SDG&E Portfolio Overview

The SDG&E portfolio uses a standard program-oriented planning approach. While PG&E has moved to a market sector-based approach, and SCE has moved to an approach that integrates programs with larger primary crosscutting programs, SDG&E remains structured within a program-oriented planning and implementation structure.

The SDG&E portfolio is moving from a budget of $76.7 million in the 2004-2005 program cycle to a portfolio of $278.1 million (excluding evaluation dollars) for the 2006-2008 program cycle. This represents a move from an average of $38.4 million per year to $92.7 million per year, an increase of 141%, significantly more than doubling the portfolio's budget. Within the SDG&E portfolio, there is one program area focused on marketing and outreach efforts that includes such components as the Flex Your Power program, where energy savings are not being counted for these efforts. SDG&E is also planning on fielding eight partnership programs. These programs will cost a total of $25.5 million and provide 35.5 million annual kWh and 1.8 million annual therm savings. However, two of these programs do not have energy saving projected from their efforts.

In addition, there are four programs for which energy savings are not being counted. These include: Codes and Standards, On-Bill Financing, Residential Education and Information, and the Emerging Technology Program.

In total, there are eighteen program areas (including third-party programs) providing the projected energy savings from the portfolio. The programs making up the SDG&E portfolio are presented in Table 24. Table 24 presents the program, the program budget for 2006, and the percent of the budget that is allocated to each program.

Goals Attainment - SDG&E

Comparison with CPUC Goals

According to the information available to the TecMarket Works Team during the review period, SDG&E projects that their portfolio will surpass the energy goals provided by the CPUC in each of the program years 2006-2008. They project that SDG&E's programs will achieve 109 percent of the CPUC's first year GWh goals, 166 percent of their first year MW goals, and 103 percent of the first year natural gas goals. SDG&E forecasts that by the end of 2008 they will have achieved 120 percent of the GWh goals, 131 percent of their MW goals and 100 percent of their natural gas savings goals. These figures suggest that as the programs wind up they will tend to become more efficient at achieving the electric energy goals. Table 25 presents SDG&E's projections of their portfolio's ability to reach CPUC energy savings goals.

The TecMarket Works Team's opinions of SDG&E's projections are that they are reasonable given the portfolio being developed and programs being offered. However, we have some concerns about the partnership programs being able to cost-effectively support SDG&E's energy goals and there is limited information on the how the goals will be supported by the third-party providers via the competitively bid programs.

Comparison with Potential

In order to conduct a comparison of SDG&E's portfolio goals with the SDG&E energy potentials, we used KEMA's 100 percent achievable potentials (the potential if the program funding was increased by 100 percent). This allowed for a comparison of an expanded program portfolio that more closely matched the spending levels across the portfolio funding stream. However, it should be noted that the SDG&E programs represent approximately a 141 percent increase from 2004-2005 funding rather than a 100 percent increase, as a result, the potentials estimated in this assessment should be considered conservative for the SDG&E programs when compared to the KEMA potentials estimates. Using this ratio, we would expect the SDG&E portfolio to come in at about 20% more than the KEMA 100% potential estimates.

At this time, there is no published report for industrial potentials, however, there is an industrial potentials study currently being finalized by KEMA. For the SDG&E industrials potential, we used preliminary estimates from the soon-to-be-published 2005 industrial potentials study being completed by KEMA. The industrial potentials should be considered proxy estimates that will need to be adjusted once the KEMA study is released in 2005. The TecMarket Works Team acknowledges that these potential estimates will change over the course of KEMA's efforts to more fully develop the estimates.

KEMA's published potential reports provide 10-year estimates of sector potentials. In order to adjust the KEMA potentials to the 3-year 2006-2008 program cycle we multiplied the KEMA potentials by .3. We use 3-year potentials in this assessment because the current program planning cycle is three years in length.

