BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

TABLE OF CONTENTS

California Alternate Rates for Energy (CARE) and Universal Lifeline Telephone Service (ULTS) Penetration Rates Workshop Report

I. SUMMARY OF ENERGY DIVISION RECOMMENDATIONS 33

II. INTRODUCTION 33

III. SUMMARY OF ENERGY UTILITIES' METHODOLOGY FOR CALCULATING PENETRATION RATES 55

A. Joint Energy Utilities 55

B. Avista Utilities 66

C. Southwest Gas 77

IV. DESCRIPTION OF CENSUS DATA USED BY ENERGY UTILITIES 77

V. SUMMARY OF TELECOMMUNICATIONS UTILITIES' METHOD FOR CALCULATING PENETRATION RATES 88

VI. SUMMARY OF SIMILARTIES AND DIFFERENCES BETWEEN CARE PENETRATION RATE METHODOLOGY AND ULTS PENETRATION RATE METHODOLOGY 99

VII. SUMMARY OF PARTIES' CONCERNS 1010

A. Accuracy of Census Information 1010

B. Definition of Household 1010

C. ULTS Customers not Eligible 1010

D. Post Enrollment Verification 1111

E. Master-meters 1212

F. Other Issues 1313

VIII. ENERGY DIVISION RECOMMENDATIONS 1313

A. Any methodological issues that need to be addressed to improve the methods currently used by the energy utilities to develop and report penetration rates, in order to ensure consistent and accurate reporting across utilities? 1313

B. How to effectively update current methods to reflect the 2000 Census data. 1414

C. How the methods discussed at the workshop could be used to develop comparable penetration rates under the ULTS program. 1414

D. How to adjust penetration rates to reflect the fact that some utilities or industries conduct post-enrollment eligibility verification, while others do not. 1515

IX. LIST OF ATTACHMENTS 1616

I. SUMMARY OF ENERGY DIVISION RECOMMENDATIONS

· Looking into other vendor data sets instead of the current vendor, Applied Geographic Systems (AGS), is not necessary.

· The energy utilities should continue with their validation efforts and sensitivity tests.

· The method for using zip code information does not have to be reevaluated.

· The energy utilities should continue using the current penetration rate methodology, but they should order special tabulations of the joint distribution of household size and income when the data become available later this year to ensure the methodology uses the most current Census data.

· The telecommunications utilities should use the proposed Field Research method, but the ULTS penetration rate should only incorporate the customer population and not the non-customers.

· The Assigned Commissioner in the ULTS proceeding should require the telecommunications utilities to conduct random verification of ULTS customers and reflect the drop offs due to both random verification and re-certification in their calculations of ULTS penetration rates; in addition, ULTS penetration rates should be reported on a quarterly basis.

II. INTRODUCTION

Pursuant to the January 14, 2002 Assigned Commissioner's Ruling¹ (ACR) in Rulemaking (R.) 01-08-027, the Public Utilities Commission's (Commission) Energy Division held public-input workshops on February 6, 2002 and March 6, 2002². The workshops were designed to explore the methodologies used in calculating penetration rates for the California Alternate Rates for Energy (CARE) and Universal Lifeline Telephone Service (ULTS or Lifeline) programs. Energy Division was to file and serve a workshop report on March 18, 2002; however, due to the need for a second public input workshop, Energy Division required additional time to incorporate the discussion from the second workshop into the report. Energy Division discussed the situation with (Administrative Law Judge) ALJ Gottstein, who authorized an extension of time for the workshop report³. As a result, comments will be due on April 19, 2002, and reply comments will be due April 29, 2002.

