IV. RRM Working Group Recommendations

Attachment 4 summarizes the RRM Working Group recommendations with respect to the unresolved issues identified in the April 28, 2000 Assigned Commissioner's ruling. We address the specific issues raised in comments in the following sections.

Before turning to the issues, we must address the utilities' recommendation that we reject the joint comments of SESCO and ICA out of hand because they have "circumvented the Working Group process." We believe that this recommendation is simply without merit. Participation at the Working Group meetings by interested parties was never mandatory, contrary to the utilities' assertions that "the Commission directed interested parties to meet in a workshop setting to discuss and, if possible, reach consensus on outstanding reporting issues."29 Rather, the Assigned Commissioner encouraged interested parties to take advantage of the forum, which is "open to interested parties," as some did.30 The Assigned Commissioner also provided all interested parties and the LIAB the opportunity to comment on the RRM Report, without qualification. We will not ignore the comments of an interested party on the RRM Report just because that party did not attend the workshops that led up to the report.

We also note that ICA, one of the joint sponsors of these comments, did participate actively in the Working Group meetings. The utilities allege that ICA must not have co-sponsored the SESCO/ICA comments since it did not dissent from the consensus positions in the RRM Report. We cannot draw such a conclusion. ICA has been served with all the filings in this proceeding and, we assume, would have filed an objection if its name inappropriately appeared as a co-sponsor of comments on the report.

We encourage both SESCO and ICA to participate in the second phase workshops because we believe that their participation will enhance the public discussion of alternatives and recommendations for our consideration. We expect future RRM Reports to clearly discuss the pros and cons of each alternative discussed by workshop participants. Consistent with the Assigned Commissioner's direction, the second phase RRM Report should include a discussion of consensus issues as well as remaining areas of disagreement among participants, with a description of the participants' opposing views.31

A. Definition of Energy-Related Hardship

Within Pub. Util. Code § 2790, there are two references to hardship:

a. The commission shall require an electrical or gas corporation to perform home weatherization services for low-income customers...if the commission determines that a significant need for those services exists in the corporation's service territory, taking into consideration both the cost effectiveness of the services and the policy of reducing the hardships facing low-income households.

b. "Weatherization" may also include other building conservation measures, energy efficient appliances, and energy education programs determined by the commission to be feasible, taking into consideration for all measures both the cost effectiveness of the measures as a whole and the policy of reducing energy-related hardships facing low-income households.

The need for and how to report "reduction in hardships" for LIEE programs remained unresolved after the workshops conducted in 1999 and was therefore addressed in the RRM Report. The report presents a proposed "working definition" of energy-related hardship. (See Attachment 5.) The Working Group recommends that the utilities report on how programs address energy-related hardship, as so defined, within the narrative of their annual reports.

The Community Action Agency of San Mateo County (CAASM) submitted a dissent to the proposed definition of energy-related hardship. In particular, CAASM argues that the utilities will not be able to report that they objectively eased energy-related stress or mental well-being, as stated in the definition of health, or be able to determine which households experience these hardships.32 In their joint comments, SESCO and ICA echo these concerns arguing that the language describing comfort, health and safety is "nebulous" and "non-quantified."33 Similarly, RHA argues that the RRM Working Group needs to develop an objective method of measuring and reporting the impact of LIEE programs in the reduction of hardship.

SESCO and ICA contend that the report ignores the most commonly considered energy-related hardship for low-income families, namely, high utility bills they cannot afford or which take away from other important needs. They propose an alternate definition that reflects this financial hardship and request that the report includes an estimate of the annual and life-cycle utility bill savings. SESCO and ICA also propose methods for evaluating and reporting information on the impacts of LIEE programs on health, safety and comfort.

In their reply comments, the utilities argue that § 2790 makes clear that the term "hardship" addresses benefits that fall outside the traditional energy efficiency cost-effectiveness test and criteria. They argue that the Working Group definition appropriately attempts to differentiate "energy related hardship" from more traditional cost effectiveness analysis. In their view, the SESCO/ICA proposed definition fails to make that distinction.

As long as the utilities are reporting information that can help us evaluate the effectiveness of programs and/or assist in the selection of appropriate measures under the program, we are not as concerned with definitional distinctions as the parties seem to be. Everyone apparently agrees that energy-related hardship includes the adverse impacts on the comfort, health and safety of low-income customers that can be mitigated by access to LIEE programs and services, and that the utilities should report, in some manner, the effect of their programs on these hardships.

Although there is disagreement on "where" to report the information, all parties also seem to agree that the bill savings impact on program participants should be evaluated and reported. The Working Group recommends that this be done under cost-effectiveness (by adding the Participant's Test to the RRM), whereas SESCO/ICA prefer that this information be considered a reporting requirement under "energy-related hardship."

Quite frankly, we are not concerned where this information appears in the RRM, as long as bill savings are quantified and reported in the RRM. The Assigned Commissioner directed the Working Group to incorporate into the RRM any additional reporting requirements that resulted from the Commission's final decision in A.99-07-002 et al.34 By D.00-07-020 in that proceeding, we directed the utilities to jointly develop standardized methods for producing bill savings and expenditure information for LIEE programs on an overall program and per unit basis, by utility.35 Public workshops are underway to discuss the methodology and the utilities are required to file a joint report by February 1, 2001. Accordingly, we direct the utilities to propose in their joint report a standardized format for bill savings and expenditure information to be incorporated into the RRM at the earliest possible opportunity. To this end, we will direct the Working Group to consider the utilities' joint proposal for standardizing this information as part of the second phase report, discussed below.

With respect to the comfort, health and safety aspects of hardship, we are not persuaded that the benefits of requiring utilities to collect specific types of data on these program effects justify the costs of such an effort, a least not at this juncture. The Working Group indicates that it will consider whether to incorporate comfort, health and safety effects as it develops specific recommendations for program cost-effectiveness evaluation in a second phase. Similarly, the Standardization Project Team has stated its intent to consider these issues in the LIEE measure selection process once cost-effectiveness tests have been reviewed and adopted by the Commission.36

To the extent that comfort, health and safety effects of LIEE programs are included in adopted cost-effectiveness tests or measure selection procedures, we may revisit the issue of how to report these effects when we have specific proposals before us. We remind proponents of any proposals that involve additional, detailed reporting requirements that they must "specify how that additional information will aid the evaluation of programs and who will be doing the data analysis. The goal is to achieve a reasonable balance between the value of the information and the cost to collect that information."37

In the meantime, the utilities should report on how LIEE programs address comfort, health and safety hardships within the narrative of the Energy Efficiency Programs Annual Report. For this purpose, the utilities should use the Working Group's proposed working definition of energy-related hardship.

B. Modifications to LIEE Cost-Effectiveness Tests

The RRM presents the format for reporting the results of LIEE cost-effectiveness based on tests that have been developed and approved by the Commission over the years. In 1999, interested parties discussed in workshops the possibility of modifying these tests, including the use of a "modified participants test" and narrative describing the limited applicability of the economic tests to low-income programs. Because consensus on such modifications could not be reached at that time, the Assigned Commissioner directed the RRM Working Group to further consider this issue.

The Working Group provided background and laid the foundation for further consideration of cost effectiveness for LIEE programs, but was unable to develop technical modifications to the test by the report due date. The Working Group proposes to address this issue in a second phase and submit recommendations to the Commission by March 31, 2001. For reporting purposes, the Working Group is recommending tests on an interim basis for which adopted methodologies are currently available. (See Attachment 5.)

SESCO and ICA criticize the Working Group for their inability to complete this task, and RHA argues that consideration of any new LIEE program initiatives should be deferred until this and other tasks are completed.

We are disappointed that the Working Group could not make further progress on exploring cost-effectiveness methodologies for the purpose of evaluating LIEE programs. However, we recognize that developing new methodologies and associated reporting requirements does take time, especially in this highly technical area. We believe that the use of existing cost-effectiveness tests on an interim basis, with the modifications proposed by the Working Group, is a reasonable approach to take for reporting PY 2000 program results in May 2001. In addition, as discussed above, we expect to augment the RRM with the bill savings and expenditure information required by D.00-07-020.