We were unable to segregate the programs into residential, non-residential, and industrial sectors using the portfolio data, because several programs crosscut over sector lines. As a result, we summed the SDG&E territory potential estimates for the 100 percent increase in funding levels presented in the KEMA reports, across the residential, non-residential, and industrial sectors and compared these potentials with the SDG&E portfolio estimates.

Natural Gas

As noted in Table 26, the total natural gas potential, as identified by KEMA is 6.73 mega-therms (Mth) for a three-year period. The CPUC's goal for the capture of natural gas by the SDG&E portfolio is 9.5 mega-therms, or about 30 percent higher than the KEMA-identified potential for a 100 percent increase in program funding. A review of the SDG&E portfolio indicates that the IOU will capture 9.07 mega-therms of natural gas over the three-year program period. This is about 5 percent less than the CPUC's goal, but represents a 34 percent increase over the KEMA's 100 percent potential estimate, with a budget increase of about 41 percent beyond the 100 percent increase level used by KEMA to establish the potential. SDG&E is out-performing the potentials estimate for natural gas savings. However, this projection is based on the use of Policy Manual NTG values, which may be significantly different than ex-post evaluation-confirmed impacts. However, we have some concern that the KEMA potentials may not be accurate for the 2006-2008 period in that they do not include all of the adjustments for the new codes and standards that apply to the 2006-2008 period.

Gigawatt Hours

SDG&E's plans indicate that the eighteen programs providing savings that are included in the June 1, 2005 filing will save about 1,003 GWhs annually. However, this projection depends on the partnership and third-party programs to provide savings as projected. This means that the bid and partnership programs will need to get on board producing significant savings in the first year. This may be a challenge for the bid and partnership programs that typically need time to ramp up and move to a steady state, cost-effective mode of operation. At this time, it looks like SDG&E will out-perform both the lower potentials goals and the CPUC's GWh goals through SDG&E programs and the addition of partnership and bid programs. Again, we have some concern about the accuracy of the KEMA potentials estimates.

Megawatts

The SDG&E portfolio projects savings of 210 summer peak mega-watts compared to the CPUC's goal of 263.5 MW and KEMA 100% potentials of 93.27 MW. The CPUC's MW goal is calculated by taking 0.19 times the GWh goal, the KEMA potentials goal uses a summer peak estimation process using a multi-hour-multi-day approach that looks at typical hottest days in California. We are not sure of the underlying approach used in the calculators provided to the review team. Multiplying the SDG&E GWh projected savings by 0.19 (as established in decision 04-09-060 of September 23, 2004) sets their MW projections at 190 MW, about 27 percent short of the CPUC goal from decision 04-09-060. However, the 210 MW projected is 225 percent over the 100% KEMA potentials.

Table 26 provides a summary overview of the potentials for a 100 percent increase in program spending over KEMA's base year, the CPUC's goals for SDG&E and the projected accomplishments of the SDG&E portfolio.

Budgets and Services Offering Balance

The budget and service offerings appear to be reasonably in balance at the sector level, and reflects the need to acquire resources from those sectors that can most cost-effectively acquire resources, without underserving residential or hard-to-reach sectors. This is always a balancing act. If programs were required to be most cost-effective, they would target only the industrial and large commercial sectors where energy savings are less expensive. The CPUC will want to keep in mind that the more stringent the energy savings goals, the more likely small commercial, residential, and hard-to-reach sectors will be abandoned in favor of the more cost-effective sectors. The CPUC will want to also keep in mind that different people will have different perspectives on which markets should be served, how the portfolio's balance should be structured, and which measures and initiatives should be incorporated into the portfolio's designs.

The single largest grouping of SDG&E's portfolio funding is going into the "Other" sector. (See Table 27.) This includes services to such sectors as the Navy and to some agricultural markets, but may also reflect the fact that 19 percent of funding is going to third parties and it is premature to calculate which sectors will be targeted by third-party programs. Of the programs that are targeting specific sectors, 42 percent of the savings are expected to be achieved in the non-residential sector, and only 5 percent in the non-residential new construction sector. While 6 percent of the savings are expected in the residential sector, only 1 percent will be achieved in residential new construction. In total, only 3 percent of the savings are coming from residential and non-residential new construction programs, which account for 8 percent of the funding.

