3. Preliminary Scoping Memo

This rulemaking is instituted on the Commission's own motion to adopt, repeal, or amend rules, regulations, and guidelines for the electric and gas utilities named herein, under the authority of Rule 6.1. The preliminary scoping memo for this rulemaking identifies the energy efficiency issues related to the RRIM which are under consideration here.

We see a need to reconsider the RRIM earlier than in 2011 as anticipated in D.07-09-043. The controversies raised concerning the first Verification Report show that methodologies of the RRIM process are quite complex and are not as easily or as timely resolved as we had hoped. We believe it is necessary to consider a more transparent, more streamlined and less controversial RRIM program. This may require making small but significant changes to the existing RRIM, or may require wholesale adoption of a new incentive mechanism. Any new or revised RRIM must continue to provide incentives to utilities to provide the maximum verifiable and socially-desirable level of energy efficiency programs and services, while protecting ratepayers through necessary cost containment mechanisms.

In this rulemaking, it is our intent to first develop a new framework for the interim review of 2008 energy efficiency activities and the final review of 2006 through 2008 energy efficiency activities (now set for 2010). Next, we intend to develop a long-term framework for energy efficiency activities in 2009 and beyond.

The interim review of 2008 energy efficiency activities is set to begin on February 28, 2009 when the utilities submit their 2008 measure and cost report to the Energy Division, according to a Ruling issued by ALJ Gamson in R.06-04-010 on January 20, 2009 (pursuant to direction given in D.08-12-059), and is scheduled to result in Commission consideration of the Energy Division Verification Report for 2008 in August 2009. The utilities' February report includes valuable data concerning utility activities and should be submitted as per the January 20, 2009 Ruling. However, except for this report, we will suspend the schedule in that Ruling in order to allow us to consider a new framework for the RRIM which may supersede and make moot the efforts under the current framework and schedule. It is our intent to adopt a new framework for the review of the remainder of 2006 through 2008 energy efficiency activities in a timeframe consistent with interim payments for 2008 no later than December 2009, and any final payments for 2006 through 2008 no later than December 2010.

In this proceeding, we may also consider RRIM issues raised in D.08-07-047 and the policy issues related to RRIM raised by the utilities in the 2009-2011 portfolio proceeding (A.08-07-021 et al.). However, certain policy issues raised by the utilities have important impacts that reach beyond the RRIM and affect portfolio cost-effectiveness and the mix of programs selected for implementation. It is critical that these issues be addressed in the context of the 2009-2011 portfolio filings to ensure full consideration of the impacts of the various proposals on the portfolios, and the impact of these policy issues on the Commission's overall policy goals for energy efficiency. These policy issues have been briefed in A.08-07-021 et al. and we anticipate issuing a decision on these policy issues prior to the development of a new RRIM in this proceeding because the 2009 - 2011 portfolios must be approved this year. Therefore, the outstanding policy issues will be decided in A.08-07-021 et al. These policy issues will then be implemented via the RRIM developed in this proceeding for 2009 and beyond.

The Commission's Energy Division will soon distribute a White Paper addressing certain RRIM issues. The White Paper may also touch upon related evaluation, measurement and verification issues, and other issues related to the RRIM. All issues raised by the White Paper, and all issues related to the RRIM, are preliminarily considered to be within the scope of this proceeding. Comments on this White Paper will be considered in this rulemaking, as directed by the Assigned Commissioner. The Assigned Commissioner may also raise other RRIM-related issues as part of this proceeding.

For issues related to RRIMs, R.06-04-010 is superseded by this rulemaking.