11. CARE Penetration Levels

One of our key concerns regarding the SMJUs' CARE programs relates to their penetration levels - i.e., numbers of customers served.

Southwest: Southwest estimates an 81% participation rate as of the end of 2008. We previously set goals for 2007 and 2008 of 93% and 95%, respectively.

Southwest proposes that we lower the goal to 85% by 2011. Southwest notes that the slow housing market and related sub-prime mortgage crisis has severely impacted the company's customer growth in Southern California.

DRA proposes that we hold Southwest to the 95% rate we mandated in D.06-12-036.

Bear Valley: Bear Valley's CARE penetration is very low (55%), in part because of its lack of dedicated CARE (or LIEE) personnel. The work has been done with existing customer service representatives. Bear Valley requests a large increase in its budget to remedy this situation, as we discuss in Section 13 of this decision.

PacifiCorp: As of May 2008, approximately 78% of PacifiCorp's eligible customers were enrolled in CARE. PacifiCorp anticipates it will reach 85% by the end of 2008. In D.06-12-036, we required PacifiCorp to increase penetration by 20% per year for 2007 and 2008, and PacifiCorp exceeded this goal in 2007 (with a 22% increase) and will miss the goal slightly in 2008.

Sierra: Sierra projects a CARE penetration rate of 83% at the end of 2008. We adopted a 79.6% goal for 2007 and 82.7% for 2008 in D.06-12-036.

Alpine: Alpine has 53 CARE customers (4.6% of its total customer base). Alpine assumes it has a 97% penetration rate because of its estimate that only 4% of its total customers are CARE eligible.

West Coast: West Coast will have 46 CARE customers at the end of 2008, and expects to add four each year from 2009-2011. It believes it is at 100% penetration.

Discussion: In the large IOU decision on the 2009-2011 programs, we set a uniform goal for CARE enrollment of 90% of eligible customers. We reached this conclusion based on findings of the KEMA Report. That report found for the large IOUs that a CARE penetration goal of 100% might not be attainable, based on the difficulty in identifying and reaching certain customers; customers with a low energy burden, who do not benefit much by participating in the program; and 10% of the customers who are "unwilling" or "unlikely" to participate in CARE.²³

We do not understand Southwest's assertion that the housing slump will lower the numbers of CARE eligible customers in its territory. It would seem the crisis would throw more customers into poverty (and hence the CARE-eligible ranks). Further, a lower customer growth rate should not affect the percentage of Southwest's total customers who need CARE benefits, and our penetration requirements are based on such a percentage.

We do not set penetration goals for the SMJUs that are higher than for the large IOUs. The CARE administrative budgets for the SMJUs are very small; indeed, some (Bear Valley), fund most CARE administration out of general rates, and have no dedicated CARE outreach funding. We also recognize that the higher the penetration goal, the more difficult it is for a SMJU to reach, since the universe of unserved customers is small. Nonetheless, each unserved CARE customer suffers hardship, and we wish to minimize such hardship as much as possible. We therefore set a uniform 90% penetration goal across all SMJUs.

Only Bear Valley, with 55% CARE penetration, has significant hurdles to jump in reaching the 90% level. However, we do two things to substantially increase its penetration: We grant it additional CARE funding, as discussed below, and we increase the eligibility income guideline from 175% to 200% of the federal poverty line. Thus, we expect Bear Valley to reach our 90% CARE penetration goal over the next three years. Bear Valley's annual reports should show significant progress toward this goal; if they do not, we may take additional action.

Finally, no SMJU shall reduce its CARE penetration level if it already exceeds 90%.

²³ KEMA Report, p. 7-20.