14. Proposed Contract Terms for Winning Bidders

Contractors' Coalition raises objections to a long list of proposed contract terms presented by the utilities in this proceeding. Among other things, Contractors' Coalition contends that changes in the contract terms for PY2000 are beyond the scope of this proceeding since the Assigned Commissioner ruled that only high priority modifications to PY1999 low-income programs would be considered, after sufficient public input had been obtained.

We disagree. Since the focus of this proceeding is to evaluate the competitive outsourcing of utility programs, we do not interpret this limitation to apply to changes in how the utility plans to outsource its program on a prospective basis, or how the utility interacts with potential winning bidders. Rather, the Assigned Commissioner's ruling limiting potential changes to PY1999 programs refers more broadly to the type of measures currently covered by the program and what the customer currently receives in terms of CARE discounts and low-income energy efficiency services in their homes.

As discussed in Section 11 above, we encourage greater consistency across utilities with respect to competitive bid practices, including contract terms. However, when we have previously reviewed RFP documents, we have generally left it to the utility and winning bidders to negotiate the final terms of the contract. For example, in D.92-09-080, we stated:

". . . We do not intend to approve or reject specific contract language in today's order. Rather, we expect the utilities to negotiate with short-listed bidders in good faith, and work with bidders to develop a package of price and non-price contract terms that appropriately allocate the risks and benefits of the agreement among affected parties, including ratepayers." (D.92-09-080, 45 CPUC2d 541, 582.)

Similarly, we afforded SoCal the flexibility to fashion a bidding scheme and contractual arrangements for its pilot low-income energy efficiency bid.⁵⁸ We will not change our approach in this proceeding, and expect the utilities to negotiate final contract terms with all contractors in good faith. However, we agree with Contractors' Coalition that no contract provision, or utility action, should restrict a contractor from discussing in a public forum (workshops, hearings, LIAB meetings, etc.) any aspect of the LIEE program that is non-proprietary and non-confidential. Utility permission should not be required. In addition, as we required in D.92-03-038 and reiterated in D.92-09-080, the utilities should clearly state in their RFPs that proposed changes to their sample contracts will not be considered in the bid evaluation process, up to the selection of a short-list of highest ranking bidders. This will help to ensure that final contract negotiations can take place in good faith.