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Ratepayer advocates question utility efficiency bonuses

November 16, 2010 |  4:19 pm

An independent pro-consumer branch of the California Public Utilities Commission announced Tuesday that it was opposing a proposal to pay $77 million in energy-efficiency bonuses to Southern California Edison Co., Southern California Gas Co. and the state's two other for-profit electric utilities.

This week, the five-member commission is scheduled to vote on two competing proposals: One by Commissioner John Bohn would award the bonuses to utility shareholders, and the other, by a commission administrative law judge, would provide no new payments.

According to the Division of Ratepayer Advocates, a PUC staff report released in April noted that Edison, SoCalGas, Pacific Gas & Electric Co. and San Diego Gas & Electric Co. failed to make enough progress in creating more energy-efficiency savings to qualify for the awards.

"When ratepayers are asked to pay hundreds of millions of dollars in bonuses to the utilities, they ought to be getting what they paid for," said Joe Como, the division's acting director. "That's simply not happening here."

In addition to asking that no new bonuses be paid to the utilities, the Division of Ratepayer Advocates would ask the commission to seek the return of $147 million in earlier bonuses plus penalties of $1.4 million.

"California's experiment with a shareholder bonus program to produce energy-efficiency gains is fundamentally broken," the division said in a statement.

The administrative law judge's proposed decision provides no new bonuses but does not seek the return of past payments or ask for penalties.

Commissioner Bohn's proposal would award $27 million in new bonuses to Edison, $40 million to PG&E, $6 million to SDG&E and $3.9 million to SoCalGas.

Both the proposed bonuses and the earlier ones were legitimately earned, said Lynda Ziegler, senior vice president for customer service at Edison. Energy-efficiency programs at her company saved more than 1 billion kilowatt-hours of power between 2006 and 2008, she said.

Ziegler dismissed the dispute with the Division of Ratepayer Advocates as a procedural disagreement.

-- Marc Lifsher