VII. Comments on Draft Decision
Pursuant to Pub. Util. Code § 311(g)(3), and Rule 77.7(f)(9), we reduce the 30-day period for comments on the draft decision due to public necessity. Here the public necessity provision is implicated by the need to get local programs up and running in time for the summer 2002.
Comments shall be filed and served on the e-mail service list for this proceeding no later than April 22, 2002. Reply comments shall be filed and served no later than April 26, 2002. The assigned Commissioner and ALJ shall also receive the comments in hard copy and by e-mail.
1. We used certain IOU local program funds from the $25 million to "bridge fund" the IOUs' existing programs through May 2002, so the IOUs have received more of the $25 million than this decision would indicate.
2. It is necessary to create a balanced portfolio of programs that serve, as much as possible, all areas of the state and different groups of hard-to-reach utility customers.
3. The best proposals/proposers: offer comprehensive service; provide a local presence; have a demonstrated history of success; are innovative; reach the hard-to-serve or niche markets not already served; reach a market that the IOUs did not propose to serve this year; serve a geographic area needing programs; advance emerging technologies; provide persistent, long-term energy savings; deliver services to small business; present the program honestly and credibly; propose reasonable budgets; leave lasting change or infrastructure at the local level; provide maximum benefits to program participants rather than being heavy on overhead; help solve transmission constraints; and work closely with or represent existing city and county governments and institutions.
4. Historically, the single and multi-family residential sectors have been hard to reach and slow to utilize new energy efficiency programs.
5. Small- and medium-sized businesses are another hard-to-reach sector that has been particularly hard-hit by rising energy costs.
6. Information and training programs do not deliver energy savings. Rather, if a consumer is informed about a particular energy efficiency program and uses the program, it is the latter program, and not the program that informed the consumer of its existence, that may claim credit for the energy savings.
7. Customers just above the LIEE income levels could benefit significantly from energy efficiency measures.
8. Many of the budgets submitted, both by the IOUs and other proposers, did not provide the level of itemization that was called for by the Policy Manual, especially in the area of subcontractor costs.
1. The Commission is not required to award the full $25 million available in IOU local funding to the IOUs if third parties propose programs we believe better serve the range of energy efficiency needs.
2. In making our decision on local programs, the Commission may consider not only the scores described in the body of this decision, but also the extent to which the proposers conformed their proposals to the policies and rules in D.01-11-066, and offer programs that help the Commission meet its desired mix of programs for 2002-03.
3. Programs that serve municipal utility customers are ineligible for PGC funding.
4. Programs that promote proprietary products are ineligible for PGC funding.
5. Programs that duplicate existing IOU programs should not receive funding.
6. It is not appropriate in selecting program providers to over-fund a particular proposer.
7. Programs solely designed to serve the low income are not eligible for non-LIEE program funding.
8. Local program providers should coordinate with other existing or selected programs to enhance consistency in rebates and other program details; minimize duplicative administrative costs; and enhance the possibility that programs can be marketed together to avoid duplicate marketing budgets.
9. Because we do not directly regulate the third parties receiving funding, we must have security not only for the final 15% or quarterly payments, but for the entire budget amount.
IT IS ORDERED that:
1. We award the programs set forth in Attachment 1 $116,969,016 in local energy efficiency funding. For third party programs (programs not sponsored by Investor Owned Utilities (IOUs)), program funding will run during 2002-03 unless changed by order of the Commission, the assigned Commissioner, or the assigned Administrative Law Judge (ALJ). For IOUs, funding will expire on December 31, 2002 unless changed by order of the Commission, the assigned Commissioner, or the assigned ALJ.
