Details for: 4070-E (Part 1 of 1).pdf


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Gary A. Stern, Ph.D.
Managing Director, State Regulatory Operations

September 3, 2019
ADVICE 4070-E
(U 338-E)
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
ENERGY DIVISION
SUBJECT:

I.

2019 Request of Southern California Edison Company for
Energy Efficiency Incentive Award

PURPOSE

In compliance with California Public Utilities Commission (Commission or CPUC),
Decision (D.)13-09-023 as modified,1 Resolution E-4897,2 and D.16-08-019,3 Southern
California Edison Company (SCE) hereby submits for Commission approval its Energy
Efficiency (EE) incentive award of $16,726,231 to be recognized as earnings in 2019.4
Table 1 presents the EE incentive awards for which SCE requests approval, and each
line item is explained in more detail below. SCE’s request relies solely on the (1) data
provided by Commission staff,5 (2) results of the Utility Audit, Finance and Compliance

1

2
3
4
5

See D.13-09-023, Decision Adopting Efficiency Savings and Performance Incentive
Mechanism, as modified by D.14-10-046, Decision Establishing Energy Efficiency Savings
Goals and Approving 2015 Energy Efficiency Programs and Budgets and D.15-10-028,
Decision Re Energy Efficiency Goals for 2016 and Beyond and Energy Efficiency Rolling
Portfolio Mechanics.
See Resolution E-4897, issued on December 18, 2017 (Resolution E-4897).
See D.16-08-019, Decision Providing Guidance For Initial Energy Efficiency Rolling
Portfolio Business Plan Filings, August 25, 2016.
See Attachment 1 for the template used to calculate the 2018 Ex Ante EE ESPI
expenditures and the 2018 Ex Ante EE ESPI savings.
Final Savings Performance Statement on 2017 Evaluated Energy Efficiency Savings for the
2019 Efficiency Savings and Performance Incentive Mechanism, August 1, 2019.
Available at https://www.cpuc.ca.gov/General.aspx?id=4137.

