4. Comments in Response to Settlement Agreements and Replies

No parties filed comments in protest of the settlement agreements between ORA and SDG&E/SoCalGas or ORA and SCE.¹⁵ On May 4, 2005, WEM filed timely comments urging the Commission to reject the ORA/PG&E settlement. WEM contends that the settlement relies upon savings and persistence data that is recognized as being inaccurate, referencing as an example to recent revisions to the useful life assumptions associated with compact fluorescent lamps (CFLs) for future program savings projections. In addition, WEM claims that updates currently being planned for the Database for Energy Efficient Resources (DEER) reveal that the system has been using inaccurate savings for much of the period covered by the pending AEAP claims.¹⁶ In addition, WEM argues that the settlement inaccurately calculates shareholder incentive claims because it does not discount them to account for the time value of money.

Finally, WEM argues that non-savings issues need to be considered before the settlement is accepted. In particular WEM contends that a recent independent audit reveals serious problems related to utility administration of energy efficiency programs from 1998-2002. WEM argues that adopting the settlement would preclude the Commission from evaluating how these audit results should impact the pending shareholder incentive claims.

On May 25, 2005, PG&E and ORA jointly responded to WEM's comments. PG&E and ORA claim that WEM is mixing up the measures and the studies required for the programs included in the AEAP covered by the settlement agreement with newer technologies and measures. In particular, they argue that the CFLs installed during the program years included in the settlement agreement have significant technological differences from those included in the programs covered by the study that WEM cites. In their view, the study WEM cites for program year 2003, applied to a limited population of 60 sites, using a different mix of CFL technologies for different purposes, should not be applied to a broader population. PG&E and ORA also refute WEM's representation of the findings of the audit WEM refers to in its comments. Finally, PG&E and ORA contend that WEM's method for calculating the present value of the shareholder incentive claim is inaccurate. Rather than starting with a discounted number and reducing that as a pure settlement discount, PG&E and ORA argue that they settled on an overall number that accommodates both a settlement discount and the time value of money.

¹⁶ DEER provides estimates of the gross energy-savings potential, costs and other performance parameters (e.g., expected useful life information) for energy efficiency measures and technologies in residential and nonresidential applications. DEER has been jointly developed by this Commission and the CEC, and is funded through ratepayers via the public goods charge.