ALJ/SRT/tcg DRAFT H-9

5/16/02

Agenda ID #470

Decision DRAFT DECISION OF ALJ THOMAS (Mailed 4/5/2002)

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)

INTERIM OPINION SELECTING 2002-03

LOCAL ENERGY EFFICIENCY PROGRAMS

TABLE OF CONTENTS

Title Page

INTERIM OPINION SELECTING 2002-03
LOCAL ENERGY EFFICIENCY PROGRAMS........................................................................... 1

I. Summary 2

II. Background 10

III. Selection Criteria 11

A. Importance of Local Programs 11

B. Proposal Scoring 12

1. Long-Term Annual Energy (Gas and Electric) Savings 12

2. Cost Effectiveness 13

3. Addressing Market Failures or Barriers 13

4. Equity Considerations 14

5. Electric Peak Demand Savings 14

6. Innovation 14

7. Synergies and Coordination With Programs Run by Other Entities 15

C. Local Program Mix 15

D. Funding Limitations 16

E. Coordinating Statewide and Local Programs 19

F. Available Funding 19

IV. Programs Selected 20

V. Other Issues 20

A. Program Implementation Plans 20

B. Budgets 21

C. Program Payments and Bonding 24

D. Independent Evaluation, Measurement and Verification (EM&V) 26

E. Total Resource Cost (TRC) Recalculation 26

F. Hard-to-Reach Program Targets 27

G. IOU Contracts With Third Parties 27

H. No Double Dipping 28

I. IOU Administration Expenses 29

J. Shareholder Incentives/Profits 29

K. Programs That Provide Limited Services With Energy Efficiency
Funding But Offer Additional Full Fee Programs 30

L. Measurement, Assessment and Evaluation 30

VI. Conclusion 31

VII. Comments on Draft Decision 31

Findings of Fact................................................................................................................... 31

Conclusions of Law.............................................................................................................. 33

ORDER.............................................................................................................................. 33

Attachment 1 - Selected Local Programs and Energy Reduction Targets

Attachment 2 - Energy Division Workshop Summary

Attachment 3 - Program Descriptions

Attachment 4 - Budget Format for Implementation Plan

Attachment 5 - Data Requests/Responses

INTERIM OPINION SELECTING 2002-03

LOCAL ENERGY EFFICIENCY PROGRAMS

I. Summary

In this interim decision, we select the local energy efficiency programs for 2002-03. We award $116,969,016 in local energy efficiency funds to a combination of governmental entities, non-profits and community based organizations, small businesses, consulting firms, investor owned utilities (IOUs) and other entities dedicated to providing energy efficiency measures at the local level. All of these programs will be funded by Public Goods Charge (PGC) funds collected in 2002 and 2003. We fund the following programs:

Energy Division Proposal Reference Number	Proposal Sponsor	Program Title	Approved Budget	IOU Service Territory	Contracting IOU
118B-02	ADM Associates, Inc	Mobile Energy Clinic Program	$726,069	SCE	SCE
119A-02	ADM Associates, Inc	Upstream High Efficiency Gas Water Heater Program	$827,116	PGE	PGE
142AB-02	Alliance to Save Energy	Green Schools, Green Communities	$1,314,286		SCE
		Program Budget Per IOU Area	$438,095	PGE
			$876,190	SCE
171AB-02	American Synergy Corporation	Comprehensive Hard-to-Reach Residential and Small Commercial Energy Savings Program	$2,980,952
		Program Budget Per IOU Area	$1,985,314	SCE	SCE
			$995,638	SCG
201-02	American Synergy Corporation	Comprehensive Hard-to-Reach Mobile Home Energy Savings	$2,277,632	PGE	PGE
244-02	ASW Engineering	The Energy Savers Program	$2,642,270	SCE	SCE
172-02	California Building Performance Contractors Association	Comprehensive Whole-House Residential Retrofit Program	$1,613,225	PGE	PGE

