III. Discussion

A. Funded Programs

The programs we fund provide needed energy efficiency services not covered by the remaining portfolio of selected programs, and meet the program criteria in D.01-11-066. In some cases, we reinstate funding for programs whose budgets we cut in the initial selection process. This additional funding will allow the affected programs to serve more customers and increase the number of measures installed. We award $15,338,979 for these programs, and set aside the rest of the available local energy efficiency funding (i.e., $418,932) to cover the maximum IOU administrative costs that may result from the inclusion of the foregoing programs in the 2002-03 program mix.³

Attachment 1 to this decision presents additional information on the new programs selected for each IOU service area. We provide the Energy Division's description of each selected program (including those awarded additional funding), required program modifications, budget and other information in Attachment 3 hereto.⁴ Each program approved in this decision shall be bound by the terms and conditions in D.02-05-046, with the exception of certain due dates set forth therein, revisions of which are set forth in Attachment 2 to this decision.

We summarize in Attachment 4 the selected local program mix by delivery structure, geography and targeted rate-class for all the local energy efficiency programs we fund in D.02-05-046 and in this decision.

B. Enron Subsidiary

We decline to fund the proposal of the Efficiency Services Group, recommended in the draft decision, on the ground that it is offered by a subsidiary of Portland General Electric, which is in turn a subsidiary of the Enron Corporation. We take official notice of the fact that Enron is in bankruptcy and currently is under investigation for activities that contributed to California's recent energy crisis. We believe it is inappropriate to fund this corporate entity under these circumstances. Enron's precarious financial situation raises concerns as to whether the program would fail midstream, hurting California electricity consumers and the Commission's overall energy efficiency efforts. There is too much uncertainty surrounding Enron for us to be able to select its program given the quality of the other programs also seeking funding.

The criteria in D.01-11-066 make room for such disallowances. Our first criterion states that "[t]he most important goal of any Commission energy efficiency program is to create permanent and verifiable energy sayings over the life-cycle of the relevant energy efficiency measures." A company faced with the financial and legal risks Enron poses may be unable to create such permanent change. It is not at all clear what the obligations of Portland General Electric will be to help satisfy Enron's debts. Given the financial precariousness of Enron and the likelihood Portland General Electric will be called to account at least in part for Enron's debt, we simply cannot approve of sending additional California ratepayer money to these entities.

Finally, we are concerned that the proposer never prominently disclosed its affiliation with Enron. It only refers to Enron once in its proposal, on page 33, and there simply states that "[t]he local Northwest Natural Gas Company is purchasing Portland General from Enron." This statement distances the proposer from Enron, rather than fully addressing the affiliation.

C. Energx Program

In D.02-05-046, we held back for further consideration funding the draft decision tentatively awarded to Energx Controls, Inc. (Energx) on the ground of concerns raised in the draft decision about an Energx state tax lien. Since submitting its proposal, however, Energx submitted evidence sufficient to establish that it has since cleared the lien, which was based on a minor accounting dispute. Therefore, we fund the Energx proposal.