16. Natural Gas Appliance Testing (NGAT) - Funding Source

PG&E has requested that the Commission fund Natural Gas Appliance Testing (NGAT) under the LIEE program rather through rates approved in its general rate case (GRC).¹⁰⁸ PG&E claims that NGAT is currently funded through general rates because of an archaic understanding that "carbon monoxide testing conducted under the LIEE program is part of the `routine' service to ratepayers and is already authorized in rates," when in fact "the NGAT procedures adopted by the Commission are specific to LIEE."¹⁰⁹ PG&E notes that NGAT has "become an integral element of the LIEE program" and that it "is specifically designed to address the needs of low income households that receive infiltration measures through LIEE."¹¹⁰ PG&E further states that the program is currently "regulated along with other LIEE program policies and procedures."¹¹¹ PG&E claims that the procedural similarities in the programs, would reduce administrative complexity if NGAT to fall within the LIEE budget. PG&E promises that ratepayers will not be double-billed for NGAT if it is funded through LIEE,¹¹² and claims that the testing protocols involved in "LIEE-related NGAT have [recently] become more complex" and expanded to cover more households.¹¹³ Thus, according to PG&E, NGAT will require additional funding.

While we agree that NGAT has become a crucial component of LIEE, we reaffirm our 2005 and 2006 determinations will not alter the current funding arrangement that NGAT is "designed to promote safety."¹¹⁴ NGAT testing is not an appropriate area for LIEE funding, but rather is "a basic utility service."¹¹⁵ As we stated in D.05-04-052, denying a similar request by SDG&E and SoCalGas:

We do not believe SDG&E and SoCalGas have adequately demonstrated that we should change the status quo and move funding for LIEE-related CO testing from base rates to PGC funding. We believe safety testing is a normal utility function for a gas utility and should be paid for out of base rates. LIEE funding is limited in amount and is designed to fund activities that help low income customers save energy. Safety, on the other hand, is something the utilities owe all customers, whether they are low income or not. Such testing should not depend on a separate stream of funding, but should be guaranteed for any customer receiving utility service. Thus, CO testing should continue to be funded from base rates. We deny SDG&E and SoCalGas' request, and remove the requested amounts for CO testing from their proposed 2005 LIEE budgets.

Notwithstanding these findings, PG&E renews an argument that was earlier presented by SDG&E and SoCalGas that the types of testing performed under the NGAT procedures go beyond the routine service and that they should be funded separately from the GRC.¹¹⁶

The Commission's finding that "[s]afety testing (including the cost of testing devices) is - and should continue to be - provided for in the utilities' base rates"¹¹⁷ does not rest on a vision of NGAT being wholly separate from LIEE or on a belief that NGAT is routinely performed for all customers. Rather, NGAT was classified as a basic utility service because promoting customer safety is a general utility function. Therefore, despite the close ties between NGAT and LIEE, NGAT is not an appropriate expenditure for LIEE funds and we refuse PG&E's request. PG&E shall not reduce the number of customers it treats as part of the LIEE program based on this holding.

We order PG&E and the other IOUs to cease requesting this budget shift, given the many decisions in which we have denied it.

¹⁰⁸ Pacific Gas and Electric Company Testimony in Support of Application for the 2009, 2010, and 2011 Low income Energy Efficiency Program and the California Alternate Rates for Energy Program, p. 1-34.

¹⁰⁹ Id.

¹¹⁰ Id. at 1-35-36.

¹¹¹ Id. at 1-36.

¹¹² Id. at 1-35.

¹¹³ Id.

¹¹⁴ D.06-12-038, p. 14.

¹¹⁵ D.05-04-052, Finding of Fact 10.

¹¹⁶ Id. at 90.

¹¹⁷ Id. at 85.