings goals (and MPS) and also in calculating the PEB net benefits.
The second change we consider is modification of our rules and practices to provide funding for projects with long lead times, beyond three years.
Parties' Positions. The parties agree that our existing program rules and practices do not adequately motivate the utilities to pursue cost-effective energy efficiency projects with long lead times, such as modifications to new and existing commercial buildings that may take several years to complete.
The utilities, TURN/CE Council, and NRDC comment that one of the barriers to committing to projects with long lead times is the uncertainly about whether utility energy efficiency funds will be available to pay for the projects after they are completed. All recommend the Commission confirm that funding for long-term projects will be available at the time of project completion, even where the payment is made after the program cycle; administrative dollars would be charged as they occur. CLECA also supports long-term program commitments that better match the long lead times of industrial investment plans.
The parties also commented on whether the utilities should be permitted to borrow up to 10% of a future budget. SCE, TURN/CE Council, DRA, NRDC, SDG&E/SoCalGas, PG&E all agree that borrowing from future budgets is necessary to alleviate funding problems with future energy efficiency projects. However, TURN/CE Council, DRA and CCSF argue that the 10% cap may be too restrictive and recommend a cap up to 20% of expected future budgets.
Discussion. We agree that the utilities must be assured that their commitments to projects with long lead times can be funded when the funding is required. As TURN/CE Council recommends, we will allow the utilities to commit funds from the next program cycle to fund programs that will not yield savings in the current cycle. Long-term funding commitments will be subject to the following conditions:
· Long-term projects that require funding beyond the three-year program cycle shall be specifically identified in the utility portfolio plans and shall include an estimate of the total costs broken down by year and associated energy savings;
· Funds for long-term projects must be actually encumbered in the current program cycle;
· Contracts with all types of implementing agencies and businesses must explicitly allow completion of work beyond the end of a program cycle;
· Encumbered funds may not exceed 20% of the value of the current program cycle budget to come from the subsequent program cycle, except by approval in an advice letter process;
· Long-term obligations must be reported and tracked separately and include information regarding funds encumbered and estimated date of project completion; and
· Energy savings for projects with long lead times will be calculated by defining the baseline as the applicable codes and standards at the time of the issuance of the building permit.
We direct the utilities to include a proposal in their 2009-2011 portfolio plans for encumbering funds from the next program cycle for long-term projects, subject to the conditions above. For calculating the PEB under the adopted energy efficiency risk/reward incentive mechanism, the funds encumbered for the long-term projects will be counted when those funds are actually spent. This is consistent with our decision to count only actual savings as they occur both towards the savings goals (and MPS) and also in calculating the PEB net benefits.
Currently, the utilities may file advice letters or applications for approval of additional energy efficiency program funding mid-cycle. The Palm Desert Demonstration Project is one example of funding augmentation for the current 2006-2008 program cycle. By D.06-12-013 and Resolution G-3402, the Commission authorized an increase of $14 million for SCE and $2.242 million for SoCalGas for this project. More recently, SCE filed a request to fund an additional $20 million for distribution of CFLs in low income neighborhoods.92 The Commission does not currently have a policy for how the associated energy savings or program costs will be considered in the context of the Commission's proposed adopted risk/reward incentive mechanism for energy efficiency.93
Before any earnings accrue under the risk/reward incentive mechanism, the utilities' energy efficiency portfolios must meet a "minimum performance standard" or "MPS" that is tied to achievement of the Commission's savings goals. The trigger for financial penalties is also based on performance levels relative to those goals. Earnings are calculated as a percentage (sharing rate) of the portfolio "net benefits," that is, the difference between portfolio savings and costs. In their comments in this phase of the proceeding, parties have raised the issue of how the savings and costs associated with mid-cycle funding augmentations should be counted within this incentive framework.
PG&E, SCE and NRDC would continue the current process of permitting the utilities to file advice letters to add new programs in the middle of a budget cycle. PG&E argues it should be able to increase its energy efficiency budget in such instances and retain energy savings goals. It recommends that the Commission permit the additional energy savings to count as any other program element toward achievement of adopted goals and incentive awards. SDG&E/SoCalGas suggests the current process should be expedited to allow the utilities to take advantage of market opportunities.
