7. Comments on Draft Decision
The draft decision of Commissioner Kennedy and ALJ Gottstein in this matter was mailed to the parties in accordance with Pub. Util. Code §311(g)(1) and Rule 77.7 of the Commission's Rules of Practice and Procedure. Comments were filed on December 20, 2004 by the City of Berkeley, CCSF, SDREO, Reaching New Heights Coalition, WEM, SBW Consulting, Inc., Robert Mowris and Associates, South Bay Cities Council of Governments, Staples Marking Communications, Inc., TURN, ORA, Runyon, Saltzman and Einhorn, Inc. and Sempra Energy Global Enterprises (SEGE).146 Reply comments were filed on December 28, 2004 by American Synergy Corporation, CCSF, County of Los Angeles, NRDC, PG&E, Robert Mowris and Associates, Intergy Corporation, SDG&E and SoCalGas (jointly), SCE and WEM.
In response to comments, we have made several clarifications and corrections to the draft decision, particularly with respect to the EM&V firewall and the 20% minimum bid requirement. In doing so, we have also added language to emphasize that the composition of the IOUs energy efficiency portfolios for program year 2006 and beyond must reflect our focus for spending ratepayer dollars: Namely, to capture the most cost-effective demand-side resources as possible over both the short- and long-term that will meet or exceed our adopted savings goals. Some of the comments regarding what to put out to bid (and what not to put out to bid), and how to consider program selections that address different market sectors suggest to us that the draft decision was not clear enough in articulating this focus. We have strengthened that language, while clarifying our intent regarding partnership programs and the competitive bid minimum requirement. However, none of these modifications represent substantive changes in the administrative structure proposal presented for our consideration in the draft decision.
We note that CCSF and TURN ask us at this juncture (with the filing of their opening comments on the draft decision) to consider fielding a "pilot" of administrative processes to be designed by Energy Division and interested parties in the months following our final administrative decision. The overall thrust of the pilot would be to test an independent administration structure involving local government entities in a limited geographic region. The proposal provides few details, other than to note that it would be an "entirely different approach," that would move beyond the "program-by-program approach," and would be limited to the San Francisco Bay Area and/or San Diego area. 147
For the policy and legal reasons fully explored in the draft decision, there are substantial drawbacks to delegating program choice and portfolio management administrative functions to a third-party administrator, whether on a permanent or pilot basis. In our view, the pilot proposal presented by TURN and CCSF at this late date is simply a thinly veiled attempt to circumvent the major conclusions of the draft decision. Moreover, contrary to TURN's assertions that it would have a "minimal disruptive impact"148, such a pilot would be highly disruptive to our goal of providing much-needed certainty to the energy efficiency industry. The issue of portfolio administration has been a source of great uncertainty for California's efficiency industry for more than the past half decade. After a long period of public debate and discussion, the draft decision chooses the "fork in the road" that leads away from independent administration for a number of policy and legal reasons. By asking us to approve a "pilot" for independent administration in combination with the administrative structure proposed in the draft decision, TURN and CCSF are essentially asking us to prolong the uncertainty surrounding administration.
We agree with NRDC and others that it is time to put this debate behind us. Based on the extensive record before us in this proceeding, we adopt the draft decision with the minor modifications and clarifications described herein. We find that the administrative structure presented for our consideration by Assigned Commissioner Kennedy and CEC Commissioner Rosenfeld provides the most workable approach to achieving the aggressive energy efficiency savings goals we have established for energy efficiency programs in the years to come.
146 SEGE is a "parent company of several business units with an interest in the California retail market for energy-related products and services ...and an interest in participating in the programs under consideration in this proceeding. With its December 20, 2004 comments on the draft decision, SEGE has filed a motion to intervene in this proceeding stating that it was only recently aware of the issue of affiliate transactions being considered in this proceeding. We will grant SEGE's motion, but remind SEGE and other business entities interested in energy efficiency issues to participate earlier in proceedings relevant to their interests. We note that the issue of banning affiliate transactions between program administrators and implementers was raised during the debate over alternative administrative structures (See TURN/ORA Coalition May 2004 comments, p. 20), that the Assigned Commissioner issued an earlier draft of the decision for discussion purposes at the September 30, 2004 oral argument that clearly identified this issue for Commission resolution, and that she also solicited further written comments from all interested parties on whether or not affiliate transactions should be banned on October 7, 2004. 147 TURN Opening Comments, p. 13; CCSF Opening Comments, p. 5. 148 TURN's Opening Comments, p. 14.
