IV. Selection Criteria

A. Threshold Criteria

To be considered, the proposals were required to meet three threshold criteria:

1. Nature of Savings

The proposal must provide verifiable demand-side electric energy efficiency savings and/or peak demand shaving. Fuel-switching and cogeneration are not eligible for funding.

The Summer Initiative was adopted to seek new ideas that would produce energy and/or demand reductions by the summer of 2001. Therefore, we only considered proposals that have a reasonable prospect of being able to demonstrate those savings. Several of the proposals received could very well lead to demand and energy savings in the long run, such as energy management services and other information and training programs. However, savings from those types of programs are hard to measure and difficult to attribute directly to the programs. For this Summer Initiative, we decided to emphasize programs where energy and demand savings will have a direct and immediate relationship to program activities.

Further, we decided to eliminate fuel-switching and cogeneration projects from consideration. While both types of projects have the potential to save energy and/or demand, Pub. Util. Code § 381 specifies that the public goods charge be used only for "cost-effective energy efficiency and conservation." Neither fuel-shifting nor cogeneration projects have been considered in the past to qualify as energy efficiency and conservation projects and thus have been expressly disallowed in prior programs. While the language set forth in § 381 leaves room for discretion in defining how the funds are spent, we are reluctant to undertake a major policy shift within the context of the Summer Initiative. This issue is more appropriately considered in a post-PY2001 rulemaking proceeding. At that time, the Commission will be able to explore fully the implications of funding cogeneration and fuel-switching projects through this mechanism.

2. Program Addresses a Market Failure

The proposal must be for activities that would not otherwise be funded through other programs or market activities.

This criterion was designed to prioritize proposals that represent solid energy and demand savings for which the Summer Initiative might be the only funding available. If utilities or other entities already fund the activities proposed, we generally did not consider them for further funding under the Summer Initiative. Further, proposals that are clearly economic from the customer's point of view, without augmented funding required, were also generally eliminated. We made an exception, however, and agreed to fund a program if Summer Initiative funding would accelerate program activities, thus potentially influencing energy and demand savings before the summer of 2001.

3. Benefits By June 1, 2001

The program or activity proposed must deliver energy and demand savings by June 1, 2001 and must be designed to achieve savings quickly.

A. Prioritized (Ranked) Criteria

If the proposals met the three threshold criteria, they were prioritized in accordance with the following criteria:

1. Cost Effectiveness

The program proposals used a variety of methods for determining cost-effectiveness. Using the information provided, we assessed the relative cost-effectiveness of the various proposals in relationship to each other, and prioritized the proposals that represent the most cost-effective energy and demand savings possible. A further description of our ongoing expectations and requirements for program cost-effectiveness for the selected programs is discussed in Section V below.

2. Total MW/MWh Reduction: Will the Program
Produce a Reasonably High Impact?

Proposals were measured against this criterion and ranked on a relative, rather than an absolute scale. Our objective was to prioritize those programs that can have a major impact on energy consumption by next summer, while minimizing administrative and other transaction costs. Because each program selected will likely still require a contracting process before being implemented, we prefer to minimize the number of distinct programs being offered, as long as this will still allow us to reach our goal of maximum demand and energy savings by next summer.

3. Program Delivery By A Mix of Entities, Including
Non-Utility Entities.

Because the utilities are already operating a large number of energy efficiency programs in the state, we wanted to give some preference in the Summer Initiative to non-utility proposals. We received three distinct types of program proposals: (1) programs that are totally self-contained, in that they can be designed, administered, and delivered by a non-utility entity; (2) programs that require utility administration, but still rely on third-parties to implement or deliver programs to consumers; and (3) programs that are delivered entirely or mostly by utility personnel. We prioritized the proposals in that order. We recognize that the utilities will still need to contract for the services, regardless of the type of delivery mechanism, and address that issue in Section V below.