We remain firm in our commitment to improve upon the status quo in the future, and encourage the Working Group to work as expeditiously as possible to produce its second phase cost-effectiveness recommendations no later than March 31, 2001, and hopefully before that date. We believe it is premature to provide guidance on specific cost-effectiveness issues, as SESCO and ICA request in their joint comments. However, the Working Group should consider the methodological issues raised in those comments, such as the appropriate discount rates, inflation rates and benefit and cost streams to use in cost-effectiveness analysis, and address them in its second phase report. As discussed above, we also expect the avoided costs used in cost-effectiveness tests to be based on the methodology and assumptions most recently adopted by the Commission.

C. Other Performance-Related Information

RHA argues that the RRM should also provide guidance on the weighting to evaluate cost-effectiveness versus other performance criteria contained in AB 1393. RHA then lists several potential program effects that are not reported in the RRM, including job skill development training, local employment, leveraging of utility and other state and federal program funds, among others.

We believe that RHA's request goes beyond the scope of the task assigned to the RRM Working Group in two respects. First, the RRM is not intended to provide guidance on how the Commission should weigh the results of cost-effectiveness tests relative to other program performance information reported in that document or presented in other forums. Therefore, it is not surprising that the RRM Report does not present policy guidance of that nature.

Second, RHA requests that the utilities measure and report on information that goes well beyond the critical gaps identified by the Commission during its recent review of competitive bidding as an outsourcing approach. As discussed at length in D.00-07-020, the Commission, utility administrators, interested parties and the general public lack consistent, standardized information on:38

    · Bill savings and expenditures for LIEE programs,

    · One-time administrative costs associated with the bidding process

    · Current training costs

    · Standardized utility administrative costs and reporting requirements

    · Relative number of community-based organizations participating in the program as contractors or subcontractors

    · Improved approaches for measuring the performance of installation contractors.

The Working Group was directed to discuss and incorporate into the RRM these additional reporting requirements, as well as the unresolved reporting requirements issues from the 1999 workshops. RHA's request goes beyond this assignment as well as the scope of today's decision, and will not be adopted.

D. Interim Methodology For Estimating Eligible CARE Customers

The Working Group was assigned the task of developing a methodology for estimating the number of CARE eligible customers, and proposes an interim methodology until the 2000 Census data becomes available. The interim methodology uses the 1990 Census as a foundation for determining demographic estimates of household size and household incomes. This data will be adjusted for growth in households and income using other recognized sources to inflate the numbers appropriately. When actual CARE customers are compared to CARE-eligible customers, CARE penetration rates can be estimated. The utilities propose to jointly contract with an economic data expert to estimate CARE demographic eligibility rates to ensure the methodology is applied consistently across the utilities.

SESCO and ICA support the general procedures recommended for this task, but make three recommended additions to the procedures. First, SESCO and ICA note that the Census Income definitions are not the same as those of the CARE program, and recommend that a report on the direction and approximate size of bias (if any) should be included in the consultant's report. The utilities respond that they are willing to conduct a sensitivity analysis to determine the extent to which definitional differences might be affecting CARE eligibility estimates. We direct them to do so.

Second, SESCO and ICA recommend that the system-wide CARE penetration rate be used to derive a value for CARE eligible customers in counties with fewer than 5,000 CARE-eligible meters. As the utilities point out, SESCO and ICA provide no statistical basis for assuming that the system-wide rate is more accurate in these instances. We will not adopt this recommendation.

Third, SESCO and ICA recommend that the annual revisions to the estimate of eligible households be conducted by a common outside consultant using the same procedures for each utility. While there may be merit to using the same consultant for annual revisions, we believe it is premature to make that determination at this time. The interim methodology will be used until the Census long form and follow-up annual American Community Survey data sets become available. At that time, the utilities and interested parties will have a better idea of the need for specific revisions to the interim methodology and can make recommendations on how best to proceed. In any event, we remind all parties that the penetration rates developed by the utilities are only estimates and should not be relied on exclusively to determine how many eligible customers are participating.

E. LIEE Definitions and Additional Reporting Requirements

SESCO and ICA comment that the definitions are still unclear on the differences between Administrative and Implementation costs. In particular, SESCO and ICA argue that Administrative costs should include training, inspections and contractor coordination costs, and an additional "related costs" category should show costs incurred because of the low-income programs, but which are not charged to that budget (e.g., gas appliance testing, shareholder incentives). SESCO and ICA also recommend separate cost categories for minor home repairs, education workshops and other subcategories in the monthly and annual reports.39

We find that SESCO and ICA have not established the benefits of their proposed system of classifying costs as administrative or implementation. Nor have they explained how the request for additional information (e.g., estimated contractor costs to go to a utility training facility, education workshops separate from Energy Efficiency) on a monthly and annual basis will aid the evaluation of programs. For now, we believe that the Working Group's recommendations on how to report LIEE program costs is a reasonable first step in the process of standardizing cost information. The detailed classification of costs recommended in the RRM Report appears to allow the programs to be compared on a discrete, functional level. Once the tables are completed, we may find that further changes may be necessary to enhance the comparability of the programs in the future. These changes may be considered by the Working Group and proposed to the Commission as part of the LIEE/CARE program planning cycles.

As noted above, the Assigned Commissioner did specifically direct the Working Group to "consider any additional reporting requirements that arise from the Commission's final decision in A.99-07-002 et al., in developing proposed revisions for low-income assistance program reporting."40 In addition to standardized methods for bill savings and expenditures (see above), the Commission directed the utilities to present standardized, consistent training costs during the PY 2002 planning cycle. (D.00-07-020, Ordering Paragraph 1(f).) In addition, the Commission directed the utilities to present the standardized information provided by SDG&E and PG&E in Exhibits 35 and 36. (Ordering Paragraph 8). The utilities were also directed to report on the number of community-based organizations participating in the LIEE program, and provide other information regarding the access of low-income program participants to programs provided by community service providers. (Ordering Paragraph 10.) The Working Group did not specifically address these reporting requirements in its report. We believe that this type of information should be provided on an ongoing basis by the utilities. The Working Group should propose a format for this information and recommendations for filing frequency in its second phase report.

SESCO and ICA recommend that the RRM be expanded at this time to also include pass rates for the utilities. We agree with the utilities that incorporating this information into the RRM is premature at this time. During the PY 2002 planning process, the Commission will be evaluating improved approaches for measuring the performance of installation contractors. At that time, we may consider what type of information should be required to be reported in the RRM for this purpose.

F. CARE Cost Classifications and Reporting Requirements

SESCO and ICA request that CARE cost classifications, where similar to LIEE, be similarly defined and categorized in a subsequent round before final approval of the CARE reporting requirements. They also recommend that the CARE reporting requirements in the RRM be expanded to provide additional CARE data as well as comparisons between current year and prior year activities for several tables. In addition, SESCO and ICA recommend the use of the median, rather than mean (i.e., average) values for certain tables.

SESCO and ICA's proposal to revisit CARE cost classifications is confusing and unclear. They fail to define the "similar cost classifications" for CARE and LIEE programs to be standardized. Moreover, SESCO and ICA do not provide the basis for this request or for the proposed additions to CARE reporting. The RRM Report tables provide a significant amount of data on CARE customers and penetration rates, by energy source and county, on a quarterly basis. Contrary to the Assigned Commissioner's instructions, SESCO and ICA fail to specify how the additional information requested will aid in the evaluation of the CARE program or who will collect and assess the additional data. For these reasons, we reject these proposals as deficient.

G. Other RRM Issues

In their joint comments on the RRM Report, the utilities note that the Working Group does not provide due dates for the monthly reports described on pages 38 and 48 of the report. The utilities recommend that these reports be due by the first Friday of the second month, following the month for which data is reported. For example, the monthly report involving January activities would be due the first Friday in March. We find these due dates to be reasonable, given the 2-3 week delay between the end of the reporting period and the time when data is made available to the utilities.

SESCO and ICA recommend that the CARE and LIEE program reports described in the RRM Report be filed together and simultaneously on an annual and quarterly basis. We find it difficult to evaluate this proposal without a better comparison of where and when the reports for these two programs are currently filed at the Commission. We do not find this information readily in the RRM Report. The Working Group should augment its RRM recommendations with a matrix summarizing where each of the CARE and LIEE reports are to be filed or submitted, on what dates or frequency, how the report is used (e.g., informational only, evaluation in Annual Earnings Assessment Proceeding), and who has access to the information (e.g., Energy Division staff, appearances to a particular proceeding). We will defer consideration of the Working Group's recommendation to create a separate CARE RRM until we obtain this information.

