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Custom Projects Review

What is Custom Project Review?

Custom measures and projects are site-specific energy efficiency projects. Custom Projects require unique calculations for each project, as they do not rely on fixed DEER or workpaper values.  For custom measures and projects, the energy efficiency savings estimated values cannot be forecasted in advance, since the preliminary forecasted values are not known until the project is identified.  The forecast energy efficiency savings values are not developed until the project is completed. Custom Programs include projects in Commercial, Residential, Industrial & Agricultural Sectors.

Why do we do Custom Project Review?

In 2009 the CPUC began conducting evaluations of Custom Projects that were receiving rate-payer incentives and found that gross and net energy efficiency savings on custom projects were dropping from year to year, and that free-ridership (projects receiving rate-payer incentives even though the customer would have switched to energy efficient products without the incentive) was also increasing to around 40%-50%. The CPUC’s evaluations also found areas where policy is not appropriately implemented and that assumptions, methods and data utilized are not always the most appropriate. Because of these factors, the CPUC started its Custom Project Review Process to improve the program administrators’ internal project review process.

The objectives of Custom Project Review are:

  1. Improve the accuracy and reliability of net efficiency savings and cost effectiveness estimates to meet net efficiency goals.
  2. Ensure ratepayer funded incentives achieve real net incremental efficiency savings.
  3. Foster ongoing improvements to the utilities' review activities.

Custom Project Review Process

Commission Decision 11-07-030 establishes a clear process by which forecasted energy efficiency savings estimates from custom measures and projects are reviewed.  Under this Decision, twice a month utilities submit a list of new Custom Project applications that they have already reviewed that are planned within their service territories.  From these bimonthly submissions, the CPUC selects a sample of projects to review.  Public Utilities Code 381.2 (per Senate Bill (SB) 1131) mandates that the CPUC may take no longer than 30 days to review a project that falls under that law.  The CPUC must complete its review of a project with a complete project package within 30 days and will issue a disposition on the project, either approving it, approving it with recommendations, or rejecting it.  Rejected projects may be revised and resubmitted for a new review.  If the disposition for a project under SB 1131 exceeds the 30 days then the CPUC review becomes advisory-only, and the CPUC's recommendations are not required to be followed.

The CPUC also reviews Custom Projects that are not covered by SB 1131. Projects in this category can include normalized meter energy consumption (NMEC) programs, strategic energy management (SEM) program, and high opportunity program and projects (HOPP). These review dispositions are advisory-only.