Dive Brief:

• California regulators are mulling a proposed decision to allow local governments to continue collaborating on Regional Energy Networks (REN) aimed at rolling out energy efficiency efforts more flexibly, along with other changes designed to help consumers use less energy.
• The order would adopt a framework for Market Transformation Initiatives (MTI) the California Public Utilities Commission has been developing in Phase 3 of its energy efficiency rulemaking. 
• Initial funding for the MTIs would be $250 million over five years under Chief Administrative Law Judge Anne Simon's proposal. The earliest regulators could vote on the decision is at the CPUC's Dec. 5 meeting. The commission could hold a closed-session meeting to discuss the item before voting.

Dive Insight:

The first RENs were approved in 2012 but the state's energy sector is evolving and regulators were considering whether to continue them in light of growth in community choice aggregators (CCA) and challenges for program administrators putting together cost-effective energy efficiency portfolios.

New rules enacted after the first RENs were approved allowed CCAs to elect or apply to become administrators for energy efficiency funds, either for their own customers and/or for all customers within the geographic area they serve.

The RENs allow local governments to collaborate and submit proposals for a new model for administering efficiency outside of IOUs, and are aimed at increasing efficiency program adoption among moderate- to low-income populations and hard to reach populations.

"The majority of parties commenting ... felt that RENs are still appropriate as program administrators in the energy efficiency portfolios," Simon wrote in the proposed decision. "Most of these parties also argue that RENs are actually increasingly appropriate, or more necessary, because of the evolving nature of the energy efficiency and energy landscape generally in California."

On the question of California's new MTIs, there was less agreement about how to administer the framework and whether the market transformation administrator should be comprised of either the existing utility-based energy efficiency program administrators or a single, statewide administrator.

The proposed order taps Southern California Edison to act as the statewide lead and contracting and fiscal agent to select an independent, statewide, third-party administrator for MTIs through a competitive solicitation process.

California's investor-owned utilities, commenting jointly, argued utilities are already administrators and have the necessary experience administering resource acquisition program. They also said synergies may exist between market transformation and other programs.

The existing IOU administrators "are naturally positioned to support MTIs" the utilities said in a May filing.

Those are good arguments, Simon noted in the proposed decision, though she ultimately went with a single administrator.

Utilities as MTI administrators "would make coordination with existing efforts easier in the short term," Simon wrote. But "the landscape of energy efficiency in California is changing ... There are more program administrators in the mix than has been the case in the past."

Multiple CCA programs have begun to take on roles in energy efficiency, according to the judge, and local governments also participate in RENs. "Thus, the utility program administrators no longer occupy the singular role that they may have in the past," according to the order.

Opening comments on the proposed decision are due by Nov. 12, with reply comments due five days later.