3. Scope of Proceeding

As outlined in the Assigned Commissioner's scoping memo, our consideration of the 2006-2008 program planning applications will focus on the following issues:

Phase 1:

1. Are the proposed portfolios cost-effective on a prospective basis taking reasonable account of uncertainty with respect to key cost-effectiveness input parameters?

2. Are the portfolios designed such that it will be feasible for the utilities to meet or exceed the Commission's energy savings goals? If each of the annual goals cannot be met in light of the accounting and ramping up transition issues described in D.04-09-050 and D.05-04-051, will the proposed portfolio plans meet or exceed the 2008 cumulative energy savings goal?

3. Are the portfolios and associated funding levels appropriately balanced between activities that address short-term and long-term savings?

4. Do the portfolio plans provide sufficient strategies and funding to address opportunities to reduce critical peak loads?

5. Do the plans reasonably allocate funds among market sectors and applications with respect to the savings potential that has been identified in the potential studies?

6. Do the plans adequately describe strategies to minimize lost opportunities, per Rule 5?

7. Do the plans provide for adequate statewide coordination of similar program offerings, e.g., with respect to outreach, upstream marketing, codes and standards advocacy and other activities that can take advantage of statewide leverage?

8. Are the utilities' plans for competitive bidding reasonable and consistent with the 20% minimum requirement established by D.05-01-055? Are their proposed bid review criteria reasonable and consistent with the policy rules?

9. What fund shifting and program flexibility rules should be adopted for these program plans?

10. Are the overall funding levels proposed for the portfolio plans reasonable? What is the appropriate ratemaking treatment to recover these costs?

Phase 2:

Are the proposed EM&V plans and funding levels reasonable in light of the adopted EM&V protocols and portfolio plans? What is the appropriate ratemaking treatment to recover these costs?

Compliance Phase:

1. Has the utility solicited competitive bid proposals and evaluated them in a manner consistent with the Commission's approved bid evaluation criteria?

2. Has the utility adequately responded to any criticisms presented by the PRG (and Energy Division consultants) during the bid review process?

3. Is the resulting portfolio still expected to be cost-effective on a prospective basis?

By ruling dated May 11, 2005, in R.01-08-028, the Assigned Commissioner directed Joint Staff to review historical studies of savings attributable to the codes and standards work funded under energy efficiency that led up to the recent revisions to state appliance and building standards administered by the CEC, and to make recommendations on:

· What level of savings should be attributed to those activities for resource planning purposes, and

· Whether the Commission should revisit the issue of counting those savings towards the goals established for PY2006-PY2008.

Today's decision addresses the Phase 1 issues identified in the Assigned Commissioner's scoping memo and the codes and standards savings issues described above. By subsequent decision in this proceeding, we will address the EM&V related issues associated with the utilities' 2006-2008 portfolio plans (Phase 2). Compliance phase issues will be addressed either by Commission resolution, or by subsequent Commission decision in this proceeding, depending upon the PRG assessment of the utilities' bid selection process and final program plans.