Market Assessment & Evaluation Studies

The utilities propose to fund and conduct various market assessment and evaluation (MA&E) studies during PY 2001. The proposed MA&E studies include both statewide studies, which are managed by individual utilities or the CEC, other studies conducted by the CEC, and utility-specific studies. Some statewide MA&E studies seek information about markets, including developing baseline and other market data, for program planning purposes, while others evaluate current programs. The CEC also manages studies for forecasting energy demand and to monitor the functioning of energy markets. Utility-specific studies generally are undertaken to provide information needed to demonstrate the achievement of milestones for shareholder incentive awards.

We approve the proposed statewide MA&E studies and budgets managed by the utilities. The statewide studies managed by the utilities have been reviewed in a public process conducted by the California Measurement Advisory Council (CALMAC)⁹ and, for the most part, consist of continuing studies to support continuing programs. It is important that these studies get under way expeditiously so that we have the appropriate data to evaluate on-going programs and plan future programs. We are, however, concerned that the MA&E studies relate to approved programs for PY 2001. Thus, while we approve the budgets and studies, we expect the utilities to revise the study plans to account for new programs, as well as changing program priorities and changing market conditions throughout the year. In this regard, we note that the statewide portfolio of studies does not appear to include any studies related to our renewed emphasis on peak demand reduction.

The statewide utility-managed MA&E budgets are approved as follows:

Statewide utility-managed MA&E budgets

Utility	MA&E Budget Authorization ($ million)
PG&E	$3.01
SCE	$1.17
SDG&E	$.50
SoCalGas	$0.10
Total	$4.78

We decline, however, to approve the budgets for utility-specific studies, which comprise 47% to 63% of the total MA&E budgets. There is no evidence that the utility-specific budgets have been reviewed by anyone other than the sponsoring utility. Further, it is difficult to discern the scope and purpose of the proposed studies or to evaluate the reasonableness of the studies. We have similar concerns with respect to the funds set aside for the CEC studies.

Thus, we believe that both the proposed utility-specific and CEC budgets and studies should be subject to additional review. Within 60 days of the approval of this decision, the utilities should present their proposed MA&E plans. The presentation should include a full description of the study plans, objectives, and budgets, and a discussion of the rationale and need for these particular studies.

We also affirm that we will rely on the Office of Ratepayer Advocates to be the Commission's primary agent responsible for verification of equipment installations and budget commitments in forthcoming AEAP proceedings.