TURN/CE Council jointly recommend a process that they argue is fair from the standpoint of ratepayer liabilities while also motivating the utilities to pursue all cost-effective energy efficiency strategies.94 They propose that energy savings from mid-cycle program changes that involve funding augmentations count toward incentive calculations as long as they are not counted toward satisfying the MPS, or in determining which "performance band" should be used in calculating incentive payments or penalties. DRA concurs with this recommendation.
Alternatively, TURN/CE Council suggest that the Commission could increase the energy efficiency savings goals whenever mid-cycle funding augmentations are approved. However, they do not recommend this approach because of the difficulty in making adjustments to those goals. TURN/CE Council also do not recommend the Commission treat mid-cycle program changes outside the incentive awards program, believing this would discourage the utilities from undertaking good programs mid-cycle.
Discussion. We establish energy efficiency funding levels for each three-year program cycle after an extensive program planning and review process. We evaluate on a prospective basis the ability of portfolio activities to achieve the three-year savings goals cost-effectively with the funds authorized, with the input of interested stakeholders and Commission staff. Therefore, we expect utility requests for funding augmentation once the Commission has approved funding levels and utility program portfolios for a particular program cycle to be limited to extraordinary circumstances.95
In effect, mid-cycle funding augmentations provide the utilities with additional funding to accomplish a goal that was set with a lower budget. As TURN/CE Council point out in their comments, fairness to ratepayers dictates that these extra ratepayer dollars not represent a bonus to increase shareholder earnings with no risks attached. The approach presented by TURN/CE Council in this proceeding provides this assurance without discouraging the aggressive pursuit of cost-effective energy efficiency. It encourages the utilities to propose innovative and responsive program elements without tipping the scale in favor of utilities from the standpoint of whether they are meeting energy savings goals.
Accordingly, we will modify our fund-shifting rules to clarify that energy savings from mid-cycle program funding augmentations will be counted in the calculation of portfolio cost-effectiveness and PEB for utility incentive awards. That is, we will include the program savings and costs just as we would for any program in our assessment of portfolio cost-effectiveness and the calculation of PEB "net benefits" under our adopted shareholder incentive mechanism. However, the savings from these programs will not count towards achievement of energy savings goals for the purpose of assessing whether performance has reached the MPS (or falls within the various performance bands) under our adopted incentive mechanism.
As we discussed in our decision adopting the risk/return incentive mechanism, we will also need to review carefully each proposal to augment energy efficiency program funding to ensure that such funding is not misclassified as LIEE, given the implications associated with LIEE classification that carry over to the proposed incentive mechanism.96 Savings associated with any mid-cycle funding augmentation to the LIEE program will not count towards the MPS.
6.8. The Role of Advisory Groups
When we returned the utilities to the role of energy efficiency program administrators, we established a number of quality control measures for program choice and portfolio management to ensure that the IOUs select programs and manage them in a manner that is consistent with our objectives.97 Advisory groups were one of the quality control measures that we adopted in D.05-01-055.
The purpose of these groups is twofold. On one level it is to promote an open exchange of information between utility program administrators, industry experts and stakeholders as the utilities develop their program selections for Commission consideration and manage their program portfolios throughout the funding cycle. On another level, advisory groups can serve an important "peer review" function by providing an independent assessment of the utilities' portfolio design and program selections.98
In D.05-01-055, we directed each utility to establish a PAG to address ongoing program management and development commencing with the 2006-2008 program cycle. Each PAG includes a subgroup of non-financially interested members that review the utilities' process of program selection and portfolio development.99 Members of each PRG review the utilities' overall portfolio plans, their plans for third-party bids, the utilities' bid evaluation criteria and the application of those criteria in selecting third-party programs. We directed the three PRGs to assess the statewide portfolio's ability to meet or exceed short and long-term savings goals in compliance with the Commission's policy rules. Our Policy Rule VII summarizes the directives in D.05-01-055 with regard to advisory groups.
The assigned Commissioner's scoping ruling of May 24, 2007100 stated that this proceeding would include consideration of the advisory group structure and process, as directed in D.05-01-055. The assigned Commissioner's April 13, 2007 ruling provided additional guidance on the advisory group structure review, including possible adjustments to PAG and PRG roles, responsibilities and processes.101
Parties' Positions. The parties generally agree that the PRG/PAGs are useful in overseeing the third-party contracting process, but less successful in the portfolio development and implementation review process. The utilities view these groups as providing value in shaping and improving the program portfolios, increasing program participation, and promoting new technologies. However, PG&E believes the usefulness of the advisory groups has been limited because its members do not share the IOU objectives in all cases. PG&E does not believe the existing advisory groups are designed to affect long-term strategic planning but can continue to be useful in promoting a fair third-party contracting process. SCE and SDG&E/SoCalGas comment that the PRG/PAG process has been useful for developing ways to improve local programs but that they do not rely upon their PRG/PAGs to determine the details of program administration or design.
