4. Low-Income Discount Proposal
Under the LIRA program, Valencia will discount the monthly service charge by 50% for all eligible residential customers. All Valencia residential customers receive metered service. The discount applies to income-eligible customers with meters of 1" or less. The average customer water bill is about $29/month, with program discounts expected to range from $3-5 per month.
This subsidy will be funded by a monthly surcharge of $0.04 on the service charge of non-eligible customers. The discounts and surcharges will be included in Valencia's "Schedule No. LIRA" tariff. Valencia will establish a memorandum account to monitor the implementation and administrative costs of the program.
4.1 Assessment of Need and Eligibility Criteria
Valencia serves approximately 25,000 customers in the community of Valencia and surrounding areas in Los Angeles County. Because of the relatively high income level of its customers, Valencia expects a LIRA program participation rate of 1%, with about $14,000 in assistance provided annually.
To be eligible for program assistance, customers must meet the same income levels and other requirements as for the California Alternative Rates for Energy (CARE) program for electric and gas service in the same service areas.3 Valencia's customers who meet CARE income levels but do not participate in a CARE program also will be eligible for the LIRA program.
Valencia will not offer LIRA assistance to master-metered customers as it has no means of ensuring that the proper credits would reach those customers. The LIRA program adopted here does not apply to sub-metered customers.
4.2 Notice and Eligibility Renewal
Valencia provided notice of the application to a local newspaper within 10 days of filing, and mailed notice to all customers within 45 days of filing. Upon Commission approval of the LIRA program, Valencia will mail a program description along with application forms to all customers. Similar to the CARE program, qualifying customers will be required to re-qualify every two years.
4.3 Valencia Tariff
Valencia is authorized to file, by Advice Letter, its "Schedule No. LIRA" tariff reflecting the discounts and surcharges of the LIRA program described above. The Advice Letter shall be filed within 30 days of the date of this order.
4.4 Accounting and Reporting Practices
Valencia requests approval to implement a memorandum account to track the program. The memorandum account will include LIRA credits, surcharge revenues, incremental costs, franchise fees, uncollectible accounts, and monthly interest and will be described in Valencia's Preliminary Statement in its tariffs. Valencia will assess the effectiveness of its LIRA program in its future General Rate Cases.
3 CARE eligible customers are generally those with income levels at or below 200% of the federal poverty level (D.05-10-044).
