V. Assignment of Proceeding

Susan P. Kennedy is the Assigned Commissioner and Kim Malcolm is the assigned ALJ in this proceeding.

Findings of Fact

1. AB 117 requires the Commission to establish certain policies and procedures regarding energy efficiency program funding no later than July 15, 2003.

2. The Commission's existing policies and procedures for selecting energy efficiency programs and administrators (or "implementers" as defined by the Commission's energy efficiency policy manual) generally fulfill those portions of AB 117 that require the Commission to permit non-utilities to apply for program funding and that articulate policy criteria for selecting programs to be funded with revenues collected pursuant to Section 381.

3. The record in this proceeding does not support providing a preference for cities, counties or CCAs to be awarded energy efficiency program funding at this time.

4. It would be impractical and contrary to AB 117's policy objectives to allocate a "proportional share of cost-effective energy efficiency and conservation activities" unless funding levels are used as a proxy for "activities."

5. A reasonable definition of "proportional share" for purposes of implementing AB 117 is a utility's average statewide per capita Public Goods Charge energy efficiency program spending from the previous year times the population in a CCA's territory.

6. The utilities already collect and disseminate upon request certain types of data and information. Ordering the utilities to continue to collect and disseminate this information, as set forth in Attachment C, will not create a measurable financial burden on the utilities and such activity is integral to the utilities' normal business operations.

Conclusions of Law

1. AB 117 does not require Commission approval for cities and counties to create CCAs; although AB 117 requires a number of preconditions before a CCA may aggregate load and purchase power on behalf of local customers, no preconditions exist in the bill before a CCA may apply for energy efficiency funding authorized in Section 381.

2. AB 117 requires the Commission to permit parties other than utilities to apply for energy efficiency program funding authorized in Section 381.

3. AB 117 does not require or state as a matter of public policy that the Commission should provide a preference for cities, counties or CCAs in deciding which parties should be awarded funding for energy efficiency programs.

4. Existing procedures, schedules, selection criteria and EM&V requirements should apply to CCAs that seek energy efficiency program funding authorized under Section 381.

5. Energy efficiency program administrators should allocate a "proportional share of cost-effective energy efficiency and conservation activities" to CCA territories where the CCA is not the energy efficiency program administrator. AB 117 permits the Commission to adjust the proportional share under certain circumstances.

6. The proportional share of energy efficiency program funding, as defined herein, should be allocated to a CCA's territory where the CCA is not administering energy efficiency programs funded by revenues collected pursuant to Section 381.

7. The respondent utilities should provide certain information and data to cities, counties and CCAs, as set forth in Attachment C.

8. The utilities should file tariffs that facilitate the dissemination of information and data that would permit cities, counties and CCAs to develop and implement local energy resource plans and programs, as set forth herein.

9. Nothing in AB 117 requires the Commission to assure utilities collect additional revenues to implement those portions of AB 117 relating to energy efficiency programs and which are the subjects of this order.

10. The modifications to the Commission's energy efficiency policy manual, in Attachment A of this order, and consistent with the findings herein, should be adopted.

INTERIM ORDER

IT IS ORDERED that:

1. The modifications to the Commission's energy efficiency policy manual set forth in Attachment A and consistent with the findings of this order are adopted.

2. Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company and Southern California Gas Company (collectively, Sempra), shall propose ways to allocate a proportional share of energy efficiency program funding to a "Community Choice Aggregators" (CCAs) territory where the CCA does not administer energy efficiency programs funded with revenues collected pursuant to Section 381. Respondents shall calculate the proportional share consistent with this order.

3. PG&E, SCE and Sempra shall provide the information and data described in Attachment C to any city, county or CCA that requests it, as set forth in this order and without charge.

4. PG&E, SCE and Sempra shall file tariffs that propose a cost-based hourly rate for the collection, analysis and dissemination of data and information relevant to the energy resource plans and programs of cities counties and CCAs. The utilities shall work with cities, counties and CCAs to determine their information and data needs, consistent with this order.

This order is effective today.

Dated July 10, 2003, at San Francisco, California.

ATTACHMENT A

Funding for Community Choice Aggregators and Other
Energy Efficiency Program Administrators

The following policies and procedures set forth how parties may apply to administer cost-effective energy efficiency and conservation programs established pursuant to Section 381. This section provides that "any party" may apply for funding. Among those parties who may qualify for funding are cities, counties or a combination of cities and counties that become Community Choice Aggregators (CCA). Other examples are non-profit entities, contractors, or community-based organizations.

