II. Background

We have approved nearly $300 million in statewide and local energy efficiency programs for 2002-03. In D.02-03-056, we approved a grant of Public Goods Charge (PGC) ratepayer funds to the DCA to provide marketing and outreach services in connection with statewide energy efficiency programs. The DCA funding was $8.057 million, and was to cover Flex Your Power ads and other publicity designed to promote energy efficiency in California.¹

We appointed Edison to administer the program statewide, because each statewide and local energy efficiency program carried out by a non-utility has a utility administrator.² DCA stated that it would be returning unspent funds already advanced to it totaling $2,817,993.00. In addition, DCA stated that it would decline to accept the remaining balance of $1,824,322.00.

In early July 2002, DCA filed and served a notice stating that it was terminating its contract and returning the approved funds. DCA stated that it would be returning unspent funds already advanced to it totaling $4,642,315.³

Edison applied for funding to carry out statewide efficiency marketing and outreach in its proposal dated December 14, 2001. It sought $10.057 million for its proposal, in which it planned to coordinate with other utilities to build on the Flex Your Power effort.⁴ While we opted in D.02-03-056 to award the funding directly to the DCA (with Edison acting solely as administrator while DCA directly carried out the program), the program we approved there was quite similar to the one Edison proposed.

Both Edison's proposed program and the one we funded required substantial coordination between the DCA and the utilities. For example, we noted in funding DCA instead of the individual investor owned utilities that "DCA has worked collaboratively with the IOUs in the past and plans to continue doing so."⁵ We also required DCA "to obtain information [about other local and statewide programs] from program providers to place on the DCA website."⁶ We provided that the content of the DCA's energy efficiency message must reflect the "input of Edison." We also appointed Edison to administer the Flex Your Power program because DCA "has worked closely with Edison in the past . . . ."⁷

Moreover, Edison is closely involved with the current DCA campaign, and time is of the essence in order to carry out the campaign on schedule. According to the DCA filing,

Southern California Edison has been integrated and involved in all related planning decisions, to date. Edison has also coordinated and communicated with the other investor owned utilities on the approval of the media creative [sic] currently proposed.

The development and focus group research for the next media campaign . . . has been completed. Edison has approved the media messaging and creative concept. [Grey] has reserved airtime for these spots. . . .

¹ The DCA has other funding for the Flex Your Power campaign totaling almost $50 million. This decision only affects the $8.057 million in Commission-administered PGC funding devoted to the campaign. ² This administration arrangement is an interim one pending the Commission's consideration of the appropriate means of administering PGC-funded energy efficiency programs in the future. ³ According to DCA, this amount is the entire amount of the second advance. The Commission allowed such advances in D.02-03-056: "We cannot grant DCA the entire year's funding up-front, but the DCA is eligible to request advance disbursements from Edison if it can document essential program expenditures before a quarterly payment is due. That is, if any essential Flex Your Power advertisement or campaign will not occur unless funds are released early, an advance may be allowed, provided DCA and Edison give five days advance notice to the Commission's Energy Division of such plan." D.02-03-056, mimeo., at 55. ⁴ 2002 Energy Efficiency Program, Statewide Crosscutting Integrated Statewide Energy Efficiency Marketing and Outreach Program, Southern California Edison, dated December 14, 2001 (Edison Proposal). ⁵ D.02-03-056, mimeo., at 36. ⁶ Id. at 56. ⁷ Id. at 55.