For purposes of determining those households eligible for low-income SWH incentives, it is helpful to review both the guidance in AB 1470 and the requirements established by statute for other low-income incentives programs, namely the SASH and MASH programs funded through CSI.
AB 1470 enacted Section 2861(e), which defines low-income residential housing as either:
· Residential housing financed with low-income housing tax credits, tax-exempt mortgage revenue bonds, general obligation bonds, or local, state or federal loans or grants, and for which the rents of the occupants who are low income households, as defined in Section 50079.5 of the Health and Safety Code, do not exceed those prescribed by deed restrictions or regulatory agreements pursuant to the terms of the financing or financial assistance; or
· A residential complex in which at least 20 percent of the total units are sold or rented to lower income households, as defined in Section 50079.5 of the Health and Safety Code, and the housing units targeted for lower income households are subject to a deed restriction or affordability covenant with a public entity that ensures that the units will be available at an affordable housing cost meeting the requirements of Section 50052.5 of the Health and Safety Code, or at an affordable rent meeting the requirements of Section 50053 of the Health and Safety Code, for a period of not less than 30 years.
The definition of low-income residential housing in AB 1470 differs slightly from the definition used to determine eligibility for the CSI SASH and MASH programs, which provide incentives for solar PV systems on low-income properties. The SASH and MASH programs rely on Section 2852, which contains a definition of "low-income residential housing" that is broader than the definition in Section 2861 because it includes multifamily housing units and individual residences that are subject to a resale restriction or equity sharing agreement. (See Section 2852(a)(3)(B) and (C).)
AB 1470 also enacted Section 2866(c), which states that the Commission may extend eligibility for funding to include residential housing occupied by ratepayers participating in a Commission-approved and supervised gas corporation LIEE program, where participants either occupy a single-family home or occupy at least 50 percent of all units in a multifamily dwelling.
Another relevant portion of AB 1470 requires the Commission to establish and enforce conditions on the installation of SWH systems on low-income properties to ensure these properties remain low-income residential properties for at least 10 years from the time of installation. (Section 2866(e)(2).) Finally, Section 2864 specifies eligibility criteria for SWH systems, including design, installation, energy output, warranty, and metering standards. The statute further mandates that "[n]o gas customer funded incentives shall be made for a [SWH] system that does not meet the eligibility criteria." (Section 2864(b).)
Given this background, we now turn to the specific eligibility requirements for single-family and multifamily properties.
5.2 Single-Family Eligibility Requirements
With regard to single-family properties, the Staff Proposal recommended that incentives be available to customers in single-family homes that participate in the LIEE Program and that meet all other income and housing eligibility requirements for the Commission's SASH program. The SASH guidelines, which derive from Section 2852, state that the residence must be owner-occupied, and the residence must meet the definition of "low-income residential housing" in Section 2852 and California Health and Safety Code Section 50079.5. In other words, the residence must be sold to a lower-income household with total income of no more than 80% of the area median income.
ACCES opposes the Staff proposal to rely on SASH eligibility guidelines, claiming the SASH guidelines are too restrictive. Instead, ACCES urges the Commission to base eligibility requirements on Section 2866 alone, i.e., customers participating in LIEE programs.
We will not require applicants to meet the SASH eligibility guidelines, as proposed by Staff. Section 2866(c) allows the Commission to extend eligibility to residential housing occupied by ratepayers participating in a Commission-approved and supervised gas corporation LIEE program who occupy a single-family home. Given this language, applicants may qualify for low-income SWH incentives by either meeting the definition of low-income residential housing in Section 2861 or by participating in a qualifying gas corporation LIEE program.
In comments on the proposed decision, PG&E, CCSE, and SoCalGas recommend the Commission limit eligibility for incentives to systems that have not already received an incentive through the CSI Thermal Program. We agree with this proposal and incorporate it below.
