4. Energy Savings - LIEE

The first key area on which the SMJUs should begin to focus is energy savings. The following table represents the energy savings estimated by the SMJUs who provided such information:

The SMJUs propose to deliver these energy savings in the following manner:

Southwest: Southwest estimates that it will assist customers in 1,400 homes in 2008 (of 30,706 eligible homes), 1,200 homes in 2009 (of 29,306 eligible), 1,350 in 2010 (of 28,644 eligible), and 1,500 (of 27,970 eligible) in 2011. It served (treated or weatherized)⁹ 1,579 homes in 2006 and 1,357 homes in 2007. Southwest focuses on weatherizing homes; its primary LIEE measures are ceiling insulation, caulking, weather-stripping, low-flow showerheads, water heater blankets and building envelop repairs which reduce infiltration.

Southwest proposes adding three new measures for 2009-2011: storm windows, floor insulation, and duct wrap for Climate Zone 16 (a cold zone that includes Tahoe, Truckee and Big Bear). Southwest also plans to extend its energy education process into 2009-2011, which includes LIEE program and weatherization materials, explanation of how to read and understand the gas bill, energy-savings tips, and natural gas safety.

Discussion: For purposes of energy savings, we are satisfied with Southwest's mix of LIEE measures, including its new measures, but are concerned about its penetration rate (i.e., the number of customers served), as discussed in the next section. Southwest may continue to offer its LIEE program as is, and may add its new proposed measures, but must increase the number of customers who benefit from the program.

PacifiCorp: PacifiCorp has installed measures in 2,022 homes since 1986, and anticipates treating 90 homes in 2008, 110 in 2009, 115 in 2010 and 120 in 2011. Its LIEE program involves installation of caulking, ceiling insulation, duct sealing/testing, duct wrap, evaporative cooler covers, faucet aerators, floor insulation, low flow showerheads, minor home repairs, outlet cover plate gaskets, water heater replacement/repair, water heater insulation, replacement windows, shell infiltration, door replacement, CFLs and fixtures, refrigerator replacement, and door weather stripping. PacifiCorp has a partnership with a community based organization (CBO), the Energy Demonstration Center in Eureka, but it has resulted in weatherization of only 15 homes (in 2007). PacifiCorp also partners with a second CBO. PacifiCorp plans to increase the number of weatherizations in future years.

Discussion: PacifiCorp's application (Table B-2) shows that it will increase energy savings each year - from 76,918 kilowatt hours (kWhs) in 2007, to 171,864 in 2011, with total energy savings for 2007-11 of 596,259 kWhs. However, PacifiCorp replaced only 18 refrigerators in 2007.¹⁰ By contrast, Sierra, with a similar number of residential customers (Sierra has 46,000; PacifiCorp has 35,300), replaced 72 refrigerators in 2008, an installation rate that exceeds PacifiCorp's by four times. PacifiCorp should increase its refrigerator replacement rate, although we do not specify a required number of replacements. We also increase PacifiCorp's required LIEE penetration as discussed in Section 6.

Sierra: Sierra treated and weatherized 106 homes in 2006, 176 in 2007, and estimates it will serve 140 homes in 2008, 153 in 2009, 171 in 2010 and 183 in 2011.¹¹ By our calculations, weatherization is the key component of Sierra's LIEE program, although it also replaces refrigerators, provides heating and air conditioning equipment and funds operation of "Cool Centers" (community-based air conditioned space where customers can have respite from the heat in extreme conditions). In the Tahoe Basin, most customers receive only CFLs. Sierra proposes to expand its CFL installations per residence from five to ten light bulbs. In its protest, DRA expresses concern that Sierra's LIEE program relies too heavily on CFLs.

Discussion: As we discuss in the Lighting section of this decision, we allow all SMJUs to use light bulbs in their LIEE programs, but the four largest SMJUs (Sierra, Southwest, Bear Valley and PacifiCorp) should not deliver CFLs exclusively. We prefer that instead of increasing CFL deliveries from five to ten light bulbs, Sierra redirect the additional budget it would spend on light bulbs to refrigerator replacement. We know from previous assessments of the LIEE program that refrigerator replacement provides significant energy savings for low-income customers. Indeed, refrigerators and lighting together deliver the greatest energy savings for the large IOUs' customers. Thus, we decline Sierra's request to increase light bulb deliveries, and redirect the requested funding to refrigerator replacement.

In comments on the proposed decision, Sierra claimed that it has reached customer saturation on refrigerator replacements, but furnished no analysis to support this assertion. We do not change the proposed decision, but will allow Sierra to seek to shift refrigerator funding to other measures midcycle by a Tier 2 Advice Letter if it can demonstrate conclusively that it cannot meet this decision's mandate.

Bear Valley: Bear Valley anticipates serving approximately 165 customers per year (of 2,700 eligible). Bear Valley's LIEE program consists mostly of lighting ($33,684 of $137,150) and refrigerator replacement ($91,887), with a tiny weatherization budget ($1,277). It proposes no measure changes for 2009-2011, but does propose increasing the LIEE-eligible income level from 175% to 200% of the federal poverty line (which would increase eligible customers to approximately 2,700, as noted above). DRA raises no objection to Bear Valley's program measure mix or penetration. We discuss its income level proposal in Section 8.

Discussion: We approve Bear Valley's LIEE program measure mix as is. Bear Valley focuses a large portion of its budget on refrigerator replacement, a measure that delivers substantial energy savings to low-income customers. The vast remainder of its budget focuses on lighting, which also delivers substantial energy savings. Thus, Bear Valley's LIEE measure mix ensures good overall energy savings, consistent with the Plan.

As we discuss later in this decision, we also allow Bear Valley to increase the level of income customers may have while remaining eligible for LIEE from 175% to 200% of the federal poverty limit. This change will bring the company's eligibility guidelines in sync with those of Southwest Gas, the natural gas supplier in Bear Valley's territory, and will increase program penetration with very limited impact on non-participating customers' bills.

Alpine and West Coast Gas: Given the small size of these SMJUs, we allow them to continue with their current LIEE measure mixes. We discuss DRA's concerns about Alpine's LIEE penetration and overhead budget later in this decision.

⁹ A treated home receives the greater number of services: weatherization, energy assessment/audit, energy education, appliance replacement, and CFLs. A weatherized home receives only ceiling attic/insulation, weather stripping, caulking, low-flow showerheads, water heater blankets, and building envelope repairs that reduce infiltration.

¹⁰ Comments of PacifiCorp (on Proposed Decision), filed November 20, 2008, p. 3.

¹¹ This figure combines "treated" and "weatherized" homes, with weatherized homes being a subset of treated homes.