VII. Energy Efficiency (EE)
The utilities reflected the Commission's preferred loading order by including energy efficiency savings targets in their LTPPs as the priority procurement resource. Since the IOUs filed their LTPPs on July 9, 2004, the Commission issued D. 04-09-060 on September 23, 2004. D. 04-09-060 translated into a numeric goal the mandate from the EAP to reduce energy use per capita. For the electric IOUs the adopted savings goals reflect the expectation that energy efficiency efforts in their combined service territories should be able to capture on the order of 70% of the economic potential and 90% of the maximum achievable potential for electric energy savings over the 10-year period covered by the LTPPs. The annual and cumulative goals for energy savings through 2013 are presented in tables to D. 04-09-060.60In its post-hearing brief, SCE states that its targets are already higher than the Commission goals established in D. 04-09-060, but PG&E's targets in its 10-year plan are lower than those in the said decision. SDG&E, on the other hand, continued to use its energy efficiency forecast from its 2003 LTP with the expectation that it will need to update its forecast and resource plans to reflect the goals adopted D. 04-09-060.61
PG&E, SCE and SDG&E should meet or exceed the Commission's EE goals over the next ten years and specifically over the next EE funding cycle (2006-2008) and to revise and update their plans to be in alignment with these goals. PG&E, SCE and SDG&E are to incorporate the goals from the EE decision in their LTPPs, and as these energy savings goals are updated and amended by subsequent decisions, the IOUs are to incorporate the most recently adopted energy savings goals into their plans. As directed in D. 04-09-060:
The energy savings goals adopted in this proceeding shall be reflected in the IOUs' resource acquisition and procurement plans so that ratepayers do not procure redundant supply-side resources over the short- or long-term. To this end, our upcoming decisions in R. 04-04-003 concerning the long-term procurement plans and 2005/2006 ongoing procurement authorizations of PG&E, SCE and SDG&E shall be made in full recognition of the aggressive energy savings goals we adopt today. For the procurement plans that will be filed in 2006 and during subsequent procurement plan cycles, or for any updating to the long-term procurement plans required by the Commission before then, PG&E, SDG&E and SCE shall incorporate the most recently-adopted energy savings goals into those filings. " (D. 04-09-060, Ordering Paragraph 6, emphasis added)
SCE proposed to add a 1% reliability factor to downgrade program savings from non-utility energy efficiency programs operating in its territory. SCE asserted that this reliability factor would address the uncertainty in the timing and magnitude of savings from non-utility programs until rigorous evaluation, measurement and verification (EM&V) of these programs becomes available.62 We reject SCE's proposal and reiterate our prior directive in D. 04-01-050 for the utilities to count expected energy savings from non-utility programs that operate in their service territories. As we stated in D. 04-01-050:
As more and more non-utility entities enter the energy efficiency program delivery field, more and more energy savings will be attributed to non-utility providers. Therefore, in this proceeding, in the next utility filing of their long- and short-term procurement plans, we order utilities in their demand forecasts for those filings to include expected energy savings from non-utility programs that operate in their service territories. (D.04-01-050, p. 107)
The utilities noted in their LTPPs that several issues are critical to the achievement of their energy savings targets and success of energy efficiency programs. These include EE program administrative structure, program funding cycle and duration, EM&V framework and protocols, performance incentives, fund shifting authority, and avoided costs used in cost effectiveness calculations for EE, demand response, and other applications. The Commission has deferred consideration of most of these issues to the energy efficiency rulemaking (R. 01-08-028) and not in this proceeding, as discussed in D. 04-01-050. The Commission has also instituted Rulemaking 04-04-025 to address avoided cost issues pertinent to energy efficiency programs and other resource applications. We will continue to coordinate these various proceedings to the extent that our decisions in those proceedings impact the utilities' LTPPs.
60 Tables 1A to 1E of D.04-09-060 shows the total electricity and natural gas program savings goals for each IOU service territory and for all IOUs. Attachment 9 to the said decision shows the corresponding funding levels (PGC + procurement funds) implied by the adopted energy savings goals.
61 NRDC's Opening Brief presents a comparison of the utilities' LTPP's proposed electricity savings targets versus those adopted in D.04-09-060.
62 SCE Opening Brief, p.36.
