22. CARE Penetration Level

22.1. Introduction

In D.02-07-033, the Commission established the goal of enrolling 100% of all eligible customers in the CARE Program. The IOUs have not met this goal, although they have made significant progress in this direction. In 2008, the estimated penetration rate for CARE enrollment is as follows: PG&E - 70%; SCE - 79%; SoCalGas - 79.6%; and SDG&E - 72%. In their applications, the IOUs estimate their enrollment goals for 2009-11:



The KEMA Report suggests that the CARE penetration goal of 100% may not be attainable.¹⁶¹ Reasons for this include the difficulty in identifying and reaching certain customers. In addition, certain customers have a very low energy burden, would not benefit greatly by participating in the program, and/or are unwilling to participate. The assessment concludes that "10% of all low income households would be unwilling or unlikely to participate in CARE."¹⁶²

The authors of the KEMA Report recommend that the Commission modify its existing 100% penetration goal; they suggest that "a conservative starting point for the optimal CARE Program penetration would be 90%." Alternatively, the study recommends a CARE penetration target of 95% for SCE, 90% for PG&E and SDG&E, and 80% for SoCalGas. Such numbers are based on certain factors, including previous enrollment rates and barriers to enrollment in each utility service area. According to the Report, "this is the percentage of the low income population that is eligible for, would be interested in, and would likely benefit from participation."¹⁶³

We set a goal of 90% CARE penetration for the 2009-11 period, as discussed fully below.

22.2. Parties' Positions

PG&E agrees with the 90% overall optimal penetration but claims that it is unlikely that it can reach this penetration target in the next budget cycle. PG&E opposes mandated enrollment targets, but supports the Commission's encouragement in reaching higher penetration rates. PG&E attributes its low enrollment of 70% to customers failing the recertification and post-enrollment verification. As 29% of its estimated CARE-eligible customers reside in rural zip codes, the cost of face-to-face contacts to enroll these customers also contributes to PG&E's lower penetration level.

SCE believes 90% is a reasonable estimate of optimal overall CARE penetration and states it continuously seeks to enroll 100% of all eligible and willing customers. SCE cites the frequency of customers' service establishment, service termination, failure to recertify and failure to respond to verification request as reasons why this level of penetration may not be achieved.

SDG&E did not comment on whether or not 90% should be the maximum possible penetration rate, instead citing its concerns with the accuracy and results of the estimate provided by the KEMA Report. SDG&E went on to discuss the different factors impacting enrollment in each service territory, which include demographics and differing customer habits and characteristics. The factors in SDG&E's service territory include an expensive housing market which results in frequent movement of low income customers out of the service territory. In addition, SDG&E states the small size of its service territory and lack of a shared service area limit its ability to pursue economies of scale in outreach and data sharing.

SoCalGas believes it has already enrolled the majority of willing and eligible customers in its service territory but claims it will continue to strive to achieve the 100% penetration goal. SoCalGas claims the lack of data on how the KEMA Report determined its recommended penetration rates make it difficult to comment on the accuracy and achievability of the recommended CARE penetration targets.

According to each IOU, they share best practices methods for customer enrollment, recertification and verification processes, implementing such methods when feasible. However, certain strategies work better in certain areas than others and there is no single way to reach all eligible customers. With the differences in each service territory and range of methods used to reach customers, the utilities claim it is difficult to determine a precise reason for the difference in penetration rates. The utilities do not offer input on how the Commission can resolve the difference.

DRA discusses the rising cost of electricity and gas, stating that CARE may provide greater value to more low income households. DRA suggests the Commission immediately instruct the utilities to enroll enough households to meet the KEMA Report's optimal penetration rates of 90% for PG&E and SDG&E, 80% for SoCalGas and 95% for SCE. DRA suggests this can be accomplished by using all tools available. By doing so, the Commission will prepare low income families to cope with rising energy costs.

PG&E claims another reason for different penetration levels: post-enrollment verification rates vary among the IOUs. Each month, PG&E selects an average of 1% of newly enrolled/recertified customers for post-enrollment verification. Approximately 65% of the selected customers fail to provide the requested income documentation and are dropped from CARE. PG&E suggests the Commission implement more consistency in post-enrollment verification among the utilities.

