8. Discussion

The utilities and the Energy Division have reconciled the differences in the Energy Division's Report with respect to the ERT calculation. We conclude that the utilities calculations of 2009 RRIM awards are in conformance with the applicable RRIM formulas, and consistent with the guidance provided in D.10-12-049, with the exception of the overstatement in the calculation of CFL bulb installations. We believe that the incentives attributed to energy savings from the 2009 program cycle to be reasonable and in line with the guidance given to the utilities in D.10-12-049.

We note that because this guidance was given in December 2010, all of the utilities' 2009 program year activities had already been completed. Thus, it can be argued that these incentives might have been anticipated, and perhaps even expected, but were not certain until after the program cycle was completed. We issued this decision in late 2011; the timeline between action and reward is perhaps too long for the RRIM to result in the utilities' desired behavior. We intend to consider these issues in the Commission's current RRIM proceeding, R.09-01-019. Our granting these applications for the RRIM for the 2009 program year should not be seen as any form of future guidance to the utilities for the 2010-2012 program cycle or beyond.

We now turn to the adjustment of the savings and subsequent incentives earned from CFLs. We agree with NRDC and with the utilities that the energy savings used as the basis for the 2009 RRIM awards should recognize savings attributable to CFLs purchased during the 2006-2008 cycle but not installed until 2009. In this regard, we stated in D.10-12-049:

Nothing in this decision precludes the utilities from seeking credit for the energy savings associated with compact fluorescent lights that were sold and rebated in the 2006-2008 period but which were not or will not be installed until later, provided the savings from those lights have not already been accounted for.

The timing of our schedule for addressing how to design future years' incentives should not preclude an appropriate recognition of savings from CFL bulbs purchased during the 2006-2008 cycle, but installed during 2009, for purposes of 2009 RRIM awards. Accordingly, we affirm that the 2009 RRIM award should recognize savings attributable to 2006-2008 program CLF bulbs installed during 2009.

However, we find that the utilities' RRIM calculation overstates the energy savings attributable to CFLs for the 2009 program year. The utility claims for bulbs installed in 2009 are approximately 40% greater than the expected 2009 installations.  In their comments on Energy Division's Report, the utilities and NRDC frame this issue as a new "policy proposal" that is outside of the scope of this proceeding. We disagree. The error identified by Energy Division was the result of the utilities not adjusting their 2009 first year installation rates to account for 2006-2008 program bulbs coming out of storage, although according to Energy Division this adjusted 2009 installation rate was included in the model it provided to the utilities in early 2009 to address the stored bulbs issue. A correction to the claimed RRIM awards is necessary to avoid an overstatement. We believe that this adjustment is reasonable and appropriate.

In addition, the 2006-2008 CFL quantities used to estimate the number of bulbs installed in 2009 must also be recalculated to be consistent with the 2009 installation rates mentioned above and ensure there is no overcounting due to the combined interacting components of the CFL savings model.

We thus adjust the 2009 RRIM awards for deemed efficiency savings from CFLs claimed by the utilities for 2009. The adjusted 2009 RRIM incentives are presented below (a more detailed explanation of the supporting calculations underlying the correction of the CFL calculation of savings and resulting adjustments to the RRIM awards is set forth in Appendix 1 of this decision):

	Utility Award Claim	(Adjustment)	Adjusted Award Amount
PG&E	$32,446,184	$6,277,438	$26,186,146
SCE	$27,572,109	$9,496,968	$18,075,141
SDG&E	$15,108,031	$1,377,641	$13,730,390
SoCalGas	$2,037,721		$2,037,721
	$77,164,045	$17,152,047	$60,011,998

We recognize that these adjustments to the savings and subsequent RRIM incentives were not anticipated by the utilities at the time of the application filing nor upon initial release of the Energy Division report. However, we make these adjustments because preventing an overstatement of the savings from CFLs is in the ratepayers' interest. It is our intent to ensure going forward that the rationale we outline today will flow through to future reviews of energy efficiency savings from CFLs. We also recognize that the adjustment in savings from this one issue of stored CFLs creates an adjustment of almost 20% from claimed incentives to what we reward today; this indicates a potential over-reliance on one measure for total savings achieved in a program year. This suggests an area for future deliberation as we consider the future of the RRIM.