4. Comments on Proposed Decision
The proposed decision (PD) of the Administrative Law Judge in this matter was mailed to the parties in accordance with Section 311 of the Public Utilities Code and comments were allowed under Rule 14.3 of the Commission's Rules of Practice and Procedure. Opening comments were filed by ACCES et al. and DRA on October 19, 2009 (Comments to PD), and no reply comments were filed.
Comments to PD essentially reiterate the Comments to the Draft Manual as discussed in section 3.2 of this decision that, as a previously approved LIEE measure under D.06-12-038, the central air conditioner replacement measure in climate zone 13 was grandfathered and approved in D.08-11-031. The Commission has considered the Comments to PD.
In response to the Comments to PD, we elaborate further on our conclusion above that D.06-12-038 and D.08-11-031 did not approve the replacement central air conditioner measure in climate zone 13. In general, the Commission should not be assumed to have decided upon the details of an application unless there is clear indication of that in the decision. Furthermore, parties have the responsibility to seek clarification of a decision if they perceive an ambiguity as soon as such ambiguity comes to light.
Contrary to assertions in the Comments to PD, D.06-12-038 does not show that the Commission decided to expand the central air conditioner replacement measures to climate zone 13. The Commission has embraced the cost-effectiveness tests up to that decision and since. The absence, therefore, of any discussion in D.06-12-038 concerning the cost-effectiveness analysis about the replacement central air conditioner measure in climate zone 13 supports our conclusion that the Commission did not approve the replacement central air conditioner measure in climate zone 13 in D.06-12-038 and D.08-11-031. D.06-12-038 also does not indicate that the Commission was expressly approving SCE's requested expansion as some sort of an exception to the cost-effectiveness test while realizing the measure to be non-cost-effective.
Furthermore, the language on page 28 and finding of fact 19 of D.06-12-038 suggest approval of "air conditioning measures" but neither identifies particular air conditioner measures nor in what household types nor in which affected climate zones. We note also that D.06-12-038 did not mention "climate zone 13" in the discussion or any of the OPs. In SCE's comment to the proposed decision, SCE requested the Commission to incorporate explicit language in the final decision indicating approval of SCE's request to expand its replacement central air conditioner measure to climate zone 13. The Commission did not do that in the final decision. Instead, the Commission did the opposite by adopting some of SCE's proposed language but notably omitting each proposed reference to climate zone 13. That omission of references to climate zone 13 supports our conclusion that the Commission did not authorize expansion of the replacement air conditioner measure to climate zone 13.
The language of D.06-12-038, the Commission's omission of all proposed references to climate zone 13, combined with the fact that the final decision contained no reference to expansion of replacement air conditioner measure to climate zone 13, confirm and bolster the conclusion that the Commission did not approve SCE's proposed expansion of the air conditioning measure to climate zone 13, as insisted on by ACCES et al. and DRA.
During the past ten years, the Commission consistently adopted decisions which confirmed cost-effectiveness as the standard in approving LIEE measures. In D.08-11-031, even when adopting the "add back" exception to the general rule, we again confirmed this:
To determine how these [add back] measures will affect our 100% by 2020 goal in the Plan, we require additional IOU reporting to show the cost, energy savings impacts, and related metrics. It remains our goal that the LIEE program delivers significant cost-effective energy savings, consistent with the Plan.8
The Commission chose to approve cost-effective LIEE measures because we are mindful of the need to make every effort toward reaching our 2020 goal of treating 100% LIEE eligible households by:
· treating more households,
· achieving more per-dollar energy savings with cost-effective measures, and
· ultimately reaching the state's goal of treating every low-income customer in California by 2020 (per Strategic Plan) without excessive rate impacts.
