Background

Energy Division's October 19^th report was provided pursuant to Decision (D.) 01-05-033. The report described the low-income assistance programs provided by these utilities and conveyed Energy Division's recommendations for these utilities to receive an allocation of the funds provided pursuant to Senate Bill 5 from the 1^st extraordinary session of 2001 (SBx1 5). Energy Division was to develop allocations as appropriate to be used for either implementing low-income assistance programs or improving the existing low-income assistance programs of these SMJU.

Subsequent to Energy Division submitting its report, Administrative Law Judge Meg Gottstein issued a ruling, on November 5, 2001, providing an opportunity for interested parties to submit comments on Energy Division's October 19^th report. The Office of Ratepayer Advocates (ORA) and Mountain Utilities submitted comments on Energy Division's report on November 26^th and November 30^th, respectively.

Comments of ORA

ORA recommended that Energy Division provide estimates of the amount of money each utility is likely to need for outreach to the low-income communities in each of their service areas and to propose a source of funds to provide the outreach. ORA also suggested that when the SMJU develop their California Alternate Rate for Energy (CARE) programs, they be required to comply with the outreach requirements contained in Assembly Bill (AB) x1 3.¹¹ which mandates quarterly bill notices. ORA requests that the SMJU, in complying with ABx1 3, provide the information comparable to that required of other utilities, which describes the CARE program and offers customers a toll-free telephone number to call for further information on CARE or to obtain a CARE application.

Comments of Mountain Utilities

Mountain Utilities pointed out the resort nature of its service area, the high market values for any available property in its service area, and that it only has 75-125 full time residential customers. Mountain Utilities indicated that the seasonal employees of the ski resort, its primary customer, live in employee housing and do not pay for the electricity consumed in the employee housing. Consequently, Mountain Utilities does not believe there are any low-income customers in its service area that could qualify for a CARE discount.

Mountain Utilities pointed out that, in discussions with Energy Division, it had agreed to implement a CARE program. However, upon further reflection, Mountain Utilities indicated that it realized that it would incur an extensive and costly administrative burden in maintaining a CARE program, for which there is likely not to be any qualified participants. Mountain Utilities asserts that if a customer were to qualify for CARE, the customer would receive approximately $300 per year in subsidy. Mountain Utilities pointed out that even if several customers were to qualify and go onto the CARE rate, the administrative costs associated with the program could exceed their annual subsidy by 100 or more times. Consequently, Mountain Utilities recommends that the Commission not order Mountain Utilities to set up and maintain a CARE program.

Mountain Utilities indicated that their limited budget would be strained if the utility is required to establish a CARE program. Mountain Utilities points out that the costs would be significant and Mountain Utilities would need to obtain full cost recovery for associated expenses on a "real time' basis.

Lastly, Mountain Utilities respectfully pointed out that Kirkwood Mountain Resort, and not the utility as indicated in Energy Division's October 19^th report, owns the employee housing for the seasonal ski resort employees.

Applicable Public Utilities Code

There are several Public Utilities (PU) Code sections that govern utility programs that provide assistance to their low-income utility customers. Of particular importance are PU Code Sections 382, 382.1, 386, 739.1, 739.4 and 2790.

Among other things, Section 382 mandates that the Commission ensure that low-income customers are not jeopardized or overburdened by monthly energy expenditures. Section 386, among other things, requires the utilities ensure that low-income families within their service areas have access to affordable electricity. Section 739.1, among other things, requires the Commission establish a program of assistance to low-income electric and gas customers and that the utilities' administrative costs related to the implementation of CARE be recovered by a balancing account.

Section 739.4, among other things, mandates that the Commission require all electrical and gas offering CARE programs to do certain types of outreach in multilingual formats, to the extent printed and recorded information is provided and that CARE application forms are modeled after the ULTS application form.