2. Introduction

The Commission originally adopted the Risk/Reward Incentive Mechanism (RRIM) in Decision (D.) 07-09-043 as means of promoting a strong utility commitment to achieving energy efficiency goals by offering incentives for significant energy efficiency achievements (or penalties for sub-standard performance). The magnitude of rewards (or penalties) is based on a share of the resource cost savings that energy efficiency measures are deemed to provide.

Through a series of decisions in Rulemaking (R.) 09-01-019, we authorized RRIM earnings for the 2006-2008 program cycle. In D.08-10-027, the Commission previously authorized the utilities to extend their authorized 2006-2008 energy efficiency programs into 2009 as a bridge year pending approval of an updated portfolio of new programs for the subsequent cycle. In D.10-12-049, we authorized the utilities to apply for energy efficiency incentive awards for 2009 program activity using the formulas and framework generally used for the 2006-2008 RRIM true-up.

For the 2009 bridge year, the utilities collectively seek approval of incentive awards totaling approximately $77,164,045. Table 1 of Appendix 1 of this decision summarizes the derivation of the utilities' incentive earnings claims for 2009. As discussed below, we reduce the requested claims to correct for an overstatement in the calculation of energy efficiency savings due to compact florescent light installations, as explained below. The resulting adjusted total of 2009 savings yields incentive awards of $60,011,998. In all other respects, we conclude that the adjusted 2009 incentive claims have been calculated in accordance with the RRIM formula and Commission guidance prescribed in D.10-12-049. Accordingly, we approve 2009 incentive earnings awards of $60,011,998. The utilities' claims and Commission approval for 2009 incentive awards are set forth below:

We authorize these adjusted awards in recognition of Commission commitments set forth in D.10-12-049 regarding the treatment of 2009 RRIM award claims. By authorizing these awards, however, we do not create a precedent or basis for how the Commission may design incentives for the current 2010-2012 energy efficiency program cycle or subsequent years' activities. We defer that issue to a separate decision. These applications are closed.