III. Summary of Program Funding

Consistent with the attached staff report, we adopt a budget for the CSI program in the amount of $2.5 billion over 10 years, beginning in 2007. The utilities may recover associated revenues in applicable ratemaking proceedings. As the staff report suggests, we set annual CSI budgets so that they are relatively high in the early years, and decline in later years as rebate levels fall and, hopefully, as the market's need for financial support decreases. We will also provide for funding flexibility between program years in recognition of actual demand for funding. Table 1 provides a schedule describing the utilities' collection of revenue requirement, although expenditures may be higher or lower in any given year according to number and nature of project proposals.

Table 1: IOU Annual Revenue Requirements for CERB Portion of CSI

(in millions of dollars)

If the difference between program expenditures and the amounts the utilities collect in rates is substantial, we will consider adjusting the collection of the revenue requirement. Table 2 illustrates the allocation of total program revenue requirement by utility.

Table 2: IOU Share of CSI Costs

	% Total budget	Budget (in millions)
PG&E	44%	$1,100
SCE	34%	$850
SDG&E	13%	$325
SoCalGas	9%	$225
Total	100%	$2,500

We also allocate up to 10% of the total budget funding of $2.5 billion to administrative costs, which includes program evaluation, and marketing and outreach efforts. Table 3 illustrates maximum utility administrative budgets.

Table 3: Administrative and Evaluation Budgets by Utility Territory

Utility	Administrative Budget
PG&E	$110.0
SCE	$85.0
SDG&E	$32.5
SoCalGas	$22.5
Total	$250.0

We herein direct each utility to collect the revenue requirement established in this order according to the schedule we adopt for each of the program years unless a subsequent order modifies this schedule. We also direct the utilities to utilize a similar cost recovery mechanism for SGIP costs. SGIP program costs, include any unrecovered costs from 2005, including revenue requirements for program year 2006 and the increased 2006 SGIP allocation authorized for solar projects in D.05-12-044, and the revenue requirements for program year 2007. These costs should be tracked in the existing SGIP memorandum accounts established by each utility. Beginning in 2007, CSI revenue requirements should be tracked in a separate account. We authorize the utilities to collect the funds during the relevant program year, for both programs, rather than requiring them to wait until the end of the funding cycle to collect amounts in the relevant accounts. We emphasize that we retain authority to audit or otherwise review spending and accounting for these programs whether or not the funds have been collected in the relevant period.

¹ Funding for 2006 is pending in another draft decision before the CPUC in Rulemaking 04-03-017 (Agenda ID 5104 for December 15, 2005) and is in addition to existing SGIP solar-related budget of approximately $42 million.

² Totals do not include 2006 funding.