The Working Group also recommends that it reconvene in two years to develop recommendations to revise reporting requirements, as appropriate. We prefer to leave the time table open, since we may require the Working Group to consider reporting issues sooner than two years from now.

Finally, the Working Group recommends that the Commission undertake an immediate review of existing LIEE and CARE reporting requirements, within and outside of the reporting requirements proposed in the RRM Report, to determine if reports that no longer are useful can be deleted. While we believe that this is a worthwhile project, we acknowledge there are other priority issues to address over the next few months. We will defer initiating this effort until the Working Group completes the second phase of RRM revisions and we are well underway with the PY 2002 planning cycle.

Comments to Draft Decision

The draft decision of Commissioner Neeper and ALJ Gottstein in this matter was mailed to the parties in accordance with Pub. Util. Code Section 311(g)(1) and Rule 77.1 of the Rules and Practice and Procedure. Timely comments were filed by SCE, SESCO, ORA and the Standardization Project Team, which consists of the utilities and project consultants. Reply comments were filed by SESCO, the Standardization Project Team, and jointly by the Latino Issues Forum and Greenlining Institute.

Joint comments were filed one day late by the East Los Angeles Community Union (TELACU) and Maravilla Foundation. It appears that the one-day delay did not present an undue disadvantage to other parties, since the joint comments were e-mailed to the service list on the due date and parties did respond fully to TELECU/Maravilla Foundation's comments in their replies. We will therefore accept the joint comments in this instance. However, as discussed in today's decision, we put all parties on notice that time extensions will not be routinely authorized in this proceeding in the future. All late-filed documents will be automatically rejected unless they are accompanied with a request for extension of time to file which includes a description of the extenuating circumstances that prohibited the party from making a timely and accurate filing.

We have carefully considered the comments on the issues address in today's decision. In response to those comments, we have modified the draft decision to require that LIEE service providers collect, copy and store income documentation, as proposed by the utilities and supported by ORA and the Latino Issues Forum/Greenlining Institute. We also make minor corrections and edits in the decision text.

Latino Issues Forum/Greenlining Institute and TELECU/Maravilla Foundation object to the further standardization efforts discussed in today's decision. In particular, TELECU/Maravilla Foundation argues that further work on gas appliance safety testing issues is unwarranted. We disagree. Gas appliance safety testing has been raised on several occasions over the last 18 months as an issue warranting further investigation. As the Commission recognized in D.00-07-020, this is an issue that the LIAB has strongly supported because of the important customer safety issues involved. (See D.00-07-020, mimeo. p. 107 and LIAB's recommendations in that proceeding.) We believe that the ongoing efforts to standardize LIEE services and procedures are necessary to ensure that all customers are treated consistently across utility service territories, and support the direction of this effort.

Findings of Fact

1. It is within the scope of the Standardization Project to consider whether or not to limit participation in LIEE programs based on the customer's heating fuel source or to exclude customers being served on a business rate.

2. Some of the changes in policies or procedures adopted for the LIEE program during Phases 2 and 3 of the Standardization Project may affect the scope of services and associated costs to implement the PY 2002 program.

3. Requiring service providers to collect, copy and store income documentation will help assure thoroughness on the part of the contractor, and minimize the potential for trying to recoup costs from customers with little or no assets. While this requirement may increase administrative costs initially, it will improve the effectiveness of the program overall by helping to ensure that only income-eligible customers participate in the program.

4. The monthly CARE discount can be discontinued relatively easily through billing adjustments if abuses are detected in the self-certification procedures that apply to that program.

5. The sizeable up-front ratepayer investment in LIEE weatherization measures, home repairs and furnace repairs/replacements (and associated bill savings to the customer) cannot be "discontinued" unless the measures are physically removed. Removal of these measures is costly and in many instances physically impossible.

6. Verification of information regarding income qualification on the part of the outreach worker has been the general practice for LIEE programs, rather than self-certification.

7. A 10-year timeframe to define previous participation in the LIEE program coincides on average with the mix of measures and measure lives installed through the program.

8. The utilities' proposal for limits on prior participation in the LIEE program allows for some exceptions to the 10-year timeframe, based on circumstances. However, it does not specifically address situations that could arise with regard to PG&E's current pre-test requirements for combustion appliance safety testing.

9. The claim that a multi-family complex or mobile home caters overwhelmingly to low-income families is convincing when at least 80% of all the individual dwellings meet the LIEE program's income requirements.

10. Applying the 80% fractional qualification rule only to units that have not yet been treated can result in the disqualification of a multi-family dwelling or mobile home park when over 80% of all the units are income-qualified.

11. Insulating the common attic space over only the 80% of units that income qualify under the LIEE program (but not the other 20%) makes little sense from an energy efficiency standpoint.

12. A policy of not treating customers needing very few LIEE measures is necessary to maintain reasonable cost-effectiveness and will allow more dollars to be spent on homes that have not yet received weatherization services.

13. The utilities' proposal for overall expenditure limits on home repairs/furnace replacements and repairs far exceeds the limits established in Res. E-3586 for PG&E and SDG&E. It results in a budget for these expenditures that is approximately 2/3 the level of all other program costs, including program outreach, measure installation, appliances and energy education.

14. A 20% limit on total expenditures for minor home repairs/furnace replacements and repairs preserves a reasonable balance between energy efficiency measures and home repairs.

15. The Phase 2 report does not provide the utilities' proposed spending caps for multi-family housing or describe how such caps would be determined. Similarly, the Phase 2 report does not present information on the caps the utilities' propose for master-metered units, or how they would be determined.

16. The utilities' proposal for establishing minimum inspection frequencies for all jobs not involving ceiling insulation utilizes per-home pass rates. Because of the shortcomings in using these rates as an indicator of relative performance quality, the Commission in D.00-07-020 directed the utilities to propose alternative indicators in their PY 2002 applications.

17. SESCO presents no factual basis for its assertion that the utilities' proposed maximum frequency cap on job corrections by inspectors discriminates against larger providers.

18. The utilities provide no explanation of the circumstances that may warrant larger sample sizes than the minimums presented in Table 5-2 of the Phase 2 report.

19. The Phase 2 report does not clearly reflect the Commission's stated policies with regard to the outsourcing of inspection personnel.

20. The Phase 2 report does not provide sufficient information to address the issue of whether PG&E's pre-approval process for LIEE measures should be continued on a standardized basis across utilities. Nor does the report address how inspectors should evaluate contractors' work with respect to the pre-approval process in determining a "pass" or "fail" situation.

21. Current dispute resolution methods regarding inspector-contractor disputes may not provide sufficient impartiality on the part of the arbitrator if that person is also a utility employee.

22. Making recommendations for a common treatment of evaporative coolers cannot be separated from the selection of specific measures to be offered by the utilities, and raises the broader issue of the overall eligibility of rental units for program measures. The measure selection process and eligibility of rental units are issues that have not yet been resolved by the Commission.

23. Eligibility of evaporative coolers relates indirectly to the type of evaporative cooler installed in rental units, i.e., portable versus permanent, and that issue has not been fully explored.

24. The Weatherization Installation Manuals, prepared during Phase 2 in compliance with D.00-09-036, would benefit from the clarifications to minor home repairs recommended by CSD and SESCO.

25. Current practices for determining the appropriate level of ceiling insulation do not include specific consideration of climate zones. Simplifying the process of incorporating climate zones will help field crews work with new requirements effectively.

26. The utilities propose to base their calculations of ceiling insulation levels on five climate areas developed from the 16 CEC climate zones. These zones are reasonably homogeneous with respect to weather and are used by the California Windows Initiative and by the Department of Energy for the Energy Star windows program.

27. The assumption that all low-income customers will use 50% air-conditioning is an extended attempt to incorporate hardship (comfort) into the analysis of appropriate ceiling insulation levels.

28. Even if the utilities' analysis used all 16 climate zones, separated gas and electric heat and compared 100% a/c vs. 50% a/c in uncombined territories, higher insulation levels would only be indicated for a limited number of low-income electrically heated homes.

29. The utilities' proposal specifically considers the interests of non-participating ratepayers by considering the net benefits of various ceiling levels, and selecting the one that maximizes net benefits.

30. Selecting maximum ceiling insulation levels that gives the highest TRC net benefits is not equivalent to choosing the level with the highest TRC.

31. The utilities proposed methodology for determining appropriate ceiling insulation levels does not use the TRC test, but rather, it utilizes a test that is designed to incorporate other considerations, including hardship.