On January 24, 2002, Energy Division distributed a letter noticing the workshop to all parties on the service lists for R. 01-08-027 and R. 98-09-005⁴. In this letter, Energy Division requested the utilities within each industry to coordinate amongst themselves and submit joint pre-workshop presentations and proposals. The energy utilities were to select an individual to present a summary of their current methodology at the workshop. In addition, each utility, party or group that jointly submitted pre-workshop presentations, proposals and/or comments were asked to briefly summarize their pre-workshop presentations, proposals and/or comments at the beginning of the workshop. Energy Division requested the pre-workshop presentations, proposals, and/or comments to be circulated to all parties on the service lists for R. 01-08-027 and R. 98-09-005 by February 1, 2002. Energy Division received pre-workshop comments from Southwest Gas⁵; Cooper, White & Cooper LLP⁶; Avista Utilities⁷; Pacific Bell/Verizon⁸; and the Joint Energy Utilities.⁹

Also, as stated in the ACR, "the telephone utilities should actively participate in the workshops by sending representatives that are familiar with the methods used to calculate penetration rates for the ULTS program, so that they can discuss the similarities and differences between those methods and the ones used by the energy utilities." Yet, both Pacific Bell and Verizon neglected to send representatives familiar with the methods used to calculate ULTS penetration rates. ALJ Gottstein, who attended the workshop, requested the telecommunications utilities to arrange for someone familiar with the ULTS penetration rate methodology to participate in the workshop. Unfortunately, no one was available to attend or even teleconference in to the workshop¹⁰; as a result, a second workshop had to be scheduled¹¹.

In this report, Energy Division makes recommendations on the following issues:

a) Any methodological issues that need to be addressed to improve the methods currently used by the energy utilities to develop and report penetration rates, in order to ensure consistent and accurate reporting across utilities.

b) How to effectively update current methods to reflect the 2000 Census data.

c) How the methods discussed at the workshop could be used to develop comparable penetration rates under the ULTS program.

III. SUMMARY OF ENERGY UTILITIES' METHODOLOGY FOR CALCULATING PENETRATION RATES

A. Joint Energy Utilities

The Commission adopted the interim methodology used by the joint energy utilities in D. 01-03-028. The joint utilities indicated that their penetration rate is calculated by using the following equation¹²:

CARE participating households

Total number of program eligible households

In this equation, the numerator, CARE participating households, is taken from utility records. The denominator, the total number of program eligible households, has to be estimated. To be eligible for the CARE program a household must be technically eligible, meaning the household has a residential meter or a qualified sub-meter, and meet CARE eligibility guidelines.

Since 2000 Census data will not be available until 2003, the energy utilities use a 5% sample of the 1990 Census, referred to as Public Use Microdata Sample (PUMS) data, as the primary source of information to reach a joint relationship between household size and income. PUMS data are at the geographical Public Use Microdata Area (PUMA) level, which is equivalent to a population of 100,000. This first step of data preparation requires looking at a table for one geographical area in the Census for one specific block group. Taking into account all the different counties results in over 200 different tables.

The next step is to disaggregate the PUMS data and tailor the data to represent utility estimates. They use Master Area Block Level Equivalency (MABLE) tables, which are correspondence Census tables developed by the Missouri Census Data Center, to break up the data to the block group level. Since the PUMS data are household level data, the broken up data can be re-aggregated to represent the areas served by the utilities, by fuel type, and by county. The result is a 1990 PUMS updated table showing the joint distribution of household size and income. In order to look at this joint distribution in terms of current year, the 1990 PUMS needs to be updated with current year Census data. Fortunately, there are vendors, like Applied Geographic Solutions (AGS), that specialize in updating Census data. For example, the 2000 Census is not 100% complete, but periodically, the Census Bureau will release parts of the 2000 Census as they become available. Since AGS is in the business of updating Census data, it will have access to these updates as they become available.

By using current year vendor data, which are not joint distributions but separate distributions of household size and income, they can develop a current year estimated joint distribution. This is accomplished by using a widely accepted statistical method called iterative proportional fitting (IPF), which takes the current year distribution of household size and the current year distribution of household income and matches them to the 1990 PUMS data. The result is an estimated current year joint distribution, which becomes the basis for CARE penetration.

Finally, this estimated current year joint distribution is multiplied by the proportion of eligible households for each combination of household income and size and summed together. This yields the number of eligible households per million, which can then be converted to a demographic eligibility rate for a particular county, utility, and fuel type. When applied to quarterly counts of technical eligibility, the result is an estimate of the number of households that are program eligible. The last step is to take the total number of CARE participants from utility records and divide by this estimate.