We reaffirm our commitment to the goals set forth in the Strategic Plan. We take seriously our duty to address the needs of low-income customers. The Commission is sensitive to and mindful of the needs of the California's low-income households. The KEMA Needs Assessment Report9 (KEMA Report) was specifically prepared at the direction of the Commission10 to determine the energy-related needs of the state's low-income population, and in September 2007, the KEMA Report was published. Information from the KEMA Report aided in the development of D.08-11-031, the LIEE decision for budget cycle 2009-2011 as well as D.07-12-51 which developed "strategic goals for LIEE programs and then . . . budgets accordingly."11
The KEMA Report estimated that there are over four million LIEE eligible households in California.12 The surveys conducted leading to the KEMA Report found that over 800,000 California LIEE eligible households have central air conditioning systems and only about 3% of those households (24,000 households) actually require replacement of the inefficient central air conditioners.13 In comparison, the KEMA Report found that the vast majority of the California LIEE households have and require replacement of cooling measures that are less expensive than central air conditioners such as room air conditioners or evaporative coolers.14
Although there are four (4) budget cycles until the 2020 Strategic Plan deadline, the Commission took cooling measures needs of the LIEE population seriously and proactively moved towards addressing the identified needs as set forth in the KEMA Report. D.08-11-031 approved, inter alia, the cooling centers as proposed by SCE and also aggressively approved the budget for approximately 15,000 cost-effective replacement central air conditioners in LIEE households (over 60% of all of the needed central air conditioner replacements) for this current budget cycle. In contrast, it seems without justification that the Comments to PD seem to be promoting the most costly of the cooling measures, the replacement central air conditioner measure, as the sole or primary solution to alleviating cooling needs of these LIEE households in climate zone 13.
In addition, D.08-11-031 went a step further and directed that the LIEE program leverage with its well-funded federal counterpart to make sure that low-income households can access more measures, including cooling measures such as central air conditioner replacement, through Low-Income Home Energy Assistance Program (LIHEAP), administered in California by the Department of Community Services and Development (DCSD).
With that backdrop, the Commission cannot ignore the fact that the KEMA Report found that the central air conditioner replacement was the least needed measure for the California's LIEE population and ranked the measure as such.15 Likewise, the IOUs' budget applications16 show that central air conditioner replacement is one of the most costly LIEE measures, averaging approximately $3000 per central air conditioner, and does not yield the energy savings that can be gained by other more cost effective measures, as discussed in section 3.2 of this decision. The Commission cannot find that it is in the ratepayers' best interest to fund such a non-cost-effective measure, which fails to yield adequate energy savings, especially when the Commission has already approved cost-effective cooling measures and implemented more cost-effective methods of addressing the identified needs.
ACCES et al., in their comment to PD, informs the Commission that "Low-income customers in PG&E's territory can receive those potentially lifesaving cooling measures [replacement air conditioners] but, right across the street, SCE's customers cannot." Contrary to this assertion made by ACCES et al., PG&E is not authorized to replace central air conditioners in climate zone 13. This is consistent with the cost-effectiveness approach adopted in D.05-12-026 based on the Standardization Team's recommendation that central air conditioner replacements are not cost-effective outside climate zones 14 and 15.
This decision is prospective and clarifies D.08-11-031 and interprets D.06-12-038 concerning the climate zone 13 and related issues. We acknowledge that D.06-12-038 could have more explicitly identified the particular measures being approved and D.06-12-038 could have more explicitly denied SCE's request to expand the replacement of central air conditioner measure to climate zone 13. The Commission recognizes how SCE and others could have in good faith misinterpreted D.06-12-038, and relatedly, D.08-11-031, as they have to date; SCE therefore will not be penalized for having implemented its LIEE program to date consistent with the interpretation as set forth in the Comments to PD.
8 D.08-11-031 at 196.
9 KEMA Report, submitted to the Commission on September 7, 2007. On September 27, 2007, the ALJ issued a ruling seeking the parties' comments on how the KEMA Report could be used to develop the LIEE program strategies and the Commission issued D.07-12-051 in R.07-01-042 which set the strategic foundation for D.08-11-031 and LIEE program.
10 D.07-12-051 at 11.
11 Id.
12 Id. at 3.
13 Id., pp. 5-36, Table 5-23.
14 Id.
15 Id. at 4.
16 A.08-05-022, A.08-05-024, A.08-05-025, and A.08-05-026.
