8. Need for Expedited Consideration

Rule 77.7(f)(9) of the Commission's Rules of Practice and Procedure provides in relevant part that:

"...the Commission may reduce or waive the period for public comment under this rule...for a decision where the Commission determines, on the motion of the party or on its own motion, that public necessity requires reduction or waiver of the 30-day period for public review and comment. For purposes of this subsection, "public necessity" refers to circumstances in which the public interest in the Commission adopting a decision before expiration of the 30-day review and comment period clearly outweighs the public interest in having the full 30-day period for review and comment. "Public necessity" includes, without limitation, circumstances where failure to adopt a decision before expiration of the 30-day review and comment period...would cause significant harm to public health or welfare. When acting pursuant to this subsection, the Commission will provide such reduced period for public review and comment as is consistent with the public necessity requiring reduction or waiver."

We balance the public interest in quickly addressing these low-income assistance matters against the public interest in having a full 30-day comment cycle on the decision draft. We conclude that the former outweighs the latter. A reduced period for review and comment balances the need for parties' input with the need for timely action. Comments were filed on ______________.

Findings of Fact

1. During 2001, the rapid deployment efforts of SDG&E, SCE, PG&E and SoCal resulted in approximately 420,000 new customers being enrolled in the CARE program, net of decreases in enrollment due to customers moving out of the service area or failing to recertify.

2. Rapid deployment during 2001 increased the number of homes weatherized under the LIEE program in PG&E, SDG&E, SCE and SoCal's service territories by more than 50,000, and at least another 50,000 were provided other energy efficiency measures during the year, such as efficient refrigerators, air conditioners or compact fluorescent lights.

3. The penetration rates regularly calculated by the telecommunications utilities (e.g., Verizon and Pacific Bell) measure the number of households that have basic phone service, rather than the penetration rate for the ULTS program. Data presented during workshops indicates that the penetration rate for the ULTS program (i.e., the number of program participants relative to the number that are eligible) is approximately 70%.

4. As discussed in this decision, SCE, SDG&E, PG&E and SoCal's methodology for calculating penetration rates would be improved by completing certain sensitivity tests currently underway, and by updating the 1990 Census data on household size and income relationships with the 2000 Census data when it becomes available in fall, 2002. Introducing additional methodological refinements at this time could divert limited resources from this updating task. Some of the refinements proposed by the utilities during workshops overlap with the recommendations presented in the Phase 1 report of the Needs Assessment Study, which are currently under consideration by the Commission.

5. Avista utilizes a simplified method of applying Census information may overestimate its eligible CARE population.

6. Southwest Gas utilizes a method of estimating CARE eligible population that cross-checks independent survey information against current Census data.

7. The calculation and reporting of ULTS penetration rates by the telecommunications utilities could be improved in several ways, as discussed in Energy Division's workshop report. These improvements should be considered in the ULTS proceeding, R. 98-09-005.

8. Over one million low-income customers are eligible for, but do not participate in, the CARE program.

9. The utilities' proposed penetration rates do not acknowledge that the fundamental goal of the program should be to reach 100% of low-income customers that are eligible for, and desire to participate in, the CARE program.

10. Utilities will not reach this goal at the same pace, given differences in demographic characteristics and the magnitude of the eligible low-income population within each service territory, as well as differences in where each utility stands today with respect to program penetration.

11. The law of diminishing returns applies to CARE outreach efforts over time, i.e., it becomes increasingly difficult to enroll additional customers, the closer the utility moves towards achieving 100% participation.

12. The utilities shall include in their 2003 CARE program plans (due July 1, 2002) a proposed scope of study for evaluating the results of automatic enrollment, and associated budget.

13. The CARE penetration benchmarks adopted today may need to be revisited in future program planning cycles based on further experience with CARE outreach efforts, including automatic enrollment. They may also need to be revised when the results of the Low Income Needs Assessment Study currently underway are available.

