COM/SK1/cvm ALTERNATE DRAFT Agenda ID# 4496

Alternate to Agenda ID# 4494

Ratesetting

Decision ALTERNATE DRAFT DECISION OF COMMISSIONER KENNEDY

(Mailed April 8, 2005)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Southern California Edison Company (U 338-E) for Approval of Incremental Energy Efficiency Program Activities for Summer 2005.

Application 05-02-029 (Filed February 25, 2005)

OPINION ON THE UTILITY'S REQUEST FOR APPROVAL OF INCREMENTAL ENERGY EFFICIENCY ACTIVITIES FOR SUMMER 2005

TABLE OF CONTENTS

Title Page

OPINION ON THE UTILITY'S REQUEST FOR APPROVAL OF INCREMENTAL ENERGY EFFICIENCY ACTIVITIES FOR SUMMER 2005 22

I. Summary 22

II. Background 22

III. Discussion 66

A. Concerns Related to the Summer of 2005 66

B. The Use of Existing Funds 77

C. Allocation of Benefits among Ratepayer Classes 99

D. The Specific Program Proposals 1212

1. Residential Programs 1414

2. Nonresidential Programs 2222

a) Nonresidential Small Business Hard-to-Reach Program 2222

b) Nonresidential Standard Performance Contract Program 3030

3. Proposed Ratemaking Treatment 3434

4. Eligibility of Direct Access Customers 3636

5. The Comments of Women's Energy Matters 3737

IV. Categorization and Need for Hearings 3838

V. Comments on Draft Decision 3838

VI. Assignment of Proceeding 3838

VII. Conclusion 3838

Findings of Fact................................................................................... 3939

Conclusions of Law.............................................................................. 4141

ORDER.............................................................................................. 4242

OPINION ON THE UTILITY'S REQUEST FOR APPROVAL OF INCREMENTAL ENERGY EFFICIENCY ACTIVITIES FOR SUMMER 2005

I. Summary

There have been growing concerns about the sufficiency of supplies this summer in southern California. In response to these concerns, Southern California Edison Company (SCE) on February 25, 2005, and revised on March 28, 2005, filed a proposal to augment energy efficiency programs designed to reduce peak demand for the summer 2005. In this decision we approve the incremental funding for which SCE originally sought approval. SCE's initial proposal was $57 million in incremental funding above currently authorized levels. While we approve revised programs of this magnitude, we order SCE to redirect $18.7 million in uncommitted energy efficiency funds from prior years for the purposes approved in this decision, and fund only the remaining amounts with new revenues.

We are encouraged by SCE's proposal to meet a potentially tight supply situation with energy efficiency measures. This is not only consistent with our view that energy efficiency is a reliable resource that can effectively meet the energy needs of the state, but it is also consistent with the loading order as discussed in the state's Energy Action Plan.¹