ALJ/SAW/hl2 Mailed 12/16/2005

Decision 05-12-026 December 15, 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)
Application of Pacific Gas and Electric Company (U 39 M) For Approval of the 2006 and 2006 California Alternative Rates for Energy and Low Income Energy Efficiency Programs and Budget.	Application 05-06-005 (Filed June 1, 2005)
Southern California Edison Company's (U 388-E) Application Regarding Low Income Assistance Programs for Program Years 2006 and 2007.	Application 05-06-009 (Filed June 1, 2005)
Application of Southern California Gas Company (U 904 G) for Approval of Low Income Assistance Programs and Budgets for Program Years 2006 and 2006.	Application 05-06-012 (Filed June 1, 2005)
Application of San Diego Gas & Electric Company (U 902 M) for Approval of Low Income Assistance Programs and Budgets for Program Years 2006 and 2006.	Application 05-06-013 (Filed June 1, 2005)

OPINION APPROVING 2006-2007 LOW INCOME PROGRAMS
AND FUNDING FOR THE LARGER ENERGY UTILITIES
AND APPROVING NEW LOW INCOME ENERGY EFFICIENCY
PROGRAM MEASURES FOR 2006

OPINION APPROVING 2006-2007 LOW INCOME PROGRAMS
AND FUNDING FOR THE LARGER ENERGY UTILITIES AND
APPROVING NEW LOW INCOME ENERGY EFFICIENCY
PROGRAM MEASURES FOR 2006 2

I. Summary 2

II. Procedural Background 5

III. Discussion 8

A. The Greenlining and ORA Comments 9

1. The Cool Center Program 9

2. Energy Efficiency Benefits From the Low Income Energy
Efficiency Program and the Benefits of Energy Education Workshops 12

B. Specific Utility Requests for Direction from the Commission 16

1. SoCalGas 16

a) Authorization to Use the Impact Evaluation of the 2001 Statewide Low Income Energy Efficiency Program to Calculate and Report Program Benefits 16

b) Approval of Forecasted CARE Administrative Costs 18

c) Authorization to Update the Gas Surcharge Rate by
Advice Letter 18

d) Authorization to Shift CARE Funds Among
Administrative Categories 18

e) Authorization to Carry Over Unspent Low Income
Energy Efficiency Funds from Year-to-Year 19

2. SDG&E 20

a) Restoration to Low Income Energy Efficiency Program Funding in 2006 of $1.091 Million Disallowed for 2005 in
D.05-04-052 20

b) Request for a 43%/57% Allocation of Low Income
Energy Efficiency Program Funds Between Gas and
Electric Programs 20

3. PG&E 22

a) Leave to Supplement Its Application If New Low Income Energy Efficiency Measures Are Approved for 2006 22

b) Approval of the March 12, 2004 Standardization Team Proposal Concerning Infiltration Measures 23

C. New Low Income Energy Efficiency Measures for 2006 24

1. Central Air Conditioning 26

2. Duct Testing and Sealing 28

3. Air Conditioning Diagnostics 29

4. Compact Fluorescent Lamp Master Purchase Plan 32

D. Future Standardization Team Activities 32

IV. Assignment of Proceeding 34

V. Comments on Draft Decision 34

VI. Conclusion 34

Findings of Fact 35

Conclusions of Law 37

ORDER 38

OPINION APPROVING 2006-2007 LOW INCOME PROGRAMS AND FUNDING FOR THE LARGER ENERGY UTILITIES AND APPROVING NEW
LOW INCOME ENERGY EFFICIENCY PROGRAM MEASURES FOR 2006

I. Summary

In this decision, we approve low income program funding for 2006 and 2007 for the Pacific Gas and Electric Company (PG&E), the Southern California Edison Company (SCE), the San Diego Gas & Electric Company (SDG&E), and the Southern California Gas Company (SoCalGas). The programs include the California Alternative Rates for Energy (CARE) Program, and the Low Income Energy Efficiency Program. We adopt the funding levels as proposed, with the exception of SDG&E's request to shift $900,000 from natural gas Low Income Energy Efficiency activities to electric. Instead, we direct SDG&E to maintain its current emphasis on the installation of natural gas efficiency measures. In addition, we approve new measures (central air conditioner replacement as well as duct testing and sealing) to be included in the Low Income Energy Efficiency Program. We approve the following funding for 2006:

This decision comes soon after our recent actions to offer greater protection to low income customers from the effects of high natural gas prices this winter. On October 27, 2005, the Commission issued Decision (D.) 05-10-044, which, among other things, expanded income eligibility for the CARE program from 175% of the Federal poverty guidelines to 200%. It also defined income eligibility for the Low Income Energy Efficiency Program in the same manner. Previously, customers with income between 175% and 200% of the Federal poverty guidelines could only participate if they were elderly or disabled. In that decision, we also permitted the use of creative efforts such as census-block targeted enrollment campaigns and approved proposals to expedite the delivery of certain energy efficiency measures to low income customers.

The utilities could not have anticipated the changes adopted in D.05-10-044 when they filed the applications underlying this decision. However, the utilities have asked the Commission to approve the proposed 2006-2007 funding levels set forth in their applications with the understanding that they may have to seek funding augmentations if program activity continues to accelerate. We approve the overall funding requests and order that these funding levels continue in effect until a subsequent decision of the Commission approving new funding levels.

While approving the proposed funding levels and programs, we recognize that the utilities we are in the midst of a season of change related to the low income programs. The Commission has expanded CARE eligibility and approved efforts to speed up the installation of the most cost-effective energy efficiency measures. In this Decision, we approve new measures to be included in the Low Income Energy Efficiency Program. We anticipate the release of the long-awaited Needs Assessment that will help the utilities identify the portions of the low income community that are underserved. The Governor recently signed Senate Bill (SB) 580 which, among other things, requires that the State take additional steps to pursue automatic enrollment for CARE. These events prompt another look at overall programs and funding, including reconsideration of the current approach to planning Low Income Energy Efficiency Programs.

The applications before us, here, reflect the current utility practice of planning Low Income Energy Efficiency Program activities around a budget, rather than budgeting to achieve specific energy efficiency or penetration goals. We want each utility to establish, and work to achieve, penetration goals (with the assistance of the Needs Assessment results and each utility's direct program experience). We also want to bring the utility low income program cycle into sync with that of the more general energy efficiency programs, which are in the midst of a three-year program cycle, scheduled to terminate at the end of 2008.

For all these reasons, we direct the utilities to file new applications by July 1, 2006 to propose program and funding changes for 2007 and 2008. In the meantime, however, in this Decision, we approve funding for the 2006-2007 program cycle, which shall be the basis for utility programs until the Commission adopts changes resulting from the July 2006 applications. Further, in order to avoid a sudden drop in program activity after the winter, we direct the utilities to file augmented 2006 budget applications no later than April 14, 2005, to enable the utilities to treat at least 5-10% more homes than they projected in the current applications. In response to these applications, we will consider the reasonableness of adopting the proposed augmentations.

¹ Revised Table 2 also incorporates the reallocation of SDG&E's LIEE Program Budget as directed by the Ordering Paragraph 14 of the Draft Decision