2. Positions of the Parties

In 1998, MaxLite/SK America (MaxLite) submitted its bid to SDG&E to obtain an $810,000 contract to furnish all labor, equipment and material necessary to install energy-saving devices and measures at residential customer sites in the SDG&E service territory. The contract was part of the Residential Energy Efficiency Service Providers Program approved by this Commission in Decision (D.) 97-12-103.

MaxLite subsequently filed for bankruptcy. With approval of the Bankruptcy Court and of SDG&E, the contract for energy savings work was assigned to Quality Conservation Services, Inc. (Quality Conservation), an energy efficiency provider with principal offices in Oak Ridge, New Jersey.

Quality Conservation states that, pursuant to the contract, it replaced incandescent light bulbs with more efficient fluorescent bulbs and replaced showerheads with low-flow devices in numerous multiple-family residential facilities. The company states that it completed the work in or about November 1999. It alleges that SDG&E has refused to pay for the work, and it seeks an order from this Commission finding that the work has been completed and directing SDG&E to pay the contract amount, plus interest.

SDG&E responds that Quality Conservation breached its agreement by, among other things, failing to provide pre-install reports. According to SDG&E, pre-install reports are essential for SDG&E to verify that the work performed by Quality Conservation resulted in energy savings. SDG&E also alleges that Quality Conservation installed ineligible measures and misrepresented itself to customers.

SDG&E asserts that even if it is found that Quality Conservation complied with all material terms of the contract, it would be eligible for at most 60% of the contract price, with the remainder due following persistence studies performed nine months after the last installation.

The parties state that they sought to resolve their difference through alternative dispute resolution procedures, but were unsuccessful.