ALJ/SRT/hl2 Mailed 4/27/2005

Decision 05-04-052 April 21, 2005

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Proposed Policies and Programs Governing post-2003 Low-Income Assistance Programs.

Rulemaking 04-01-006

(Filed January 8, 2004)

In the Matter of the Application of PACIFICORP for Approval of 2005 Low-Income Assistance Program Budgets.

Application 04-06-038

(File June 30, 2004)

In the Matter of the Application of Southwest Gas Corporation (U 905 G) for Approval of Program Year 2005 Low-Income Assistance Program Budgets.

Application 04-07-002

(Filed July 1, 2004)

Application of Southern California Gas Company (U 904 G) for Approval of Program Year 2005 Low-Income Assistance Programs and Funding.

Application 04-07-010

(Filed July 1, 2004)

Application of San Diego Gas & Electric Company (U 902 M) for Approval of Program Year 2005 Low-Income Assistance Programs and Funding.

Application 04-07-011

(Filed July 1, 2004)

Southern California Edison Company's (U 338-E) Application Regarding Low-Income Assistance Programs for Program Year 2005.

Application 04-07-012

(Filed July 1, 2004)

Application of Pacific Gas and Electric Company (U 39 M) for Approval Of The 2005 California Alternate Rates for Energy and Low Income Energy Efficiency Programs and Budget.

Application 04-07-013

(Filed July 1, 2004)

IN THE MATTER of the Application SIERRA PACIFIC POWER COMPANY (U 903), for an Order Approving its 2005 California Alternate Rates for Energy (CARE) and Low Income Efficiency (LIEE) Plans and Budgets.

Application 04-07-014

(Filed July 1, 2004)

In the Matter of the Application of Avista Corporation for Approval of Program Year 2005 Low-Income Assistance Program Budgets.

Application 04-07-015

(Filed July 1, 2004)

In the Matter of the Application of the SOUTHERN CALIFORNIA WATER COMPANY (U 133 W) Regarding Low Income Assistance Programs for its Bear Valley Electric Service Customers for Program Year 2005.

Application 04-07-020

(Filed July 8, 2004)

Application of Alpine Natural Gas Operating Company No. 1 LLC in Compliance with Decision 03-12-016 (PY 2004 Low Income Energy Efficiency ("LIEE") and California Alternate Rates For Energy ("CARE") program Plans).

Application 04-07-027

(Filed July 2, 2004)

In the Matter of the Application of West Coast Gas Company (U-910-G) For Approval of Program Year 2005 Low-Income Assistance Program Budgets.

Application 04-07-050

(Filed July 29, 2004)

INTERIM OPINION APPROVING 2005 LOW INCOME ENERGY
EFFICIENCY (LIEE) AND CALIFORNIA ALTERNATIVE RATES
FOR ENERGY (CARE) PROGRAMS FOR PACIFIC GAS AND
ELECTRIC COMPANY, SOUTHERN CALIFORNIA EDISON
COMPANY, SOUTHERN CALIFORNIA GAS COMPANY, AND
SAN DIEGO GAS & ELECTRIC COMPANY 3 3