Energy Division Proposal Reference Number	Proposal Sponsor	Program Title	Approved Budget	IOU Service Territory		Contracting IOU
311BC-02	California State University Chancellor's Office	California State University Energy Efficiency Program Proposal	$536,766			SCE
		Program Budget Per IOU Area	$366,309	SCE
			$170,457	SDGE
230ABCD-02	California State University Fresno	Agriculture Pumping Efficiency Program	$4,929,655			PGE
		Program Budget Per IOU Area	$3,333,333	PGE
			$679,793	SCE
			$593,483	SCG
			$323,046	SDGE
162ABC-02	California Urban Water Conservation Council	Pre-Rinse Spray Head Installation Program for the Food Service Industry Proposal	$2,217,513			PGE
		Program Budget Per IOU Area	$562,806	PGE
			$1,299,648	SCG
			$355,059	SDGE
234A-02	CHEERS	Building Department and Small Builder Title 24 Standards Training	$631,881	PGE		PGE
116-02	City of Davis	Davis Comprehensive Energy Efficiency Program (DCEEP)	$1,905,968	PGE		PGE
284-02	City of San Diego	Whole House Energy Retrofit Incentive Program	$1,448,946	SDGE		SDGE
203-02	City of Stockton / InSync	Stockton Area Comprehensive Local Proposal	$956,938	PGE		PGE
156-02	County of Los Angeles	The County of Los Angeles Internal Services Division Energy Efficiency Program	$3,333,333	SCE		SCE
292-02	D&R International	Appliance and Lighting Products in Residential New Construction	$778,727	SDGE		SDGE
99-02	Ecology Action of Santa Cruz	Small Business Energy Efficiency Program	$1,904,762	PGE		PGE
245C-02	Ecos Consulting	LiteVend Program	$481,331	SDGE		SDGE
258BC-02	Ecos Consulting	Energy Star CFL Program for Small Hardware and Grocery Retailers	$5,504,182			SCE
		Program Budget Per IOU Area	$4,051,416	SCE
			$1,452,766	SDGE
274-02	Efficiency Services Group Inc	Energy and Water Saving Program for Residential Rental Properties in Targeted Local Communities in PGE Service Area	$3,320,368	PGE		PGE
Energy Division Proposal Reference Number	Proposal Sponsor	Program Title	Approved Budget	IOU Service Territory		Contracting IOU
141ABC-02	Electric & Gas Industries Association	A Proposal to Develop & Administer an Interest Rate Buy-Down for the Installation of High Efficiency HVAC Equipment	$5,380,983		PGE
		Program Budget Per IOU Area	$3,269,151	PGE
			$1,524,728	SCE
			$587,105	SCG
208-02	Energx Controls Inc	Local Small Commercial Energy Efficiency & Market Transformation Program	$1,142,857	SCG	SCG
98AB-02	Energy Analysis Technologies	Residential Duct Services Program	$1,095,238		SCG
		Program Budget Per IOU Area	$547,619	SCE
			$547,619	SCG
232A-02	Energy Coalition	The Energy District Approach for Sustainable Energy Efficiency in California	$3,047,619	SCE	SCE
148ABC-02	Energy Solutions	LightWash	$2,559,905		PGE
		Program Budget Per IOU Area	$1,407,930	PGE
			$837,800	SCG
			$314,175	SDGE
243ABC-02	EnSave Energy Performance Inc	California Variable Speed Drive Farm Program	$484,977		PGE
		Program Budget Per IOU Area	$399,621	PGE
			$71,291	SCE
			$14,065	SDGE
113-02	Fisher-Nickel Inc	Energy Efficiency in Commercial Food Service	$3,183,796	PGE	PGE
126-02	Frontier Associates	Green Building Technical Support Services	$565,396	PGE	PGE
180-02	GeoPraxis	Time-of-Sale Home Inspection Proposal	$875,931	PGE	PGE
130-02	Geothermal Heat Pump Consortium	Proposal to Promote Geoexchange to SCE Customers	$1,287,531	SCE	SCE
248B-02	Global Energy Partners, LLC	Energy Efficiency Services for Electricity Consumption and Demand Reduction in Oil Production in the State of California	$1,730,250	SCE	SCE
278BC-02	Global Energy Services	Chinese Language Efficiency Outreach (CLEO)	$358,087		SCE
		Program Budget Per IOU Area	$279,913	SCE
			$78,173	SCG

