3. Positions of Parties
SCE requests the Commission approve a continuation of the Partnership for the duration of SCE's energy efficiency 2010-2012 program cycle with a proposed incremental budget of $7.90 million (in addition to the $3.47 million authorized for SCE by D.09-09-047 and Advice Letter 2410-E) and the proposed fund shifts requested herein. SCE requests approval to fund the continuation of the Partnership by shifting $7.90 million in funds from the 2010-2012 budgets authorized in D.09-09-047. Specifically, SCE requests authority to shift $6,500,000 from the Residential Energy Efficiency Program, $722,000 from the Commercial Energy Efficiency Program, $200,000 from the Residential and Commercial HVAC Program and $478,000 from the Energy Leader Partnership Program to fund the Partnership. SCE contends these funds have already been authorized for recovery from customers by D.09-09-047, and thus approval of this Application will not result in an additional rate increase.
SCE proposes certain modifications to the Partnership, including new program offerings for the 2010 - 2012 energy efficiency cycle approved by D.09-09-047, and minor modifications to existing program elements. SCE also proposes discontinuance of the thermal energy storage program (which was not successful), the American Grid home monitoring system (due to minimal savings), and the Behavior Change Program (due to inconclusive results).
SCE claims the Partnership supports the California Long Term Energy Efficiency Strategic Plan's (Strategic Plan) goals of achieving significant reductions in residential and commercial energy use and implementing whole house retrofits, zero net energy projects, HVAC upgrades, new technologies, innovative financing, and the development of reach codes. SCE also claims the Application is responsive to new energy efficiency pilot requirements adopted in D.09-09-047.
SCE contends the Partnership serves as a model for other cities and utilities to utilize, as the Partnership has developed several innovative projects that are being considered for future replication. SCE also contends the Partnership has provided support for Palm Desert's involvement in the development of Assembly Bill (AB) 811 (Stats. 2008 Chap. 159) regarding financing of energy efficiency projects.
SCE asserts the Partnership has made significant progress toward achieving its goals in the four years since its inception, claiming over 7,000 residential home energy surveys have been conducted, resulting in over $19 million in paid rebates and incentives to customers for installation of energy efficient equipment. SCE also claims energy savings from this Partnership have reduced greenhouse gas emissions by 47,000 metric tons, equivalent to removing over 9,000 vehicles from California roadways.
SCE claims that through 2009 it and its partners have achieved 36.5 megawatt-hour (MWh) reductions for the Partnership, and 11.2 megawatts (MW) of peak reductions, accounting for 71% and 69%, respectively, of the electric energy savings and demand reduction goals established by the Commission.3 SCE acknowledges that Palm Desert has set goals of 30% reductions in MWh, MW and therms, which equates to energy savings of 215,000 MWh, peak demand reduction of 48.7 MW, and natural gas consumption savings of 5.7 million therms. SCE states that through 2009 between it and Palm Desert, 43% of the MWh reduction goal and 54% of the peak MW reduction goal for the anticipated five-year period of the Partnership have been achieved.
SCE also identifies several additional initiatives of the Partnership to date, including:
· AB 811 development support;
· Contribution to local government leadership;
· Simplified customer process (e.g., "one-stop-shop");
· Residential behavioral change program;
· Customized incentives and services;
· Marketing and outreach;
· Emerging technologies promotion; and
· Development of replicable projects.
SCE and SoCal Gas jointly contend that there was not sufficient data to complete a full analysis of the pilot to determine whether continued funding should be authorized, because analytical data was intended to be gathered over five years, not three years. They claim that some projects can demonstrate proof of concept (the ability to achieve energy savings or demand reduction), but there is not yet sufficient information to determine whether projects can be replicated or whether such replication would be cost-effective. The utilities also suggest that there has been a lack of communication between the Energy Division and the utilities on what should be the Partnership's metrics of success; they state a willingness to work further with Energy Division to resolve evaluation issues.
SoCalGas seeks approval to spend $2.1 million in funding to save 457,073 gross therms during the 2010-2012 energy efficiency program cycle. Funding would come from unspent uncommitted monies from the 2004 -2005 energy efficiency program cycles recorded in its Conservation Expense Account. Since these funds have already been collected from customers, SoCalGas states that its request will not require a rate increase.
DRA recommends that the Commission not authorize extension of or additional funding of SCE's participation in the Partnership unless the Commission's Energy Division confirms that lessons learned from the Direct Impact Evaluation Report and the Palm Desert Implementation Assessment have been incorporated into any future SCE participation in the Partnership.
DRA contends that the EM&V studies of SCE's participation in the Partnership revealed shortcomings in the implementation of the program, especially the collection of data to track results of a pilot program that is not held to the same cost-effectiveness standards of other energy efficiency programs, but is expected to yield information that may be useful in other settings. DRA points out that the Partnership was funded at a much higher level than other local government programs, and contends that therefore ratepayers should expect a greater level of rigor would be applied to demonstration of program design and monitoring of activities and expenditures.
Regarding SoCalGas' application, DRA notes that the Energy Division's Impact Evaluation concluded that the 768 therms of ex ante net savings from SoCalGas's participation in the Partnership were so small that "a minimum of evaluation resources were expended" in evaluating the program.4 DRA points out that this is significantly less than the savings asserted in SoCalGas's Application. The Impact Evaluation on p. 73 further noted that it appeared that all gas efficiency measures in Palm Desert were reported through other SoCalGas programs, which means that the money spent marketing the SoCalGas Palm Desert Program was really being spent in support of other SoCalGas programs in the area. Therefore, DRA finds it difficult to conclude that SoCalGas's participation in the Partnership produced benefits commensurate with the funds expended.
Therefore, DRA recommends that if the Commission decides to authorize extension and continued funding of SoCalGas's participation in the program, it should ensure that the following recommendations (as well as others reflected in the EM&V reports) are incorporated into the design of the program:
· Clear explanation of the program logic that linked program actions to intended outcomes;
· Collection and submission on a timely basis of quantitative data to support the direct linking of program actions with outcome;
· Documentation to define or track the design innovations featured by the Palm Desert Partnership;
· Documentation, or tracking of program activities that could establish the effectiveness, replicability, and scalability of program activities to other jurisdictions; and
· A planning document that clearly articulates the specific responsibilities and goals for each partner.
TURN asks that the Commission not authorize SCE's proposed level of funding to be shifted towards the Partnership for the 2010-2012 program cycle. TURN contends SCE has failed to provide the type of information necessary to permit the Commission to conduct the type of review called for in past decisions, particularly D.09-09-047. Both EM&V studies of the Partnership and past Commission decisions have come to the conclusion that the Partnership has not been successful in generating certain desired outcomes for energy efficiency. In fact, TURN contends the Program Assessment was very clear when it observed that the level of funding afforded the Partnership was not met with a comparative level of rigor in the program's design, documentation and demonstration. TURN further cites the Program Assessment as stating, "as [the Partnership] is currently operated it is unlikely that the $48.8 million in requested funding between 2007 and 2012 will be cost effective or yield program design innovations that can be clearly defined, measured, and replicated elsewhere."
TURN notes that although SCE contends that the requested funds for 2010 through 2012 for the Partnership have already been authorized for recovery from customers, permitting the utilities to spend these authorized funds means less funds to be spent on more cost-effective and meritorious residential programs. For example, the proposed $6.5 million reallocation from the Residential Energy Efficiency Program is 2.7 % of that program's current program budget for the 2010-2012 program.
3 Exhibit SCE-4, Revised Table II-1.
4 Impact Evaluation at 72-73.