Energy Savings Issues

To assess if the portfolio energy savings are reasonable for the measures used, we conducted a review of the measures included in the SDG&E portfolio. First we sorted out all the measures that used DEER values to predict energy savings, and reviewed them for accuracy with the DEER database. We then examined the majority of the remaining measures that did not use DEER for estimating impacts.

DEER Measures Estimates

SDG&E used DEER estimates for 51 percent of the kWh savings, 45 percent of the kW impacts and for 7 percent of the natural gas savings included in the portfolio. There were 148 measures in the SDG&E portfolio that were tied to the DEER database.

All of the measures that were estimated using DEER were reviewed for accuracy and consistency with the DEER 2005 Database. The DEER data was downloaded

from http://www.rtf.nwppc.org/deer2005/# on May 13, 2005.

In the "measure list" tables of the utility workbooks, the "Measure ID" was typically a match with the "RUNID" field in the DEER data. In some cases averages across the DEER "Measure ID" were used instead of the more specific "RUN ID". Comparisons of the utility estimate and DEER estimate were made based on the information available in the filed workbooks. For example, if the utility noted that they used an average for all DEER refrigerators, the evaluation team attempted to replicate their calculations for a valid comparison.

The majority of SDG&E's kWh savings that were estimated using DEER clearly match the DEER estimates. Many of the estimates that were over were lighting measures in the Express Efficiency program, but it is not clear why a higher per unit estimate was used. For those estimates that were lower than DEER, most came from broad measure categories (HVAC and Other) in the Standard Performance Contract program.

Equal portions of the energy savings matched with the DEER therm estimates as were underestimated. The underestimated savings appeared to be related to a difference in the units being used by SDG&E and DEER (See Table 30). These were whole building measures.

Programmable thermostats in the Express Efficiency and the Small Business Super Saver programs did not make up a large portion of the portfolio savings, but they were extremely overestimated by SDG&E compared to the DEER per unit savings. This may have been an issue of units, or a typographical error.

The majority of the demand savings that were estimated using DEER matched closely with the DEER database (See Table 31).

Non-DEER Measure Estimates

SDG&E used non-DEER estimation procedures to estimate 46 percent of the projected energy savings (kWh), and 48 percent of the estimated demand impacts. Non-DEER estimation procedures were used for 90 percent of the natural gas saving measures included in the portfolio.

Thirty-eight non-DEER measures were reviewed by the TecMarket Team. These measures represented the majority of the energy savings that were not estimated using DEER data. Twenty three of the measures presented concern either because of the ambiguity of the documentation or issues with the calculations or a lack of assumptions that were being used. These measures represent 28 percent of SDG&E's kWh projected kWh savings and 56 percent of their projected therm savings. SDG&E will need to provide estimation information for the nine measures that we could not fully review. Table 32 presents the non-DEER measures and the TecMarket Team's assessment of the reasonableness of the estimation approach. For the remaining measures listed here as "reasonable", the documentation clearly explained how the measure savings were estimated, and the methods seemed reasonable to the evaluation team. More detailed information about the specific concerns of the measures listed here, can be found in Appendix A.

Cost-Effectiveness - SDG&E

SDG&E estimates the TRC cost-effectiveness ratio for their portfolio at 1.94, indicating the portfolio is cost-effective at acquiring energy resources for California. However, several of SDG&E's programs do not show a cost-effectiveness estimate and are excluded from the portfolio cost benefit calculations.

TRC Reported

Eighteen of the SDG&E programs have a cost benefit ratio estimated using the TRC test. Three of these programs are projected not to be cost-effective. The remaining fifteen programs have benefit cost ratios that are positive and when added to the portfolio, bring the cost benefit ratio for the portfolio to 1.94. Table 33 presents the SDG&E portfolio and the results of the TRC tests, where applicable.

