On the heels of adopting industrial-strength energy-efficiency goals, the California Public Utilities Commission is floating a plan that would tap investor-owned utilities to run efficiency program selection and management. The plan, advanced by commissioner Susan Kennedy, rejects proposals for an independent, nonutility administrator. "If we don't get the structure right, we will not achieve those goals," Kennedy said. The commission presided over oral arguments on the issue September 30. Kennedy noted that the commission's September 23 decision more than doubled annual efficiency targets for the next decade, putting the state at "the cutting edge of what is possible" for efficiency. Kennedy's plan would give investor-owned utilities decision-making responsibility for program selection and administration. She said that regulators can hold utilityrun programs accountable. She is concerned that if administrative control is given over to nonutility organizations, the control is unclear. Her proposal would adopt "safeguards" against utility bias in program selection, such as secretive procurement advisory groups, and a ban on affiliate transactions. Investor-owned utilities, the Natural Resources Defense Council, and the Sacramento Municipal Utility District support this plan. Utilities argue they should select programs because they have the most experience designing and implementing them. On the other side, Hayley Goodson, The Utility Reform Network attorney, argued that utility programs have been stuffed with fat, reducing amounts of funding available for program implementation. Specifically, she noted that between 12 percent and 88 percent of utility efficiency funds in 2002 were funneled to administration, according to calculations by the CPUC's Energy Division. TURN, the city of San Francisco, and the Office of Ratepayer Advocates are among proponents of an independent entity to manage efficiency programs. Goodson said Kennedy's plan fails to address potential conflicts of interest that utilities face as both program selectors and portfolio managers. Because utilities have preferences for certain management styles and strategies, they may not fully or fairly evaluate certain programs, she asserted. Goodson cast doubt on whether voluntary advisory groups would guard against utility bias.