CPUC Okays One-Third Increase for CEC Program Administration

Though voicing concerns about administrative costs, the California Public Utilities Commission on June 26 approved a $21 million 2008-2009 budget for the California Energy Commission’s Natural Gas Public Interest Energy Research (PIER) Program. Commissioners scrutinized the $3.1 million for program administration and management in the budget, which represented an increase of $1.3 million from amount in the current budget. “I don’t like this,” said commissioner Tim Simon. He added that the allocation of ratepayer money for administration is “very disturbing.” The two agencies have had their standoffs over jurisdictional and budgetary issues. The CPUC is more independent under the state constitution; the Energy Commission is more influenced by the Capitol. However, commission president Mike Peevey said that while the level of administrative costs seemed on the high side he is willing to work with the sister state energy agency. Commissioners directed staff to dig into the budgetary issues on a more intense level. The budget wound up being approved unanimously. The CEC administers the PIER program, but it’s the CPUC that’s responsible for reviewing and approving the program’s budget because it is funded with utility ratepayer money. The 2008-09 fiscal year begins July 1. Commissioners could not decide on a move to grant homeowners--whose land values may be impacted by transmission lines--intervenor compensation. This issue was held while the commission looks more carefully into its intervenor program. “It’s a perversion of intervenor compensation,” said Peevey. There’s a difference between private citizens who have something to gain and consumer groups like The Utility Reform Network who get ratepayer funds for intervening in public cases, he added. “I don’t think it’s proper to be handing out money.” The case brought up thorny issues. Some commissioners were drawn to the intervenors’ side--who argue that they lose property value. Others were skeptical. “Is this decision where we draw the line?” asked commissioner Dian Grueneich. Until about 25 years ago, anyone who tried to make their case as intervenors at CPUC hearings had to do so out of their own wherewithal. Then the commission began allowing organizations like TURN, Utility Consumers’ Action Network, and Aglet to petition for ratepayer funds to compensate for attorney and expert witness fees, among other expenses. The fees are sometimes reduced or turned down completely. The theory is that paying outsiders to add to hearings gives the commission a different perspective than relying on the Division of Ratepayer Advocates and its own staff--and that is valuable enough to consider paying intervenors through ratepayer funds. Also at its June 26 meeting, the commission unanimously voted to partially grant but otherwise deny a petition for modification jointly filed by the California Center for Sustainable Energy and the California Solar Energy Industries Association regarding a pilot program for solar water heating incentives. The request by CCSE and CALSEIA to extend the duration of the program was granted, but their request to offer incentives to PG&E and Southern California Edison customers was denied. The pilot began in July 2007 and is scheduled to run 18 months. CCSE and CALSEIA report that the pilot has received 75 applications during that time period, with 25 projects completed or pending payment, far below the 750 residential systems set as a program goal and allowed by the program budget. In April, CCSE and CALSEIA jointly filed a petition to expand the pilot program to include Pacific Gas & Electric and Southern California Edison ratepayers and to extend its duration by six months, maintaining more time was needed to avoid gaps in the program during the commission’s development of a statewide program under AB 1470. They had also requested other minor changes, including an increased incentive level and program budget for residential systems, additional funds for administration of the pilot, and allocation of funding responsibility for the pilot between PG&E, Edison, and San Diego Gas & Electric ratepayers through a co-funding agreement. In addition to granting the time extension, the CPUC’s decision also grants expanded pilot program eligibility. CCSE may modify its pilot program to offer solar water heating incentives to new residential and commercial construction projects.

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CPUC Okays One-Third Increase for CEC Program Administration

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