B. Avista Utilities

Avista Utilities (Avista) provides gas service in the Tahoe area. Avista indicated there are many resort communities and second homes in their territory. Avista estimates one-third of the 18,000 residences they provide service to are secondary or vacation homes. Avista assumes these customers are not eligible for CARE because low-income customers are not likely to have vacation or second homes. Avista is not aware if any of their customers, who are not eligible for CARE, apply for the program because the Department of Community Service and Development (DCSD) performs the CARE certification.

To determine its penetration rates, Avista first takes the net percentage of households not eligible, due to being seasonal/secondary homes, from the total residential population. From there, Avista uses data from the Census website to compare counties in their territory to California. For example, Avista claims that comparing El Dorado County to California in terms of household income and poverty reveals a relationship that implies El Dorado is about 55% of that occurring throughout California. Avista infers that whatever the eligible population is on a statewide level, El Dorado's eligibility would be 55% of statewide eligibility. So, if the large utilities have 20% of their households eligible for the CARE program, then Avista would have about 10% eligible, assuming the relationship between California and El Dorado County holds true.

Avista indicated that subtracting the seasonal residential customers from Avista's 18,000 total customers yields 13,000 households. Avista then applies the percentage from the Census web site to the 13,000 households which results in the number Avista estimates is eligible for the CARE rate, which is the denominator of their CARE penetration rate. The numerator is simply the number of participants.

C. Southwest Gas

Southwest Gas (SWG) serves both ends of the spectrum in terms of the general type of community. Placer County has a high per capita income and San Bernardino County has a low per capita income; likewise, SWG estimates about 3.3% in Placer County are eligible for CARE compared to about 29.3% in San Bernardino County. SWG claims that there are some communities that are 60% vacation homes and therefore excluded from CARE participation. In total, they have about 119,000 CARE subscribers. Still, SWG reports their overall penetration numbers are similar to the large utilities. SWG indicates that some of its service districts have a very high penetration rate of 70%.

SWG uses an outside company to survey their universe of customers for economic and demographic data. Since SWG is a single-fuel utility, they incorporate only those housing units that have natural gas service. Their estimates are based on cross-tabulations of income and household size and are checked against current Census data for reasonableness. This provides a higher level of accuracy than estimates based solely on Census data.

IV. DESCRIPTION OF CENSUS DATA USED BY ENERGY UTILITIES

The energy utilities indicate 2000 Census PUMS data will not be available until 2003. They believe the PUMS data are needed to provide the most accurate estimate for the least cost. In addition to the PUMS data, summary files (SF followed by the version number, i.e., SF2, SF3, SF4) of population and housing specifications from the 2000 Census will be released.¹³ According to the U.S. Census Bureau website¹⁴ SF1 and SF2 provide information from questions asked of everyone, i.e., age and race. SF3 and SF4 will provide estimates from the sample questions, i.e., income. In other words, SF3 will take 2000 Census results and show, for example, how many households are in the $0 - $5000 income range, but SF3 will not provide the number of people living in each household. Through their vendors, the energy utilities update 1990 PUMS data with these summary files.

Another option is for the energy utilities to order special tabulations of demographic and income data in California before they become available in the 2000 PUMS. According to the Census Bureau, special requests for a cross-tabulation of household size and income will not be available until SF3 is released, since that is when income data will be available. These tabulations will provide the requisite joint distribution the energy utilities need to estimate CARE eligibility. A Census Bureau representative estimates the tabulations at the block group level will cost $800 to $1000 and may take up to two weeks to process.

The energy utilities believe it may not be worthwhile to order the special tabulations of joint household size and income distribution because they are currently using a vendor, (Applied Geographic Solutions or AGS), that has access to the summary file updates. AGS is in the business of capturing demographic data, and they use the most recent data available, i.e., SF3. The energy utilities assert that their current methodology already incorporates the most recent data available. Therefore, the energy utilities recommend waiting for the release of 2000 PUMS data in 2003. They argue that the expected benefits from ordering special tabulations are negligible, as the tabulations are available only six to nine months before PUMS data are available. The utilities propose waiting for the updated PUMS data will be the most cost efficient approach.