32. Limiting the number of approved ceiling insulation levels is responsive to workshop recommendations to keep the program simple.

33. There is no consensus among the utilities and interested parties on the extent of gas leak/CO emission risks and the proper means of mitigating them, or the extent to which infiltration reductions resulting from LIEE activities exacerbate existing conditions. There appear to be significant gaps in information on these gas appliance safety issues.

34. The utilities' proposed minimum standard for natural gas appliance safety testing achieves some greater consistency in the procedures across utilities, but does not determine which testing procedures are most appropriate to address natural gas appliance safety risks.

35. The utilities' proposed 80% qualification rule for master-metered units does not mean that no eligible customers in a master-metered, multi-family building will qualify unless 80% also qualify. Rather, it means that if fewer than 80% qualify, those who individually qualify can still be treated. If 80% or more qualify, all can be treated.

36. Imposing a maximum on participation of master-metered units recognizes that there are some disadvantages associated with treating master-metered customers, as described in the Phase 2 report. In particular, it is unclear that master-metered tenants will receive benefits from the program to the same degree as individually-metered tenants.

37. There is an inconsistency in the utilities' recommendations on how to establish caps for multifamily units and for master-metered units.

38. Participation in the Working Group meetings was not a mandatory requirement for interested parties to participate in this proceeding or to file comments on the RRM report.

39. There is no factual basis to the utilities' assertion that ICA did not cosponsor the joint SESCO/ICA comments on the RRM report.

40. Irrespective of where information on program expenditures and bill savings is reported in the RRM document, this information is important to the evaluation of LIEE programs.

41. Energy-related hardship includes the adverse impacts on the comfort, health and safety of low-income customers that can be mitigated by access to LIEE programs and services. The Commission has not yet determined whether and how consideration of energy-related hardship will be incorporated into cost-effectiveness tests or measure selection criteria.

42. The Working Group was unable to develop technical modifications to LIEE cost-effectiveness tests by the report due date.

43. Until more extensive technical modifications can be developed in a second phase, the use of existing cost-effectiveness tests to report PY 2000 program results provides information on program costs and benefits that is reasonably consistent with past reporting.

44. The RRM is not intended to provide policy guidance on how the Commission should weigh cost-effectiveness relative to other performance information reported in that document or presented in other forums.

45. RHA's recommendations on reporting and data collection go well beyond the critical gaps identified by the Commission in D.00-07-020 and the assignment given to the Working Group.

46. The Working Group has developed an interim methodology for estimating the number of CARE eligible customers and penetration rates that utilizes the 1990 Census information as a foundation until the 2000 Census data becomes available.

47. The Census Income definitions are not the same as those of the CARE program.

48. SESCO and ICA's proposal to use a system-wide penetration rate for counties with fewer than 5,000 CARE-eligible meters assumes without statistical evidence that the system-wide rate accurately reflects penetration rates in these counties.

49. Utilities and interested parties will have a better idea of how best to revise the interim methodology when the 2000 Census long form and follow-up annual American Community Survey data sets become available.

50. In their joint comments, SESCO and ICA propose a system of classifying LIEE costs as administrative or implementation but do not establish the benefits of their proposal or how their requests for additional information will aid the evaluation of programs.

51. The detailed classification of LIEE costs recommended by the Working Group appear to allow the programs to be compared on a discrete, functional level, although full comparability will not be clear until the tables are completed.

52. The Working Group did not specifically address the reporting requirements established by D.00-07-020.

53. In recommending that CARE and LIEE cost classifications be similarly defined and categorized, SESCO and ICA do not define the specific cost classifications they believe should be standardized. Nor do they present the basis for this request or for the additions to CARE reporting they propose in their comments.

54. The RRM Report tables provide a significant amount of data on CARE customers and penetration rates, by energy source and county, on a quarterly basis.

55. The RRM Report does not provide due dates for the monthly reports described on pages 38 and 48 of the report.

56. There is approximately a 2-3 week delay between the end of the reporting period and the time when data is made available to the utilities.

57. It is difficult to evaluate SESCO/ICA's proposal to file CARE and LIEE reports together and simultaneously without information on where and when the reports for CARE and LIEE are currently filed at the Commission. The RRM Report does not clearly provide this information.

58. The Working Group request for immediate review of all existing LIEE and CARE reporting requirements is not feasible given other priority issues to address over the next few months.

Conclusions of Law

1. As part of Phase 3 of the Standardization Project, the project team should consider the carryover standardization issues identified in today's decision, with input from interested parties in a workshop setting:

(a) Whether customers being served on a business rate should be automatically excluded from the LIEE program.

(b) Whether customers who do not purchase their heating fuel from the utility should be excluded from the LIEE program.

(c) Procedures for limiting expenditures by housing type, including specific caps proposed by the utilities along with an explanation of:

    (1) How the caps are determined, and

    (2) The relationship between the housing stock in each utility's service territory and the maximum percentage of funds devoted to multi-family housing.

    (3) How the proposed caps are consistent with the approach recommended for limiting treatment of master-metered units (see (d) below).

(d) Procedures for limiting the treatment of master-metered units, including specific caps proposed by the utilities and an explanation of how they were determined.

(e) Whether the procedures explained in (c) and (d) above should be standardized across utilities and if so, how.

(f) Whether PG&E's measure pre-approval approach should be continued on a standardized basis across utilities and, if so, how inspectors should evaluate contractors' work with respect to pre-approvals in determining a "pass" or "fail" situation.

(g) How dispute resolution procedures for inspector-contractor disagreements should be standardized across utilities. Alternates to having utility employees serve as arbitrators under these procedures should be carefully considered.

(h) Whether renters should be provided with evaporative coolers under the LIEE program and if so, what type (i.e., portable versus permanent) and whether co-payments should be required.

(i) How the avoided cost assumptions used in the designation of ceiling insulation levels should be modified based on the avoided cost determinations made in the PY 2001 energy efficiency program planning process, A.99-09-049 et al.

(j) More detailed specification for the gas appliance safety/combustion appliance safety (CAS) testing minimum standards adopted in Phase 2, including threshold CO levels.

2. The Standardization Project Team should consider bifurcating Phase 3 in order to present recommendations on some or all of the carryover issues discussed in this decision well before the start of the PY 2002 planning process. In any event, the Standardization Project Team should present its recommendations to the Commission on all of the Phase 3 issues no later than April 15, 2001.

3. In preparing their PY 2002 budget and funding level recommendations, the utilities should clearly indicate the effects of the Commission's Phase 2 and 3 determinations on the LIEE program scope and costs of service.

4. It is reasonable to require LIEE program service providers to verify and record income eligibility information before measure installation, and to collect, copy and store that documentation. If a customer is found to be ineligible because they exceed the income limitations, the question of whether the error was the responsibility of the customer or the contractor should be answered by the contractor's documentation.

5. The utility should periodically audit the income information recorded and collected by the LIEE service provider. As in the CARE program, the utility should also perform periodic audits of customer records to verify the income qualification of LIEE program participants.

6. The utilities' proposed limits on prior participation in the LIEE program are reasonable, and should be adopted. In addition, any unit that previously failed a combustion appliance safety pre-test, and therefore did not receive infiltration-related measures (but received other measures), should be considered eligible for the measures it did not receive if the test is subsequently passed during the 10-year window.

7. The utilities should qualify the entire multi-family complex or mobile home park for LIEE services if at least 80% of all the individual dwelling units meet the LIEE program income requirements, irrespective of whether they have been previously treated. This 80% rule should apply separately to attic insulation levels for common attic areas.

8. It is reasonable to apply the 20% overall expenditure limit on minor home repairs/furnace replacement and repairs adopted by Res. E-3586 to all utilities. If a utility sees that it is likely to exceed the 20% level, then it can request a relaxation of that guideline via Advice Letter on a case by case basis.

9. The Phase 2 report should be clarified to indicate under what circumstances additional repairs can be made (if any) by the LIEE weatherization contractor to respond to gas leak/CO emission problems identified during the utility's natural gas appliance testing procedures, and what expenditure limits would apply to those repairs.

10. The Phase 2 report should be modified to describe the circumstances that may warrant larger sample sizes than the minimums presented in Table 5-2. The Phase 2 report should also clarify that the utilities will keep records of actual inspection frequencies, by contractor, as well as the number of minor corrections.

