COM/LYN/kth Mailed 2/5/2001

Decision 01-01-060 January 31, 2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Pacific Gas and Electric Company for Approval of Year 2001 Energy Efficiency Programs, in Compliance with Ordering Paragraph 93 of Decision 00-07-017 (U 39 M).	Application 00-11-037 (Filed November 15, 2000)
Application of SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) for Approval of Program Year 2001 Energy Efficiency Program Plans, Budgets, and Performance Award Mechanism.	Application 00-11-043 (Filed November 15, 2000)
Compliance Application of Southern California Gas Company (U 904-G) for Approval of 2001 Energy Efficiency Programs.	Application 00-11-044 (Filed November 15, 2000)
Application of San Diego Gas & Electric Company (U 902-M) for Approval of 2001 Energy Efficiency Programs.	Application 00-11-045 (Filed November 15, 2000)

TABLE OF CONTENTS

Title Page

OPINION 2

Summary 2

Background 3

PY 2001 Applications 4

Protests to the Applications 5

Program and Budget Approval 6

Program Budgets 7

Funding Flexibility 9

Refrigerator Rebates 10

Third Party Initiatives (TPI) 11

Market Assessment & Evaluation Studies 13

Shareholder Incentives and Milestones 16

Background 16

Utilities' Proposal 16

Weighting 19

Incentives for Energy Savings 19

Shareholder Incentives for Market Effects and Information Programs 26

No Ex Post Measurement of Net Benefits 27

Program Guidance 27

Compliance with Assembly Bill 970 27

Expansion of Weatherization Programs 27

Expansion of HVAC Programs 28

Expansion of New Construction Programs 29

Compliance with D.00-07-017 Directives 29

Targeted Outreach and Information 29

Local Government Initiatives 30

Other Programs to Maximize Energy and Demand Savings 31

Residential remodeling 31

Commercial Cooling 31

Other Issues 32

Edison's Funding Proposal 32

Public Education Outreach Campaign 33

Comments on Draft Decision 33

Findings of Fact 35

Conclusions of Law 38

ORDER 41

OPINION

Summary

In this Opinion, we approve the utilities' Program Year (PY) 2001 energy efficiency programs and the proposed budgets, with modification. In the sprit of getting these programs off the ground and effective immediately we are authorizing the utilities proposed energy efficiency programs with minor modifications. The most substantial change regards a focus on bottom line energy savings targets. The utilities' incentives are directly tied to achieving the specified energy savings targets. Because we want the utilities to have the ability to succeed in achieving real energy savings we have provided for flexibility in administering these programs. In addition, we have purposefully eliminated any bureaucratic process that could hinder the timely and effective implementation of energy saving measures. It is based on this reasoning that we are issuing a final decision in this matter rather than opting for further proceedings. We do this in the interest of fostering action and continuity in program implementation and also with the knowledge that there has been extensive public participation.

In making our determination to approve the proposed PY 2001 programs and budgets, with modifications, it is foremost in our thinking that it is our duty to provide Californian's with every opportunity to control energy usage and reduce consumption. Indeed, that is exactly the purpose of the public goods charge. Given the energy supply shortage and high prices for both electricity and gas, we are confident that the utilities will make every effort to make the program changes required and implement these programs in a manner that serves the interest of enabling consumers to cope with energy prices by reducing consumption.