Market Assessment & Evaluation Studies

The utilities propose to fund and conduct various market assessment and evaluation (MA&E) studies during PY 2001. The proposed MA&E studies include both statewide studies, which are managed by individual utilities or the CEC, other studies conducted by the CEC, and utility-specific studies. Some statewide MA&E studies seek information about markets, including developing baseline and other market data, for program planning purposes, while others evaluate current programs. The CEC also manages studies for forecasting energy demand and to monitor the functioning of energy markets. Utility-specific studies generally are undertaken to provide information needed to demonstrate the achievement of milestones for shareholder incentive awards.

We approve the proposed statewide MA&E studies and budgets managed by the utilities, subject to mid-year modification, and decline to approve the CEC-managed budgets or the utility-specific budgets at this time. The statewide studies managed by the utilities have apparently been reviewed in a public process conducted by the California Measurement Advisory Council (CALMAC)¹³ and, for the most part, consist of continuing studies to support continuing programs. It is important that these studies get under way expeditiously so that we have the appropriate data to evaluate on-going programs and plan future programs. We are, however, concerned that the MA&E studies be related to the programs that are ultimately approved for PY 2001. We have made many suggestions herein for program modifications, as have protestants and interested parties. Thus, while we approve the budgets and studies, we expect the utilities to revise the study plans to account for new programs as ordered in the final decision, as well as changing program priorities and changing market conditions throughout the year. In this regard, we note that the statewide portfolio of studies does not appear to include any studies related to our renewed emphasis on peak demand reduction.

The statewide utility-managed MA&E budgets we preliminarily approve are as follows:

Statewide utility-managed MA&E budgets

Utility	Interim M&E Budget Authorization ($ million)
PG&E	$3.01
SCE	$1.17
SDG&E	$.50
SoCalGas	$0.10
Total	$4.78

The budgets for utility-specific studies comprise 47% to 63% of the total MA&E budgets, yet there is no evidence that the utility-specific budgets have been reviewed by anyone other than the sponsoring utility. Further, it is difficult to discern the scope and purpose of the proposed studies or to evaluate the reasonableness of the studies from the short descriptions included in the applications.

We have similar concerns with respect to the funds set aside for the CEC studies. We need further review to determine the appropriateness of these studies and funding levels. For example, we are concerned that the residential energy end use survey was not begun in 2000 despite the fact that funds were approved for the study in 2000. We are further concerned with the representation that this study will not be completed unless further funding is approved for the CEC's proposed enhancement of the Commercial End Use Surveys (CEUS) data collection. We expect that funds will be used in a manner consistent with our authorization and do not sanction the unilateral transfer of funds from the approved purpose to another purpose. We also question the reasonableness of the CEC's request to fund the Database of Energy Efficiency Resources (DEER) budget out of PY 2001 funds despite the fact that the CEC states that it will not begin the project until 2002.

Thus, we believe that both the proposed utility-specific and CEC budgets and studies should be subject to further review. We recommend that the utilities use the CALMAC as the first forum for reviewing the utilities' proposals for the CEC and utility-specific studies. Within 60 days of the approval of this decision, the utilities should present their proposed MA&E plans in a workshop for review and discussion. The presentation should include a full description of the study plans, objectives, and budgets, and a discussion of the rationale and need for these particular studies. The CEC may participate with respect to the studies for which it seeks funding. Within 10 days after the workshop, the utilities should jointly file a report setting forth the detailed descriptions of the study plans, objectives, and budgets, the rationale and need for the study, the recommendation if one is made regarding adoption, rejection, or modification of the proposed utility-specific studies, and a summary of the comments and objections, if any, of other interested parties. The report should also include a discussion of the issues raised herein and of the non-selection of other studies related to other programs included in the utilities' portfolios as well as those suggested by interested parties. We delegate to the Assigned ALJ and Assigned Commissioner authority to approve the utility-specific and CEC MA&E studies so that they can commence in a timely manner.