4. Underserved and Residential Markets

Although the purpose of the Summer Initiative is generally focused on achieving maximum energy and demand savings by next summer, we recognize that there are equity considerations associated with delivering benefits to those consumers from whom the public benefits funding was collected in the first place. We also recognize that there is generally tension between serving hard-to-reach customers and other criteria such as cost-effectiveness or aggregate impact. While we do not adhere to a strict tracking of collection and spending based on customer class, we take into consideration the fact that the majority of the funds being spent on the Summer Initiative were collected from residential consumers. Therefore, we rated proposals that deliver benefits to residential (particularly multi-family) and small commercial consumers higher than other proposals based on this criterion.

5. Savings Credibility: Does the Program Utilize a Proven
Program or Technology?

This criterion was designed to favor those programs that deliver energy or demand savings on the basis of proven technologies or delivery strategies than those that might be more speculative. For example, we ranked proposals that were more experimental or "pilot" in nature lower than those utilizing technologies or programs with a longer and more predictable track record.

6. Location: Priority and Transmission Constrained

We prioritized more highly programs that would create benefits or activities in the San Diego and the San Francisco Bay Area, since those are the areas in which prices and transmission constraints, respectively, are creating the most severe need.

7. Innovation: Newness of Program Concept

We gave a higher ranking to proposals presenting unique or new ideas than those utilizing more traditional concepts. We recognize that there is tension between this criterion and savings credibility.

B. Programs Selected

After ranking all of the proposals, we looked for opportunities to consolidate overlapping or competing program concepts. In many cases, proposers presented ideas that were similar and could be combined into a statewide program offering. Where possible, we opted to offer similar programs to consumers throughout the state, rather than creating approaches that are specific to individual utility service territories or locations, although we also opted to fund some proposals made by specific end users and cities.

Based upon our stated criteria and groupings, we have selected the following programs for funding as part of the Summer Initiative:

Table 2. Selected Summer Initiative Activities

Implementer	Program	PG&E	SCE	SDG&E	SoCalGas		Total
		(in thousands of dollars)
New Statewide Programs
Ecos	Torchiere replacement	350	250	150		750
Utilities/ARCA	Refrigerator recycling	5,500	1,200	3,000		9,700
Utilities/third parties	Third Party targeted solicitation	3,500	1,700	1,000		6,200
Utilities	Pool pump efficiency and timers	2,500	3,000	500		6,000
UC/CSU	Campus energy efficiency	2,500	3,500	2,000		8,000
Utilities/Res-Team	Residential and small commercial standard offer	3,700	2,600	1,500	4,000	11,800
Utilities/cities	LED rebate program	12,500	7,500	4,000		24,000
Ongoing Statewide Programs
Utilities	Large and Small SPC program modifications	0	0	0	0	0
Utilities	Express Efficiency program modifications	0	0	0	0	0

Projects in Specific Locations
City of Oakland	Energy efficiency design improvement	300				300
City of Oakland	Green LED traffic lights	504				504
City of Oakland	Museum chiller replacement	291				291
SDG&E	Whole House Fans			100		100
SDG&E	Torchiere Turn-In			50		50
Humboldt Creamery	Energy efficiency measures	100				100
Presidio Trust	Energy efficiency measures	500				500
COPE	Pumping efficiency	2,500	1,500			4,000
TOTAL FUNDING		34,745	21,250	12,300	4,000	72,295

Appendix A sets forth detailed descriptions of the selected programs, the rationale for their selection, the contractual responsibility of each utility for the program, and details about measurement and verification requirements and program designs.

Unless a program or activity is expressly mentioned in this ruling, it is not approved through the Summer Initiative. ⁵ The utilities may wish to include programs or make program modifications not expressly approved through the Summer Initiative process in the PY 2001 energy efficiency programs. However, any such proposals will be subject to that separate proceeding and forum.

Further, these programs are funded only through the end of 2001. If particular programs begun through the Summer Initiative demonstrate the ability to produce ongoing benefits to California electric consumers, we will consider authorizing ongoing funding as part of PY2002 energy efficiency programs.