14. Achieving the 100% penetration rate goal described in this decision is estimated to increase CARE rate subsidy and administrative costs by approximately $182.8 million per year. These increases in subsidy costs are unavoidable if we are to meet the needs of low-income customers and the intent of the Legislature.

15. Achieving the 100% CARE penetration goal to enroll one million low-income households will produce estimated annual bill savings of $174.7 million, or $174.00 per year per CARE-enrolled household.

16. Automatic enrollment of low-income customers into CARE is a necessary component of a strategy to achieve the program penetration goal described in this decision.

17. Automatic enrollment has been implemented in other states, including Texas, Idaho, Oregon, New York, Vermont, Montana and Massachusetts. Under the Texas program, preliminary data indicates that 460,000 out of 623,000 households receiving public benefits from social programs were successfully identified for automatic enrollment with their energy service provider.

18. The Medi-Cal and WIC programs administered by DHS, the Healthy Families program administered by MRMIB, and the Energy Assistance Programs administered by DCSD ("partner programs") share certain characteristics that make them prime candidates for partnership in the automatic enrollment program. These are: 1) their program eligibility requirements most closely match the Commission-adopted CARE eligibility requirement of 175% of the federal poverty guidelines; 2) each agency requires proof of income prior to enrollment, and 3) these programs provide the greatest number of household records with the least amount of duplication.

19. The majority of potential CARE customers will be automatically enrolled through participation in Medi-Cal. The maximum allowable income for no-cost Medi-Cal is generally up to 133% of federal poverty guidelines. The number of clients with incomes between 133% and 250% of federal poverty guidelines is approximately 7.2%. The number between 185% and 250% is about 2.6%.

20. The number of households that are eligible for the partner programs and whose income might exceed the Commission's current income eligibility requirements for CARE is insignificant compared to the number of eligible customers with incomes within the CARE requirement.

21. As discussed in this decision, CARE eligibility requirements need to be broadened to implement the automatic enrollment program we adopt today.

22. The potential for automatic enrollment to dramatically increase CARE enrollments is evident: In 2001, approximately 5.5 million individuals, or 3.4 million households participated in Medi-Cal, WIC, Healthy Families and LIHEAP. Up to 80% of these households are served by at least one investor-owned utility.

23. Based on the experience in other states, the majority of new CARE enrollments through automatic enrollment is likely to occur during the initial two months of clearinghouse operation. Subsequent annual automatic enrollment is expected to decrease and level out over time.

24. The eligibility screening process performed by DHS, MRMIB, and DCSD for their programs equal or exceeds the utilities' screening process for CARE. Therefore, a two-tier recertification process is not warranted.

25. Commission administration of the automatic enrollment program, as described in this decision, is necessary to ensure confidentiality of all client information provided through the agency partnerships with DHS, MRMIB, and DCSD.

26. The monitoring reports described in this decision are needed to track the effectiveness of the automatic enrollment program we adopt today.

27. Random verification of customers whose eligibility has been established under the partner programs could result in qualified low-income customers dropping out of the CARE program unnecessarily, and would increase administrative costs needlessly.

28. A bill insert is the most logical method to provide utility customers with advance information about the Commission's automatic enrollment program.

29. Combined utility and Commission start-up costs for administration of clearinghouse activities are an estimated $990,000.00.

30. The phone utilities do not currently conduct any post-enrollment verification of customer eligibility under the ULTS program. A recent study mandated by the Commission indicates that 30% of ULTS participants are not eligible for the program, and an additional 12% may or may not be eligible.

31. Based on the estimates presented in this proceeding, PG&E, SCE, SDG&E and SoCal will have sufficient LIEE funding from PGC collections, carryovers and one-time SBX1 5 funds to cover rapid deployment costs during PY2002.

32. PG&E, SCE, SDG&E and SoCal project significant shortfalls in funding from current rates and SBX1 5 one-time appropriations to cover CARE rapid deployment costs through 2002.

Conclusions of Law

1. The rapid deployment programs adopted for SCE, SDG&E, SDG&E and SoCal in D.01-05-033 should continue until further Commission order. As discussed in this decision, the ratemaking implications of continuing rapid deployment of CARE during 2002 needs to be addressed in a separate ratemaking proceeding.

