Public Goods Charge Energy Efficiency Administration Update

In 1998 when California started its plan to restructure the electricity market, a surcharge was placed on the utility bills of all customers of the investor-owned utilities (IOUs): PG&E, Southern California Edison, SDG&E and Southern California Gas Company. This public goods charge (PGC) was, and still is, collected to fund energy efficiency, renewable energy and low-income energy programs.

The California Public Utilities Commission (CPUC) has tried two schemes for implementing programs using the energy efficiency PGC funds (the renewable funds are administered by the California Energy Commission, and the low-income funds are administered by the IOUs). For the first couple of years the IOUs selected programs, including programs implemented by third parties, which the CPUC either approved or asked the IOUs to change. Since 2002, the CPUC has solicited proposals from third parties for about 20% of the energy efficiency PGC funds, with the IOUs proposing programs for the remainder. Neither method has proven satisfactory.

CPUC Commissioner Susan Kennedy has been tasked with finding a structure that uses these funds in the most effective way. This is one part of the larger Rulemaking (R. 01-08-028) that will also look at energy efficiency goals, avoided costs, performance incentives, and evaluation, measurement and verification (EM&V).

On April 8th various entities filed proposals for administrative structures to handle these funds. The structure needed to address the following functions:

• Policy oversight
• Quality assurance
• Research and analysis in support of policy oversight
• Program choice
• Portfolio management of programs
• Management of portfolio level EM&V
• Management of individual program level EM&V
• Fiscal agent
• Dispute resolution

The CPUC received a total of four proposals from:

• The three electric IOUs
• Natural Resources Defense Council (NRDC) and others
• The Utility Reform Network (TURN) and others
• Women’s Energy Matters (WEM) and others

The IOUs’ proposal and NRDC’s proposal leave the decision for choosing programs and program implementers, and program portfolio management with the IOUs, with advice from committees. TURN proposes a nonprofit entity to handle those functions. And WEM’s proposal promotes a standard offer program where entities bid to implement programs decided by the CPUC. The other administrative functions are more aligned between the proposals.

Comments on the proposals were due on April 26th. More than 20 entities provided comments. The next step in this process has yet to be defined. Visit LGC’s discussion board where we will post updates as they happen.

To receive an email copy of any of the proposals, contact Pat Stoner at pstoner@lgc.org.

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