2. Within 60 days after the Commission approves this decision, all parties granted funding shall file and serve Program Implementation Plans (Plans). Each party shall also post its Plan on its website in a prominent and easy-to-find location. The IOUs chosen to administer each third party program shall oversee the filing and service of these entities' Plans. Each Plan shall contain at least the following information for each program funded (IOUs and third parties with more than one funded program shall submit one document containing separate Plans for each individual program):
· Title of individual program
· Plans to implement this decision's changes to original proposals
· Revised energy and peak demand savings targets, as well as per-unit energy savings and unit-count projections, as applicable
· Revised cost-effectiveness calculations, as applicable
· For information-only programs with no energy savings targets, other objective measures for evaluating program progress
· Hard-to-reach targets and goals. Where this decision does not specify such targets and goals, the program implementer should define them in its Plan. Where this decision specifies such targets, they should appear in the Plan
· Budget (in the format and following the guidelines set forth in the following section and in Attachment 4 to this decision.)
No party shall delay program preparations or commencement while preparing or after submission of the Program Implementation Plans. The Commission will monitor and evaluate the local programs using the Plans as a benchmark.
3. Based on their past experience, including what occurred with the Summer Initiative programs (A.99-09-049 et al.), the IOUs shall present estimates in their comments of the appropriate percentage they anticipate for administrative expenses for each third party program.
4. Local program providers shall coordinate with other existing or selected programs to enhance consistency in rebates and other program details; minimize duplicative administrative costs; and enhance the possibility that programs can be marketed together to avoid duplicate marketing budgets.
5. Where a third party provider is aware of a competing Low Income Energy Efficiency (LIEE) program, it shall make LIEE-eligible consumers aware of the free program before attempting to sell a program with an associated cost. The IOUs supervising third party contracts shall build in a mechanism to encourage such program coordination. In addition, IOUs with local (and statewide) programs shall file the reports required of them in Decision (D.) 01-12-020 in this proceeding as well. In all cases, IOUs and third parties shall coordinate the delivery of LIEE and non-LIEE energy efficiency programs targeted at hard-to-reach customers so that the interests of low-income customers are best served.
6. With their Program Implementation Plans, all providers shall submit new budget materials to better match the requirements of the Energy Efficiency Policy Manual approved in D.01-11-066. These parties shall follow the budget format found in Attachment 4 to this decision, entitled "Budget Format for Implementation Plan." The budgets shall contain a higher degree of detail than those already provided. In addition to providing itemization where it is required, we need explanatory material either within the budget table or in footnotes. For instance, formulas for allocating costs to overhead should be explained. If a party uses historical or experiential information to allocate certain costs, it should explain the basis for its allocation. These parties should explain their budgets in straightforward and easily understood language. Parties shall use extra care in properly characterizing "administrative" costs. Subcontractor costs, for example, are not all "administrative," but rather depend on the nature of work performed.
7. In connection with D.02-03-056, our decision approving statewide energy efficiency programs for 2002, we required the IOUs and third party funding recipients to meet and confer and then file a uniform plan for the allocation of costs within categories. This plan - and any modifications to it ordered by the Commission or ALJ - shall be used to allocate local program costs in a consistent manner. Any change in allocation that results should be filed with parties' Program Implementation Plans.
8. Third party local programs shall end no later than December 31, 2003 unless otherwise ordered.
9. The final 15% of program funding (for programs with energy savings) or the final quarterly program payment (for information/training programs) shall be contingent on program performance, with the risk of proportionate reductions in these amounts for programs that do not meet their goals. We will apply an objective reasonableness standard to our determination of whether each program meets its goals, and will not require a refund if the program sponsor's failure to meet goals was reasonable. If, on the other hand, the program proponent did not make reasonable attempts to meet its goals, or cannot explain why its failure to meet goals was reasonable, the program proponent shall refund a portion of this final payment.
10. As part of its process of contracting with the IOUs, each third party shall post a bond or other security ensuring that the Commission and/or the IOUs administering each contract will have a means of recovering program funding for ratepayers. Such bond or other security must guarantee the return of any funding to which the third party was not entitled - either because it unreasonably failed to meet program goals, or due to bankruptcy, complete program failure, malfeasance or other similar circumstances. Such bonding or other security is a condition precedent to any third party receiving funding. If the third party provider does not secure the required bond or other security, then it will be ineligible to receive any energy efficiency program funds.