2. The penetration rate methodologies used by the energy utilities are reasonable, subject to the modifications described in this decision.

3. The penetration rate benchmarks adopted today are reasonable and should be adopted. They acknowledge the differences among utilities, and at the same time reflect our commitment to move at a meaningful pace towards 100% CARE penetration.

4. The automatic enrollment program described in this decision is reasonable and should be adopted. With the implementation of automatic enrollment, low-income customers should be eligible to participate in CARE under the current CARE income/household size guidelines or if the household participates in Medi-Cal, Healthy Families, WIC or one of the three energy assistance programs administered by DCSD.

5. For the reasons discussed in this decision, the utilities should exclude automatic enrollment customers from their random post-enrollment verification process.

6. Partnering with the ULTS program under automatic enrollment should be deferred until the Commission determines the extent to which ineligible customers are enrolled in ULTS, and whether to revise the telephone utilities' self-certification and post-enrollment verification procedures. As discussed in this decision, coordination of other types of customer outreach strategies between ULTS and CARE programs should proceed without delay.

7. The Commission clearinghouse costs under automatic enrollment should be allocated in proportion to each utility's estimated eligible unenrolled CARE population. The utilities should track all other costs associated with the program (e.g., subsidy costs and utility administrative costs) in a memorandum account or in their CARE balancing account, as appropriate, pending Commission action on A.02-04-031 et al.

8. In order to move forward with automatic enrollment as expeditiously as possible, this order should be effective today.

9. The period for public review and comment on the draft decision should be reduced, pursuant to Rule 77.7(f)(9).

ORDER

IT IS ORDERED that:

1. The method currently used by Southwest Gas Company (Southwest) to estimate California Alternate Rates For Energy (CARE) penetration rates, as described in its February 1, 2002 pre-workshop comments in this proceeding, is approved without modification.

2. As discussed in this decision, Energy Division shall ensure that the CARE Needs Assessment Study is designed to obtain income and household size data specific to Avista Utilities' (Avista) service territory for the purpose of estimating the number of CARE eligible homes. This data shall be used to update Avista's penetration rates and to evaluate Avista's achievement of the CARE penetration benchmarks set forth in this decision.

3. Energy Division shall work with Avista and Southwest Gas to develop a consistent format for reporting CARE penetration on an annual basis. Avista and Southwest Gas shall submit this information in the annual CARE reports required by Decision (D.) 89-07-062.

4. Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCal), collectively referred to as "the utilities", shall make the following improvements to the methodology adopted in D.01-03-028 for calculating CARE penetration rates:

a. Complete sensitivity tests on smoothing techniques, variations in small area weighting methods and an analysis of whether differences between program and Census definitions of household income influence eligibility estimates significantly.

b. Order and utilize the special tabulations of 2000 Census data when they are available in Fall, 2002 to update CARE penetration rates.

The utilities shall jointly file report on the results of the tests/analyses required under (a) above, and any proposed refinements to methodology, no later than November 1, 2002. They shall file updated penetration rates using the 2000 Census data required under (b) above on June 1, 2003 per our reporting requirements manual.

5. The goal of the Commission is to reach 100% of low-income customers that are eligible for, and desire to participate in, the CARE program. To this end, we establish the following minimum benchmarks for program penetration, by utility:

	PG&E	SCE	SDG&E	SoCal	Avista	Southwest
2002	63%	88%	75.0%	70.0%	50.0%	89.0%
2003	74%	90%	78.0%	76.0%	60.0%	90.0%
2004	83%	91%	82.0%	81.0%	70.0%	92.0%
2005	84%	92%	85.0%	85.0%	80.0%	94.0%

6. The automatic enrollment program for CARE described in this decision is adopted. Under this program, customers of PG&E, SCE, SDG&E and SoCal shall be enrolled into CARE when they participate in any of the following programs:

a. Medi-Cal, administered by the California Department of Health Services (DHS);

b. Healthy Families, administered by Managed Risk Medical Insurance Board (MRMIB);

c. Woman, Infants and Children administered by DHS, and

d. Energy Assistance Programs administered by the Department of Community Services and Development (DCSD).

