Energy Division Recommendations

After submitting its October 19th report, Energy Division continued to work with these utilities to find ways to improve outreach for their CARE programs that could help increase enrollment into their CARE programs. Based on Energy Division's review, subsequent information obtained after its October 19th report, and proposals Energy Division received from the SMJU for SBx1 5 CARE funds, Energy Division developed recommendations specific to each utility. In addition, Energy Division outlined what remains to be addressed and recommendations for those issues as appropriate. Energy Division's recommendations are presented in the sections below.

West Coast Gas' proposal to prepare and distribute CARE outreach materials will help improve CARE program participation. In addition, installing the voice message equipment on their phone system to give CARE information to customers placed on hold will also help improve CARE participation. West Coast Gas is not proposing to conduct any mass marketing, the use of which is limited by SBx1 5. West Coast Gas' proposed use of SBx1 5 CARE funds would not replace any surcharge-generated revenues utilized to fund the CARE program because West Coast Gas does not presently collect any monies for conducting CARE outreach.

Energy Division recommends that the Commission approve West Coast Gas' proposal to use SBx1 5 monies to fund $2,240 for the one-time costs of preparing, printing, assembling, and mailing CARE outreach materials, as outlined in West Coast Gas' proposal attached to this update.

Alpine's proposed tasks would help to begin and increase participation in their CARE program. The tasks that Alpine proposes do not include any type of mass marketing that is limited by SBx1 5. Alpine's use of SBx1 5 CARE funds, as proposed, would not replace any surcharge-generated revenues utilized to fund the CARE program because Alpine does not presently collect any monies for conducting CARE outreach.

Energy Division recommends the Commission approve Alpine's proposal to use $2,150 of SBx1 5 funds for the one time costs of printing, assembling, and mailing CARE outreach materials, as outlined in their attached proposal. In addition, Energy Division recommends that the Commission allocate an additional $95 of SBx1 5 funds for Alpine to use in developing and printing a CARE application form, the amount that West Coast Gas indicated that it would need to prepare and print CARE application forms. Energy Division also recommends that the Commission authorize $650 for Alpine to install voice message equipment on their phone system to give CARE information to customers when they are placed on hold. This is the amount West Coast Gas proposed to do the same. In total, Energy Division recommends that Alpine be awarded $2,895 of SBx1 5 money to conduct CARE outreach.

In addition, now that it appears that Alpine is about to enroll customers in its CARE program, Energy Division recommends that the Commission set aside $3,000 of SBx1 5 CARE funds to provide for the subsidy for any of Alpine's customers that qualify for CARE. This use of SBx1 5 CARE funds also would not replace any surcharge-generated revenues utilized to fund the CARE program, since Alpine currently does not have a surcharge for the CARE program.

If Mountain Utilities is ordered to implement a CARE program, CARE program set-up costs for Mountain Utilities could be funded out of SBx1 5 CARE funds. Mountain Utilities' ratepayers would be responsible for ongoing CARE and LIEE program maintenance costs. CARE program set-up and maintenance costs would include, but not be limited to, preparing, printing and mailing CARE application forms and outreach materials each year, compliance costs associated with the yearly adjustment to the income guidelines, regulatory and administrative costs associated with participating in Commission low-income proceedings, and submitting advice letters or applications each year. In addition, since SBx1 5 LIEE funds are no longer available, Mountain Utilities' ratepayers would be fully responsible for set-up and maintenance costs for a LIEE program.

In its October 19, 2001 report, Energy Division recommended that Mountain Utilities should implement a CARE program. Subsequent to that report, Mountain Utilities mailed the "Flex Your Power" brochure to its residential customers and did not receive any responses. In addition, Energy Division received cost proposals from the other utilities for conducting CARE outreach. These costs, combined with associated regulatory costs would be significant for a utility the size of Mountain Utilities. These costs would be justified and reasonable if Mountain Utilities did have qualified customers who could benefit from CARE and LIEE assistance.

However, SBx1 5 and ratepayer funds required to set up and maintain a CARE and LIEE program for Mountain Utilities would be spent frivolously if Mountain Utilities does not and is likely not to have any customers in the near future who qualify for the CARE or LIEE program. Based on the information received by Energy Division after submitting its October 19th report, Energy Division is now recommending that Mountain Utilities not be required to implement a CARE or LIEE program at this time.

