2. Procedural Background
Ordering Paragraph 17 of D.06-06-063 required the utilities (and their contractors) to present the revised E3 calculators, including all inputs, to their program advisory and peer review groups for review in joint statewide public meetings and to submit final E3 calculator and input revisions in compliance with D.06-06-063 by September 8, 2006. Ordering Paragraph 17 also provided parties to this proceeding the opportunity to comment on the utilities' compliance submittals by September 22, 2006, with reply comments due by September 29, 2006. Finally, Ordering Paragraph 17 directed the following:
"After considering written comments, and in consultation with Joint Staff, the assigned ALJ in R.06-04-010 shall address the compliance submittal by ruling, or take other steps as necessary to ensure compliance with today's decision."
The Division of Ratepayer Advocates and The Utility Reform Network (DRA/TURN) filed joint comments on the utilities' compliance submittals, and PG&E and SCE filed reply comments.4 Energy Division subsequently met with each of the utilities individually to discuss the SPM-related issues raised in the advisory group meetings and written comments.
On December 21, 2006, after considering written comments and in consultation with staff, the assigned Administrative Law Judge (ALJ) issued a ruling addressing the utilities' compliance submittals (Compliance Ruling).5 The assigned ALJ found that the utilities' E3 calculators still did not fully comply with the directives in D.06-06-063 with respect to the treatment of costs in the SPM tests of cost-effectiveness, and directed the utilities to make changes to the way in which they were inputting costs into the E3 calculators to comply with that decision.
On March 16, 2007, the utilities jointly wrote to the ALJ asking that that the Compliance Ruling be suspended pending the submission of a more formal pleading. On May 31, 2007, the utilities appended that letter to the Joint Petition, and served the Joint Petition on the service lists in this proceeding and in R.06-04-010. DRA, Natural Resources Defense Council (NRDC) and Ecology Action filed responses to the Joint Petition on July 3, 2007. With the permission of the assigned ALJ, the utilities jointly filed a reply on July 12, 2007 (Joint Reply).
In their Joint Reply, the utilities recommend that the Commission hold a workshop to address the concerns in the Joint Petition and the criticisms in DRA's response, and urge that such a workshop be held as soon as possible. NRDC also suggests that the Commission hold a workshop as soon as possible, in order to try to develop a consensus position among the parties.
Neither the Compliance Ruling nor our orders in D.06-06-063 have been suspended. However, subsequent to the filing of the Joint Petition, we addressed the treatment of costs associated with "free riders" that was also discussed in the utilities' March 16, 2007 letter and Joint Petition.6 This specific cost-effectiveness issue was identified for resolution in Phase 1 of R.06-04-010 in the Assigned Commissioner's scoping memo, and all interested parties had an opportunity to present their views and recommendations during Phase 1 workshops and written filings in that phase of the proceeding. Our resolution of how to treat the costs associated with free riders is presented in D.07-09-043; therefore, we do not address the parties' positions on this issue any further in today's decision.
In consultation with the assigned ALJ, Energy Division staff and the assigned Commissioner, we have considered the request for further workshops. We conclude that they are not necessary for the purpose of addressing the remaining issues raised in the Joint Petition or in parties' responses. However, as discussed in Section 5, the utilities in coordination with Energy Division and its E3 calculator consultants should jointly hold workshops to respond to the types of practical implementation questions raised by Ecology Action in order to educate program implementers on the proper classification and reporting of program costs consistent with our determinations.7
We consider the Joint Petition in the context of SPM definitions for the various components of the "Total Resource Cost" (or "TRC") test of cost-effectiveness and the overall intent of this test. Excerpts from D.06-06-063, the Compliance Ruling and D.07-09-043 on these issues are presented in Attachments 2 and 3.
4 We incorporate the DRA/TURN and SCE comments into the record in this proceeding, by reference, noting that they were inadvertently filed in related energy efficiency proceedings and accepted for filing by the Docket Office at the assigned ALJ's direction.
5 ALJ's Ruling Addressing Compliance Filings Pursuant to D.06-06-063, in R.06-04-010, December 21, 2006. This ruling was also served on the service list in R.04-04-025.
6 "Free riders" refer to program participants who would have purchased the energy efficiency measure without the utility program.
7 In particular, Ecology Action raises "how to" questions regarding the reporting expected of them for costs associated with direct install program activities that may include a combination of free and co-pay measures.