Energy Division Proposal Reference Number	Proposal Sponsor	Program Title		Approved Budget		IOU Service Territory		Contracting IOU
255CD-02	Heschong Mahone Group	Efficient Affordable Housing Program	$483,697				SCG
		Program Budget Per IOU Area	$241,849		SCE
			$241,849		SCG
134-02	ICF Associates Inc	Partnership for Energy Affordability in Multi-Family Housing	$1,826,305		PGE		PGE
218AB-02	ICF Associates Inc	Demand Control Ventilation Pilot Program	$589,153				SCG
		Program Budget Per IOU Area	$394,733		SCE
			$194,421		SCG
184AB-02	Local Government Commission	Regional Energy Authority Pilot Projects	$939,903				PGE
		Program Budget Per IOU Area	$454,002		PGE
			$485,901		SCE
237ABC-02	PECI	Proposal for Delivering Energy Efficiency Services to Local Independent Grocery Sector	$3,838,485				SDGE
		Program Budget Per IOU Area	$1,830,957		PGE
			$1,408,724		SCE
			$598,804		SDGE
11-02	PGE	School Resources Program	$600,000		PGE
15-02	PGE	Energenius	$300,000		PGE
19-02	PGE	Pacific Energy Center (PEC)	$2,340,000		PGE
290-02	Proctor Engineering Group Ltd.	Check Me	$2,852,381		SCE		SCE
106-02	Quantum Consulting Inc	Municipal Wastewater Retro-Commissioning (PG&E Territory)	$952,381		PGE		PGE
107-02	Quantum Consulting Inc	Municipal Wastewater Retro-Commissioning (SCE Territory)	$1,528,714		SCE		SCE
174-02	Quantum Consulting Inc	The Oakland Energy Partnership Program	$6,052,498		PGE		PGE
179-02	Richard Heath & Associates, Inc.	Proposal to Provide A Small Nonresidential Energy Fitness Program	$1,904,762		PGE		PGE
287-02	Richard Heath & Associates, Inc.	Mobile Home Energy Efficiency & Education Program	$1,514,616		SDGE		SDGE
182AB-02	Rita Norton & Associates	South Bay Communities & Affiliates Energy Efficiency Program	$1,904,762				SCE
		Program Budget Per IOU Area	$1,276,190		SCE
			$628,571		SCG
125-02	RLW Analytics Inc	The Energy Savers Program	$1,904,762		PGE		PGE
Energy Division Proposal Reference Number	Proposal Sponsor	Program Title	Approved Budget		IOU Service Territory		Contracting IOU
300-02	San Diego Regional Energy Office	San Diego Public Agency Information and Technical Support Program	$910,402		SDGE		SDGE
301-02	San Diego Regional Energy Office	San Diego Region Energy Resource & Education Center	$1,805,107		SDGE		SDGE
303-02	San Diego Regional Energy Office	San Diego Region Cool Communities Shade Tree Program Proposal	$744,941		SDGE		SDGE
304-02	San Diego Regional Energy Office	San Diego Region Agriculture, Water and Energy Program	$524,097		SDGE		SDGE
305-02	San Diego Regional Energy Office	San Diego Region Direct Install Small Commercial Program	$1,724,367		SDGE		SDGE
306-02	San Diego Regional Energy Office	San Diego K-12 Energy Education Program	$429,676		SDGE		SDGE
97A-02	SBW Consulting, Inc.	Compressed Air Management Program	$1,569,524		PGE		PGE
37-02	SCE	Residential In-Home Energy Survey Program	$700,000		SCE
40-02	SCE	Small Nonresidential Hard to Reach Program	$1,000,000		SCE
42-02	SCE	Pump Tests & Hydraulic Services Program	$1,930,000		SCE
43-02	SCE	Demonstration & Information Transfer	$450,000		SCE
44-02	SCE	Local Government Initiative	$850,000		SCE
45-02	SCE	Codes & Standards Program	$50,000		SCE
83-02	SCG	Nonresidential Financial Incentives Program	$990,000		SCG
84-02	SCG	Diverse Markets Outreach Program	$1,079,000		SCG
63-02	SDGE	Hard to Reach Lighting Turn In Program	$433,000		SDGE
64-02	SDGE	In-Home Audits Program	$150,000		SDGE
65-02	SDGE	Small Business Energy Assessments	$417,000		SDGE
66-02	SDGE	EZ Turnkey Program	$900,000		SDGE
70-02	SDGE	Codes and Standards	$200,000		SDGE
197-02	SESCO, Inc.	The Gas-Only Multi-family Gas Program	$2,380,952		SCG		SCG
177-02	State & Consumer Services Agency	Proposal for a Local K-12 Schools Energy-Efficiency Program	$2,965,476		PGE		PGE

Energy Division Proposal Reference Number	Proposal Sponsor	Program Title		Approved Budget	IOU Service Territory	Contracting IOU
144AB-02	Xenergy	Energy Efficient Local Government Partners Program	$1,664,565				PGE
		Program Budget Per IOU Area	$619,048		PGE
			$1,045,517		SCE
202AB-02	Xenergy	Comprehensive Compressed Air Program	$1,524,000				SCE
		Program Budget Per IOU Area	$1,142,857		SCE
			$381,143		SDGE

In Decision (D.) 01-11-066, we established the rules for IOUs and third parties to follow in seeking local funding. We made third parties eligible for $100 million in funding for local programs, 65% of the total local program funding available in 2002-03. We made IOUs Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (Edison or SCE), and Southern California Gas Company (SoCalGas or SCG) eligible for $25 million in local program funding. ¹ The following table represents the local funding we made available:

While we authorized third parties to seek funding for 2002 and 2003 in D.01-11-066, we limited the potential IOU funding to 2002 so that the Commission might examine the appropriateness of expanding the amount of local funding available to third parties in 2003. We also found on review of all local program proposals that the appropriate allocation of IOU and third party local funding differed somewhat from our original estimate. We believe that our funding decision today results in the best mix of local energy efficiency programs for California. We note, however, that 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

We have evaluated the proposals submitted by the IOUs and the non-utilities according to the criteria and point system established in D.01-11-066:

(1) Long-term annual energy savings 25 points

(2) Cost effectiveness 20 points

(3) Addressing market failures or barriers 17 points

(4) Equity considerations 15 points

(5) Electric peak demand savings 10 points

(6) Innovation 8 points

(7) Synergies and coordination with 5 points programs run by other entities

We have modified the IOU and third party proposals where needed to establish more robust energy savings targets or more economical spending targets. Where appropriate, we have limited program focus to smaller geographic areas, customer segments, and/or activities; and have reduced budgets for certain programs to meet funding constraints, achieve a more balanced program portfolio and enhance synergies with other programs. We also carry through several provisions from D.02-03-056, our decision approving statewide programs, relating to how IOUs and third party providers will be able to establish eligibility for final payments; IOU and third party submission of Program Implementation Plans 60 days following the effective date of this decision; and resubmission of budgets.