3. LIAB's Compliance with Commission Directives

Before turning to the specifics of LIAB's recommendations, we first address SDG&E/SoCal's contention that LIAB's filing is deficient because it fails to meet the requirements of D.99-03-056, D.00-02-045, and the March 26, 1999 Assigned Commissioner's Ruling. In particular, SDG&E/SoCal argues that LIAB provides no support for why its PY 2001 recommendations should be given high priority consideration and does not comply with the Commission's directive that its PY 2001 recommendations must be based on sufficient public input. SDG&E/SoCal also argues that the filing is deficient because there is no discussion of the pros and cons of the LIAB's recommendations or any discernable consideration of the interests of all stakeholders, including ratepayers.

In response, LIAB states the following:

"The genesis of the Board's program year (PY) 2001 recommendations was the submission of Proposed Policy Rules in November 1998 and final submission on December 23, 1998 of the Board's Proposed Request for Proposal (RFP) for Independent Administration. The Board approved the basic framework of the earlier work, with some updating and modification during meetings in March, April and May of this year. Discussion points for the Board's recommendations, which were the basis of the Board's May 10^th submittal, were circulated prior to and during the Board's meetings of March 28, 2000, April 11 and 12, 2000 and May 2 and 3, 2000. At its May 3, 2000 meeting, the Board voted unanimously to adopt the Discussion Points of the PY 2000 document as revised by the Board and authorized Stephen Rutledge to make the final edits, per the Board's direction and submit the recommendations on the Board's behalf. Since 1998, this Board committed itself to, and did, in the face of tremendous obstacles, have full public discussion on each and every one of these points, and at each point the delegated representative of each and every utility was present and participated in those discussions."⁸

Based on LIAB's response, it does appears that LIAB solicited public input in developing its PY 2001 recommendations. However, LIAB's filing does not reflect the nature of that input, or the alternatives that LIAB considered in developing its selected recommendations. Therefore, it is impossible for us to ascertain whether such public input was sufficient or effective. We expect there to be constructive dialogue among LIAB Board members and public participants during public meetings, as well as serious consideration of all the options presented to the Board. During the PY 1999 program planning cycle, we clearly expressed these expectations:

"The Commission is disappointed in the degree to which the LIGB sought feedback and suggestions from the utilities and other interested parties, and the LIGB's apparent lack of evaluation and analysis of such feedback before making its recommendations to the Commission. In the future, the LIGB is expected to solicit comments and recommendations from the utilities and interested parties and adopt a timeline which allows for evaluation and incorporation of these responses, as appropriate. The LIGB, in the future, should provide thorough substantiation of its recommendations in its work products."⁹

In D.00-02-045, we directed that LIAB provide to the Commission "at a minimum" its best advice agreeable to the majority of Board members, "along with some discussion of the rationale or pros and cons associated with the Board's recommendations." (D.00-02-045, mimeo., p. 24.) We also encouraged LIAB to provide "additional context around recommendations where appropriate and possible. For example, if the Board considered a list of options, it would be useful if the forgone alternatives, along with the pros and cons of each, were also communicated to the Commission." (Id. See also, Conclusion of Law 14.)

In reviewing LIAB's filing, we find that LIAB's filing meets only the bare minimum of these requirements by providing a discussion of LIAB's rationale for each recommendation. LIAB did not present any significant discussion of forgone alternatives (presumably some of which would have been suggested by the utilities and other public participants), or the pros and cons of each, as we encouraged LIAB to do in D.00-02-045. Moreover, LIAB did not explain how it evaluated the relative ranking of proposals made by the public, and why its recommendations represent the top priorities for Commission consideration, as directed by the Assigned Commissioner in his ruling regarding PY 2000/PY 2001 planning.¹⁰

More specifically, the Assigned Commissioner articulated his expectations for the type of selective changes that LIAB's filing would encompass, by referencing his instructions to the California Board For Energy Efficiency (CBEE) ¹¹:

"...'selected' implies `limited in number' and therefore CBEE and interested parties should focus on only the highest priority modifications for the Commission's consideration. I believe that the following categories, among possible others, represent the type of modifications appropriate for Commission consideration: (1) changes needed to clarify aspects of our policy rules that were not addressed during the PY 1999 program process, (2) program initiatives that may have been neglected because of the compressed time schedule for PY 1999 program planning....or (3) program design modifications that are needed to "fix" a problem already observed in their implementation. I am not interested in relitigating issues that were debated and addressed by the Commission...

"In its recommendations, CBEE should explain how it evaluated the relative ranking of proposals made by the public, and why its recommendations represent the top priorities for Commission consideration."¹²

This information was not provided in LIAB's filing. Moreover, as noted by the assigned ALJ, some of LIAB's recommendations involve either issues that are currently being litigated during the PY 2000 planning cycle (in Application (A.) 99-07-002 et al.) or have been addressed to LIAB's satisfaction in the joint Standardization Report.

Because LIAB did not follow the guidelines set forth by the Assigned Commissioner for the content of this filing, we find the usefulness of LIAB's recommendations to be quite limited. Rather than reject them outright, as SDG&E/SoCal propose, we will consider whether any of them represent top priorities that should be adopted at this time. In the future, however, we will not accept filings from LIAB that do not conform to the directives set forth by this Commission, the Assigned Commissioner or the Assigned ALJ. We provide further direction to LIAB concerning our expectations in Section 6 of this decision.