11. The use of per-home pass rates as the basis of minimum inspection frequencies should be revisited after the Commission considers the use of alternate indicators of installation quality during the PY 2002 planning process. The Commission may also consider at that time the need for specific upper limits to the inspections of jobs that do not involve ceiling insulation, as appropriate.

12. The statement on Page 5-4 of the Phase 2 standardization report regarding the outsourcing of inspection personnel should be conformed to reflect the Commission's stated directive, as discussed in this decision.

13. As discussed in this decision, the utilities should expand the definition of minor home repairs in the Weatherization Installation Manuals per CSD's recommendation. In response to SESCO's comments, the utilities should list replacement of switch/outlet covers as a repair that mitigates imminent hazard and clarify that replacement applies to all walls.

14. The utilities Phase 2 proposal for determining the appropriate level of ceiling insulation levels reasonably balances the objective of developing procedures to incorporate climate variations into workable, standardized ceiling insulation procedures, with the goal of providing a reasonable level of weatherization services to program participants at reasonable costs to non-participating ratepayers. This proposal should be adopted on an interim basis, until the Commission's overall LIEE cost-effectiveness methodology is determined. At that time, the use of an average of avoided costs and retail rates in the determination of appropriate ceiling levels may be revisited.

15. In the Phase 3 report, the project team should present an update on the designation of ceiling insulation levels based on the avoided cost determinations made in the PY 2001 energy efficiency program planning process, A.99-09-049 et al.

16. As discussed in this decision, the project team should conduct a study of natural gas appliance safety conditions and alternative CAS testing procedures in Phase 4 of the Standardization Project. Phase 4 should be completed in time for consideration of the information during the PY 2004 program planning cycle.

17. The joint utilities' proposal for natural gas appliance safety procedures is a reasonable first step towards achieving greater consistency in these procedures, in light of the broadly divergent views on the nature of the safety issue and how best to address it. The utilities should present more detailed specifications for the minimum standard, including threshold CO levels, in the Phase 3 report.

18. The Commission has determined that natural gas appliance safety/CAS testing will not be billed to LIEE or any other public purpose program and this issue should not be relitigated during the PY 2002 program planning cycle. Whether and how the utilities can increase distribution rates to recover the costs of natural gas appliance safety/CAS is an issue to be determined in pending or future cost of service ratemaking proceedings, and not the PY 2002 program planning cycle.

19. Establishing a cap on the treatment of master-metered units is necessary to obtain a reasonable level of overall participant benefits from program budgets and enables the Commission to balance the treatment of low-income customers with different types of metering arrangements.

20. The recommendations presented in the September 15, 2000 Phase 2 LIEE Standardization Project Report and October 26, 2000 Phase 2 Follow Up Report should be adopted, subject to the modifications and clarifications discussed in this decision.

21. The utilities recommendation that the joint comments of SESCO and ICA be rejected because they circumvented the Working Group process is without merit and should be rejected.

22. Future Working Group RRM Reports should clearly discuss the pros and cons of each alternative discussed by participants. The report should include a discussion of consensus issues and remaining areas of disagreement among participants, with a description of the participants' opposing views.

23. Consistent with the Assigned Commissioner's direction, proponents of any proposals that involve additional, detailed reporting requirements during the RRM revision process must specify how that additional information will aid the evaluation of programs and who will be doing the data analysis. Proposals should achieve a reasonable balance between the value of the information and the cost to collect that information.

24. In their February 1, 2001 joint report on LIEE program expenditures and bill savings, the utilities should propose a standardized format for this information to be incorporated into the RRM at the earliest possible opportunity. The RRM Working Group should therefore consider this proposal in the second phase RRM report.

25. Until the Commission has specific proposals before it regarding LIEE cost-effectiveness tests and measure selection criteria, it is premature to require utilities to collect specific types of data on the impact of LIEE programs on comfort, health and safety. For now, utilities should report on how LIEE programs address these hardships within the narrative of the Energy Efficiency Programs Annual Report. For this purpose, the utilities should use the Working Group's proposed working definition of energy-related hardship.

26. The use of existing cost-effectiveness tests on an interim basis, with the modifications proposed by the Working Group, is a reasonable approach to take for reporting PY 2000 program results in May 2001.

27. In the second phase of RRM revisions, the Working Group should consider the methodological issues raised in SESCO/ICA's comments, such as the appropriate discount rates, inflation rates and benefit and cost streams to use in cost-effectiveness analysis, and address them in the second phase report. Avoided costs should be based on the methodology and assumptions most recently adopted by the Commission.

28. RHA's request for policy guidance and additional reporting requirements goes beyond the scope of the task assigned to the RRM Working Group the issues addressed in today's decision, and should not be adopted.

29. The utilities should conduct a sensitivity analysis to determine the extent to which income definitional differences between the Census and CARE program might be affecting CARE eligibility estimates. The results of this analysis should be included in the consultant's report.

30. SESCO/ICA's recommendation to use system-wide CARE penetration rates for counties with fewer than 5,000 CARE-eligible meters is not justified and should not be adopted.

31. SESCO/ICA's recommendation to conduct annual revisions to the estimates of eligible CARE households by a common outside consultant is premature and should not be adopted at this time.

32. The Working Group's recommendations on how to report LIEE programs costs is a reasonable first step in the process of standardizing cost information. Once the tables are completed, the Commission may consider any further changes that may be necessary to enhance the comparability of the programs in the future. These changes may be considered by the Working Group and proposed to the Commission as part of the LIEE/CARE program planning cycles.

33. In the second phase RRM report, the Working Group should present recommendations for reporting format and filing frequency for the following information required by D.00-07-020:

c. Standardized, consistent training costs (Ordering Paragraph 1(f));

d. Participation of community-based organizations in the LIEE and other information regarding the access of low-income program participants to programs provided by community service providers (Ordering Paragraph 10);

e. Information for all utilities in the format presented for PG&E and SDG&E in Exhibits 35 and 36 (Ordering Paragraph 8); and

f. The LIEE bill savings and expenditure level information presented by the utilities in their February 1, 2001 joint report. (Ordering Paragraph 7).

34. The Commission may consider what type of information should be reported in the RRM on installation quality during the PY 2002 planning process, after the Commission evaluates improved approaches for measuring the performance of installation contractors.

35. The second phase RRM Report should be filed in the Commission's Docket Office and served on the service list in this proceeding no later than March 31, 2001.

36. SESCO/ICA's recommendations regarding CARE cost classifications and reporting requirements are deficient and should be rejected.

37. The monthly reports described on pages 38 and 48 of the RRM Report should be due by the first Friday of the second month, following the month for which data is reported.

38. Consideration of whether to file CARE and LIEE program reports together, as proposed by SESCO/ICA, should be deferred until we obtain better comparison information on where and when the Working Group recommends that they be filed at the Commission.

39. The RRM Report recommendations should be clarified with a matrix summarizing where each of the CARE or LIEE reports described in the RRM Report is to filed or submitted, on what dates or frequency, how it is used (e.g., informational only, filed in a Commission proceeding), and who has access to the information (e.g., Energy Division staff, appearances to a particular proceeding).

40. Because the Commission may require the Working Group to consider reporting issues sooner than two years from now, the Working Group recommendation to reconvene in two years should not be adopted.

41. Any effort to review existing CARE and LIEE reporting requirements, within and outside of the reporting requirements recommended in the RRM, should be deferred until the Working Group completes the second phase of RRM revisions and we are well underway with the PY 2002 planning process.

42. In order to proceed with additional standardization of program policies, procedures and reporting requirements for the PY 2002 planning process as expeditiously as possible, this order should be effective today.

43. The late filing of joint comments by TELECU and Maravilla Foundation did not disadvantage parties and should be accepted.

ORDER

IT IS ORDERED that:

1. The recommendations presented by the Standardization Project Team in the September 15, 2000 Phase 2 Low-Income Energy Efficiency (LIEE) Standardization Project Report (Phase 2 Report) and October 26, 2000 Phase 2 Follow Up Report are approved, subject to the modifications and clarifications listed in Ordering Paragraph 3.

2. Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company, Southern California Edison Company, and Southern California Gas Company, collectively referred to as "the utilities," shall incorporate all Commission directives adopted in this decision related to the Phase 2 Report and follow-up report dated October 27, 2000 into the new statewide policy and procedures manual to be filed on April 15, 2001. The procedures set forth in the Weatherization Installation Standards manuals and the policy and procedures adopted today shall govern all LIEE installations in the utility programs beginning January 1, 2002 unless otherwise directed by the Commission.

