Background

The Preferred Policy Decision set the groundwork for the establishment of a customer education program and an independent education trust. (D.95-12-063 [64 CPUC2d at p. 84].) In D.97-03-069 (71 CPUC2d 440) the Commission authorized the three largest electric utilities in California to develop and implement a joint customer education program in conjunction with the Commission. D.97-03-069 also authorized the formation of the EET. Separate customer education programs for two smaller electric utilities were authorized in D.97-08-063 (74 CPUC2d 489). In D.97-08-064 (74 CPUC2d 508), the Commission approved the customer education program, and authorized a total budget for all of these educational activities. The EET was specifically authorized in D.97-08-064 to manage the education and outreach efforts utilizing the services of CBOs. The EET was ordered to file a proposal describing the design of the CBO education and outreach effort, and the efforts of the EET.

In D.98-07-098, the Commission reviewed the EET's proposed work plan and budget. Due to a lack of detail as to the kinds of activities the EET would be engaged in, and how the CBO educational effort would be designed or carried out, the EET was ordered to file a more detailed plan. In D.98-12-085, the Commission approved the EET's plan for the CBO outreach efforts. The EET was directed to file a revised plan and budget describing the kinds of non-CBO education efforts that the EET was to carry out. The non-CBO efforts of the EET were approved in an assigned Commissioner's ruling dated April 23, 1999.

On April 27, 1999, CSD requested, among other things, an additional $1.5 million to fund educational efforts targeted at small businesses. The Commission authorized CSD to do so in D.99-08-024. However, CSD was ordered to file a plan with details on how it plans to use the funds, who it plans to use to implement the plan, and the projected budget and schedule for implementing the plan. CSD filed its small business education plan on September 7, 1999. In accordance with D.99-08-024, the Commissioner assigned to direct access reviewed CSD's plan, and issued a ruling on October 19, 1999 authorizing CSD to implement the small business education outreach activities as described in CSD's filing of September 7, 1999, and in accordance with the October 19 ruling.

When the customer education efforts were first established, the primary themes and messages that the Commission wanted to convey was to inform consumers about the changes to the electric restructuring, how those changes affects them, and what their choices and options are with respect to direct access. Other messages and themes included information about potential marketing abuses, the continued safety and reliability of the generation and transmission network, the competition transition charge, aggregation, renewable energy, and energy efficiency. All of this information was to be conveyed in a neutral and unbiased manner, which allows consumers to make informed choices. (71 CPUC2d 440, 457-458; 74 CPUC2d 508, 538.)

When the Commission reviewed the initial work plan and budget of the EET in D.98-07-098, the Commission noted that the work plan called for the awarding of the CBO grants in three phases. The Commission stated that it saw merit in this suggestion because it would allow the administrative committee of the EET time "to fine-tune the outreach program should changes be necessary as a result of monitoring the phase one efforts." (D.98-07-098, p. 17.) When the CBO effort was approved in D.98-12-085, the Commission noted that the phased funding cycles for the CBOs would allow the EET to research and evaluate potential problem areas, and to "make changes and improvements to the outreach effort before the next funding cycle is initiated." (D.98-12-085, p. 30.)

Discussion

Circumstances have changed significantly since the electric industry was deregulated in California. The wholesale price of electricity has risen dramatically and the price of natural gas has risen steeply as well. Increased demand, shortages of electricity, and unreasonable prices charged by generators, marketers, and brokers have contributed to the rise in electricity prices, and have led to rolling blackouts in California.

In order to minimize or prevent blackouts during the coming summer, the Governor and various state agencies are urging customers to conserve on their use of electricity and use electricity efficiently. These conservation measures take on added importance because of the electricity rate surcharge that many ratepayers will pay. Conservation and energy efficiency efforts will help to reduce the demand for electricity, and help to reduce individual customer bills.

As a result of the dramatic changes in the electricity market, it is vital that the remaining customer education efforts focus their attention on these changes. That is, the CBO effort, as well as the small business outreach effort, should educate consumers about what they can do to conserve energy and use electricity and natural gas efficiently so that they can reduce their electricity consumption. The emphasis on conservation and energy efficiency will have a dual effect. It can lead to reductions in the customer's electricity bill, and it will reduce the overall demand for electricity which will help minimize rolling blackouts.

Many small businesses who must use large amounts of electricity and natural gas in their businesses are especially vulnerable to higher bills. Conservation tips for this group of customers are important. The small business effort, as well as some of the CBO effort, should focus their efforts on educating this group about conservation and energy efficiency.