V. SUMMARY OF TELECOMMUNICATIONS UTILITIES' METHOD FOR CALCULATING PENETRATION RATES

In D.91-07-056, the California Public Utilities Commission mandated the telecommunications utilities (Verizon, formerly GTE, and SBC Pacific Bell) to perform a comprehensive assessment of the affordability of telephone service in California. Field Research Corporation (Field Research) conducted the study, referred to as the Affordability Study, which included a non-customer survey and a customer survey¹⁵. The goal of the study was to determine reasons for not having phone service and to explore the affordability of telephone service; it was not designed to measure ULTS penetration levels.

However, Field Research applied survey results from the Affordability Study¹⁶ to estimate households eligible for ULTS, which was used to develop a penetration rate. Starting with total California households, Field Research used the FCC (Federal Communications Commission) telephone penetration rate of 96.1% to determine the total number of customers in California that have telephone service. That would mean 3.9% of Californians are non-customers because they do not have telephone service.

Field Research applied the survey results to these figures to determine the number of customer and non-customer households that qualify for ULTS. Field Research based eligibility for ULTS on household income and family size information gathered from the customer and non-customer surveys. Based on customer survey results from 1993 to 2000, about 20% of total customers qualify for ULTS. Therefore, Field Research determined that 19.2% (20% of 96.1%) of total California households with telephones qualify for ULTS.

Of the people that have phones and are eligible, Field Research found that 70% participate in ULTS. The 70% penetration rate does not include low-income customers who may qualify for ULTS but do not have phones. Field Research also quantified the number of customers without phones that were eligible for the ULTS program. They calculate that 82% (or 3.2% of total California households) of these customers would participate in the ULTS program. Adding this number to the 19.2% previously calculated results in 22.4% of total California households eligible for ULTS.

VI. SUMMARY OF SIMILARTIES AND DIFFERENCES BETWEEN CARE PENETRATION RATE METHODOLOGY AND ULTS PENETRATION RATE METHODOLOGY

Both energy utilities and the telecommunications utilities express concern about the fundamental differences that exist between the ULTS and CARE programs. Some of these differences include definition of household, the fact that telephone households are more dynamic and energy households are relatively static, and the fact that there are municipal utilities providing electricity and/or gas service but few, if any, providing telephone service.

The following table shows some of the similarities and differences between the CARE penetration rate methodology and the ULTS penetration rate methodology.

	CARE	ULTS
Numerator (Source of data)	The number of CARE participating households (Utility records)	The estimated number of ULTS participating households (Survey results)
Denominator (Source of data)	The Number of Program Eligible Households per Utility (Census data adjusted to reflect current year)	Percentage of customers estimated as eligible based on survey results. (Survey results applied to Census data.)
Household size and income	An eligible household has to be technically eligible (residential meter or qualified sub-meter) and demographically eligible (meet the CARE guidelines for household size and income).	According to Field Research, the surveys asked for information on household size and income.
Statistical Methods	Iterative Proportional Fitting	Extrapolating sample population to reflect entire population

Starting with the numerator, the CARE methodology uses actual enrollee numbers as reported by the utilities. While the numerator in the ULTS methodology also reflects the number of enrollees in the program, this number is estimated based on survey results.

The denominators, however, do not reflect the same population. The denominator for the CARE methodology includes program eligible households; in other words, households must meet size and income requirements and be technically eligible by having a residential meter or qualified sub-meter. Essentially, this means there is some segment of the low-income population that is not included in the denominator because of the technical eligibility requirement. When Field Research estimated a 70% penetration rate, that rate did not include non-customers, so that rate is comparable to the CARE rate.

When considering the denominators, both the CARE and ULTS programs have income and size requirements, and both methodologies reflect these requirements. Differences exist, however, with the way the methodologies determine if households meet these requirements. As described in section two of this report, the energy utilities break up Census data and statistically adjust it to reflect the total households that meet household size and income requirements. The Field Research methodology, assuming it is used to only reflect eligible customers, uses survey questions to determine if households meet size and income requirements.

VII. SUMMARY OF PARTIES' CONCERNS

A. Accuracy of Census Information

Some of the workshop participants expressed concern about possible undercounting occurring when the Census is conducted and if the consultant does anything to address this undercount. The energy utilities indicated that there would be some degree of error from any data set. However, in their view, the Census data is still the best source for information because of the size of the sample and the comprehensive method in which it is conducted.

