Currents

An Energy Newsletter for Local Governments

2006-2008 Energy Efficiency Programs

by Patrick Stoner, Local Government Commission

Planning for the next three years of energy efficiency (EE) programs began earlier this year following the CPUC decision to place administration of these funds with the investor owned utilities (IOU). Each IOU set up a program advisory group (PAG), with the exception of Southern California Edison and Southern California Gas Company who combined to share one PAG.

The purpose of the PAGs is to help the IOUs make informed choices as to the types of EE programs to fund for 2006-08, and which entities (IOUs, third party contractors, local governments or others) could best implement them. These groups are only advisory; the IOUs will be making their own decisions about the programs that they will file with the CPUC on June 1^st.

In addition to the PAGs, peer review groups (PRG) were established to ensure the PAG process was open and fair, and to make recommendations to the CPUC on the IOU program filings. PAG members will be allowed to compete to implement EE programs, PRG members will not. PRG members include representatives from the CPUC Energy Division, the Office of Ratepayer Advocates, the California Energy Commission, The Utility Reform Network (TURN) and the Natural Resources Defense Council (NRDC).

I have been participating in PG&E's PAG meetings as a representative of local governments. Much of this update is related to my experience on that PAG. PG&E's PAG met seven times from February through April. Several workshops were also convened during that time period, as well as two statewide PAG meetings. This has been a very open process, with repeated efforts on the part of PG&E to get feedback from the PAG and the public on the process, on the materials provided by PG&E and others to help inform our comments, and on program ideas.

Between the last PAG meeting and June 1^st, PG&E and the other IOUs will be developing their program portfolio, identifying the types of programs to include, and in which market segments they plan to place the most emphasis. PG&E will allow third parties and local government partnerships to propose programs in nearly all areas of the portfolio, excluding only upstream (point-of-sale) lighting and new information-only programs. PG&E plans to complete its RFP process before determining the exact budget for each program area. PG&E will compare the top bids with the potential savings in each market segment to create a well-balanced portfolio that will maximize savings now and in future years.

I feel confident that PG&E's filing on June 1^st will fairly treat local governments, third parties, and the IOUs. PG&E has solicited program ideas from current and potential future local government partnerships for its June 1^st filing. I don't think I will be surprised on June 1^st. I cannot speak for what happened with the other PAGs.

PG&E is looking at creating a new paradigm to develop a least cost portfolio that budgets for energy savings by market segment with two key elements – deemed savings and calculated savings. The deemed savings are for mass-market type programs, and the calculated savings are for larger projects such as standard offer programs. The market segments identified by PG&E are:

• Mass Markets
• Agriculture and Food Processes
• Schools and Colleges
• Retail Stores
• Fabrication Process Heavy Industries
• Hi-Tech Facilities
• Medical Facilities
• Office Buildings
• Lodging Facilities
• Residential New Construction
• Education, Training, Codes, and Emerging Technologies
• Statewide Information

Each market will need the following interventions, to different degrees, to create savings:

• Information, education and training
• Deemed savings
• Calculated savings

Third parties and local government partnerships will be able to apply to implement each of these intervention strategies for the various market segments. For third party proposers (at least 20% of all funding), PG&E envisions having three PG&E staffers independently score each proposal and provide scoring justification, having the PRG review the scoring, and allowing the proposers to question the results. This should make this a very open and fair process.

PG&E is hoping to start its RFP process shortly after its June 1^st filing, opening up non-controversial program areas then, and having another RFP release later for areas that are more controversial. In order to reduce the cost to proposers, PG&E is also proposing a two-step process that asks for program ideas, savings and budgets initially, and more detailed proposals for the highest-ranking ideas. All of this needs CPUC approval.

The work of the PAGs is not over. They will continue to meet on at least a quarterly basis throughout the three program years.

If you have questions about this process, email me at pstoner@lgc.org and I will either try to answer them or direct you to someone at the IOUs for information. And be looking for the June 1^st filings.

| Back | Next |