Issues Addressed - SDG&E

Administrative Costs

Using SDG&E's June 1, 2005 SDG&E filing, we exported the administrative costs as a percent of total programs costs. The results from this effort were surprising in that there is a very wide range of administrative cost depending on the program reported. Administrative costs for the portfolio as a whole average 16.5 percent, however the range runs from a high of 100 percent of costs to a low of 0 percent of costs.

One partnership program (County of San Diego) has 100 percent of the costs for the program placed in the administrative line of the worksheet. Likewise, the other partnership programs have administrative costs from 0 to 40 percent; we are not sure why there is such a wide range of administrative costs. We do not think it is possible to have partnership programs with zero or 100 percent administrative costs. However, we are also not sure how SDG&E is allocating administrative costs. Discussions with CPUC staff reflect that there should always be administrative costs, and that they should never be 100 percent of a program's cost. Discussions with SDG&E indicate that they think the administrative costs are applied correctly. The statewide review section of this report presents a table of administrative cost categories. The CPUC should consider requesting that SDG&E confirm that they are using the categories in this table to construct their administrative costs. On-Bill Financing has a high administrative cost (43.8%). We suspect that this is because a large part of this initiative will be structuring, monitoring, and managing the loans and dealing with customer shut-offs and debt collection efforts. Table 34 presents the percent of the budget that is administrative costs for each program.

* From SDG&E Revised Workbook of June 1, 2005.

Net to Gross

As instructed by the CPUC, SDG&E used NTG estimates from the Policy Manual. As a result, the NTG numbers used were either .80 or .96, depending on the measure. This may be unrealistic. For example, in the Team's experience, refrigerator pick up programs can have a NTG ranging from .3 to .8, depending on how the participant screening process is structured or how participants are identified and enrolled. The NTG estimates used in the portfolio are significantly high when examined from a perspective of net-realized and evaluation-verified NTG. This also means that the cost benefit estimates across the portfolio are higher than what will be confirmed via the evaluation process and net energy savings will cost more than what is reflected in the portfolio planning documents. While using standard NTG levels makes it easier for planning and analysis, their use significantly increases the risk of not achieving savings goals by overstating them in the portfolio.

Risk Issues

There are a few general risks that apply to the SDG&E portfolio as a whole and some additional program-related risks that are discussed in this section of the report. In addition, the program-specific review tables presented at the end of this chapter provide additional information that applies to specific programs within the SDG&E portfolio.

Oversight Risk

In response to the PRG comments the SDG&E portfolio has changed the level of change authority they would like to have. SDG&E proposes fund shifting guidelines according to the following table:

This framework appears to provide sufficient flexibility for the program administrator and does provide sufficient overview for the CPUC for the following cases:

· For fund shifts among categories exceeding the 25% limitation, pre-Commission approval is required before funds are shifted.

In addition, the CPUC has other oversight responsibilities:

· Approval of the addition of new programs that are developed outside of the program administrator's competitive bid process.

· Oversight of program solicitations and selects in the competitive bid process.

This fund shifting approach provides the CPUC with some oversight. However, the CPUC is responsible for the performance of the portfolio and the way in which program funds are spent. The CPUC will want to establish an oversight policy and provide that policy to the IOUs for inclusion in their portfolio plans.

Ramp Up

Much of the SDG&E portfolio is the continuation of programs that have performed well over the past years. The use of proven programs helps lower the risks of programs not performing up to their expectations. However, one risk to the portfolio is associated with the significant increase in operating budgets and size of the goals compared to previous programs. According to D04-02-059, SDG&E 2004-2005 program budget was $38.8 million per year, according to the data provided by SDG&E for the 2006 program, the IOU will spend $92.7 million in 2006. This represents more than 140 percent increase to the budget in a single year. The SDG&E portfolio will need to be able to increase participation rates and capture the additional installations at a much greater rate than previous programs. While the IOU's ability to capture these additional participants remains to be demonstrated, the program description should state how they plan to accomplish the increased participation and instillations, especially when the projected savings are greater than the potential savings. This explanation should not be a brief indication that the program size will be increased, but should be a strategic presentation of how the program will be increased and what aspects of the program will be adjusted to capture the increased participation.