B. Definition of Household

It is noted that under the differing definitions of household, one CARE household can have multiple ULTS recipients, each defined as an individual household. It is unclear how significant this is. Indeed, there are many more telephone lines than there are household meters available. This may be more prevalent in some communities than others. Field Research estimates that 8.1% of physical dwellings have more than one ULTS household.

C. ULTS Customers not Eligible

The Affordability study reports 30% of ULTS participants are not eligible for ULTS. In addition, Field Research estimates that an additional 12% may not be eligible. This conclusion can be supported by comparing the study's forecast that 2.13 million households are eligible and would subscribe to ULTS; while in actuality, there are approximately 3.5 million current ULTS customers in California.

Some workshop participants asked if there is some misunderstanding that seems common to the customers' declaration of eligibility versus the analysis of the survey responses that say they are not eligible. What are the telecommunications utilities' interpretations about what is going on here, outside the obvious potential of fraud. Is there a policy clarification needed?

Some of the telecommunications companies do not think people are necessarily behaving fraudulently, and they point out that the Commission is revising GO 153 in terms of clarifying eligibility. They indicated that customers might not be clear that they should remove themselves from the program when they no longer meet the eligibility requirements.

D. Post Enrollment Verification

There are two types of post enrollment verification: 1) Random verification of a sample of customers, and 2) Regular re-certification of customers. The energy utilities do both while the telecommunications utilities only do re-certification.

SDGE explained that their computer system automatically pulls a random sample of enrollees. The system identifies customers and automatically sends letters requesting documentation. If there is no response within 30 days, SDGE sends a second letter and prints a note on the bill asking the customer to re-certify. Then the customer responds either by saying they are not eligible, providing copies of their documents, or there is no response. SDGE accepts all kinds of documentation to prove eligibility, i.e., state forms, award statements, info from other agencies, W2 forms.

The SCG post-enrollment verification process is different. SCG sends one letter requesting income documentation with a self-addressed stamped envelope, and if there is no response they send a reminder. Ten days past the documentation due date the customer is dropped from the program.

Energy Division asked the energy utilities to give an estimation of what percent respond to a request for documentation of eligibility. The energy utilities provided the following data taken from their monthly reports to the Commission.

Utility	% Customers That Respond	% Customers That Drop
SDGE	54	46
SCG	69 (stay on)	31
PGE	70 (stay on)	30
SCE	Not available	Not available

A proposal was put forth to have some future discussion among interested parties to see what best practices there might be among each of the utilities and to see if there is a relationship between practices and response rate of both random verification and re-certification. Representatives from Verizon and Pacific Bell indicated they do not conduct random verification for the ULTS program. However, if a customer fails to re-certify they will be taken off the program. ULTS customers must return a self-certification form every year. Pacific Bell is not sure the percentage of customers not returning their re-certification form.

Verizon states that 30% of their customers do not return the forms, so they send out a second mailing to those customers that do not return the first form. Pacific Bell has stopped doing second mailings, as GO 153 does not require it.

Many participants were concerned about any potential adjustment of the numerator of the energy utilities' penetration rate to normalize the difference between utilities that conduct random verification and those that do not. The reported 30% drop off rates from random verification can have significant impact on the program penetration. The energy utilities' penetration rates have already been adjusted to account for the drop-offs due to random verification and re-certification because they use actual customer data to establish the number of participants for the numerator of the penetration rate.

E. Master-meters

The energy utilities say they do not include households without meters in their estimates of the eligible population. The utilities believe the objective of the CARE rate is to reduce economic burden, and if the customer does not have a meter, CARE would not be able to reduce the customer's energy burden.

Some workshop participants expressed concern about master-meter bias, which could overestimate penetration since meters are used for the numerator and households are used in the denominator. SDGE clarified that when vendor data come in, the utilities take out any master-meters that are not technically qualified for the rate. On the other hand, any estimate derived directly from Census data would contain master-metered households and therefore, would be overstating the number of low-income households eligible for CARE.

