XIV. Program Evaluation and Cost-Benefit Applications

Currently, the Working Group evaluates SGIP program cost-effectiveness by hiring contractors. Itron, Inc. recently issued two reports relevant to solar project incentives. The first proposed cost-benefit models for evaluating the portfolio of projects provided solar incentives (and other SGIP projects). The second used the cost-benefit models to provide estimates of program cost-effectiveness. The staff report suggests that third parties conduct program evaluations under the oversight of Commission staff.

Program evaluations imply some type of cost-benefit analysis. We are currently reviewing appropriate cost-benefit models and their inputs in this proceeding and hope to adopt final models, inputs and applications in the near future.

We agree with the implication of the staff recommendation that program administrators are not appropriate candidates for program evaluation because of the inherent conflict of interest that occurs with self-assessments. We adopt the staff's recommendation for staff to oversee program evaluation. The utilities and SDREO should issue RFPs for these evaluations and contractors would be selected and managed by Commission staff. To the extent possible, evaluation and monitoring protocols should be those specified in R.-01-08-028 for energy efficiency programs or similar to them. On the basis of these reports, we will solicit the proposals of staff and the parties for recommendations on program changes that would promote cost-effectiveness, a robust market, innovation and reduced program risk to ratepayers. We direct the utilities and SDREO to file no later than March 31, 2006, motions seeking approval of proposed outlines and evaluation schedules.