11. All third party contractors shall provide evidence that they have the requisite California licensing, bonding and insurance to perform work for the State of California no later than April 22, 2002.
12. Independent third parties not affiliated with the program provider shall evaluate local programs and measure and verify local programs' claimed energy savings and measures installations. Parties shall report their plans in this regard in their Program Implementation Plans. The IOUs responsible for the third party contracts shall ensure that independent EM&V occurs. We delegate to the Commission's Energy Division the authority to determine whether and where EM&V should be performed simultaneously on a group of like programs. Before carrying out EM&V activities, third parties shall contact the Energy Division at (415) 703-2776 for guidance in this regard.
13. All proponents shall recalculate the Total Resource Cost (TRC) of their programs and submit the new calculation - with all supporting workpapers or other detail - no later than April 22, 2002.
14. All proponents of programs with hard-to-reach targets - either suggested by the provider or by the Commission - shall include such targets in their Program Implementation Plans.
15. For each third party program, we have identified the IOU responsible for carrying out day-to-day program administration, distributing funding, ensuring that third parties prepare and submit quarterly program reports, and notifying the Commission of serious concerns with a program. These IOUs shall contract with the third parties, using a consistent contract format statewide, and shall ensure that contracts are signed no later than May 15, 2002 so that programs can begin serving customers no later than June 1, 2002. In comments on this decision, each IOU assigned contract oversight responsibilities shall identify persons whom the third parties awarded funding may contact for guidance on contracting and other next steps.
16. To ensure that funds are available to reimburse IOUs for their expenses of administering third party programs (up to 5%), we hold back 5% of total local program funding.
17. The IOUs overseeing the third party programs shall include a provision in their third party contracts requiring third parties to ascertain whether customers have received other energy efficiency program benefits and to minimize or eliminate double dipping. The IOUs shall also propose a mechanism for minimizing double dipping in their Program Implementation Plans.
18. Consistent with our decision awarding statewide funding, IOUs and third parties shall not receive profit or shareholder incentives for carrying out energy efficiency programs.
19. All providers awarded funding in this decision must prominently disclose to customers, orally and in writing, that such customers are not obligated to purchase any full fee service or other service beyond that which we fund here. All providers shall provide the text of their disclosure in English and Spanish with their Program Implementation Plans. They may work together to devise such language. Moreover, all funded providers shall disclose the source of funding by stating prominently that their programs are "funded by California ratepayers under the auspices of the California Public Utilities Commission."
20. If Energx Controls Inc. has an outstanding State of California tax lien, it shall pay that lien, and provide evidence of payment to the Commission and the IOU assigned to oversee its contract, before it receives any of the program funding awarded here. In the alternative, it shall provide evidence that such lien does not exist.
21. In all cases, consistent with D.01-11-066, the Commission retains the right to withdraw, withhold or require refund of program funds in the event of complete or partial program failure, malfeasance and/or bankruptcy.
22. We modify D.01-11-066 to make clear that the Measurement, Assessment and Evaluation programs identified on pages 18-21 shall not be carried out by the IOUs. Rather, the Commission will arrange for contractor(s) to carry out these projects.
This order is effective today.
Dated , at San Francisco, California.
NOTE: DUE TO THE HUGE SIZE OF THE ATTACHMENTS AND TO SAVE POSTAGE, WE ARE NOT INCLUDING ATTACHMENTS 1 THRU 5 WITH THIS COPY. COPIES OF THESE WERE E-MAILED TO THE PARTIES AND POSTED ON THE COMMISSION'S WEBSITE AT
http://www.cpuc.ca.gov/WORD_PDF/COMMENT_DECISION/14467.doc
Attachment 1 to R0108028 - Selected Local Programs and Energy Reduction Targets
Attachment 2 to R0108028 - Energy Division Workshop Summary
Attachment 3 to R0108028 - Program Descriptions
Attachment 4 to R0108028 - Budget Format for Implementation Plan
Attachment 5 to R0108028 - Data Requests/Responses