There will be increased risk in launching on a wide number of programs all ramping up at the same time. This will require significant management and IOU supervision to oversee this ramp up, and to successfully implement larger and more aggressive programs. There is also a risk that as the programs attempt to ramp up, the higher administrative and management costs associated with this ramp up will need to be offset by increased enrollments and installations. SDG&E will need to carefully monitor these programs to see that they are successfully moving in a cost-effective direction.

New Implementers

Strongly associated with ramp up risk is the risk associated with obtaining new implementers to field energy programs that are also effective. Experience in California has shown that not all service providers are up to this difficult task.

Third-Party Bid Programs

SDG&E projects that the third-party programs will achieve 168 GWh and 1.6 million therms. Past experience has shown that there are effective third-party programs as well as programs that need improvements to be cost-effective, thus risk increases. Historically, the third-party programs have been risky. Several of these programs have not developed on projected timelines and have not achieved their goals. Many of these programs requested extensions to operate well into 2005 so that they could capture the energy savings projected for 2004. While many of the third-party programs have performed well, others have been slow to launch and capture savings. Placing so much of the energy savings into these programs represents a risk.

Partnership Programs

SDG&E has a significant number of these types of programs. The success of these programs often hinge on the ability of the partner to acquire cost-effective savings. While partnership programs can look good in the design stage, in practice they often have implementation issues that work to lower the amount of energy that can be acquired through these programs. However, if they are effectively directed, managed and operated, partnership programs can expand the effects of the portfolio. Again, these unknowns increase portfolio risk.

Kilowatts versus Kilowatt Hours

The SDG&E portfolio, as well as the other electric IOU portfolio seem to focus on capturing kWh over kW (see related comments in statewide assessment). An example is the portfolio's reliance on residential CFLs as a measure that captures primarily kWh, but provides very little kW benefits during the day at system peak.

Statewide Marketing and Outreach (FYP) and Other Information Programs

The Flex Your Power Program in particular, and similar programs in general, are a significant risk. Flex Your Power is a high-budget program funded without a solid understanding of what types of messages and promotional events are successful at not just informing, but in causing actions to be taken. Past evaluations have not addressed these issues well. This program is a significant unknown in terms of its ability to increase energy savings directly or indirectly. Funding seems to be based on applied trust that it will directly or indirectly accomplish some level of energy savings across all sectors, without supporting documentation. The CPUC should consider granting approval for one year of funding with the second and third year contingent on the results of an effects evaluation.

Freeriders

Several programs rely on point of purchase approaches. These programs can have significant freeriders that act to erode savings unless there are strong participant filter screens. For these programs especially, the applied NTG ratios may be in error.

On-Bill Financing Initiative

This program component is a significant risk in that we are not sure the market is ready for another financing structure. Past financing programs in other states have not done well, while others have succeeded. SDG&E will need to monitor this effort to determine if it should continue past the first year. If this program overcomes the resource barriers identified in the literature, it can provide a significant level of savings beyond what can be expected without a financing program. However, this program also provides appearance risks. This program appears to be taking ratepayer Public Goods Charge funds and giving it to the IOUs to cover the costs of loaning money to customers at a high rate of return for the utilities.

Program-Specific Risks

The above discussions of risks focus on selected key areas of risk. However, there are also risks associated with each program offered within the SDG&E portfolio. These program-specific risks are presented in the program-specific review tables provided at the end of this chapter. The reader is encouraged to review these program-specific risks in addition to the more general or crosscutting risks discussed above.