Instead, Energy Division is recommending that the economic demographics in Mountain Utilities' service area be researched in Phase 2 of the Commission's Needs Assessment Study. This will allow the Commission to consider establishing a CARE program for Mountain Utilities' customers, if demographics are such that residents in the area could qualify for a CARE program. Energy Division recommends that only reported census income should be evaluated for determining if any of Mountain Utilities' customers qualify for CARE. Energy Division understands it would be extremely difficult to get a large enough sample in Mountain Utilities' service area to make any reasonable statistical inferences.

Outstanding Issues

While there are substantial costs associated with modifying utility tariffs, in this case adding a section to their tariffs on the CARE program and customer application form, Energy Division recommends that Alpine and West Coast Gas be required to do so. A formal advice letter process permits public input on their proposed CARE application form and would ensure that the income guidelines and application forms are updated each year to reflect the new income guidelines that are released each May 1st by the Energy Division, pursuant to Resolution E-3524, effective February 19, 1998.

West Coast Gas and Alpine are not currently providing reports on their CARE programs. Energy Division recommends that the Commission require West Coast Gas and Alpine to submit monthly reports, with year to date expenditures and yearly budget amounts.

The CARE reports should account for administrative and outreach costs as well as discount subsidy costs on a monthly and year-to-date basis. The data should be broken out by base and SBx1 5 funding, showing the annual budgets projected for each category. The CARE reports should also show the number of new customers enrolled per month and the current year-to-date total number of customers enrolled in the program.

If West Coast Gas and/or Alpine choose to use capitation fees to increase enrollment, Energy Division recommends that this budget item be reported separately under CARE administration. These were the Energy Division reporting recommendations contained in the Energy Division Workshop Report on Distribution Proposals for Unallocated SBx1 5 Low Income Funds, provided on July 2, 2001 (p. 41).

West Coast Gas and Alpine did not propose to prepare and provide any of their CARE application forms or outreach materials in multi-lingual formats. Some of the other SMJU also do not provide forms or materials in multi-lingual formats, while a few provide some materials in Spanish as well as English.

Energy Division recommends that the Commission order that the ethnic demographics in each of the SMJU's service areas be researched in Phase II of the upcoming Needs Assessment Study. This will enable the utilities and the Commission to determine if multi-lingual formats for CARE outreach materials are necessary. Energy Division recommends that only reported Census information should be used to evaluate if multi-lingual formats for outreach materials should be developed by the SMJU, and if so, in what languages. Again, Energy Division understands it would be extremely difficult to get a large enough sample in these utilities' service areas to make any reasonable statistical inferences.

Energy Division is willing to work with West Coast Gas and Alpine to help them develop CARE participation goals as required by AB (X1) 3, as well as the requirements of the March 29, 2002 ACR that directs the utilities to develop a balancing account for recovery of CARE program administrative costs.

Energy Division agrees with ORA that the SMJU should be required to comply with the mandate of ABx1 3 and provide quarterly bill notices. West Coast Gas and Alpine indicated to Energy Division that all telephone calls in their service area are local calls. Energy Division believes this meets the spirit of the ABx1 3 mandate that the utilities offer customers a toll-free telephone number to call for further information on CARE or to obtain a CARE application.

The low-income customers of all of the SMJU would benefit from participating in a LIEE program. Currently, Alpine and West Coast Gas do not have LIEE programs. Although SBx1 5 LIEE funds are no longer available, those SMJU who have CARE programs but who do not have a LIEE program should begin to take steps to implement a LIEE program.

Initially, these utilities should work with Energy Division to consider providing a LIEE program in their service area. They should be directed to contact any community-based organizations who provide programs similar to LIEE in or near their service areas and provide Energy Division with a contact in those organizations. Energy Division could then evaluate the extent of the need for LIEE services in these areas and what if any LIEE measures would best serve those needs. At a minimum, Energy Education could be provided.

A Joint Assigned Commissioner's Ruling Regarding the Review of Post-2002 Low-Income Assistance Programs for Southwest Gas and Other Small and Multi-Jurisdictional Utilities was issued on April 19, 2002. This ruling initiates the evaluation of post-2002 low-income assistance programs offered by the SMJU. The ruling specifically directs Southwest Gas, Avista Utilities, Bear Valley Electric Company, PacifiCorp, and Sierra Pacific Power Company to submit proposals regarding 2003 program year plans and budgets in separate applications by July 1, 2002. Energy Division recommends that Alpine and West Coast Gas be directed to do the same and that these utilities be required to propose LIEE programs in their July 1st applications.

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