DRA and TURN explain the PRG process has been useful in promoting a fair third-party contracting process but argue that the PAGs have not been successful in promoting innovation, best practices, program design or cost-effectiveness. DRA comments that the PAGs are mostly a forum for the utilities to inform members of decisions the utilities have apparently already made. DRA proposes changes to the PRG/PAG process that would incorporate more strategic planning.
CCSF would reconstitute these forums to include key market players, state agencies such as CARB and Cal EPA, and experts on new technologies, market transformation and sustainable development. LA, NAESCO and the California Center for Sustainable Energy (CCSE) also believe PRG/PAG members have little or no influence over utility portfolio decisions. CCSE would redefine these advisory groups so that they would focus on ongoing evaluation and program selection, with some authority over some program decisions. The County of Los Angeles (LAC) would broaden the scope of the advisory group process to include program design and operation as well as networking and collaboration. NRDC would create a statewide PRG to review statewide bids and refocus the advisory process to provide a more meaningful venue for portfolio and program improvement and innovation. Women's Energy Matters (WEM) proposes independent administration of energy efficiency programs.102
Discussion. We take seriously the concerns of many parties regarding the PRGs and PAGs, especially the comments that these are more often forums for the utilities to present decisions already made rather than to seek input in a collaborative manner. We also share the utilities' concerns that advisory groups are not effective ways to provide useful information on the details of utility program management or administration. A recent report by a Commission consultant found that the PAGs may not have consistently served their intended functions, that the meetings are not well structured, and that the utilities do not appear to use the feedback they receive from the members. It also suggests that non-members are frustrated by their lack of access.103
Today we adopt a strategic planning process that will greatly assist in portfolio development for 2009-2011 and beyond. We have emphasized the process is to be collaborative in nature and have directed our staff to oversee at least the initial steps of the process, to ensure such collaboration. In large part, this more collaborative process subsumes the advisory function of the PAG. To avoid redundancy and promote an efficient process, we eliminate the PAGs in favor of the more inclusive and comprehensive strategic planning approach we adopt today. We have also made a number of rule and policy changes for promoting improved program design and delivery in this decision that also eliminates the prior role of the PAG.
As described in D.05-01-055 and Policy Rule VII.4, members of each PRG are expected to: (1) participate in the ongoing PAG process, (2) review the IOUs' submittals to the Commission and assess the IOUs' overall portfolio plans, including their plans for bidding out pieces of the portfolio per the minimum bidding requirement, and (3) review the bid evaluation utilized by the IOUs and their application of that criteria in selected third-party programs. The Commission further required the utilities to consult with the PRG's for certain fund shifting requests, proposals to modify customer incentive levels, and for adding new programs mid-cycle104. In addition, the three PRGs are expected to meet and assess the statewide portfolio in terms of its ability to meet or exceed short and long-term savings goals in compliance with the Rules.
Given our elimination of the PAG, the first function of the PRGs is eliminated. We do, however, retain the remaining functions of the PRGs and expand its role to oversee the development of criteria and selection of government partnership programs. The PRG should provide an assessment report on the IOU 2009-2011 portfolio applications, competitive solicitation, and the government partnership process 30 days after the IOU applications are filed.
To the extent that the assigned Commissioner or ALJ, in consultation with the staff, finds it necessary to modify the PRG process or activities in response to the development of the Strategic Plan or the 2009-2011 portfolios, they may do so by ruling at any time during the program cycle.
We will continue to award intervenor compensation for participation in PRG meetings in accordance with existing law and Commission decisions. However, participation in these groups does not automatically qualify an intervenor for compensation. The compensation program does not anticipate the use of consumer advocates as technical consultants or as substitutes for utility or Commission staff, and related work may not be eligible for compensation. Nonetheless, we encourage consumer group participation in the PRG, and will consider compensating associated work if the consumer group can demonstrate consumer benefits from that participation and can show that participation contributed to a Commission order or decision, consistent with Public Utilities Code Section 1801 et seq.