According to SCE, each utility processes billing data individually and extrapolates billing data to eliminate households that are master-metered from the denominator. Some counties in SCE's territory have master-metered households that are not eligible, so SCE estimates households not eligible to receive the discount. Additionally, there are no adjustments necessary to the numerator because SCE looks at actual utility numbers, not Census data.

The joint utilities believe the numerator is not a problem because utilities know how many customers they are serving. After disaggregating and re-aggregating, if a household is not technically eligible it is not included in the denominator. It seems unlikely that multiple households inhabiting a single metered dwelling would be socio-economically spread out. If there are six families living in a house with one meter, they are probably all poor and splitting the electricity bill.

Some workshop participants are very interested in getting whatever data could be assimilated on how many households are actually missing because they are not sub-metered and for that reason not technically eligible. A large concern involves mobile homes and agricultural homes, which make the categorically ineligible group much larger.

F. Other Issues

The small LECs oppose being required to establish a penetration rate that requires doing something like the Affordability Study. With respect to rural areas, the Pacific Bell study does not include other LECs. The small LECs believe they should not be obligated to perform such a study because they do not have the resources to go door to door, and the cost would be prohibitive.

VIII. ENERGY DIVISION RECOMMENDATIONS

In this section, Energy Division provides recommendations on the topics and issues brought up in the January 14, 2002 ACR.

A. Any methodological issues that need to be addressed to improve the methods currently used by the energy utilities to develop and report penetration rates, in order to ensure consistent and accurate reporting across utilities?

The energy utilities provided some suggestions for improving their current methods:

1. Look at other vendor data sets instead of the current vendor, AGS. Another well-known vendor is Claritas; is one better than the other?

2. Complete additional sensitivity tests and validate against independent data sources.

3. Reevaluate method for using zip code information.

In the interest of time and consistency, Energy Division does not recommend looking into another vendor, such as Claritas. AGS and Claritas are both well- respected firms. Energy Division realizes that a lot of time and effort went into deciding on AGS as the vendor for updating Census data. Given that this is the twelfth intercensal year, it may not be the best use of time and resources to start looking at other vendors.

However, Energy Division recommends the energy utilities complete additional sensitivity tests and validation efforts. According to page nine of the Technical Addendum¹⁷ distributed at the February 6, 2002 workshop, the additional sensitivity tests and validation efforts are already underway. Also, the Technical Addendum on page 21 states that the Rural Health Council (RHC) method for using zip code information is required by the Commission, but the Goldsmith method is used for zip codes not explicitly classified by the RHC. Since the Goldsmith and the Commission required RHC methods are currently employed, Energy Division does not require further evaluation for using zip code information.

B. How to effectively update current methods to reflect the 2000 Census data.

The joint energy utilities recommend waiting until PUMS data become available in mid-2003. They argue that the tabulated Census data, which is available 6-9 months earlier than PUMS, would not have significantly changed the current results. They claim the use of current market data balances out Census data, so the method is minimally dependent on 1990 Census PUMS data.

As a result of the 2000 PUMS data not being available until mid-2003, the energy utilities have to estimate what current year Census data would look like based on 1990 Census data. The energy utilities need data that show how household income and household size relate to each other. This relationship is required because CARE eligibility is not based on just household size or just household income, but both household size and income.

As explained above, the energy utilities can order special tabulations of 2000 Census data that show this relationship between household size and income. These special tabulations can be ordered by Fall 2002 and for relatively low cost; therefore, Energy Division sees no reason to continue using 1990 Census PUMS data for another year and recommends the energy utilities to order special tabulations when they become available later this year.

C. How the methods discussed at the workshop could be used to develop comparable penetration rates under the ULTS program.

The energy utilities recommend the telecommunications utilities use their method when developing penetration rates for ULTS. The energy utilities realize significant definitional differences between the ULTS and CARE programs making an apples-to-apples comparison difficult. For example, energy utility households are defined by meters, whereas telecommunications utility households could have multiple lines, and therefore multiple households, per house. In addition, the household counts are more static in energy than telecommunications households, and the telecommunications utilities do not have different municipal services to consider.

