VI. Statewide Marketing and Outreach Programs

A. Proposals and Criteria for their Consideration

Statewide marketing and outreach programs are currently funded to any qualifying organization or business according to a process of competitive bidding. The utilities and third parties submitted a total of twenty-eight (28) proposals. We reviewed them in light of the Commission's criteria for such programs, expressed first in D.01-11-066. Specifically, D.01-11-066 found that marketing and outreach programs should inform consumers about ways to reduce their bills and energy consumption, emphasizing long-term structural improvements to buildings and equipment rather than behavioral changes that might require ongoing consumer education.

We reject some of the proposals because they failed to meet the established criteria. Some of the proposals would educate industry members, such as architects, engineers, and business owners, or promote certain technologies, which are more appropriately proposed as part of local programs. A number of proposals duplicate other efforts. Others would limit information geographically and fail to meet the requirement that these marketing efforts reach all California customers.

We also reject proposals that do not provide clear schedules, those that are relatively expensive, or do not adequately describe the proposed program and budget, or failed to describe relevant work and educational qualifications necessary for marketing and outreach of energy efficiency programs.

Twenty-one of the 28 proposals presented in this docket did not meet the criteria the Commission established for these programs and we deny funding for them. Attachment 4 lists the proposals we reject and our reasons for disallowing them.

Seven proposals met the Commission's criteria. Each demonstrates the availability of qualified personnel and relevant work experience. Each would market throughout the state targeting individual consumers, and would work collaboratively with utilities and third-party implementers of local programs. The seven proposals are as follows:

· Runyon Saltzman & Einhorn, Inc. (RS&E) -- $7.65 million to target low income and rural communities using newspaper and radio advertising in English, Spanish, Korean, Chinese and Vietnamese, supplemented by brochures, direct mail and efforts of community-based organizations;

· Efficiency Partnership (EP) and utilities (SCE, PG&E, SDG&E & SCE) -- $15 million to facilitate programs and providers and extend the "Flex your Power" campaign in 2003;

· Global Energy Services -- $2.97 million for marketing and outreach in Chinese, Vietnamese and Korean languages;

· Dae Advertising/Insync -- $.944 million for outreach to Asian communities;

· Headquarters Advertising -- $2.45 million for marketing in Hispanic communities;

· Univision Television Group and Staples/Hutchinson and Associates (Univision) -- $3 million for televised marketing and information to Hispanic communities.

· Pacific Gateway -- $250,000 to promote energy efficiency programs on radio spots and during halftime breaks at professional basketball games.

Unfortunately, we have not allocated enough funding for seven marketing proposals, which total more than $32 million. Dividing less than $20 million seven ways would reduce the effectiveness of some of the projects. For this reason, we have selected those three projects that presented the most efficient budgets, propose to target the broadest audiences and appear to complement each other.

B. The Efficiency Partnership Proposal for Funding a Nonprofit Corporation

We first address the joint proposal of EP and the utilities to fund a "formal stakeholder organization in the form of a California nonprofit corporation called the Efficiency Partnership." Proponents recommend about $2.7 million in funding for this initial effort to create a new organization that would coordinate, plan and facilitate statewide energy programs. It would do so by providing a forum for representatives of business, nonprofit agencies and government who manage or administer energy efficiency programs.

Although the initial proposal does not describe specifically how it would meet its objectives, the stated goal of the Efficiency Partnership would be to assure the delivery of the broadest array of efficient energy programs in California. In effect, the Efficiency Partnership would act as a central clearinghouse for programs statewide, moving that role away from the utilities and state government. Initial funding for the effort would be used to recruit participants from various sectors and organize a structure for third party program coordination. By proposing this new nonprofit organization, EP and the utilities appear to move program administration out of the utilities' operations and to a more independent administrator. The proposal, if implemented, is a first step in that direction and could ultimately have dramatic implications for future program management.

This proceeding sought proposals for marketing and outreach. The EP proposal goes well beyond that solicitation by seeking funding for a whole new organization that could change the way programs are coordinated and even administered. It appears to presuppose future funding by creating an institution responsible for some elements of program management. We are also concerned that the proposal itself provides almost no information about how the organization would budget allocated funds, the products it would pursue, and how the organization would be accountable to the Commission and the public.

EP's stated objectives and even the proposed institutional structure may be precisely where we are headed. Although mainly conceptual, the proposal put forth by the utilities and EP is innovative and appears to address a need. However, we cannot agree at this time to fund the creation of a new institution that could have major implications for program administration. Because we did not seek proposals in this instance for the creation of institutions that would coordinate statewide programs, we did not provide others with an opportunity to present their own ideas in the context of specific policy and program goals. At this point, we have not articulated such program and policy goals, or considered the various options to affect them or for the role and design of a new organization. We also do not have enough information about the structure and products of the proposed organization to justify allocating millions of dollars to it.