Finally, we encourage parties to participate in our formal proceedings in 2008 and the years beyond that will review the utility applications for approval of their portfolio plans and the associated budgets. We also strongly encourage the utilities to work with interested parties in advance of filing their applications to minimize controversy, incorporate good ideas into their portfolio proposals, and conform their proposals to Commission policies and rules.
6.9. Evaluation, Measurement and Verification (EM&V) Processes and Funding
In D.05-01-055, we directed our staff to conduct EM&V studies to verify the level of actual energy savings achieved through the energy efficiency programs. The development of energy efficiency programs that deliver reliable energy savings for California's ratepayers depends on well-designed methods of EM&V.105
The June 27, 2007 ALJ Ruling solicited proposals for modifications to the current EM&V processes. As we provide guidance for the next generation of energy efficiency programs, we also seek improvement to the EM&V process to better promote utility energy efficiency program delivery. We address here only processes and budgets, not the protocols, metrics, methodologies or analytical foundations for EM&V, which are appropriately issues for other forums.
Parties' Positions. PG&E states that the Commission's current EM&V process is too bureaucratic and should be changed. PG&E and NRDC suggest that at a minimum EM&V evaluators clarify what data is needed for evaluation early in the program cycle. PG&E also suggests evaluators, implementers, designers and administrators meet to develop common understandings on the scope and focus of the evaluations and data needs.
SDG&E/SoCalGas and DRA comment that the timing of EM&V study results is critical for their usefulness in subsequent program cycles and for refining ongoing programs. SDG&E/SoCalGas suggests an annual forum to discuss the use of EM&V study results in program design and delivery. SCE proposes changes to current rules to clarify better the responsibilities of Commission staff, program administrators and program implementers for EM&V work. Currently, the Policy Rules state:
"Energy Division will be responsible for program and portfolio impacts-related EM&V; Program administrators and program implementers shall manage program design, evaluation, and market assessment, with Energy Division taking the lead role in the selection of contractors."106
SCE would modify this language to state that program implementers are not responsible for EM&V and to permit program administrators to undertake a wider variety of studies that are relevant to EM&V. It proposes the following language:
Energy Division will be responsible for program and portfolio impacts-related EM&V; Program administrators shall manage other types of studies, including process evaluation, market assessment, and early measurement and verification studies, with Energy Division taking the lead role in the selection of contractors."
TURN recommends the use of more early evaluations of program elements, mentioning recent studies of CFL useful life estimates undertaken prior to the formal EM&V process. DRA makes similar comments on this topic. TURN would also have Commission staff manage the E3 calculator to improve the reliability of the software and supporting data.
Discussion. The parties provide practical and useful ideas for improvements to the EM&V process that would make EM&V reports more useful and more accurate. We direct Commission staff to implement the following process changes to the EM&V work staff manages:
· Convene regular meetings with utilities and interested parties to develop common understandings about the types of data and information required and the processes to be used;
· Identify key evaluation topics that may be studied early in the cycle to provide information to utilities and other program implementers;
· Where possible, provide early feedback of EM&V findings to the utilities and program implementers; and
· Convene an annual meeting with the utilities and other interested parties to describe and discuss any EM&V findings that could lead to improvements in the program portfolio.
In addition, staff may directly manage the development of the cost effectiveness calculator tool (E3) at its discretion.
Consistent with our guidance for the 2006-2008 portfolio plan development, 8% of utility budgets should be set aside to fund both utility and Commission managed EM&V studies, policy support, and strategic planning projects.107 The Executive Director may hire and manage one or more contractors to assist Commission Energy Division staff for the purpose of advancing the energy efficiency strategic planning work described in this order. Such costs, if any, shall be paid from the 8 percent of the utilities' portfolio budgets to fund Commission EM&V, policy support, and strategic planning projects described in this order and D.05-04-051 (OP 10), on a proportional basis in relationship to energy efficiency funding levels reported each year as specified by the Executive Director. The Executive Director, with the approval of the Commission's General Counsel, i) may contract directly with outside consultants for these services, or ii) may arrange for one or more of the utilities to contract with outside consultants for the provision of the required services to Commission Energy Division. Contracting through the utilities for services for Energy Division shall be subject to the agreement on terms, conditions and documentation for the contract arrangement that are acceptable to the utility and the Executive Director. However, Energy Division will be Contract Manager and will retain all contract management responsibilities for these contracts, with the utilities funding the contract utilizing their authorized energy efficiency program funds as described above.