3. The April 15, 2001 statewide policy and procedures manual submitted pursuant to Ordering Paragraph 2 shall incorporate the following modifications and clarifications to the recommendations presented by the Standardization Project Team in this proceeding.

(a) Any unit that previously failed a combustion appliance safety pre-test, and therefore did not receive infiltration-related measures (but received other measures) shall be considered eligible for the measures it did not receive if the test is subsequently passed during the 10-year window.

(a) The utilities shall qualify the entire multi-family complex or mobile home park for LIEE services if at least 80% of all the individual dwelling units meet the LIEE program income requirements, irrespective of whether they have been previously treated. This 80% rule should apply separately to attic insulation levels for common attic areas.

(a) The 20% overall expenditure limit on minor home repairs/furnace replacement and repairs adopted by Resolution E-3586 shall apply to all utilities. If a utility sees that it is likely to exceed the 20% level, then it can request a relaxation of that guideline via Advice Letter on a case by case basis.

(b) The Phase 2 Report shall be clarified to indicate under what circumstances additional repairs (if any) can be made by the LIEE weatherization contractor to respond to gas leak/carbon monoxide emission problems identified during the utility's gas appliance testing procedures, and what expenditure limits would apply to those repairs.

(a) The Phase 2 Report shall be modified to describe the circumstances that may warrant larger sample sizes than the minimums presented in Table 5-2. The Phase 2 Report shall also clarify that the utilities will keep records of actual inspection frequencies, by contractor, as well as the number of minor corrections.

(b) The statement on Page 5-4 of the Phase 2 Report regarding the outsourcing of inspection personnel shall be modified to state that utilities can undertake in-house either the prime contractor (administration) function or the inspection function, but not both, with the very limited exceptions discussed in D.00-07-020.

(a) The final determination on whether to establish ceiling insulation levels based on retail rates, avoided costs or a combination of the two will be a continuing issue until the overall LIEE cost-effectiveness methodology is determined. The recommendation to use an average of avoided costs and retail rates is adopted on an interim basis.

(a) The manner in which the caps on the treatment of multi-family and master-metered units are established will be further considered during Phase 3 (see Ordering Paragraph 6).

4. The use of per-home pass rates as the basis of minimum inspection frequencies shall be revisited after the Commission considers the use of alternate indicators of installation quality during the PY 2002 planning process. The Commission may also consider at that time the need for specific upper limits to the inspections of jobs that do not involve ceiling insulation, as appropriate.

5. As discussed in this decision, the utilities shall expand the definition of minor home repairs in the WIS manuals, list replacement of switch/outlet covers as a repair that mitigates imminent hazard and clarify that replacement applies to all walls.

6. As part of Phase 3 of the Standardization Project, the project team shall consider the carryover standardization issues identified in today's decision, with input from interested parties in a workshop setting:

(a) Whether customers being served on a business rate should be automatically excluded from the LIEE program.

(b) Whether customers who do not purchase their heating fuel from the utility should be excluded from the LIEE program.

(c) Procedures for limiting expenditures by housing type, including specific caps proposed by the utilities along with an explanation of:

(1) How the caps are determined, and

(2) The relationship between the housing stock in each utility's service territory and the maximum percentage of funds devoted to multi-family housing.

(3) How the proposed caps are consistent with the approach recommended for limiting treatment of master-metered units (see (d) below).

(d) Procedures for limiting the treatment of master-metered units, including specific caps proposed by the utilities and an explanation of how they were determined.

(e) Whether the procedures explained in (c) and (d) above should be standardized across utilities and if so, how.

(f) Whether PG&E's measure pre-approval approach should be continued on a standardized basis across utilities and, if so, how inspectors should evaluate contractors' work with respect to pre-approvals in determining a "pass" or "fail" situation.

(g) How dispute resolution procedures for inspector-contractor disagreements should be standardized across utilities. Alternates to having utility employees serve as arbitrators under these procedures should be carefully considered.

(h) Whether renters should be provided with evaporative coolers under the LIEE program and if so, what type (i.e., portable versus permanent) and whether co-payments should be required.

(i) How the avoided cost assumptions used in the designation of ceiling insulation levels should be modified based on the avoided cost determinations made in the PY 2001 energy efficiency program planning process, A.99-09-049 et al.

(j) More detailed specification for the gas appliance safety/combustion appliance safety (CAS) testing minimum standards adopted in Phase 2, including threshold CO levels.

7. The Standardization Project Team shall consider bifurcating Phase 3 in order to present recommendations on some or all of the carryover issues listed in Ordering Paragraph 6 well before the start of the PY 2002 planning process. In any event, the Standardization Project Team shall present its recommendations to the Commission on all of the Phase 3 issues no later than April 15, 2001. Comments on the Phase 3 interim and final reports shall be due 25 days after the reports are filed, and replies are due 15 days thereafter.

8. As discussed in this decision, the Standardization Project Team shall conduct a study of natural gas appliance safety conditions and alternative testing procedures in Phase 4 of the Standardization Project. The utilities may augment the project team with additional technical consultants, as needed. Energy Division shall continue to assist in coordinating the standardization effort. The Assigned Commissioner shall direct the project with respect to the scope of work, budget and schedule. After obtaining input from the public and interested parties to this proceeding, the Standardization Project Team shall file a proposed study methodology, budget and schedule for Phase 4 by September 1, 2001. Copies shall be served on the Assigned Commissioner and on all appearances and the state service list in this proceeding. The schedule shall provide for completion of Phase 4 in time for the Commission's consideration of the study during the PY 2004 planning process.

9. In preparing their PY 2002 budget and funding level recommendations for LIEE programs, the utilities shall clearly indicate the effects of the adopted standardization policies and procedures on the program scope and costs of service.

10. The recommendations presented by the Reporting Requirements Manual (RRM) Working Group and presented in the October 2, 2000 RRM Working Group Report for Low-Income Assistance Programs (RRM Report) are approved, subject to the modifications and clarifications listed in Ordering Paragraph 12.

11. Within 30 days of the effective date of this decision, the RRM Working Group shall file a revised RRM reflecting the Working Group's recommendations, as modified in today's decision. The Working Group shall serve a notice of the report's availability to all appearances and the state service list in this proceeding. The reporting requirements presented in the revised RRM shall be used by the utilities in reporting the results of their PY 2000 LIEE and California Alternate Rates for Energy (CARE) programs in May, 2001 and beyond, unless further modified by Commission decision.

12. The revised RRM submitted pursuant to Ordering Paragraph 11 shall incorporate the following modifications and clarifications to the recommendations presented by the RRM Working Group in this proceeding:

(a) The monthly reports described on pages 38 and 48 of the RRM Report shall be due by the first Friday of the second month following the month for which data is reported.

(b) The Working Group may be directed by the Commission or the Assigned Commissioner to convene and consider reporting issues periodically, as needed.

(c) Any effort to review existing reporting requirements for low-income assistance programs, within and outside of the reporting requirements recommended in the RRM Report, should be deferred until the Working Group completes the second phase of RRM revisions and the Commission is well underway with the PY 2002 planning process.

(d) A matrix summarizing where each of the CARE or LIEE reports described in the RRM Report is to be filed or submitted, on what dates or frequency, how it is used (e.g., informational only, filed in a Commission proceeding), and who has access to the information (e.g., Energy Division staff, appearances to a particular proceeding). After this information is obtained, the Commission may further consider whether to change the current procedures of filing CARE and LIEE reports separately. The Commission also defers consideration of the Working Group's recommendation to require a separate CARE RRM at this time.

13. In their February 1, 2001 joint report on LIEE program expenditures and bill savings, as required by D.00-07-020, the utilities shall propose a standardized format for this information to be considered by the RRM Working Group and incorporated into the RRM at the earliest possible opportunity.

14. In developing the interim methodology for estimating eligible CARE customers, the utilities shall conduct a sensitivity analysis to determine the extent to which income definitional differences between the Census and CARE program might be affecting CARE eligibility estimates. The results of this analysis shall be included in the consultants' report.