With the implementation of automatic enrollment, low-income customers shall be eligible to participate in CARE if they meet the current CARE income/household size criteria or if the household participates in any one of the programs listed above.

7. The Executive Director shall begin immediate efforts to obtain automatic enrollment partnership agreements with DHS, MRMIB, and DCSD. As soon as practicable after these interagency agreements are finalized, the Assigned Commissioner will issue a ruling outlining additional implementation tasks and the schedule for completing these tasks.

8. The Commission shall serve as the clearinghouse to identify electronic matches between partner agency and utility customer records, as described in this decision. Beginning 90 days from the effective date of this decision, the utilities shall submit the names and addresses of customers currently not receiving CARE to the Commission on a monthly basis. Energy Division shall conduct meetings with these utilities to develop data transfer and matching protocols.

9. The utilities shall track customers who are automatically enrolled in CARE under the program, report on the number of customers successfully matched, enrolled and recertified, and report the results of random post-enrollment verification. This information shall be included in the monthly rapid deployment reports until further notice by the Commission or Assigned Commissioner.

10. The utilities shall file annual status reports on automatic enrollment until further notice by the Commission or Assigned Commissioner. The Energy Division shall work with the utilities to develop the format, content and filing dates for these reports. The utilities shall include in their 2003 CARE program plans (due July 1, 2002), a scope of study for evaluating the results of the first 12 months of the automatic enrollment program, and an associated budget.

11. The utilities shall provide utility customers with advance information about the Commission's automatic enrollment program via a bill insert, as described in this decision. The utilities should begin immediately to work with the Energy Division in developing the appropriate text and be prepared to include the insert in bills upon approval. We delegate to the Assigned Commissioner the review and approval of the bill insert text. Within 30 days from the date of this decision, the Assigned Commissioner shall issue a ruling setting forth the approved text.

12. The Assigned Commissioner shall prioritize and clarify by ruling any additional implementation issues that may need to be addressed over time as the Commission gains experience with CARE automatic enrollment.

13. The costs of the Commission clearinghouse function shall be reimbursed by PG&E, SCE, SDG&E and SoCal in proportion to each utility's estimated eligible, unenrolled CARE population, as follows:

SCE: 9%

PG&E: 47%

SDG&E: 7%

SoCal: 37%

14. Pending Commission action on Applications (A.) 02-04-031 et al., the utilities shall track all costs related to automatic enrollment in a memorandum account or in an existing CARE balancing account, as appropriate. These include the 20% CARE rate subsidy costs, utility administrative costs (e.g., mailing a bill insert, handling customer inquiries resulting from the mailing, and data identification and transfer functions) and the Commission's clearinghouse costs.

15. As discussed in this decision, the Low Income Oversight Board (LIOB) shall hold public meetings for targeted outreach to specific telephone utility service areas for the purpose of coordinating customer outreach between CARE and Universal Lifeline Telephone Service (ULTS). LIOB shall report its recommendations within 90 days from the effective date of this decision in the form of a report to the Commission. Comments are due 30 days thereafter. LIOB's report shall summarize the positions of parties and participants in the public meetings, present the pros and cons of options considered, and discuss the rationale for LIOB's recommendations.

16. Energy Division's recommendations for improvement to ULTS penetration rate calculations and eligibility verification, as presented in the April 2, 2002 Workshop Report on CARE and ULTS Penetration Rates, shall be considered in the ULTS proceeding, R.98-09-005.

17. The Assigned Commissioner may, for good cause, modify the due dates set forth in this decision.

18. All reports and other submittals required by this decision shall be filed at the Commission's Docket Office and served electronically on all appearances and the state service list in this proceeding. U.S. mail service of the comments is optional, except that one hard copy of each document shall be mailed to Judge Meg Gottstein at the State Office Building, Room 5044, 505 Van Ness Avenue, San Francisco, California, 94102. In addition, if there is no electronic mail address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means-such as overnight delivery-is mutually agreed upon.) Current service lists for this proceeding are available on the Commission's web page, www.cpuc.ca.gov.

