21. CARE Administrative Costs

21.1. Introduction

We approve the IOUs' CARE budgets, even though they reflect an increased level of administrative cost for the 2009-11 period over the prior period. We find that the IOUs' budgets have increased because it costs more to reach each new customer as IOU CARE penetrations reach higher levels; postage and mailing costs have increased; the need for supervision and oversight of the program increases as penetration increases; capitation fees to contractors have increased as the program expands; and due to other more individualized reasons. We therefore approve the budgets as requested.









In addition to the IOU budget request we approve an additional $167,000 for a pilot to pursue automatic enrollment through One-E-App, and grant PG&E an additional $136,000 for its work related to the pilot, as discussed later in this decision. In 1005, the Legislature passed Senate Bill 580 requiring the Commission to work with the California Health and Human Services Agency. Over the past several years, the Commission has pursued several avenues to fulfill this requirement to no avail. The pilot authorize herein provides a step in the right direction to fulfilling our responsibility.

21.2. Parties' Positions

DRA challenges the IOUs' CARE administrative costs as too high, and asks us only to approve costs at a level commensurate with the 2006-08 program. DRA asserts that the Commission's direction over the last several years to employ automatic enrollment, categorical eligibility, census-based targeting, and the like should be reflected in lower CARE administrative costs. DRA recommends that the IOUs' customer service representatives handling all customer calls begin to handle CARE outreach, with no increase in CARE budgets because such services are part of the general utility function.¹⁵⁹

DRA presents the following tables to illustrate the IOUs' proposed administrative budgets and DRA's proposed reductions.

The IOUs counter that their costs have gone up for several reasons. First, the IOUs state it costs more to reach and enroll new CARE customers as the IOUs' penetration levels increase. The IOUs claim they already reach the customers who are easier to find, so they must spend more time and money reaching customers who are eligible but not enrolled.

PG&E also explains that because it has so many more customers than it did before we increased the CARE income guidelines to 200% of federal poverty level in 2005, its overall costs have increased to retain these customers, especially since it recertifies eligibility every two years. PG&E also argues larger CARE customer base increases the need for management and oversight.

SCE states that most of its cost increases stem from a computer upgrade designed to streamline CARE and FERA enrollment processes and provide a more efficient process for SCE's low income customers' enrollment, recertification and verification. Further, SCE is proposing several aggressive multilingual outreach and door-to-door campaigns. Utilization of multilingual media outlets within Southern California is very expensive, according to SCE. In addition, within the current 2008 program year, SCE has seen more than a 900% increase in enrollment efforts by CARE Capitation agencies. At year end 2007, SCE expended slightly more than $27,000 to CARE capitation agencies for more than 2,100 new CARE enrollments. However, as of May 2008, SCE has expended nearly $270,000 for nearly 19,000 new CARE enrollments. According to SCE, approximately $450,000 of SCE's increase in CARE administrative expenses is to make provision for these increased efforts by the community-based organizations participating in SCE's CARE Capitation Program.¹⁶⁰

SDG&E states it has increases due to new computer requirements in each of the three years of the budget cycle, and new program requirements for sub-metered CARE customers.

21.3. Discussion

We find increases in CARE administrative costs are warranted. We agree with the IOUs that it costs more to reach customers once penetration levels increase, since the customers that are easiest to reach are already in the program. We find it reasonable that increased penetration requires additional staffing and management, raises capitation payments, and increases recertification costs. We support SCE's increased focus on multilingual outreach. Finally, we support computer upgrades for the CARE program, especially since we are requiring the IOUs to make better use of CARE data for the LIEE program (as we discuss in the Tiering/Segmentation section earlier in this decision). Thus, we allow the increases as requested.

We will not require all IOU service/customer representatives to inform all customers about CARE on any service call, although they shall do so for CARE when a customer contact occurs regarding LIEE, and vice versa; when it is likely a customer needs program assistance; and at the time of a customer's service initiation or change of service address. Such service shall not be charged to the CARE administrative budget; we agree with DRA that telling customers about services for which they are likely eligible is a basic utility function to be borne in general rates.

¹⁵⁹ "[W]here a cost is one the utility would have to incur regardless of the presence of the low income programs, it should be funded in base rates, rather than by the limited/earmarked PGC surcharge." D.05-04-052, p. 52.

¹⁶⁰ Response Of [SCE] To The Administrative Law Judge's Ruling Seeking Further Information From The Large Investor-Owned Utilities' 2009-2011 Low Income Energy Efficiency/CARE Applications, filed June 27, 2008, answer 14.