COM/CXW/MEG/k47 Mailed 12/12/2001

Decision 01-12-020 December 11, 2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the Commission's Proposed Policies and Programs Governing Low-Income Assistance Programs.

Rulemaking 01-08-027 (Filed August 23, 2001)

INTERIM OPINION:

LOW INCOME ENERGY EFFICIENCY STANDARDIZATION PROJECT (PHASE 3), CALCULATIONS FOR BILL SAVINGS AND

REPORTING REQUIREMENTS MANUAL (PHASE 2),

INCLUDING COST-EFFECTIVENESS TESTING OF

LOW-INCOME PROGRAMS

TABLE OF CONTENTS

Title Page

INTERIM OPINION 1

I. Summary 2

II. Background and Issues 3

A. LIEE Standardization Project (Phase 3) 5

B. Reporting Requirements Manual (Phase 2) Including Cost-Effectiveness Testing of LIEE Programs 9

C. Standardized Method For Producing Data on LIEE Bill
Savings and Expenditures 10

III. Reporting LIEE Bill Savings and Program Costs 11

IV. Phase 3 Standardization Issues 15

A. Eligibility of Customers on Business Rates 16

B. Eligibility Based on Heating Fuel 17

C. Limitations on Expenditures by Housing Type 28

D. Limits on Prior Participation in LIEE Program 32

E. Fractional Qualification in Multifamily/Mobile Homes 33

F. Limits on Minor Home Repairs and Furnace Repairs/Replacements 35

G. Frequency of Inspections 36

H. Eligibility of Renters For LIEE Equipment 40

I. Natural Gas Appliance Testing 42

J. Ceiling Insulation Levels 44

K. Inspector-Contractor Dispute Resolution 49

L. Lead-Safe Practices 51

M. Measure Pre-Approval 51

N. WIS Manual Copyright 52

O. Other Issues 54

P. Implementation of Adopted Changes 56

V. Cost-Effectiveness Testing 56

VI. Other RRM Phase 2 Issues 64

VII. Comments on Draft Decision 64

TABLE OF CONTENTS

(Continued)

Findings of Fact 65

Conclusions of Law 71

ORDER 73

Attachment 1 Acronym/Abbreviation

Attachment 2 Definitions of LIEE Program Cost Variables and Reporting Formats

Attachment 3 Standardization Team's Response to Miscellaneous Issues Relating to Chapter 7 of the Policy and Procedures Manual

Attachment 4 Non-Energy Benefits Quantified By The Reporting Requirements Manual Working Group

I. Summary¹

The purpose of this decision is to continue our efforts to standardize the policies and procedures for implementing and reporting the results of low-income assistance programs, across utilities. Today's determinations apply to the low-income assistance programs implemented by Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (SCE) and Southern California Gas Company (SoCal), collectively referred to as "the utilities."

We adopt the utilities' proposed definitions and reporting format for bill savings and program costs associated with the low-income energy efficiency program, and present the results of the bill savings analysis to date. The utilities are directed to present regular updates of bill savings and program cost information with their annual reports on low-income programs, beginning with the May 1, 2002 annual report. As described in this decision, we also adopt standardized formats for reporting the participation of community-based organizations in the LIEE program and program installation costs per dwelling.

We address a number of unresolved policies and procedures regarding the implementation of low-income energy efficiency programs as part of our ongoing standardization efforts. These include: 1) eligibility of customers on business rates, 2) eligibility based on heating fuel, 3) limits on prior participation in the program, 4) qualification of multifamily units and mobile homes, 5) limitations on expenditures by housing type, including master-metered dwellings, 6) inspection frequencies, 6) ceiling insulation levels, and 7) inspector-contractor dispute resolution procedures, among others. Our determinations become effective 30 days from the date of this decision, or January 1, 2002, whichever is later.

In addition, we consider recommendations on how to evaluate the low-income energy efficiency program either overall or on the measure-specific level, taking into account both the cost-effectiveness of the services and the policy of reducing hardships facing low-income customers. We reject the use of a single metric for this purpose, as proposed by the Reporting Requirements Manual Working Group. We direct the utilities to incorporate the non-energy related benefits presented in this proceeding into the existing participant cost and utility cost tests, for further consideration. In particular, we direct the Reporting Requirements Manual Working Group and Standardization Project Team to explore how to consider each test in making final measure selections or in evaluating the overall effectiveness of low-income energy efficiency programs, with public input. A joint report of the Reporting Requirements Manual Working Group and Standardization Project Team with recommendations on this issue is due 120 days from the effective date of this decision.