This order is effective today.

Dated , at San Francisco, California.

COMPARISON CATEGORY	PGE	SCE	SDGE	SCG	SOURCE
LIEE 2001 budget	$ 60,152,000	$29,561,413	$13,229,459	$38,320,262	table 1
LIEE YTD expenses	$ 38,569,947	$18,313,491	$11,546,629	$22,596,860	table 1
LIEE % YTD/budget	62.8%	62.0%	87.3%	59.0%	table 1
YTD homes weatherized	29,973	1,246	10,817	33,046	table 4
Weatherized in last decade	412,569	25,574	88,813	244,827	table 30
YTD homes treated	43,963	85,161	19,679	37,954	table 4
Treated in last decade	450,540	769,707	105,622	285,494	table 30
Eligible LIEE participants	1,106,798	839,968	241,282	1,260,675	table 30
LIEE penetration (treated)	40.7%	91.6%	43.8%	22.6%	table 30
YTD kWh saved	16,387,953	26,662,835	5,901,217	396,552	table 5
YTD kW saved	2,955	5,893	1,655	-	table 5
YTD therm saved	748,873	-	233,041	746,325	table 5
Avrg 1st yr bill savings YTD	$ 55.38	$ 38.76	$ 38.96	$ 15.11	table 5a-c
Avrg lifecycle bill savings YTD	$ 439.85	$ 220.32	$ 345.15	$ 101.88	table 5a-c
CARE 2001 budget	$ 63,566,197.00	$53,397,800	$12,827,627	$34,094,827	table 6
CARE YTD expenses	$112,187,295.00	$71,515,422	$17,411,799	$43,187,262	table 6
CARE % YTD/budget	176.5%	133.9%	135.7%	126.7%	table 6
YTD CARE enrollment	414,722	349,672	46,835	329,656	table 16
Current CARE participants	554,038	729,367	151,121	655,446	table 16
Eligible CARE participants	1,045,252	832,903	241,283	1,090,360	table 16
CARE penetration level	53.0%	88.0%	62.6%	60.0%	table 16
Notes:
The information on this table was taken from the January 2002 Rapid Deployment Monthly Reports of the four utilities, except for revisions to PG&E and SCG's LIEE figures in their April 2002 revisions, and revisions to PG&E's CARE budget and YTD expenses, which will be reflected in revisions included in the May report.
SDG&E homes treated was changed from the January 2002 report to include 1992, 1993, and 1994 homes weatherized that
were not previously included. These numbers will be reflected in Homes Treated starting with the May 2002 report.

Attachment 1

Acronyms and Abbreviations

A. - Application

Avista - Avista Utilities

CALWORKS - California Work Opportunities and Responsibility to Kids

CARE - California Alternative Rates for Energy

CFLs - compact fluorescent lights

D. - Decision

DCSD - Department of Community Services and Development

DHS - Department of Health Services

DSS - Department of Social Services

ERCOT - Electricity Reliability Council of Texas

KW - kilowatt

KWh - kilowatt-hour

LIEE - Low-Income Energy Efficiency

LIF/G - Latino Issues Forum and Greenlining Institute

LIHEAP - Low-Income Home Energy Assistance Program

LIOB - Low-Income Oversight Board

MEDS - Medi-Cal Eligibility Database System

MRMIB - Managed Risk Medical Insurance Board

ORA - Office of Ratepayer Advocates

Pacific Bell - Pacific Bell Telephone Company

PGC - Public Goods Charge

PG&E - Pacific Gas and Electric Company

PHC - prehearing conference

PUCT - Public Utilities Commission of Texas

PUMS - Public Use Microdata Sample

PY - program year

R. - Rulemaking

RT - Reporter's Transcript

SB - Senate Bill

SCE - Southern California Edison Company

SDG&E - San Diego Gas & Electric Company

SoCal - Southern California Gas Company

Southwest - Southwest Gas Company

TDHS - Texas Department of Human Services

ULTS - Universal Lifeline Telephone Service

Verizon - Verizon California Inc.