Low-income consumers of energy must also be informed about the availability of the CARE program. The CARE program provides eligible customers with a 15% discount on their energy usage. Just recently, in D.01-03-082, the Commission expanded the eligibility criteria for the program from 150% of the federal poverty guidelines to 175% for electric customers of Pacific Gas and Electric Company (PG&E) and Southern California Edison Company (SCE). This change will allow more low-income customers to participate in the CARE program. Customers eligible for the CARE program are also exempt from the three-cent per kWh surcharge adopted in D.01-03-082, and from the interim surcharge adopted in D.01-01-018, that was made permanent in D.01-03-082. The Commission stated in D.01-03-082 at page 38 that: "As we expand the eligibility for this important program, it is crucial to make eligible people aware of the program." The remaining customer educational efforts should assist in making eligible residential customers aware of the CARE program, and inform eligible CARE customers of the exemption from the surcharge.

AB 1 from the First Extraordinary Session (Stats. 2001, ch. 4; referred to as AB1X) exempts residential customers, whose usage is below 130% of baseline, from rate increases.³ D.01-03-082 at page 16 specifically stated that the three-cent surcharge "will not apply to residential usage below 130% of baseline rates." The CBO educational efforts should incorporate this message into their efforts as well.

Since circumstances in the electricity industry have changed significantly since 1996, it is imperative that the remaining educational efforts that the Commission has previously authorized, be updated to reflect the current state of affairs. As the Commission noted in D.98-07-098 and D.98-12-085, changes and improvements should be made to the customer education efforts as circumstances warrant. Instead of focusing on the availability of direct access, the educational efforts should be changed to reflect current topics of interest such as conservation, energy efficiency, eligibility for the CARE program, and exemptions from the three-cent per kWh surcharge.

Low-income educational efforts are also being pursued in the low-income assistance programs in Application (A.) 00-11-009, A.00-11-011, A.00-11-012, and A.00-11-020. The EET and CSD should coordinate their educational efforts with this effort.

The EET is directed to ensure that the remaining educational efforts of the CBOs incorporate these messages and themes. CSD is directed to ensure that the small business outreach effort also incorporates these messages and themes.

Today's decision does not modify past Commission decisions regarding the customer education programs, the EET, or small business outreach. Instead, we are simply refocusing and fine-tuning the remaining educational outreach efforts to reflect current circumstances.

Comments On Draft Decision

The draft decision of the Administrative Law Judge (ALJ) in this matter was mailed to the parties on April 24, 2001, in accordance with Section 311(g)(1) of the Public Utilities Code and Rule 77.7 of the Commission's rules. Parties to this proceeding have been provided with an opportunity to comment on the draft decision.

Findings of Fact

1. AB 1890 mandated the development and implementation of a customer education program.

2. The Commission has authorized various customer education programs, some of which have not been completed.

3. When the customer education programs were established, certain themes and messages regarding the deregulated electricity market were the focus.

4. The Commission recognized that changes to the educational outreach effort might be needed.

5. Circumstances have changed significantly since the electric industry was deregulated in California.

6. The Governor and various state agencies are urging customers to conserve on their use of electricity and use electricity efficiently.

7. Eligibility for the CARE program has been expanded as a result of raising the eligibility criteria from 150% to 175% of the federal poverty guidelines for electric customers of PG&E and SCE.

8. Customers eligible for the CARE program are exempt from the surcharges adopted in D.01-01-018 and D.01-03-082.

9. AB1X exempts residential customers whose usage is below 130% of baseline, from certain rate increases.

10. D.01-03-082 stated that the three-cent per kWh surcharge will not apply to residential usage below 130% of baseline rates.

11. The ALJ's draft decision was mailed to the parties on April 24, 2001.

Conclusions of Law

1. The uncompleted customer education efforts should be adjusted to account for the recent changes to the deregulated electricity markets, and focus on such topics as conservation, energy efficiency, eligibility for the CARE program, and exemptions from the three-cent per kWh surcharge.

2. The EET and CSD should be directed to ensure that the remaining educational efforts of the CBOs and the small business outreach effort incorporate these new themes and messages.

3. Today's decision does not modify past Commission decisions.

O R D E R

IT IS ORDERED that:

1. The Administrative Committee of the Electric Education Trust is directed to ensure that all of the uncompleted customer education efforts, authorized in past Commission decisions and rulings, be updated to ensure that the educational efforts disseminate information on energy conservation, energy efficiency, eligibility for the California Alternate Rates for Energy (CARE) program, and exemption of eligible CARE participants and residential customers who are below 130% of their electricity baseline from the three-cent per kilowatt hour surcharge adopted in Decisions 01-01-018 and 01-03-082.

2. The Commission's Consumer Services Division is directed to ensure that all of the uncompleted educational efforts targeted at small businesses, be updated to ensure that the educational efforts disseminate information on energy conservation and energy efficiency.

This order is effective today.

Dated , at San Francisco, California.