Comprehensiveness and Lost Opportunities - SDG&E

This review focuses on the comprehensiveness of the portfolio and lost opportunities that are associated with selected programs.

During the review, the TecMarket Team identified a number of potential lost opportunities associated with the SDG&E portfolio. These include the following.

Lack of Budget to Capture Newly Identified Opportunities

A review of the SDG&E portfolio indicates that the available budget is allocated to planned programs or activities. While this is consistent with CPUC instructions, it also means that there may be no strategic opportunities budget that can be used when one or more of the programs identify a new opportunity or when a market condition makes an opportunity available. (See statewide lost opportunities section of this report for additional information.)

Limited Income Refrigerator Replacement Program

This program does not seem to include lighting measures that if done well, can be as cost-effective as refrigerators.

Cross-Program Referrals

SDG&E's portfolio is structured to be program oriented. This structure requires strong referral mechanisms so that customers who participate in one program are automatically coordinated with all other programs that serve that type of customer. The whole portfolio could be strengthened by creating a strong referral mechanism to other programs so that customers only need to contact one program to understand all services that are available to that customer. Enrollment information from one program should automatically be available to all other programs in the portfolio.

Hard-to-Reach Lighting Turn-In and Education Program

Seems to only focus on one size of bulb, yet other size bulbs offer greater savings and better fit on several fixture types.

Home Energy Consumption Tool / HEES

It does not seem to have a strong referral component to get participants into other programs or to refer participants to people who can get the needed work done. HEES does not seem to refer participants to do-it-yourself instruction guides for recommended work.

Multifamily Rebate Program

MFR does not seem to include CEE Tier II dishwashers and clothes washers.

Advanced Home Program

This creative program seems to only focus on ducts, cooling, water heating and insulation. No advanced lighting or heating described. Yet there are a number of new lighting systems that are showing potential.

Clothes Washer Voucher Incentive Program

Focuses only on one point of purchase (POP) measure when there may be other POP interests by exposed shoppers. Huge lost opportunities are created by allowing vouchers for washers with a water factor of 9.5, when the average water factor for washers qualifying for Oregon tax credits is below 6.0.

Evaluation Considerations

In addition to the general portfolio evaluation issues discussed in this section, we have identified program-specific evaluation issues that need to be considered. These issues are presented in the program-specific review tables provided at the end of this chapter. The reader is encouraged to examine the program-specific evaluation issues in addition to the portfolio issues discussed above.

Partnership Programs

These programs will need early process and impact evaluations to help them get up and running and achieving savings. Programs that are not achieving strong savings in the first year should be reexamined for cost-effectiveness and to determine if the programs are capable of providing cost-effective resources to the portfolio over the following two years.

Third-Party Programs

In the past, the impact evaluations of the third-party programs have not been as rigorous as the evaluations conducted on the IOU programs. The primary reason for this condition is that the third-party programs are often underbudgeted for evaluation efforts, and the program selection approach rewarded administrators that minimized the scope of their evaluations (evaluation dollars were counted against the program in comparing program costs with anticipated benefits). These programs should receive a rigorous impact evaluation that focuses on acquired net effects. Many of the previous third-party evaluations used measure counts times the DEER estimates as the basis for their impact estimates. A more rigorous approach is needed. Likewise, it will be important to conduct process evaluations of these programs early to identify those that are having problems getting started and capturing savings.

Bid Programs

These programs may hold considerable potential for the portfolios and be capable of capturing very cost-effective energy savings. It will be important for the process evaluation to look at the entire bidding, selection process as well as program performance issues. Likewise, these programs should have rigorous impact evaluations as early as possible to determine their impacts and to confirm their potential.

Marketing and Outreach Programs

These programs need to be evaluated to document the effects that they have on the market and to estimate the savings being achieved. We expect that these programs have significant savings, but there is currently little if any documentation that these programs provide the market effects on which they are developed. This should be an early evaluation objective.

