COM/LYN/ALJ/MEG/hkr Mailed 10/20/2003

Decision 03-10-057 October 16, 2003

Attachment 1

Attachment 2 [PDF]; Appendix 1 [PDF]; Appendices 2 & 3 [PDF]

Attachment 3 [PDF]; Appendix 1; Appendix 2; Appendix 3; Appendix 4; Appendix 5

Attachment 4; Table 2; Table 3

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Southern California Gas Company (U904G) for Authority to increase its Gas Revenue Requirements to Reflect its Accomplishments for Demand-Side Management Program Years 1995 and 1997, Energy Efficiency Program Year 1999, and Low-Income Program Years 1998 and 1999 in the 2000 Annual Earnings Assessment Proceeding ("AEAP").	Application 00-05-002 (Filed May 1, 2000)
And Related Matters.	Application 00-05-003 Application 00-05-004 Application 00-05-005 Application 01-05-003 Application 01-05-009 Application 01-05-017 Application 01-05-018 Application 02-05-002 Application 02-05-003 Application 02-05-005 Application 02-05-007

INTERIM OPINION ON WHETHER TO REOPEN THE SHARED-SAVINGS INCENTIVE MECHANISM ADOPTED IN DECISION 94-10-059
FOR ENERGY EFFICIENCY PROGRAMS

TABLE OF CONTENTS

Title Page

INTERIM OPINION ON WHETHER TO REOPEN THE SHARED-SAVINGS
INCENTIVE MECHANISM ADOPTED IN DECISION 94-10-059
FOR ENERGY EFFICIENCY PROGRAMS 22

1. Summary 22

2. Procedural History 33

3. The Shared-Savings Mechanism Adopted in D.94-10-059 55

4. Scope of the Decision 1111

5. Positions of the Parties 1212

5.1 CEC 1313

5.2 ORA 1313

5.3 NRDC 1414

5.4 The Utilities 1414

5.5 TURN 1515

5.6 WEM 1616

6. Discussion 1717

7. Comments on Draft Decision 3333

8. Assignment of Proceeding 3434

Findings of Fact 3434

Conclusions of Law 3737

INTERIM ORDER 3737

Attachment 1

Attachment 2 [PDF]; Appendix 1 [PDF]; Appendices 2 & 3 [PDF]

Attachment 3 [PDF]; Appendix 1; Appendix 2; Appendix 3; Appendix 4; Appendix 5

Attachment 4; Table 2; Table 3

INTERIM OPINION ON WHETHER TO REOPEN THE SHARED-SAVINGS INCENTIVE MECHANISM ADOPTED IN DECISION 94-10-059
FOR ENERGY EFFICIENCY PROGRAMS

1. Summary¹

Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (SCE), and Southern California Gas Company (SoCal), collectively referred to as "the utilities," administer energy efficiency programs that are paid for by their electric and gas ratepayers. Since the early 1990s, the utilities have been awarded profits (also referred to as shareholder earnings) for administering these programs, based on various shareholder incentive mechanisms adopted through the years. Among other issues, this consolidated Annual Earnings Assessment Proceeding (AEAP) addresses the utility profits related to energy efficiency programs that were implemented or, in the case of long lead-time new construction projects, initiated, during program years (PYs) 1994-1997.²

By ruling dated March 13, 2002, the assigned Administrative Law Judge (ALJ), in consultation with the Assigned Commissioner, solicited comments on whether we should reopen Rulemaking (R.) 91-08-003/Investigation (I.) 91-08-002 to modify the shareholder incentive mechanism adopted in Decision (D). 94-10-059 for shareholder incentives before us in this proceeding and in future AEAPs. We address this issue today in full recognition that our authority under Public Utilities Code (Pub. Util.) Code § 1708 to reopen proceedings must be exercised with great care, with adherence to procedural due process requirements, and justified only by extraordinary circumstances. Consistent with our prior decisions, we examine whether the determinations reached in D.94-10-059 relied on misconception of fact or law, and whether the subsequent developments in electric restructuring would have materially changed our determinations on a shared-savings mechanism for the pre-1998 program years.

We conclude that the shared-savings incentive mechanism adopted in D.94-10-059 should not be reconsidered, and R.91-08-003/I.91-08-002 should not be reopened for that purpose. However, nothing in today's decision is intended to preclude us from disapproving or modifying the utility profits associated with this incentive mechanism that the utilities submit in pending and future AEAPs, based on our verification of savings. All profits claimed by the utilities are subject to verification, consistent with our adopted measurement and evaluation protocols.