P.O. Box 800

8631 Rush Street

Rosemead, California 91770

(626) 302-9645

Fax (626) 302-6396





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ADVICE 4070-E (U 338-E) -2- September 3, 2019 Branch (UAFCB) audit,6 and (3) SCE’s 2018 Claims data as provided in the Commission’s California Energy Data and Reporting System (CEDARS) data base.7 Table 1 - Summary of SCE Incentive Award Request Component Part 1 – Program Year (PY) 2018 Components 2018 Ex-Ante Savings8 2018 Ex-Ante Review Performance or Resource Program Management Fee 2018 Codes & Standards Program Management Fee 2018 Non-Resource Program Management Fee Part 1 – PY 2018 Sub-total Part 2 – PY 2017 Components 2017 Ex-Post Savings 2017 Ex-Ante Savings True Up Award $1,015,631 $3,587,493 $634,559 $451,202 $5,688,885 $10,176,376 $681,190 Part 2 – PY 2017 Sub-total Other Adjustments– 2016 Home Energy Report (HER) Incentive $10,857,566 Additions to PY 2017 Sub-total $192,615 UAFCB Audit Adjustments 2017 Non-Resource Program Management Fee True Up 2017 Ex-Ante Review Performance True-Up 2017 Codes & Standards True-Up UAFCB Audit Adjustments Sub-total Total Award 6 7 8 $192,615 ($3,535) ($0) ($9,300) ($12,835) $16,726,231 Energy Efficiency Examination, Southern California Edison Company Program Year 2017, Utility Audit, Finance and Compliance Branch, August 5, 2019. Available at ftp://ftp.cpuc.ca.gov/utilityaudits. Available at https://cedars.sound-data.com/upload/confirmed-dashboard/SCE/2018/. D.13-09-023, p. 95, refers to this component as the “[p]reliminary ex ante locked down deemed measure savings award.” CPUC Guidelines for the 2019 AL Submission refers to this component as “Ex-Ante Savings.”
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ADVICE 4070-E (U 338-E) II. -3- September 3, 2019 BACKGROUND On September 11, 2013, the Commission adopted D.13-09-023 approving the 2013-2014 EE incentive mechanism for SCE and the other California investor-owned utilities (IOUs), including the timeline for the IOUs to submit their award requests.9 In D.15-10-028, issued on October 29, 2015, the Commission revised D.13-09-023, and established the following Efficiency Savings and Performance Incentive (ESPI) submission timelines:10 • By September 1, 2019,11 each utility will submit its ESPI advice letter addressing the 2018 Ex-Ante Review (EAR) performance award claim, and • Within 30 days of issuance of the Final Savings Performance Statement, each utility will submit an advice letter addressing the ex post savings award claim. 2017-2018 Efficiency Savings and Performance Incentive Mechanism Timing and Components The ESPI Mechanism processes award claims over a two-year cycle, meaning the award payments are granted in two installments:12 1. Part 1 – Claims for ESPI awards covering the program year (PY) shall be made during the following year (PY + 1) for the following ESPI elements:13 • Non-resource program management fee • C&S management fee • EAR performance bonus • Preliminary ex ante locked down deemed measure savings award14 2. Part 2 – Claims shall be made two years following the PY (PY + 2) for the following ESPI elements:15 • Custom projects • Ex post verified deemed measure savings 9 10 11 12 13 14 15 D.13-09-023, Attachments 5 and 6. D.15-10-028, Appendix 5. September 1, 2019 is a Sunday and September 2, 2019 is the Labor Day holiday. Pursuant to CPUC Rules of Practice & Procedure 1.15 (Rule 1.15), this Advice Letter is submitted September 3, 2019. Id. at pp. 84-85. Id. at p. 95. “Ex Ante Lock-down” refers to the finalization of staff review of ex ante estimates of savings for a given program or measure. D.13-09-023, p. 96.
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ADVICE 4070-E (U 338-E) • -4- September 3, 2019 True up of preliminary ex ante savings payment based on verified counts Other adjustments, such as UAFCB Audit Adjustments and other adjustments the Commission may authorize or require, are also included in the relevant year’s ESPI award. Additionally, D.13-09-023 awards shareholder earnings to IOUs based on four components:16 1. Non-Resource Programs Management Fee – Equal to three percent of nonresource program expenditures, not to exceed authorized expenditures, and excluding administrative costs; 2. Codes & Standards (C&S) Management Fee – Equal to12 percent of approved C&S program expenditures, not to exceed authorized expenditures, and excluding administrative costs; 3. Ex Ante Review (EAR) Performance Bonus – Equal to three percent of resource program expenditures based on ex ante review process performance, excluding: administrative; C&S; evaluation, measurement, and verification (EM&V); and Community Choice Aggregation/Regional Energy Network (CCA/RENs) costs; 4. Resource Programs Performance Bonus - Up to nine percent of resource program expenditures based on ex ante and ex post energy savings, and excluding administrative, C&S, EM&V, and CCA/RENs costs. III. SCE’s 2019 ESPI Award Request As shown in Table 1, SCE’s ESPI request of $16,726,231 is based on Part 1 (for PY 2018) and Part 2 (for PY 2017) of the ESPI mechanism and includes true-ups based on the results of the Audit for 2017.17 Additionally, the request includes the savings generated from the Home Energy Reports program for PY 2016, as authorized by the Commission. This section describes SCE’s ESPI request broken down for each part of the ESPI mechanism, including true-ups. a. Part 1 – PY 2018 SCE’s PY 2018 award, as shown in Table 2, is comprised of four components. The payment is made over two years. SCE’s request herein for $5,688,885 represents the first payment of the PY 2018 award. 16 17 D.13-09-023, pp. 94-95. Final Savings Performance Statement on 2017 Evaluated Energy Efficiency Savings for the 2019 Efficiency Savings and Performance Incentive Mechanism, p. 8.
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