2. Background
Southern California Edison Company (SCE) and Southern California Gas Company (SoCalGas) proposed the Palm Desert Demonstration Partnership (Partnership) in 2006. On December 14, 2006, the Commission issued Decision (D.) 06-12-013, approving the utilities' request with certain modifications. Specifically, this Decision authorized SCE to record up to $14 million in SCE's Procurement Energy Efficiency Balancing Account from existing unspent, uncommitted energy efficiency monies to fund Partnership expenditures during 2006-2008. D.06-12-013 specified project duration of two years, but also stated that SCE may seek an additional two years through future funding requests.
The Partnership was to be a collaboration among SCE, SoCalGas, the Energy Coalition and the City of Palm Desert (Palm Desert), who proposed to deliver these additional, incremental program offerings:
· A suite of comprehensive and cost-effective packages of Demand-Side Management measures and educational and behavioral changes that also incorporate emerging technologies as they become commercially available for Heating, Ventilation and Air Conditioning (HVAC), lighting, refrigeration, and pumping;
· A focused, comprehensive HVAC program that maximizes on-peak energy savings and demand reduction by focusing on early replacement through higher incentives offered through special seasonal "sales" and aggressive promotion of services;
· Closely coordinated local education, training, marketing and outreach (including neighborhood "sweeps" and events) in which the partners work together to educate consumers and co-promote programs;
· Packaging financial incentive bundles that marry cost-effective utility incentive levels with various financing packages to facilitate customers' participation in energy efficiency programs; and
· Tying together Palm Desert's new energy codes and mandates that go beyond Title-24 with utility-offered technical assistance and incentives to facilitate compliance.
D.06-12-013 cautioned that the Commission would "carefully consider the results of ex post Evaluation, Measurement and Verification (EM&V) when it considers funding requests for this program during the 2009-2011 program cycle." (D.06 12 013 at 16.)
In their applications for the current (now 2010-2012) energy efficiency program cycle, SCE and SoCalGas requested a total of $23 million for the Partnership, before completion of the EM&V of the Partnership's energy savings to date. In D.09-09-047 at 271 (the Commission's September 24, 2009 decision authorizing the state's investor-owned energy utilities' current energy efficiency portfolios), the Commission limited funding authority for SCE for the Partnership to $3.90 million to continue program implementation through June 2010, and required SCE and SoCalGas to request any additional extension of the Partnership beyond June through a separate Application. (D.09-09-047, Ordering Paragraph 39.) That decision specified that an application to extend the program would need to provide detailed information documenting the Partnership's performance to date, as well as addressing specific pilot project criteria set by the Commission for all energy efficiency pilot projects.1
On April 22, 2010, SCE and SoCalGas jointly filed a Petition for Modification of D.09-09-047. SCE and SoCalGas requested that the Commission modify D.09-09-047 to authorize continuation of the Partnership on a month-to-month basis, at the then-currently authorized budget levels2 of approximately $578,000 per month for SCE and $72,000 per month for SoCalGas until the Commission issued a decision on the then-forthcoming Applications for continuation of the Partnership for the remainder of the 2010-2012 cycle. D.10-06-039 granted the Petition for Modification to continue the Partnership on a month-to-month basis until the end of 2010, at reduced budget levels of $289,000 per month for SCE and $36,000 per month for SoCalGas, contingent upon each utility filing an Application by July 16, 2010 to continue the Partnership through 2012.
The Applications before us today were filed on July 1, 2010. The applications were protested by Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN). At a Prehearing Conference on August 31, 2010, the Administrative Law Judge (ALJ) consolidated the proceedings. On September 8, 2010, the ALJ issued a Ruling requesting that parties supplement the record by responding to a series of questions about the Partnership. Parties responded to the Ruling on September 24, 2010, with replies on October 1, 2010.
1 D.09-09-047 at 271, citing Section 4.3 (at 48-49). The criteria applicable to all pilot programs included ten specific elements which address cost-effectiveness, innovative design and partnerships, baseline metrics, methodologies for testing cost-effectiveness, as well as a budget and timeframe for completing the Project and obtaining results within a portfolio cycle.
2 D.09-09-047, OP#39, authorized SCE and SoCalGas interim funding of $3.9 million. D.09-09-047 at 271, specifies this funding is for the first six months of the 2010-2012 cycle. This equates to $3.47 million for SCE and $0.43 million for SoCalGas for a six- month period, or $578,000 and $72,000 per month for SCE and SoCalGas, respectively.
