Program and Budget Approval

We agree with the majority of parties that PY 2001 programs and overall budgets should be instituted immediately. Therefore, we authorize the utilities to implement their proposed PY 2001 programs effective January 1, 2001, with the modifications and directions as set forth below.

Given the urgent need to reduce demand in California, it is critical that there be no delay in implementing the PY 2001 programs. During the last year, electricity demand has exceeded supply and electricity prices have risen to unprecedented heights. Electricity supply shortfall now cause routine Stage II alerts and regularly threatened Stage III alerts. California consumers are now potentially facing continued curtailments and rolling blackouts throughout the year.

To have an impact in 2001, it is important that these programs begin immediately and are implemented in a continuous, uninterrupted manner. Measures to reduce load are the most effective means of ensuring reliability and putting downward pressure on prices in the near term. The PGC was designed to assist customers in reducing their energy use. It is our duty to ensure that programs are quickly implemented to provide consumers with assistance. Further, the Legislature has indicated its continuing and expanded support for energy conservation activities through the passage of AB 970 to meet the challenges of peak demand reduction and Senate Bill (SB) 1194/AB 995 to continue PGC funding post-2001.

Further, a review of the applications indicates that the proposed programs and program portfolios have been improved over the PY 2000 programs. While we believe that there are more improvements to be made to maximize energy and peak demand savings, the utilities have modified programs, measures, and incentives, and have proposed new programs to meet the need for peak load savings and to enhance energy savings.

We recognize that there are legitimate disputes regarding the PY 2001 programs. However, in the spirit of expeditiously getting energy efficiency and conservation programs off the ground and implemented in a continuous, fluid manner we approve the applications. Furthermore, we are confident that the energy savings targets and associated incentives will drive the utilities to make the necessary program improvements. Indeed, we have purposefully provided the utilities with maximum flexibility to accomplish this objective. In short, we believe that given the current state of electric and gas prices, it is in the interest of those implementing energy saving programs and the customers that benefits from them, to have these program in place immediately without the disruption and uncertainty that results from continued litigation.