Confirm the TRC with Current Evaluation Data

Because the portfolios are based on IOU generated estimates of savings or DEER estimates, there is a need to conduct early impact evaluations on key program and market interventions to confirm the `as-delivered, as-achieved' net energy impacts. The results from these new evaluations will need to be incorporated into the portfolio estimates of annual impact so that the projections of savings will be updated to be more consistent with achieved savings.

KW versus kWh

The evaluation will want to address the balance of achieved kW and kWh and assess how the programs and the portfolios are impacting the system load factors.

Attribution Issues

With the past and current educational programs and the desire of some of the IOUs to count savings from these programs (e.g. Codes and Standards) the evaluation effort will need to develop an attribution policy and protocol. The policy will need to focus on how evaluations will deal with the issues of attribution across the many different types of programs and cross-program efforts. The protocol will have to focus on what evaluation efforts will be needed across these evaluations. Clearly there will be a need for all impact evaluations to include a knowledge and attribution aspect to how participants heard about the programs and what information they have been exposed to that is portfolio related.

Market Sector Grouping Evaluation Approach

The recent change to have the CPUC conduct the impact evaluations means that these studies can be more easily grouped together rather than conducted as single program studies. The CPUC will want to examine the IOU portfolios and structure the evaluations to deal with technology and market focuses rather than program focuses. This change will improve the evaluation quality, increase evaluation results comparability, and lower the relative cost of the evaluation effort.

Bidding Programs - SDG&E

Little information to assess.

Partnership Programs - SDG&E

Little information to assess.

Policy Issues - SDG&E

Residential New Construction

The four utilities have taken different approaches to Residential New Construction. SDG&E has decided to eliminate its Residential New Construction program - instead, it has its Advanced Home Program, with a budget of $6,639,750.

An alternative to the Advanced Home Program structure is to combine it with related programs that are designed to attack the same market. New Construction or Advanced Homes programs could be integrated with other programs, such as the Emerging Technologies Program, Codes and Standards Program, and Sustainability programs in order to establish a strategic initiative that is specifically designed to provide cost-effective long-term savings through adding innovations to a large dissemination program, and eventually to code changes. In that way, the efforts are strategically designed and would meet the criteria of being run to produce long-term cost-effective savings. In addition, these program all deal with the same market. To show an integrated delivery function for these construction-related programs would send the market a clear signal that the IOUs can work with technologies from inception, to demonstration, to market launch, to increasing saturation, and finally to code inclusion.

Even then the program that helps disseminate the technological improvements may need to be larger than that supportable by the current budget.

Conclusion

In conclusion, the SDG&E portfolio represents a solid mix of programs and measures that together as a portfolio are projected by SDG&E to provide cost-effective energy savings. This review covers several issues pertaining to the programs in this portfolio, but also recognizes the complexity and comprehensiveness of the portfolio. The SDG&E portfolio is projected to meet the goal set out by the CPUC as long as the Policy Manual NTG ratios are applied to the covered measures. Achievements that are estimated from ex-post evaluation-verified capacity might be significantly smaller for some programs once achieved NTG ratios are applied. This may lower the cost-effectiveness of the SDG&E portfolio to be only marginally cost-effective.

Many programs are expansions of successful programs that will need to be ramped up to higher levels than in previous years. This can be a challenge for some programs. The portfolio relies on the bid programs, the third-party programs, and the partnership programs to be cost-effective and to meet the CPUC's energy goals. However, much of these efforts are beyond the direct control of the IOU. It will be critically important for SDG&E to carefully monitor these programs and be ready to move resources away from poor performing programs or programs that are slow to ramp up to other programs that are providing cost-effective programs if the goals are to be achieved.

Program-Level Assessment - SDG&E

This section of the report presents the program-specific assessment information and issue discussions that were identified during the portfolio review effort. The issues reviewed are presented in the left-most column of Table 36 and each subsequent column represents a specific program, allowing the reader to see if the review team determined there to be a issue associated with a specific program, and to understand the review team's perspectives associated with each issue.

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