These rules also establish how energy efficiency program administrators direct a proportional share of their program activities to the CCA's territory and set forth other administrative requirements.

This section implements AB 117 (Chapter 838, September 24, 2002) which modified the California Public Utilities Code.

Definitions

· Community Choice Aggregator - As provided in Public Utilities Code Section 331.1, a CCA is any of the following entities, if that entity is not within the jurisdiction of a local publicly owned electric utility that provided electrical service as of January 1, 2003:

a) Any city, county, or city and county whose governing board elects to combine the loads of its residents, businesses, and municipal facilities in a communitywide electricity buyers' program.

b) Any group of cities, counties, or cities and counties whose governing boards have elected to combine the loads of their programs, through the formation of a joint powers agency established under Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.

· Administrators - For purposes of implementing Section 381.1, an "administrator" is any party that receives funding for and implements energy efficiency programs pursuant to Section 381.

· Proportional Share - For purposes of implementing Section 381.1, "proportional share" refers to the average per capita share of all the utility's Public Goods Charge energy efficiency program funding that occurred statewide in the previous year times the population in a CCA's territory. The average per capita share shall be determined using the latest California population listed in E-1 City/County Population Estimates published by the California Department of Finance Demographic Unit.

Guidelines for Funding Applications

Any party that has been established by local authorities as a CCA pursuant to Section 331.1 may apply for energy efficiency funding subject to the guidelines, criteria, schedules, and EM&V that apply to third parties, as set forth in this Policy Manual and Commission rulings and orders. The CCA need not have Commission authority to aggregate electrical load or purchase energy on behalf of its customers in order to apply for energy efficiency program funding pursuant to Section 381.1.

In determining whether to approve an application to become administrators, the Commission will consider the value of program continuity and planning certainty and the value of allowing competitive opportunities for potentially new administrators. The Commission will weigh the benefits of each party's proposed program to ensure that the program meets the following objectives:

(1) Is consistent with the goals of the existing programs established pursuant to Section 381.

(2) Advances the public interest in maximizing cost-effective electricity savings and related benefits.

(3) Accommodates the need for broader statewide or regional programs.

The Commission may adjust the share of energy efficiency program activities directed to a CCA's territory to promote equity and cost-effectiveness. The Commission will maintain energy efficiency programs targeted to specific locations where needed to avoid or defer transmission or distribution system upgrades irrespective of whether the loads in that location are served by the CCA or an electrical corporation. The Commission may require program administrators to share information on program impacts with the CCA and to accommodate any unique community program needs by shifting emphasis of approved programs, provided that the shift in emphasis does not impact the effectiveness of overall statewide or regional programs.

For purposes of AB 117, CCAs may apply for energy efficiency program funding consistent with the timing of Commission authorized solicitations for energy efficiency proposals.

CCA Applications for Program Funding Extensions and Renewals

A CCA with program funding may apply to extend programs by submitting program implementation plan revisions to the Commission. The revised program implementation plans may propose existing or new programs. The program implementation plan revisions should consider evaluation, measurement and verification (EM&V) results from the previous term, if available or if required by the Commission. If the EM&V results are not final, CCAs should submit initial results.

The Commission may accept all, part, or none of the CCA's proposed programs. The Commission may condition additional funds on program changes. The CCA should be prepared to provide additional information on proposed changes.

Allocating the proportional share of program activities

In cases where a CCA is established but does not administer energy efficiency programs pursuant to Section 381, the jurisdictional utility shall propose how to allocate the proportional share of funding to that CCA's territory. The utility serving the CCA's territory shall submit its estimate of the proportional share for review of the estimate's accuracy and reasonableness. That estimate should be made available to the CCA upon request and to entities considering whether to create a CCA.

Consistent with Section 381.1, the Commission may adjust the proportional share allocated to a CCA's territory as follows:

(a) to the extent that energy efficiency and conservation programs are targeted to specific locations to avoid or defer transmission or distribution system upgrades, the targeted expenditures shall continue and

(b) to accommodate any unique community program needs by placing more, or less, emphasis on particular approved programs to the extent that these special shifts in emphasis in no way diminish the effectiveness of broader statewide or regional programs.

(c) to ensure an equitable and cost-effective allocation of energy efficiency program activities.

Non-CCA administrator roles and obligations

Any party may propose programs for all or part of a CCA's territory whether or not the CCA proposes energy efficiency programs for its customers.