DRA objects to PG&E's post-eligibility income verification efforts. DRA notes that PG&E received $5 million to be spent in 2007-08 on CARE outreach in order to increase penetration rates. Despite this funding increase, PG&E's level of CARE penetration has not increased to projected levels. Moreover, DRA claims that PG&E's post-enrollment verification process resulted in a net decrease of 36,228 customers. DRA requests that the Commission set clear certification guidelines to ensure that this does not occur again. (We discuss recertification in the next section of this decision.)

22.3. Discussion

The Commission recognizes the efforts conducted by the utilities to find additional customers to enroll in CARE. The IOUs' outreach efforts include everything from sending direct mail¹⁶⁴ to placing advertisements in ethnic media. These efforts are important, given that low income customers need the financial assistance afforded by the CARE subsidy, especially in the face of rising energy costs. Outreach strategies designed to enroll customers in CARE are set to continue, with increases in outreach funding in the next budget cycle and outlined in the following graph:



The Commission recognizes that the goal of reaching all eligible customers in each service territory may be prohibitively expensive, as the utilities go to great lengths to reach out to customers, often with disappointing and costly results. Under the current budget, costs of reaching certain customers can be quite high. For example, the cost of direct mail can be as high as $21 per customer enrolled, as illustrated by the following table and in Attachment B-3 of the IOUs' budget applications.



Other efforts are even more costly yet produce even less impressive results. For instance, SDG&E's mass media campaign (which includes radio, TV, and print) cost a total of $239,020 in 2007 yet only resulted in a net enrollment of 900 customers, a cost of $266 per customer enrolled. Similarly, SCE conducted several outreach events for CARE in 2007, spending $33,000 for a net enrollment of only 1,033 customers (a $32 per customer enrolled cost).

As the IOUs note, the KEMA Report does not go into great detail on how it obtained the optimal CARE penetration levels for each individual utility. Given that we believe a CARE penetration goal of 100% to be exceedingly expensive and difficult to meet, we set a new CARE penetration goal of 90% for all large IOUs. We base this goal on the KEMA Report's estimate that 10% of low income customers are unwilling or unlikely to participate in CARE. Over the next budget cycle, the utilities should strive to meet this standard penetration goal.

The record on 10% of eligible customers as unwilling or unlikely to participate in CARE has been developed in this proceeding, especially in the context of calculating the number of eligible and willing LIEE customers. In addition, the 90% CARE penetration goal is viewed as a "conservative starting point" and based on evidence collected in an onsite survey. By making this the new goal, customers who have a very low energy burden, would not benefit greatly by participating in the program, and/or are unwilling to participate are factored into a more feasible estimate of how many customers should be reached in the next budget cycle.

In the process of trying to meet this new goal, the Commission welcomes new ideas on how to achieve higher penetration rates without substantially increasing the CARE outreach budget. The Commission may reconsider this penetration goal in future decisions, in case barriers to enrollment are removed that make the 100% penetration rate more feasible.

In response to comments by the IOUs, we make clear that 90% is the goal toward which the IOUs shall strive, rather than a hard and fast requirement. However, this decision gives the IOUs relief from the prior 100% penetration goal, and we provide the IOUs two potentially significant new tools to increase LIEE enrollment: categorical eligibility based on a customer's participation in several public benefits programs not currently relied on in our energy low income programs; and an automatic enrollment tool, One-E-App, a Web-based eligibility solution used by a variety of CBOs and other organizations (schools, clinics, churches and others) for eligibility in a wide range of health and social services. These changes should make the 90% goal, or good progress toward it, attainable in the 2009-11 period.

¹⁶¹ KEMA Report, p. 7-20.

¹⁶² Id.

¹⁶³ Id.

¹⁶⁴ SoCalGas seeks to add telemarketing to its list of outreach methods, although this may be only for a LIEE program. We have concerns about marketing abuses associated with telemarketing, based on experience on the telecommunications side. We do not prohibit telemarketing outright, but SoCalGas shall be sure that it is carefully screening the firm(s) it uses, making sure services are in-language, and preventing abuse. SoCalGas shall report candidly on its experience in the Mid-Course Correction Proceeding.