Commission staff should post on our energy efficiency website a detailed budget and plan for receiving comments on proposed EM&V projects no later than 60 days after the authorization of the IOU portfolio budgets. It should also notify the service list of this proceeding of the availability of this information. If necessary, utilities may borrow funds at Commission staff direction from the PY 2006-2008 EM&V funding authorized in D.05-11-011 to commence projects related to PY 2009-2011 EM&V, policy support, and strategic planning projects that require an early start. The IOUs must submit a portfolio level budget and plan for their own energy efficiency process evaluation and market analysis projects with their program funding request.
72 See D.04-09-060, OP 4 and D.05-01-055, OPs 6 and 7.
73 D.05-09-043, OP 8.
74 D.05-01-055, p. 89.
75 July 18, 2007, NEEA Comments, § C.6.a.
76 There are three generic ways to reduce or replenish the decay quantity: (1) repeat programs at additional expense in later years to replace "dead" measures in-kind, (2) avoid short-term decay by promoting longer life measures in early years, or (3) document that market transformation of certain products or measures guarantees that like-efficiency measures are routinely installed when the consumer replaces an expired measure.
77 D.07-09-043.
78 D.04-09-060, p. 10.
79 The clarification we make in this decision on how cumulative savings should be interpreted and reported will not necessarily impact the utilities' achievement of the MPS under our adopted incentive mechanism for the 2006-2008 program cycle, given that savings from measures installed since 2004 and throughout this current cycle may persist. However, we expect that this clarification will influence the utilities' development of their portfolios for 2009-2011.
80 See Jeff Hirsch memo (section 4) attached to Small Business CA's comments (pp. 15-26) for more details.
81 As defined in Policy Rule II.4, the "cream skimming" results in the pursuit of cost-effective measures, leaving behind other cost-effective opportunities. Cream skimming becomes a problem when lost opportunities are created in the process. Lost opportunities occur when a customer does not install an energy efficiency measure that is cost-effective at the time, but whose installation is unlikely to be cost-effective if the customer attempts to install the same measure later.
82 See http://www.eebestpractices.com/index.asp.
83 We include all governmental entities -- such as community colleges, the University of California and California State Universities, and school districts - in our definition of local governments.
84 July 23, 2007, SDG&E Comments, p. 12.
85 July 16, 2007, DRA Comments, p. 32.
86 D.05-09-043, p. 154.
87 June 21, 2007, ALJ Ruling Soliciting Questions on Energy Efficiency Programs and Strategies Workshop Topics.
88 Policy Rules, Rule X1.1.
89 See, D.05-09-043, Ordering Paragraph 6: "[U]tilities are authorized to expend 2006 monies to fund activities in 2005 for programs that have long start-up period to ensure timely implementation in 2006. The utilities may also use authorized 2006 funds to continue successful 2005 programs that are approved for implementation in this decision to avoid a hiatus in program availability provided all other funding options have been exhausted, as discussed in this decision."
90 D.05-09-043, OP 6.
91 D.05-09-043, p. 154.
92 See, Application for Approval of SCE's "Change a Light, Change the World" Compact Fluorescent Lamp Program, A.07-05-010, dated May 10, 2007.
93 See, D.07-09-043 (Phase I Risk/Reward Decision).
94 July 25, 2007 TURN/CE Council Joint Filing, p. 45.
95 This expectation applies to requests for funding augmentation that would require either approval to increase revenue requirements or approval to carryover unspent funding authorized for an earlier program cycle.
96 See, D.07-09-043 (Phase I Risk/Reward Decision), Section 9.5.
97 D.05-01-055, p. 89.
98 D.05-01-055, p. 98.
99 In addition to Energy Division, DRA, and CEC staff, other PRG members include NDRC, TURN, and in San Diego, Utility Consumers' Action Network (UCAN) and an academician from the University of California at San Diego.
100 Ruling, p. 24.
101 Ruling, p. 9.
102 WEM's comments are outside the scope of this proceeding.
103 The report, conducted pursuant to a contract with the Commission, is titled "Program Advisory Group and Peer Review Group Process Evaluation" and was published February 14, 2007 by TecMarket Works.
104 D.05-09-043 p. 149 and Table 8 (Adopted Fund Shifting Rules); D.06-12-013, OP 2.
105 Policy Rule V.1.
106 Policy Rule V.3; see also D.05-01-055.
107 D.05-04-051, OP 10.