15. As discussed in this decision, the RRM Working Group shall present recommendations on the following issues related to low-income assistance programs in a second phase report:

(a) Technical modifications to cost-effectiveness testing and reporting, as appropriate. Methodological issues to be considered include the selection of appropriate discount rates, inflation rates and benefit and cost streams to use in cost-effectiveness analysis. Recommendations shall also address whether (and if so, how) to incorporate comfort, health and safety effects into the cost-effectiveness testing methodology. Avoided costs shall be based on the methodology and assumptions most recently adopted by the Commission.

(b) Reporting format and filing frequency for the following information required by D.00-07-020:

    1) Standardized, consistent training costs (Ordering Paragraph 1(f));

    2) Participation of community-based organizations in the LIEE and other information regarding the access of low-income program participants to programs provided by community service providers (Ordering Paragraph 10);

    3) Information for all utilities in the format presented for PG&E and SDG&E in Exhibits 35 and 36 (Ordering Paragraph 8.);

    4) The LIEE bill savings and expenditure level information presented by the utilities in their February 1, 2001 joint report. (Ordering Paragraph 7).

16. The RRM Working Group shall file the second phase RRM Report no later than March 31, 2001 and serve a notice of its availability to all appearances and the state service list in this proceeding. Comments on the report shall be due 25 days after it is filed, and replies are due 15 days thereafter.

17. All future RRM Working Group reports, including the second phase report, shall clearly discuss the pros and cons of each alternative discussed by participants. The reports shall include a discussion of consensus issues and remaining areas of disagreement among participants, with a description of the participants' opposing views. Proponents of any proposals that involve additional, detailed reporting requirements during the RRM revision process shall specify how that additional information will aid the evaluation of programs, who will be doing the data analysis, and how the proposal achieves a reasonable balance between the value of the information and the cost to collect that information.

18. All filings required by today's order shall be filed in the Commission's Docket Office and served on the appearances and state service list in this proceeding, or successor proceeding. The due dates for filings discussed in this decision may be modified by the assigned Administrative Law Judge, for good cause.

19. The late-filed comments of the East Los Angeles Community Union and Maravilla Foundation on the draft decision are accepted.

This order is effective today.

Dated March 15, 2001, at San Francisco, California.

LORETTA M. LYNCH

President

HENRY M. DUQUE

RICHARD A. BILAS

CARL W. WOOD

GEOFFREY F. BROWN

Commissioners

ATTACHMENT 1

ACRONYMS

A.

Application

CAASM

Community Action Agency of San Mateo County

CARE

California Alternate Rates for Energy

CAS

Combustion appliance safety

CEC

California Energy Commission

CO

Carbon monoxide

CSD

Commission's Consumer Services Division

D.

Decision

ICA

Insulation Contractors Association

LIAB

Low-Income Advisory Board

LIEE

Low Income Energy Efficiency

PG&E

Pacific Gas and Electric Company

Phase 2

Low-Income Energy Efficiency Standardization Project

Phase 2 Report

Standardization Project Report

Phase 4

Additional phase

post test

after the installation of measures

PPT

Public Purpose Test

pre test

prior to the installation of measures

Project team

Standardization Project Team

Pub. Util. Code

Public Utilities Code

PY

Program year

RER

Regional Economic Research, Inc.

Res.

Resolution

RHA

Richard Heath & Associates

RRM

Reporting Requirements Manual

RRM Report

RRM Working Group Report for Low-Income Assistance Programs

SB

Senate Bill

SCE

Southern California Edison Company

SDG&E

 San Diego Gas & Electric Company

SESCO

SESCO Inc.

SoCal

Southern California Gas Company

TRC

total resource cost

WIS

Weatherization Installation Standards

Working Group

RRM Working Group

(END OF ATTACHMENT 1)

ATTACHMENT 2

Development of Recommendations: Phase 2 Standardization
Project and Reporting Requirements Manual

The Standardization Project Team consists of the utilities and the project consultants: Regional Economic Research, Inc. (RER) and Richard Heath & Associates (RHA). Energy Division assisted in coordinating the effort. In the course of developing the recommendations contained in the Phase 2 standardization (and follow-up) report, the team took the following steps:

· On June 7, 2000 and June 21, 2000, RER and RHA presented a Phase 2 overview at a public workshop held in conjunction with meetings of the LIAB and its Technical Committee in San Francisco. Comments from the public were received and attendees were invited to submit other comments and questions to the Standardization Project team via mail or electronic mail.

· On July 26, 2000, RER presented preliminary recommendations at a public workshop held in Los Angeles in conjunction with a meeting of LIAB's Technical Committee.

· On August 1, 2000, RER presented an updated set of preliminary recommendations at a public workshop held in San Francisco in conjunction with a meeting of the LIAB.

· On August 29, 2000, RER presented the Phase 2 draft recommendations to the public in a workshop held in association with a meeting of the LIAB in Garden Grove. As at other workshops, public comment was invited.

· On September 26-27, 2000, a two-day Standardization Project team meeting was held in San Francisco. The first day was dedicated to gas appliance testing and the second day was dedicated to the remaining issues.

· On October 10, 2000, another team meeting was held in Downey for additional discussions gas appliance testing and remaining issues. The need for a public input workshop was discussed and the team worked with the Commission's Energy Division to establish workshop details and set up the notice.

· On October 18, 2000, a team meeting was held in San Francisco to address unresolved issues and try to finalize the draft report that would be sent out for public comment.

· On October 19, 2000, the team distributed a draft version of the Phase 2 Follow-up Report for public comment. On the morning of October 24, 2000, a public workshop was held in San Diego to solicit public comments on the draft. Three participants contributed comments - SESCO, RHA, and the Insulation Contractors Association (ICA). In the afternoon, the team met to consider public comments and finalize the Phase 2 Follow-up Report. The team also considered responses to public comments received on the Phase 2 Final Report.

To develop the recommendations contained in the Reporting Requirements Manual (RRM) Working Group Report, the utilities, Office of Ratepayer Advocates and the Energy Division staffed the Working Group with personnel directly involved with the delivery of low-income program services. Three Working Group members, one from PG&E, one from SoCal and another from SDG&E, also serve on the California Measurement Advisory Council's (CALMAC) Low Income Measurement and Evaluation Committee (LIMEC). Two Working Group members, one from PG&E and another from ORA, also serve on the weatherization installation standards project team. A representative from the Insulation Contractors Association (ICA) participated extensively as a member of the Working Group. The full membership in the Working Group is provided in Table A.

TABLE A - RRM Working Group Participation

July 12, 2000 - September 14, 2000

 

July 12

San Francisco

July 24

Los Angeles

Aug. 3

San Francisco

Aug. 14

San Diego

Aug. 28

Downey

Aug. 31

Downey

Sept. 5

Irwindale

Sept. 14

San Francisco

 

CPUC

A

A

A

A

A

A

A

A

ORA

A

A

A

A

A

A

A

A

LIAB

A

A

A

A

A

A

    

LIMEC

A

A

A

A

A

A

A

A

 

SCE

A

A

A

A

A

A

A

A

SoCalGas

A

A

A

A

A

A

A

A

PG&E

A

A

A

A

A

A

A

A

SDG&E

A

A

A

A

A

A

TC

A

 

Insulation Contractors Association (ICA)

A

A

A

      

TC

A

The East Los Angeles Community Union (TELACU)

A

A

            

Proteus

  

A

            

Community Action Agency of San Mateo County

  

A

A

          

Community Resource Project

  

A

            

California State Department of Community Services Development (CSD)

  

A

  

A

        

Southern California Forum

  

A

  

TC

        
 

A = Attendance

  

TC = Teleconferencing

        

ECHNICAL COMMITTEE

July 26, 2000

Name

Organization

Phone

May Wait

CSD

(916) 324-6298

William Parker

CAA of San Mateo

(650) 595-1342

Eddie Jimenez

Proteus, Inc.

(557) 733-5423

Vallis Wineger

Winegard Enery

(626) 256-3400

Bob Burt

Insul Centr. Association

(916) 444-2950

Michael Rosauer

CPUC/Energy

(415) 703-2579

Josie Webb

CPUC/ORA

(415) 703-2247

Thomas Tenorio

CRA Butte County, Inc.

