II. Background

SCE filed this application on February 25, 2005, to address what it describes as potentially constrained electric energy supplies in Southern California during the 2005 summer season. The company seeks (i) an increase of $57 million in procurement energy efficiency funding, and (ii) modifications to existing programs, including increases to existing incentive levels for specific energy efficiency measures, designed to accelerate and increase customer participation in energy efficiency with the goal of generating 193 gWh of additional energy savings and 37.5 MW of peak demand reduction during this summer and beyond.

In Decisions (D.) 03-12-060 and 04-02-059, the Commission approved a number of procurement-funded energy efficiency programs as part of SCE's 2004-05 energy efficiency program portfolio.² With the added funds proposed in this application, SCE seeks to bolster four key procurement-funded programs that have measures designed to immediately and significantly reduce peak demand. We discuss each of these proposals below.

Residential Single-Family Energy Efficiency Rebates. SCE proposes to immediately implement an expanded point-of-sale, instant rebate strategy for selective residential energy efficiency measures to significantly increase program participation, particularly for those measures (refrigerators, pool pumps) that can reduce peak demand for the residential market during the Summer 2005. Currently, instant rebates are only available for compact fluorescent light purchases. In addition to the instant rebate for the customer, SCE initially proposed that the participating retailer receive a special incentive fee of $25 for each unit sold, which could be used to cover fees associated with offering the point-of-sale rebate or offered as an additional incentive to the customer. The point-of-sale expansion would emphasize ENERGY STAR^â qualified refrigerators and single speed pool pumps and motors. SCE estimates that these proposed program modifications would produce 7.7 gWh of net energy savings and 3 MW of net peak load reductions during the summer months, and require $3 million in additional procurement funding.

Residential Appliance Recycling. SCE recommends immediately increasing the incentive level for freezers to $50 (from the existing level of $35) and lifting the age restriction currently imposed on the Residential Appliance Recycling program.³ SCE predicts that its proposed program modifications would produce approximately 19 gWh of net energy savings and 3.2 MW of net peak load reductions during the summer months, and require $4 million in additional procurement funding.

Nonresidential Small Business Hard-to-Reach. SCE proposes to target an additional 8,000 small and very small business customers in areas surrounding the Los Angeles area basin during the summer months, offering the installation of no-cost energy-efficient lighting retrofits. SCE would select previously solicited lighting contractor(s) from the Small Nonresidential Hard-to-Reach Program to reach these incremental customers. SCE looks to this program expansion to produce an estimated 50 gWh of net energy savings and 9.8 MW of net peak load reductions during the summer months, and require $15 million in additional procurement funding.

Nonresidential Standard Performance Contract. SCE proposes to enhance the current procurement-funded program by offering an additional incentive for lighting measures, which would be promoted as the SPC Summer Demand Reduction Initiative, and be available to SCE nonresidential customers installing lighting efficiency measures during the Initiative implementation period (through August 2005). SCE predicts that these installations would result in an estimated permanent net peak demand reduction of 20.2 MW and net annualized energy savings of 117 gWh in the summer months, and require $35 million in additional procurement funding.

In order to deploy these programs prior to the summer, SCE requested expedited treatment and a shortened protest period for this application. By ruling dated March 7, 2005, Administrative Law Judge Steven Weissman shortened the protest period to require protests to be filed no later than March 17, 2005. The Utility Reform Network (TURN), the Office of Ratepayer Advocates (ORA), Inland Empire Utilities Agency (Inland Empire), and Women's Energy Matters filed responses or comments on or before that date. SCE filed its reply to the protests on March 28, 2005. In its reply, SCE reported on its discussions with the protesting parties, the efforts of the parties to agree on program modifications, and the changes to which SCE has agreed.