In summary, we determine that to qualify for the low-income SWH incentives through the CSI Thermal program, applicants must meet all of the following requirements:
· The project's site must be within the service territory of, and receive natural gas service from PG&E, SoCalGas, or SDG&E;
· The applicant must install a SWH system with a Solar Rating and Certification Corporation (SRCC) OG-300 rating that displaces the use of natural gas, and which has not already received an incentive through the CSI Thermal Program;
· The SWH system must meet the requirements in Section 2864, including but not limited to system design, installation, energy output, and system warranty;
· The residence must be occupied by the homeowner and/or applicant; and
· Either a) the household must currently be participating in a Commission-approved and supervised gas corporation LIEE program (now known as ESAP); or b) the residence must meet the definition of low-income residential housing in Section 2861(e).
Finally, ACCES recommends the Commission allow federal Department of Energy agencies to apply for the CSI Thermal low-income incentives in order to leverage federal funding for SWH through weatherization programs and low income energy assistance. We encourage federal agencies to apply for incentives on behalf of any ratepayers who otherwise meet the eligibility criteria above.
5.3 Multifamily Eligibility Requirements
The Staff Proposal did not recommend incentives to low-income residents of multifamily housing, reasoning that 30% of multifamily residents do not pay separately for water heating and the Commission could not ensure savings from a SWH installation would flow to the tenant. The Staff Proposal noted that multifamily low-income customers often pay rent and utilities in a combined formula whereby reductions in utilities only lead to increases in rent such that the total out of pocket expense remains equal.
In comments to the Staff Proposal, a number of parties objected to the exclusion of multifamily low-income properties and urged the Commission to allow residents of multifamily housing to qualify for low-income SWH incentives. ACCES, Bridge Housing, CCSE, CALSEIA, EcoPlexus, Libre Energy, SDG&E/SoCalGas, SOLID and TURN all urged the Commission to make incentives available to low-income customers living in multifamily housing. Libre Energy and ACCES contend that even if tenants do not directly pay for utilities, the benefits of solar water heating would be passed through to them through their rent. ACCES stated that the Commission overlooked the 70% of multifamily residents that pay for utilities separate from rent. Bridge Housing suggests that 80% of the budget be reserved for incentives to multifamily housing, while in contrast, CCSE suggests 8% of the budget be reserved for this purpose. CALSEIA suggests that incentives for multifamily should only go to non-profit housing agencies, while SDG&E/SoCalGas oppose this suggestion. TURN proposed that rebates be structured in a way that ensures they flow to end users.
We agree that multifamily properties with natural gas water heating should qualify for low-income incentives, particularly given that approximately 70% of multifamily residents pay for utilities separate from their rent. The Commission agrees that even in low-income properties where low-income residents do not pay a gas bill separate from the rent or where rent and utilities are subject to joint caps, the benefits of energy savings from SWH may be able to be passed on to tenants in accordance with Section 2866(d). This can occur because organizations that manage or operate low-income properties may reinvest the money saved on energy bills to improve the property or offset other costs. For these reasons, the Commission will allow multifamily properties to apply for low-income SWH incentives through the CSI Thermal Program. Due to the small size of the program, however, we decline to adopt separate budget allocations for multifamily and single-family low-income properties.
Therefore, in order to qualify for low-income SWH incentives, the multifamily housing property must meet either the definition of low-income residential housing in Section 2861(e) or meet the terms of Section 2866(c)(2) by demonstrating that at least 50 percent of all units in the multifamily housing structure are occupied by ratepayers that are participating in a Commission-approved and supervised gas corporation LIEE program (now known as ESAP) administered by PG&E, SoCalGas or SDG&E.
In addition, in order to qualify for SWH incentives for multifamily properties, applicants must demonstrate that their gas-displacing SWH systems meet all other eligibility criteria requirements of the CSI Thermal program, including but not limited to the requirements in Section 2864 regarding design, installation, energy output, SRCC certification, and warranty.