The Commission applauds the initiative of EP and the utilities for moving our thinking ahead in this area. We commit here to developing our policy direction on the issue of future program administration in this docket, and considering the EP proposal, or modifications to it, in that context.

We will address the following questions pertinent to EP's proposal and future program management:

· How best to assure coordination between all energy efficiency program providers, including local governments, businesses, CBDs and water districts;

· How best to assure coordination between program providers and "upstream" product and service providers;

· The type(s) of organizations that would be most appropriately undertake coordination and facilitation efforts;

· Appropriate budgets and funding for coordination and facilitation efforts not conducted by the Commission.

We will solicit responses and specific proposals from any interested parties.

C. Marketing and Outreach Program Proposals

We approve funding for marketing and outreach programs on the basis of their exceptional proposals and their complementary elements, as follows:

(1) Efficiency Partnership -- $11.9 for marketing and education programs that capitalize on the "Flex your Power" campaign, and which target English and Asian-speaking audiences emphasizing structural energy savings measures rather than short term behavioral changes by consumers. (This funding is for marketing and outreach only, consistent with our discussion of EP's proposal for funding a new nonprofit corporation);

(2) RS&E -- $2.5 million for statewide programs directed to low income communities in rural areas, including grants to community-based organizations with strong community ties.

(3) Univision -- $2 million for marketing and information to Hispanic communities, using televised messages, building on its success from the previous year.

We select EP for the most substantial program work because of its extensive experience marketing energy efficiency and knowledge of related programs. EP has products that may be used in future campaigns and valuable expertise. EP will focus on broad media campaigns in English and Asian languages. We select Univision to provide marketing and information in Spanish on the basis of its strong proposal and success in the previous year. Although RS&E had a very good proposal with elements similar to those proposed by EP, it does not have the breadth or depth of experience with such programs, suggesting it may not be as cost-effective as either EP or Univision. RS&E does, however, propose a vital program element that was not proposed by EP or Univision, namely, outreach to low income and rural communities. We therefore fund those efforts.

RS&E, EP and Univision should coordinate their efforts with each other and with the utilities and third-party implementers for consistent, coherent and timely marketing and outreach.

The total amount of funding for these marketing and outreach programs is $16.4 million, about $6 million more than we originally anticipated funding for these programs. We add to the original funding level because of our confidence in the success of the "Flex Your Power" campaign and the need to underscore the importance of energy efficiency in the minds of the public following the energy crisis. The additional funding for these programs will come from carry-over funds, consistent with summary tables.

D. Program Administration of Marketing and Outreach Programs

A third party should evaluate marketing and outreach program no later than 18 months of program initiation.

For efficient program operation, implementation plans must be submitted no later than 60 days from the date of the decision approving the marketing and outreach proposals. Each party should also post their plans on their websites in a prominent or easy-to-find location. Each plan should contain the following information:

· Title of Individual Program

· Plans to implement the decision's changes to the original proposal

· Objective measures for evaluating program success

· Hard-to-reach target and goals. Where the decision does not specify these targets and goals, the program implementer should define then in its plan. Where the decision specifies such targets, they should appear in the plan.

· Budget (current budget format may be obtained from the Energy Division).

· Description of coordination plan with other providers of marketing and outreach for consistent, coherent and timely campaigns.

The Commission will monitor and evaluate the statewide marketing and outreach programs using the plan as a benchmark. The parties should not delay the program preparations or commencement while in the preparation stage or after submission of the program implementation plans.

SCE shall continue to administer the 2003 marketing and outreach programs approved in this decision. SCE should contract with RS&E, EP and Univision to ensure that funding is used only on energy efficiency messages authorized in this decision. Program payment will depend on the implementers' compliance with the contractual requirements. The other utilities shall transfer allocated PGC funds for statewide marketing and outreach to SCE so that it may compensate RS&E, EP and Univision. In all cases, the Commission will retain total ownership interest in all content developed with the funding it awards here.

2003 Statewide Marketing and Outreach Programs	Funding Source
	SDG&E	SCG	SCE	PG&E	Total Budget
Efficiency Partnership/IOUs	$1,637,072	$1,177,690	$3,928,018	$5,189,232	$11,932,012
Runyon Saltzman & Einhorn	$ 344,023	$ 247,486	$ 825,456	$1,090,494	$ 2,507,549
Univision Television Group	$ 274.400	$ 197,400	$ 658,400	$ 869,800	$ 2,000,000
Total	$2,255,495	$1,622,576	$5,411,874	$7,149,526	$16,439,471