COM/SK1/bb1 2/9/04

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking to Examine the Commission's Future Energy Efficiency Policies, Administration and Programs.

Rulemaking 01-08-028 (Filed August 23, 2001)

ASSIGNED COMMISSIONER'S RULING SOLICITING POST-WORKSHOP COMMENTS ON ENERGY EFFICIENCY CUSTOMER NEEDS WORKSHOP AND SCHEDULING AND SOLICITING PRE-WORKSHOP COMMENTS FOR THE WORKSHOP ON PARTNERSHIPS

This ruling summarizes the Commission's second and very successful energy efficiency workshop in this phase of this proceeding and solicits comments on topics concerning how the Commission might more adequately address the needs of customers, also known as energy users, in our effort to maximize the energy efficiency savings potential in California while at the same time, making energy efficiency a viable resource as stated in the Energy Action Plan¹. In addition, this ruling also schedules a third workshop to address collaboration and partnerships among energy efficiency program implementers.

The Commission is conducting these series of workshops in order to learn from utilities, program implementers, energy consumers, manufacturers, consultants, government agencies and community organizations how the Commission may make the most of the state's energy efficiency resources in the coming years.

Summary of Workshop #2 Addressing Customer Needs

The California Public Utilities Commission ("CPUC") in joint effort with the California Energy Commission ("CEC") and the California Power Authority ("CPA") hosted a workshop on December 15, 2003 to hear from representative energy users in an effort to focus on the individual needs of these energy users, or customers, in many cases by hearing from organizations that sell or install efficiency solutions. The workshop consisted of three different panels: Residential, Commercial and Industrial. Each panel was given the opportunity to address questions posed by the moderators and the audience. In general, the workshop was held in order to examine how the Commission can: 1) improve existing Public Goods Charge funded energy efficiency programs, 2) create new ways to achieve energy efficiency savings for the state of California, and 3) make changes in the current administrative structure to better meet customer needs expressed at the workshop. A summary of the major points made by participants at the workshop follows:

· Many participants supported the move to a two or three year program funding cycle (as opposed to a one year cycle) to give the program sufficient time to attract customers and mesh the program funding cycle with the investment decision cycles of customers.

· Some program administrators asked for more ability to shift funding and make changes in program design between funding authorizations (particularly for larger customers). On the other side of this spectrum, some retailers, building consultants and trade allies requested more consistent, standardized program designs with similar rebate amounts to be offered by all utilities across the state.

· Many customers suggested the need for a more consistent and visible marketing campaign to keep energy efficiency programs and products at the top of the customer's mind.

· Trade allies mentioned that their customers have both energy and non-energy motivations for investing in energy efficiency. They in turn stressed the necessity to design programs that capture both needs.

· Several industrial customers indicated that their firms would not invest in energy efficiency measures unless they had payback periods of two years or less. Some suggested that the CPUC should only provide rebates for projects with 3 to 6 year payback periods. Most institutional energy users indicated they have problems getting capital for the up-front cost of efficiency projects, and that some form of financing would help them. Representatives of small business and industrial users suggested that variations of "on-bill" financing would enable them to undertake more efficiency measures.

· A wide range of opinions were presented on the value of rebate programs and the best way to design them. One related view was that rebates work only for the end-users that can afford to buy new equipment or appliances, but not for those whose financial circumstances dictate repairs and not replacement.

· Representatives of small and large businesses commented on the need to get better and more usable information on their monthly energy use from their utilities. Some businesses stated they could not even get electronic copies of their bills for use in spreadsheet analysis. Larger businesses indicated a desire to receive consolidated bills that contain the energy use from all of their facilities across the service territory, or state in some cases.

Based on these comments, I draw the following general conclusions related to proposed improvements in structure or design:

1. Expanding the program funding cycle from two to three years should be considered.

2. More flexibility is needed in program design to reach customers whose funding cycle does not match with current program cycle.

3. Customers want and deserve better information on their bills about the structure and pattern of their energy usage, and convenient ways to analyze and compare information for companies or institutions with multiple facilities throughout a city/county or California.

4. There is a need to tailor financial incentive programs to match the funding decision cycles of many different types of customers, including non profit housing, different types of retail chains and different types of industrial customers.

Building in large part on the pre-workshop comment submissions and the discussion at the December 15 workshop, I would now like to solicit post-workshop comments of all interested parties, including those who did not attend the Commission's workshop. The purpose of these comments is to sharpen the feedback to the CPUC regarding these opinions and conclusions, hear from a wider audience than submitted pre-workshop comments, and to establish a robust, written record that the Commission will use in deciding the future structure, administration and implementation of energy efficiency programs throughout the state

I would like all interested parties to answer as many of the following questions as are of interest to you. Post-workshop comments for the Consumer Needs Workshop shall be limited to ten pages and should be submitted no later than March 5, 2004.

¹ http://www.cpuc.ca.gov/static/industry/electric/energy+action+plan/index.htm