SK1/KLM/sid 10/30/2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Examine the Commission's Future Energy Efficiency Policies, Administration, and Programs.

Rulemaking 01-08-028 (Filed August 23, 2001)

ASSIGNED COMMISSIONER'S RULING SOLICITING POST-WORKSHOP COMMENTS ON ENERGY EFFICIENCY POTENTIAL WORKSHOP AND SCHEDULING AND SOLICITING PRE-WORKSHOP COMMENTS FOR THE WORKSHOP ON CONSUMER NEEDS

The Commission is conducting a series of energy efficiency workshops in collaboration with the California Energy Commission and California Power Authority in furtherance of the Energy Action Plan¹ to learn from utilities, program providers, consumers, manufacturers, consultants, government agencies and community organizations how the Commission may make the most of the state's energy efficiency resources in the coming years.

This Assigned Commissioner's Ruling ("ACR") summarizes the Commission's first and very successful energy efficiency workshop in this phase of this proceeding and solicits post-workshop comments from the parties in order to determine next steps for the Commission to take in determining how to best achieve statewide energy efficiency potential. At the same time, this ACR schedules the second workshop in this proceeding.

As discussed in the September 24, 2003 ACR, the purpose of the second workshop on "Customer Needs" is to hear from residential, industrial, commercial and other customers such as retailers, manufacturers, and local governments who are interested in energy efficiency programs and energy efficient technologies and who may or may not have participated in existing state funded programs. (The findings of this workshop will inform future program design and criteria used for state funded programs, but will not influence the 2004-2005 program review and approval process.) This ACR solicits pre-workshop comments for the second workshop in order to select speakers and also to aid in structuring the agenda.

Summary of Workshop #1 Addressing Energy Efficiency Potential

The Commission held a workshop on October 8, 2003 to explore the potential for energy efficiency in California using the Hewlett Foundation Energy Series report, "California's Secret Energy Surplus," as the basis for discussion. The report provided a useful and insightful foundation for the workshop and motivated presentations and comments from parties representing all interests, including program providers, equipment contractors, government agencies, consumers and consultants.

The success of the workshop derives in large part from the willingness of these various interests to share their ideas and concerns in an open forum. The workshops are initial steps to creating an active dialogue between diverse members of the energy efficiency community. Such open communication will facilitate information sharing, disclose common interests, identify barriers to savings potential and increase the policy options available to the state's energy efficiency decision-makers.

Based on the discussion and presentations at the workshop, I draw the following general conclusions about the potential for energy efficiency in California:

· The state is not currently maximizing its energy savings potential;

· The Xenergy report on energy savings potential and the technologies and measures identified at the workshop can provide a useful foundation for the Commission to use in estimating the range of savings potential that could be achieved in the next few years;

· Maximizing energy efficiency savings in California will require improved coordination between government, non-profit organizations and private-sector entities, an emphasis on a systems approach to program implementation and a commitment to permanent market and behavioral changes;

· In addition to encouraging customers to install existing efficiency technologies, the state will need to promote more innovation in emerging energy efficiency technologies and in energy efficiency programs that will be included in California's energy efficiency programs;

· Some of the Commission's existing policies should be modified to maximize opportunities to promote energy savings;

· Information about markets, products and programs needs to be more accessible to all involved in energy efficiency efforts;

· Program design needs to recognize customer preferences and the most effective ways to motivate customers to participate in programs; and

· The Commission must evaluate program success and use evaluations as the foundation for subsequent funding cycles and program implementation.

These observations of the parties will guide my thinking in subsequent policy discussions and Commission decisions. They are useful in honing the inquiry and form the basis for the next round of questions below.

¹ The final Energy Action Plan and associated documents can be found at www.cpuc.ca.gov/static/industry/electric/energy+action+plan/index.htm.