2. Procedural Background
By ruling dated July 3, 2003, Assigned Commissioner Susan Kennedy established the scope and direction for this proceeding during the remainder of 2003, and beyond. Among other things, the ruling discusses the need to
establish energy savings goals in this rulemaking based on the overall potential
for cost-effective energy efficiency.3 To this end, the Commission held a workshop in collaboration with the CEC and CPA on October 8, 2003 to explore the potential for energy efficiency in California. The most recent evaluations of the potential for increased savings from electric and natural gas efficiency investments in California were used as the starting point for the workshop discussion, including The Hewlett Foundation Energy Series report, "California's Secret Energy Surplus" (Hewlett Foundation Report), which is based on studies funded through the public goods charge.4 The workshop was attended by over twenty-five individuals and organizations representing a wide range of interests, including program providers, equipment contractors, government agencies, consumers and consultants.
By ruling dated October 30, 2003, Commissioner Kennedy summarized her conclusions from the discussion and presentations at the workshop, and solicited written comments to follow-up questions related to the potential for energy efficiency and the ways the Commission could adjust policy and program rules to achieve that potential. Post-workshop comments were filed on January 7, 2004 by the City of Berkeley, California Consumer Empowerment Alliance, Davis Energy Group, Intergy Corporation, Office of Ratepayer Advocates (ORA), San Diego Regional Energy Office, SCE, The Utility Reform Network (TURN), Natural Resources Defense Council (NRDC), PG&E, Robert Mowris Associates, and Women's Energy Matters (WEM).
Per Commissioner Kennedy's further direction, Energy Division and CEC staff jointly prepared a report on annual energy savings targets by IOU service territory, building upon the record in this rulemaking on energy savings potential and work underway for the CEC's 2003 Integrated Energy Policy Report proceeding. We collectively refer to Energy Division and CEC staff working on this effort as "Joint Staff" throughout this decision. The Assigned Commissioner also established a schedule for opening comments, a public workshop, and reply comments on the Joint Staff reports.5
Joint Staff distributed two separate reports for public review on March 26, 2004: (1) Natural Gas Savings Goals Report, and (2) California Electricity Energy Savings Goals Report. The latter reflected a Joint Staff addendum to an October 2003 report on statewide electricity savings goals prepared by CEC staff.6
Opening comments on the Joint Staff reports were filed on April 14, 2004 by NRDC, ORA, PG&E, SCE, jointly by SDG&E and SoCalGas, and WEM.7
On April 20, 2004, Joint Staff facilitated a workshop on the energy efficiency savings goals outlined in the reports. Post-workshop reply comments were filed in May 2004 by PG&E, SCE, Intergy Corporation (Intergy), SESCO, Inc. (SESCO) and jointly by SDG&E/SoCalGas.
Since issuing its reports on March 26, 2004, Joint Staff has responded to comments by performing additional analysis and making certain modifications to its initial savings goal recommendations. In the following sections, we first summarize the Joint Staff's March 26, 2004 recommendations for energy savings goals, and summarize the issues raised by workshop participants and in post-workshop comments. Next, we describe Joint Staff's response to these issues. Finally, we address the remaining areas of contention and present our adopted energy savings goals.
6 These documents can be viewed at: http://www.cpuc.ca.gov/static/industry/electric/energy+efficiency/rulemaking/index.htm
7 We note that WEM's April 14, 2004 pre-workshop comments do not address the energy efficiency targets presented in the Joint Staff report. Rather, they reiterate WEM's position on energy efficiency administrative structure, arguing for the California Standard Offer Program that WEM has submitted for Commission consideration in a different phase of this proceeding. WEM's April 14, 2004 filing is not relevant to the issues we address today, and is therefore not considered in the discussion that follows.