Non-CCA administrators must coordinate with each other and the CCA to ensure that , to provide advance information where appropriate about the likely impacts of energy efficiency programs and to assure that CCAs are aware of existing programs for purposes of planning and avoiding duplication of program efforts.

Non-CCA administrators must provide implementation plans and impact forecasts to any party requesting those documents.

Utility Data

Utilities are responsible to develop information that will assist cities, counties and CCAs in resource planning and determining whether to apply for Section 381 funding. Each utility shall provide an estimate of the proportional share as described herein for a CCA's territory or proposed territory. It shall provide all types of information required by the Commission in its most recent order addressing CCA information and shall work with CCAs, cities and counties to develop data resources and information that is relevant to CCA resource planning and program implementation.

(END OF ATTACHMENT A)

ATTACHMENT B

SEC. 2. Section 331.1 is added to the Public Utilities Code, to read:

331.1. For purposes of this chapter, "community choice aggregator" means any of the following entities, if that entity is not within the jurisdiction of a local publicly owned electric utility that provided electrical service as of January 1, 2003:

(a) Any city, county, or city and county whose governing board elects to combine the loads of its residents, businesses, and municipal facilities in a communitywide electricity buyers' program.

(b) Any group of cities, counties, or cities and counties whose governing boards have elected to combine the loads of their programs, through the formation of a joint powers agency established under Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.

SEC. 4 Section 366.2 is added to the Public Utilities Code to read:

366.2. (a) (17) An electrical corporation shall recover from the community choice aggregator any costs reasonably attributable to the community choice aggregator, as determined by the commission, of implementing this section, including, but not limited to, all business and information system changes, except for transaction-based costs as described in this paragraph. Any costs not reasonably attributable to a community choice aggregator shall be recovered from ratepayers, as determined by the commission. All reasonable transaction-based costs of notices, billing, metering, collections, and customer communications or other services provided to an aggregator or its customers shall be recovered from the aggregator or its customers on terms and at rates to be approved by the commission.

SEC. 5. Section 381.1 is added to the Public Utilities Code, to read:

381.1. (a) No later than July 15, 2003, the commission shall establish policies and procedures by which any party, including, but not limited to, a local entity that establishes a community choice aggregation program, may apply to become administrators for cost-effective energy efficiency and conservation programs established pursuant to Section 381. In determining whether to approve an application to become administrators, the commission shall consider the value of program continuity and planning certainty and the value of allowing competitive opportunities for potentially new administrators. The commission shall weigh the benefits of the party' s proposed program to ensure that the program meets the following objectives:

(1) Is consistent with the goals of the existing programs established pursuant to Section 381.

(2) Advances the public interest in maximizing cost-effective electricity savings and related benefits.

(3) Accommodates the need for broader statewide or regional programs.

(b) All audit and reporting requirements established by the commission pursuant to Section 381 and other statutes shall apply to the parties chosen as administrators under this section.

(c) If a community choice aggregator is not the administrator of energy efficiency and conservation programs for which its customers are eligible, the commission shall require the administrator of cost-effective energy efficiency and conservation programs to direct a proportional share of its approved energy efficiency program activities for which the community choice aggregator's customers are eligible, to the community choice aggregator's territory without regard to customer class. To the extent that energy efficiency and conservation programs are targeted to specific locations to avoid or defer transmission or distribution system upgrades, the targeted expenditures shall continue irrespective of whether the loads in those locations are served by an aggregator or by an electrical corporation. The commission shall also direct the administrator to work with the community choice aggregator, to provide advance information where appropriate about the likely impacts of energy efficiency programs and to accommodate any unique community program needs by placing more, or less, emphasis on particular approved programs to the extent that these special shifts in emphasis in no way diminish the effectiveness of broader statewide or regional programs. If the community choice aggregator proposes energy efficiency programs other than programs already approved for implementation in its territory, it shall do so under established commission policies and procedures. The commission may order an adjustment to the share of energy efficiency program activities directed to a community aggregator's territory if necessary to ensure an equitable and cost-effective allocation of energy efficiency program activities.

(END OF ATTACHMENT B)

ATTACHMENT C

Utility Information Available to Cities, Counties and CCAs

Each utility shall provide the following information to Cities, Counties or CCAs requesting it, pursuant to this order:

SEMPRA shall provide:

(END OF ATTACHMENT C)

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