Note Regarding References to ORA: Until September 2018, Public Advocates Office was previously known as ORA - Office of Ratepayer Advocates. 

 

Energy Efficiency
PG&E:  Review of 2006 - 2008
Risk / Reward Mechanism

 

Background

This proceeding was reopened to examine three decisions involving the investor owned utilities’ energy efficiency shareholder incentive awards for their 2006-2008 energy efficiency portfolios.  In December 2010, the CPUC issued a Decision, which approved the final shareholder rewards for PG&E's 2006-2008 programs in the among of $104.1 million. The Decision based the rewards on utility reported savings rather than on CPUC staff’s Evaluation Reports.

On November 19, 2014, the Public Advocates Office (the Office) filed a Petition  requesting the CPUC rescind the utilities' energy efficiency rewards based on improper ex parte communications between PG&E and a commissioner, which violated state law and the CPUC’s rules. The ex parte communications addressed pending proposed decisions for the final incentive award for the 2006 - 2008 program years.

 

In September 2015, the CPUC issued a Decision reopening the proceeding to ensure utility rewards were reasonable and based on verified calculations, and to consider whether refunds should be made to ratepayers.  On March 18, 2016 PG&E filed a Proposal  seeking to retain their full incentive awards.  

See more background on the Office's Review of Utilities’ 2006-2008 Risk/Reward Incentive Mechanism web portal.

 

Settlement Agreement

On June 23, 2016 the Office, TURN, and PG&E filed a proposed Settlement Agreement which would require PG&E to return to ratepayers the entire final incentive award of more than $29 million, approved in the Final Decision. The reward would be returned by reducing PG&E's future rewards for energy efficiency program achievements. The rewards would be reduced by at least $5.8 million per year for five years until the entire $29 million offset is complete, via the current Efficiency Savings and Performance Incentive (ESPI) mechanism.   

 

CPUC Final Decision

In September 2016, the CPUC issued a Final Decision, adopting the Settlement Agreement 

 

 

 

Public Advocates Office Position 

The Office supports the Settlement Agreement because it comports with the Office’s recommendations that the CPUC’s 2010 Reward Decision should have complied with previous CPUC orders. The Settlement requires PG&E shareholders to repay 100% of its final adjusted payment.  

 

The Office urged the CPUC to calculate the utilities’ incentive rewards based on the results from the CPUC’s Energy Division’s evaluation reports, as originally conceived by the CPUC’s energy efficiency program evaluation framework. 

 

See the Office’s:

   

April 8, 2016 Joint Comments with TURN on the utilities’ proposals. 

March 18, 2016 Joint Proposal with TURN. 

December 4, 2015 Joint Prehearing Conference Statement with TURN.  

 

 

CPUC Docket 

See the Proceeding docket.