ALJ/DMG/tcg Date of Issuance 2/4/2009

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Examine the Commission's Energy Efficiency Risk/Reward Incentive Mechanism.

FILED PUBLIC UTILITIES COMMISSION JANUARY 29, 2009 SAN FRANCISCO, CALIFORNIA RULEMAKING 09-01-019

ORDER INSTITUTING RULEMAKING

1. Summary

This Order Instituting Rulemaking (OIR or Rulemaking) will address the Commission's policies related to an energy efficiency risk/reward incentive mechanism (RRIM). Incentives for energy efficiency activities administered by Pacific Gas and Electric Company, Southern California Edison Company, San Diego Gas & Electric Company, and Southern California Gas Company ("the utilities")¹ will be subject to this new rulemaking.

In this rulemaking, we will evaluate modifications to the RRIM for energy efficiency first adopted in Decision (D.) 07-09-043. For 2006 through 2008 energy efficiency activities, we suspend the schedule for verification and review of incentive claims in favor of this rulemaking. For RRIM issues only, this rulemaking serves as a successor to Rulemaking 06-04-010, our post-2005 rulemaking on Policies, Programs, Evaluation, Measurement and Verification, and Related Issues.

¹ For the purpose of this Rulemaking, energy efficiency programs exclude low-income assistance activities, including the Low-Income Energy Efficiency (LIEE) program.