I. Summary 3 3

II. Background 6 6

III. IOUs' Proposed 2005 LIEE Programs 7 7

A. SCE's LIEE Program Proposal 8 8

1. SCE's Proposal 8 8

a) Budget 8 8

b) Rate Increase 9 9

c) Ratemaking Treatment 11 11

d) Cool Centers 12 12

2. ORA's Comments on SCE's LIEE Proposal 13 13

3. Discussion of SCE's LIEE Program Proposal 15 15

a) Rate Increase 15 15

b) Cool Center Disallowances 16 16

c) Hearings on SCE's Rate Increase 19 19

B. PG&E's LIEE Program Proposal 21 21

1. PG&E's Proposal 21 21

a) Budget 21 21

b) Electric/Gas Cost Split 22 22

c) Go-Backs 22 22

d) Two-Year Program Cycle 24 24

e) Third-Party Contractor Data 24 24

f) Central Air Conditioning Maintenance Pilot 24 24

2. ORA's Comments on PG&E's LIEE Proposal 25 25

3. Discussion of PG&E's LIEE Proposal 26 26

a) Budget 26 26

b) Electric/Gas Cost Split 26 26

c) Go-Backs 27 27

d) Cool Centers in PG&E's Service Territory 27 27

C. SDG&E's LIEE Program Proposal 28 28

1. SDG&E's Proposal 28 28

a) Budget and Program Elements 28 28

b) Marketing and Outreach 31 31

c) Cool Zone Program 31 31

d) Carbon Monoxide/Natural Gas Appliance
Testing Budget 32 32

e) AEAP Issues 32 32

2. ORA's Comments on SDG&E's LIEE Proposal 33 33

a) Funding of CO/NGAT Testing 33 33

b) Pilot Air Conditioning Maintenance Measure 33 33

c) Go-Backs 33 33

d) Energy Education Workshops 34 34

3. Discussion of SDG&E's LIEE Proposal 34 34

a) Cool Zones 34 34

b) Energy Education Workshops 35 35

c) AEAP Performance Incentives 35 35

D. SoCalGas' LIEE Proposal 35 35

1. SoCalGas' Proposal 35 35

2. ORA's Comments on SoCalGas' LIEE Proposal 37 37

3. Discussion of SoCalGas' LIEE Proposal 38 38

IV. IOUs' Proposed 2005 CARE Programs 39 39

A. SCE's Proposed CARE Program 40 40

1. SCE's Proposal 40 40

2. ORA's Comments on SCE CARE Application 43 43

3. Discussion of SCE CARE Application 44 44

a) Estimated CARE Subsidy 44 44

b) CARE Administrative Budget 45 45

c) Automatic Enrollment 46 46

B. PG&E's 2005 CARE Program 47 47

1. PG&E's Proposal 47 47

2. ORA's Comments on PG&E's CARE Application 48 48

3. Discussion of PG&E CARE Application 49 49

a) Automatic Enrollment 49 49

b) Subsidy Estimate 49 49

C. SDG&E's 2005 CARE Program 50 50

1. SDG&E's Proposal 50 50

2. ORA's Comments on SDG&E's CARE Proposal 51 51

3. Discussion of SDG&E's CARE Proposal 52 52

4. CARE Management and Financial Audit 54 54

5. Low Income Oversight Board (LIOB) 54 54

D. SoCalGas' 2005 CARE Program 54 54

1. SoCalGas' Proposal 54 54

2. ORA's Comments on SoCalGas' CARE Proposal 55 55

3. Discussion of SoCalGas' CARE Proposal 56 56

a) Outreach Budget Increase 56 56

b) Low Income Oversight Board 57 57

V. Issues Generic to Utility CARE/LIEE Applications 57 57

A. Two-Year Program Cycle 57 57

B. Cool Centers 58 58

C. Carbon Monoxide Testing/Natural Gas Appliance Testing Settlement 59 59

1. Reasonableness in Light of the Whole Record 63 63

2. Consistent with the Law 65 65

3. In the Public Interest 65 65

4. Funding of CO Testing 66 66

a) SDG&E and SoCalGas Proposal For Funding of
CO Testing 66 66

b) Comments on SDG&E and SoCalGas Proposal
For Funding of CO Testing 67 67

c) Discussion of SDG&E and SoCalGas Proposal
For Funding of CO Testing 68 68

D. Pilot Air Conditioning Maintenance Measure 69 69

E. IOU Contractor Costs 70 70

F. LIEE Measurement and Evaluation 71 71

VI. Other Issues 71 71

A. Low Income Oversight Board Membership 71 71

B. Assembly Bill 868 - Migrant Farm Housing Centers 74 74

1. Background 74 74

2. "Deemed Eligible" Provision 76 76

3. Passing Savings to Occupants 76 76

4. Non-OMS Centers 78 78

5. Small and Multijurisdictional Utility (SMJU) Migrant
Center Issues 80 80

C. LIEE Measure Reinstatement 81 81

1. Background 81 81

2. Discussion 83 83

D. LIEE Program Contributions Toward Statewide Conservation
Goals 86 86

VII. Assignment of Proceeding 87 87

VIII. Comments on Draft Decision 87 87

Findings of Fact 92 92

Conclusions of Law 95 95

INTERIM ORDER 99 99

INTERIM OPINION APPROVING 2005 LOW INCOME ENERGY EFFICIENCY (LIEE) AND CALIFORNIA ALTERNATIVE RATES FOR ENERGY (CARE) PROGRAMS FOR PACIFIC GAS AND ELECTRIC COMPANY, SOUTHERN CALIFORNIA EDISON COMPANY, SOUTHERN CALIFORNIA GAS COMPANY, AND SAN DIEGO GAS & ELECTRIC COMPANY

I. Summary

This decision acts on the applications of the large California investor owned utilities (IOUs) for Low Income Energy Efficiency (LIEE) and California Alternate Rates for Energy (CARE) funding for the 2005 calendar year. The large IOUs are Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), Southern California Gas Company (SoCalGas), and San Diego Gas & Electric Company (SDG&E). This decision grants most of the IOU requests for funding, with the following exceptions:

TABLE 1
BUDGET DISALLOWANCES

Utility

Description of Request

Disallowance ($)

Reason for Disallowance

SCE

Cool Center

<$142,500>

Fixed costs are too high

SCE

Cool Center Transportation

<$42,750>

PGC not designed to fund

SCE

Cool Center Personnel

<$175,750>

The program should only fund personnel that directly support Cool Center activity

SCE

Cool Center Snacks

<$19,000>

Ratepayer funds should only be used to fund the energy efficiency measures themselves

SoCalGas

Carbon Monoxide (CO) Testing

<$1,245,000>

CO testing should be funded from base rates

SoCalGas

CO Testing

<$555,000>

CO testing should be funded from base rates

SoCalGas

CARE Audit

<$141,000>

Audit cancelled

SDG&E

Performance Incentives

<$222,000>

Outside the scope of this proceeding

SDG&E

CO Testing

<$150,000>

CO testing should be funded from base rates

SDG&E

CO Testing

<$353,100>

CO testing should be funded from base rates

SDG&E

LIOB

<$1,000>

LIOB expenses are absorbed by CPUC

SoCalGas

LIOB

<$1,000>

LIOB expenses are absorbed by CPUC

With the foregoing modifications, we grant the IOUs the following funding amounts for their LIEE and CARE programs for 2005:



TABLE 2
AUTHORIZED LARGE IOU PY2005 LIEE PROGRAM
		PG&E	SCE	SoCalGas	SDG&E
ENERGY EFFICIENCY
	Gas Appliances	$ 3,334,300	$ 0	$ 8,020,500	$ 919,943
	Electric Appliances	17,274,700	20,971,520	0	4,259,769
	Weatherization	14,109,000	394,450	15,949,814	3,924,924
	Outreach / Assessment / Marketing	3,978,000	2,817,745	4,600,000	0
	In-Home Energy Education	3,978,000	518,400	600,000	1,231,517
	Education Workshops	50,000	0	420,000	265,355
Energy Efficiency Total		$42,724,000	$24,702,115	$29,590,314	$10,656,508
LANDLORD CO PAYS
	Air Conditioner Replacement - Central	0	0	0	0
	Air Conditioner Replacement - Room	5,000	0	0	0
	Refrigerator (CoPay)	20,000	0	0	0
Landlord Co Pays Total		$25,000	$0	$0	$0
PILOTS
	Cool Center 3	0	0	0	0
	Cool Zones	0	0	0	0
	LIHEAP Leveraging	750,000	0	0	0
	Natural Gas Appliance Testing (NGAT)	0	0	0	0
Pilots Total		$750,000	$0	0	0
OTHER PROGRAM ACTIVITIES
	Training Center	400,000	20,000	325,000	0
	Inspections	2,500,000	555,000	1,132,919	486,048
	Advertising	0	15,000	281,000	250,000
	Measurement & Evaluation (M&E)	300,000¹	195,000	60,000	50,000
	Regulatory Compliance	476,000	70,000	230,000	200,000
	Other Administration	9,320,000	1,772,885	1,669,642	563,614
Other Program Activities Total		$12,996,000	$2,627,885	$3,698,561	$1,549,662
Oversight Costs - CPUC Energy Division		$35,000	$70,000	$36,000	$21,000
TOTAL LIEE PROGRAM PROPOSALS		$56,530,000	$27,400,000	$33,966,503	$13,060,172

	Indirect Costs	2,500,000	420,000	641,628	833,002

Indirect Costs are not charged to LIEE program.


TABLE 3
LARGE IOU 2005 AUTHORIZED CARE BUDGETS

	PG&E	SCE	SoCalGas	SDG&E
Outreach	$3,850,000	$ 1,633,000	$ 1,949,750	$ 1,465,327
Automatic Enrollment	150,000	60,000	30,000	21,200
Cool Centers		95,000
Proc., Certification & Verification	2,100,000	600,000	925,334	227,269
Bill System / Programming	150,000	557,000	265,045	72,800
Measurement & Evaluation	487,000	58,000	393,560	235,700
Regulatory Compliance	170,000	50,000	163,306	123,872
General Administration	450,000	1,063,300	297,315	177,314
Low Income Oversight Board	0	0	0	0
CPUC Energy Division	100,000	82,700	83,000	50,000
Total CARE Expenses	$7,457,000	$ 4,199,000	4,108,310	$2,625,882
Subsidies & Benefits	191,300,000	168,100,000	75,315,876	32,907,285
Total Program Costs and Discounts	$198,757,000	$172,299,000	$79,424,186	$35,532,167