Energy Division acknowledges the fundamental differences between the CARE and ULTS programs but believes the methods presented at the workshops can be used to compare the penetration rates of the two programs. Energy Division recommends the energy utilities continue using their current penetration rate methodology. Energy Division does not recommend the telecommunications utilities to adopt the energy utilities methodology. Instead, Energy Division believes the penetration rate methodology presented by Field Research adequately provides a comparable ULTS penetration rate. However, Energy Division recommends only incorporating the customer population when calculating ULTS penetration rates. This puts the ULTS penetration rate on a comparable basis with CARE penetration, since the CARE methodology only considers customers with residential meters or qualified sub-meters. The CARE methodology does not factor in non-customers, or people without meters; therefore, a comparable ULTS methodology should not factor in non-customers, or people without telephone service.

According to Field Research customer survey results, 20% of total California households with telephone service are eligible for ULTS. This result is very similar to the energy utility statistics. Furthermore, the results show 70% of households that qualify for ULTS are already enrolled in the program. Since this 70% is taken from households that qualify for the UTLS program, it could be compared to energy utilities' penetration rates, which are taken from households that qualify for the CARE program. Energy Division realizes the Field Research methodology estimates a penetration rate for the entire state; therefore, in the interest of developing comparable ULTS and CARE penetration rates, Energy Division recommends also looking at the cumulative penetration rates of the energy utilities, in addition to penetration rates by individual energy utility.

Finally, Energy Division recommends the Assigned Commissioner in the ULTS proceeding to have the telecommunications utilities report ULTS penetration rates on a quarterly basis. This would help in achieving the goals set forth in this proceeding.

D. How to adjust penetration rates to reflect the fact that some utilities or industries conduct post-enrollment eligibility verification, while others do not.

Energy Division believes the energy utilities' penetration rates are not significantly changed because they conduct post-enrollment verification. Rather, Energy Division believes the current random verification process used by the energy utilities is predominantly a barometer for assessing the extent of unqualified customers' participation in the program. Instead of reflecting the fact that the telecommunications utilities do not conduct post-enrollment verification, the Energy Division recommends the Assigned Commissioner in the ULTS proceeding to require the telecommunications utilities to conduct post-enrollment verification of ULTS customers. By doing so, the ULTS penetration rates would not have to be arbitrarily adjusted because the drop offs would be appropriately reflected in the underlying data.

IX. LIST OF ATTACHMENTS

NAME OF ATTACHMENT	NUMBER
Attendance for February 6, 2002 Workshop	A
Attendance for March 6, 2002 Workshop	B
Workshop Notice for February 6, 2002 Workshop	C
Workshop Notice for March 6, 2002 Workshop	D
Affordability of Telephone Service Handout	E
Pacific Bell and Verizon Summary of Presentation	F
Pacific Bell and Verizon Summary of Presentation Attachment A	G
Pacific Bell and Verizon Summary of Presentation Attachment B	H
Census Planned Release Date Schedule	I
Extension of Time for CARE and ULTS Workshop Report	J
Joint Energy Utilities' Presentation on CARE methodology	K
Avista Pre-workshop Proposal.doc	L
Joint Energy Utilities Pre-workshop proposal (v1).DOC	M
Pacific Bell and Verizon Pre-workshop Comments.DOC	N
Roseville Telephone Company Letter.doc	O
Small LECs Letter.doc	P
Southwest Gas Pre-workshop Proposal.doc	Q
January 14, 2002 Assigned Commissioner's Ruling	R
Technical Addendum to Joint Energy Utilities' Presentation	S

Dated April 2, 2002 at San Francisco, California.

Jeorge Tagnipes

Energy Division

CERTIFICATE OF SERVICE

I certify that I have by mail this day served a true copy of the original attached Energy Division Workshop Report on California Alternate Rates for Energy (CARE) and Universal Lifeline Telephone Service (ULTS) Penetration Rates on all parties of record in this proceeding or their attorneys of record, either by electronic mail or, for any party for which an electronic mail address has not been provided, by first class mail.

Dated April 2, 2002, at San Francisco, California.

/s/ Jeorge Tagnipes

Jeorge Tagnipes

NOTICE

Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.

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