4. Low-Income SWH Incentive Budget

The Staff Proposal recommended allocating $20 million of CSI Thermal Program funds for incentives to SWH systems on low-income single-family properties. Environment California and ACCES contend the Staff Proposal erred in not allocating 10% of the entire $250 million CSI Thermal Budget, or $25 million. TURN recommended low-income SWH incentives be increased to $40 million.

In D.10-01-022, the Commission agreed to increase the budget over the $20 million proposed by staff, and allocated $25 million for low-income SWH incentives through the CSI Thermal Program. (See D.10-01-022, Table 7 at 57.) In that same decision, the Commission specified that money collected under AB 1470 will fund incentives to SWH displacing natural gas usage, while funds collected through CSI will fund electric-displacing SWH systems. (Id., Appendix A at 14.) Thus, the $25 million budget for low-income SWH incentives should be collected exclusively from natural gas ratepayers and should only be used to fund natural-gas displacing SWH systems.

The table below is a copy of Table 7 from D.10-01-022, which shows the total budget for the natural-gas displacing portion of the CSI Thermal program. The table indicates that the entire $25 million set aside for the low-income SWH component is dedicated to incentives. Thus, we clarify that any expenses to administer and market low-income SWH incentives must be absorbed by the existing $20 million administration budget and $25 million market facilitation budget for the entire CSI Thermal Program.

Table 1: Budget for Gas-Displacing CSI Thermal Program

Gas-Displacing CSI Thermal Program Elements	CSI Thermal Program Sub-Elements	Budget
Incentives 82%	General Market Incentive Component	$180,000,000
	Low-Income Incentive Component (10% of total funds)	$25,000,000
	Subtotal	$205,000,000
Market Facilitation 10%	Marketing & Outreach, including training, consumer education, and other market facilitation activities such as engaging with permitting offices or financing providers.	$25,000,000
	Subtotal	$25,000,000
Program Administration 8%	Application/incentive processing, General Administration, and System Inspection	$15,000,000
	Measurement and Evaluation	$5,000,000
	Subtotal	$20,000,000
Total		$250,000,000

The low-income incentive budget will be allocated among the three PAs with gas customers in the same proportions as the total CSI Thermal gas-displacing program, as adopted in D.10-01-022 and reproduced in Table 2 below.⁶

Table 2: Low-income Budget Allocation by Program Administrator

We emphasize that pursuant to Section 2866(f), if any portion of the $25 million that is budgeted for low-income SWH incentives is unexpended and unencumbered on August 1, 2018, that money shall be used to augment cost-effective energy efficiency measures in low-income residential housing that benefit ratepayers. We will direct the PAs to submit an advice letter no later than September 1, 2018 to summarize expenditures through the program and identify any remaining funds so those funds can be transferred to energy efficiency programs as required by the statute.

⁶ See D.10-01-022, Appendix A, Table 4 at 15.