We also address several related issues:

· The IOUs' request to place their LIEE/CARE programs on a two-year rather than a one-year funding cycle;

· The IOUs' Cool Center/Cool Zone programs;

· Carbon monoxide testing of gas appliances;

· A proposed new LIEE measure - air conditioning maintenance;

· How IOUs prove their third party contractor costs;

· Low Income Oversight Board (LIOB) membership;

· Assembly Bill 868 (CARE subsidies for residents of migrant farm housing centers);

· Reinstatement of cooling measures in one California climate zone; and

· The Green Buildings Initiative, signed by Governor Schwarzenegger on December 14, 2004.

¹ Subject to discussion entitled "LIEE Measurement and Evaluation," below

Order Instituting Rulemaking on the Commission's Proposed Policies and Programs Governing post-2003 Low-Income Assistance Programs.	Rulemaking 04-01-006 (Filed January 8, 2004)
In the Matter of the Application of PACIFICORP for Approval of 2005 Low-Income Assistance Program Budgets.	Application 04-06-038 (File June 30, 2004)
In the Matter of the Application of Southwest Gas Corporation (U 905 G) for Approval of Program Year 2005 Low-Income Assistance Program Budgets.	Application 04-07-002 (Filed July 1, 2004)
Application of Southern California Gas Company (U 904 G) for Approval of Program Year 2005 Low-Income Assistance Programs and Funding.	Application 04-07-010 (Filed July 1, 2004)
Application of San Diego Gas & Electric Company (U 902 M) for Approval of Program Year 2005 Low-Income Assistance Programs and Funding.	Application 04-07-011 (Filed July 1, 2004)
Southern California Edison Company's (U 338-E) Application Regarding Low-Income Assistance Programs for Program Year 2005.	Application 04-07-012 (Filed July 1, 2004)
Application of Pacific Gas and Electric Company (U 39 M) for Approval Of The 2005 California Alternate Rates for Energy and Low Income Energy Efficiency Programs and Budget.	Application 04-07-013 (Filed July 1, 2004)

IN THE MATTER of the Application SIERRA PACIFIC POWER COMPANY (U 903), for an Order Approving its 2005 California Alternate Rates for Energy (CARE) and Low Income Efficiency (LIEE) Plans and Budgets.	Application 04-07-014 (Filed July 1, 2004)
In the Matter of the Application of Avista Corporation for Approval of Program Year 2005 Low-Income Assistance Program Budgets.	Application 04-07-015 (Filed July 1, 2004)
In the Matter of the Application of the SOUTHERN CALIFORNIA WATER COMPANY (U 133 W) Regarding Low Income Assistance Programs for its Bear Valley Electric Service Customers for Program Year 2005.	Application 04-07-020 (Filed July 8, 2004)
Application of Alpine Natural Gas Operating Company No. 1 LLC in Compliance with Decision 03-12-016 (PY 2004 Low Income Energy Efficiency ("LIEE") and California Alternate Rates For Energy ("CARE") program Plans).	Application 04-07-027 (Filed July 2, 2004)
In the Matter of the Application of West Coast Gas Company (U-910-G) For Approval of Program Year 2005 Low-Income Assistance Program Budgets.	Application 04-07-050 (Filed July 29, 2004)


TABLE 1 BUDGET DISALLOWANCES
Utility	Description of Request	Disallowance ($)	Reason for Disallowance
SCE	Cool Center	<$142,500>	Fixed costs are too high
SCE	Cool Center Transportation	<$42,750>	PGC not designed to fund
SCE	Cool Center Personnel	<$175,750>	The program should only fund personnel that directly support Cool Center activity
SCE	Cool Center Snacks	<$19,000>	Ratepayer funds should only be used to fund the energy efficiency measures themselves
SoCalGas	Carbon Monoxide (CO) Testing	<$1,245,000>	CO testing should be funded from base rates
SoCalGas	CO Testing	<$555,000>	CO testing should be funded from base rates
SoCalGas	CARE Audit	<$141,000>	Audit cancelled
SDG&E	Performance Incentives	<$222,000>	Outside the scope of this proceeding
SDG&E	CO Testing	<$150,000>	CO testing should be funded from base rates
SDG&E	CO Testing	<$353,100>	CO testing should be funded from base rates
SDG&E	LIOB	<$1,000>	LIOB expenses are absorbed by CPUC
SoCalGas	LIOB	<$1,000>	LIOB expenses are absorbed by CPUC