WIC - Women, Infants and Children

Attachment 2 (Page 1) CARE Enrollment and Drop Off History May 1 thru December 31, 2001
	A	B	C	D	E
	Gross Enrollment & Recerts	Drop Offs	Net Incr in Enrollment	Penetration Rate May 1, 2001	Penetration Rate December 31, 2001
SCG (1)	166,396	60,108	106,288	56.0%	60.0%
PG&E (2)	285,555	157,621	127,934	41.0%	53.0%
SCE (3)	238,905	114,668	124,237	73.0%	88.0%
SDG&E (4)	35,110	23,748	11,362	57.6%	62.6%
Totals	725,966	356,145	369,821
Sources:	January 22, 2002 Reports --- Cell References Are to Hard Copies (not electronic copies)
(1)A= Table 16, Sum Column E: May -Dec
(1)B= A-C
(1)C= Table 16, Cell F12
(1)D=Table 10, Cell E 5/Table 16, Cell B5
(1)E=Table 16, Cell
(2)A=Table 16, Sum Column E:May-December
(2)B=A-C
(2)C=Table 16, Cell G15-G7
(2)D=Table 16, H7
(2)E=Table 16, Cell H 15
(3)A=Table 16, Sum Column E: May-December
(3)B=A-C
(3)C=Table 16,Cell G Dec- Cell G April
(3)D= Table 16, Row H April
(3)E= Table 16, Row H December
(4)A=Table16, Sum Column E May thru December
(4)B=A-C
(4)C= Table 10, Column E Dec minus Column E April
(4)D= Table 10, Cell E 8/Table 16, Cell B 8
(4)E=Table 16, Cell H 15

Attachment 2 (Page 2) CARE Enrollment and Drop Off History January 2002
	A	B	C
	Gross Enrollment & Recerts	Drop Offs	Net Incr in Enrollment
SCG (1)	23,531	19,422	4,109
PG&E (2)	27,982	20,632	7,350
SCE (3)	13,744	9,088	4,656
SDG&E (4)	4,797	2,341	2,456
Totals	70,054	51,483	18,571
Sources:	February 21, 2002 Reports (unless otherwise noted)
(1)A= Table 10, Cell D2 minus Cell D1 (Revised Jan 2002 Rpt filed March 21)
(1)B= A-C
(1)C= Table 10, Cell B2 (Revised Jan 2002 Rpt filed March 21)
(2)A=Table 10, Cell B4
(2)B=A-C
(2)C=Table 10, Cell F15 (Jan 22 Rpt) minus Cell E4
(3)A=Table 10, Column B January
(3)B=A-C
(3)C=Table 10, Cell E December minus Cell E January+A5
(4)A=Table10, Column B
(4)B=A-C
(4)C= Table 10, Column E December (Jan 22 Rpt) minus Column E January

Attachment 2 (Page 3) CARE Enrollment and Drop Off History February 2002
	A	B	C
	Gross Enrollment & Recerts	Drop Offs	Net Incr in Enrollment
SCG (1)	31,714	24,822	6,892
PG&E (2)	31,824	15,911	15,913
SCE (3)	9,912	7,942	1,970
SDG&E (4)	8,827	2,961	5,866
Totals	82,277	51,636	30,641
Sources:	March 21, 2002 Reports
(1)A= Table 10, Cell D3 minus Cell D2
(1)B= A-C
(1)C= Table 10, Cell B3
(2)A=Table 10, Cell B5
(2)B=A-C
(2)C=Table 10, Cell E5 minus E4
(3)A=Table 10, Cell B3
(3)B=A-C
(3)C=Table 10,Cell E Feb minus Cell E Jan
(4)A=Table10, Cell B6
(4)B=A-C
(4)C= Table 10, Cell D6 minus D5