(530) 538-7559

Jack Parkhill

SCE

(626) 302-8040

Donna Jones-Moore

SoCalGas

(213) 244-4256

Lou E. Estrella

SoCalGas

(213) 244-3227

Roberto del Real

SoCalGas

(213) 244-3276

Steven Geraci

PACE

(213) 989-3289

Traci Smith

LA Works

(626) 960-3964

Jonathan Tom

CPUC

(415) 703-1809

Bob Ramirez

RER

(858) 481-0081

Fred Sebold

RER

(858) 481-0081

Anne Keegan

SoCalGas

(213) 244-3834

George Sanchez

RHA

(858) 514-4025

Stephen Ruthledge

LIAB/CPUC

(415) 703-1428

Louise Perez

CRP

(416) 567-5220

Allan Ross

QCS

(626) 926-0029

George Bigelow

TECACU

(800) 906-3911

Art Cisneros

VICS

(562) 692-0461

Guadalupe Rodriguez

VICS

(562) 695-4342

Donna Weaver

SCE

(626) 302-8995

Arleen Navotney

SoCal Forum

(818) 781-4151

Weatherization Installation Standardization Tem Public Input Workshop

Initial Phase II Draft Recommendations

August 1, 2000

San Francisco, CA

Attendee List

Name

Organization

Bob Burt

ICA

Bill Parker

San Mateo CAA

Janice Foreman

SMUD

Bob Ramirez

RER

Fred Sebold

RER

Jim O'Bannon

RHA

Lou Estrella

SoCalGas

Donna Jones-Moore

SoCalGas

Dennis Guido

PG&E

Eddie Jimenez

Proteus

Louise Parker

CSD

Don Wood

SDG&E

Dave Rogers

SDG&E

Jack Parkhill

SCE

Roberto Haro

LIAB

Steve Rutledge

CPUC/LIAB

LIAB Meeting

August 29, 2000

Name

Organization

Phone

Donna Jones-Moore

SoCalGas

(213) 244-4256

  

May Wail

CSD

(916) 324-6298

Louise A. Perez

CRP

(916) 567-5220

Michael Rosauer

CPUC

(415) 703-2579

Dennis Guido

PG&E

(415) 972-5429

William Parker

CAA SM

(650) 595-1342

Eddie Jimenez

Proteus, Inc.

(559) 733-5423

Allan Rago

QCS

(626) 923-0029

Dan Wood

SDG&E

(858) 536-4002

Fred Sebold

RER

(858) 481-0081

Richared D. Villasenor

TELACU

(562) 777-1142

George Bigelow

TELACU

(562) 777-1142

Arleen Novotney

SoCal Forum

(818) 781-4151

Jeff Beresini

PG&E

(415) 973-2931

Lou E, Estrella

SoCalGas

(213) 244-3227

Jack Parkhill

SCE

(626) 302-8040

Roberto del Real

SCE

(213) 244-3276

Josie Webb

CPUC/ORA

(415) 703-2247

Wallis Winegar

Winegard Energy

(626) 256-3300

Jeannie Harrel

SCE

(626) 302-8275

LIEE Standardization Workshop Sign-Up Sheet

October 24, 2000

San Diego, CA

Name

Organization

Phone

Jonathan Tom

CPUC-ED

(415) 703-1809

  

Dennis Guido

PG&E

(415) 972-5429

Josie Webb

CPUC/ORA

(415) 703-2247

Richard Villasenior

TELACU

(800) 906-3911

Rene A. Morales

TELACU

(800) 906-3911

Wally Golberg

Southwest Gas

(702) 876-7367

John Jensen

RHA

(858) 514-4025

George Sanchez

RHA

(858) 514-4025

Roxanne Fogueroa

RHA

(510) 748-4330

Bob Burt

ICA

(916) 444-2950

Roberto del Real

SoCalGas

(213) 244-3276

Lou E. Estrella

SoCalGas

(213) 244-3227

Luis Chavez

Winegard energy

(626) 265-3400

Don Wood

SDG&E

(858) 536-4002

Bob Ramirez

RER

(858) 481-0081

Fred Sebold

RER

(858) 481-0081

Jack Parkhill

SCE

(626) 302-8040

Jim O'Bannon

RHA

  

Donna Wagoner

CPUC-ED

  

Stephen Rutledge

CPUC-CSD

(415) 703-1428

(END OF ATTACHMENT 2)

ATTACHMENT 3

Summary of Phase 2 Standardization Recommendations

The Standardization Project Team makes the following Phase 2 recommendations:

Customer Eligibility

Minor Home Repairs and Furnace Repairs and Replacements

The Standardization Project Team has adopted the definition of a minor home repair as "a repair required to enable installation of weatherization measures or made to reduce infiltration." Proposed policies with respect to minor home repairs are:

Inspection Policies and Procedures

The Standardization Team offers several recommendations designed to make inspection policies more consistent:

Ceiling Insulation Levels

Table 1 provides the results of the Standardization Project Team's analysis of adding various amounts of ceiling insulation to different preexisting levels. For each existing ceiling insulation level, the level of insulation that gave the highest net benefits (present value of savings less the installed cost) was chosen as the amount of installation to add. Three scenarios were run: one that used avoided costs to value electricity and gas savings, one that used averages of avoided costs and retail rates to value savings; and another that used retail rates to value savings. The third through fifth columns of Table 1 depict the recommendations that would be based on strict use of the results of these three sets of assumptions.

Table 1: Implied Ceiling Insulation Policies (Baseline Assumptions)

   

Insulation to be Added

Climate Zone

Existing Ceiling Insulation Level

Avoided Costs Only

Average of Avoided Costs & Retail Rates

Retail

Rates Only

North Coast

    R-0 (uninsulated)

R-19

R-19

R-19

 

    R-1 to R-11

None

R-1141

R-11

 

    R-12 to R-19

None

None

None

 

    Above R-19

None

None

None

South Coast

    R-0 (uninsulated)

R-1942

R-19

R-19

 

    R-1 to R-11

None

None

None

 

    R-12 to R-19

None

None

None

 

    Above R-19

None

None

None

Inland

    R-0 (uninsulated)

R-19

R-19

R-30

 

    R-1 to R-11

None

R-11

R-19

 

    R-12 to R-19

None

None

None

 

    Above R-19

None

None

None

Desert

    R-0 (uninsulated)

R-30

R-30

R-30

 

    R-1 to R-11

R-11

R-19

R-19

 

    R-12 to R-19

None

None

None

 

    Above R-19

None

None

None

Mountain

    R-0 (uninsulated)

R-30

R-30

R-38

 

    R-1 to R-11

R-19

R-19

R-19

 

    R-12 to R-19

None

None

R-19

 

    Above R-19

None

None

None

In keeping with its Phase I recommendation, the Standardization Team recommends the use of the values resulting from the scenario that makes use of the average of avoided costs and retail rates for the statewide standard. Given the current level of uncertainty with respect to market prices and avoided costs, the Standardization Team recommends that these ceiling insulation policies be revisited during Phase 3 of the Standardization Project, as well as periodically in future years.

Eligibility of Evaporative Coolers for Rental Units

The Standardization Project Team recommends that this issue be deferred until later in Phase 3.

Eligibility of Master-Metered Units

The Standardization Project Team recommends that master-metered units be eligible under the following conditions:

CO/CAS/Gas Appliance Testing

The Standardization Project Team recommends that greater consistency in natural gas appliance testing policies and procedures be achieved through an agreement to a minimum set of procedures to be implemented across programs. These minimum standards have two general provisions:

The specific procedures listed in Table 2 summarize the recommended minimum standards. Individual utilities can continue to provide additional procedures if they consider these additional steps warranted.

Table 2: Recommended Minimum Standard for Gas Appliance Testing

General Procedure

Specific Procedures

Olfactory Test

    _ Smell for natural gas leaks

Visual Examinations

Flue and Vent System-Check for:

    _ Draft hood defects: Multiple, missing or improperly installed

    _ Holes in pipe or other hazardous conditions.

    _ Connection with a solid fuel appliance chimney.

    _ Flue/vent cap missing or damaged.

    _ Inadequate distance from an evaporative cooler inlet.

 

Appliance Components-Check for:

    _ Furnace combustion chamber door(s) not present.

    _ Water Heater combustion chamber cover (rollout shield or access door) not present.

    _ Excessive amounts of carbon or rust in/around heat exchanger, draft hood or flue/vent pipe.

Combustion Air Evaluation

Combustion Air Vents-Check for:

    _ Vents are present and adequate (size and location)

    _ Source of combustion air is adequate and unobstructed.

Ambient CO Tests

    _ CO tester zeroed outdoors.

    _ First CO sample taken indoors with all combustion appliances turned off.

    _ Second CO sample taken in same indoor location after space heating system has been operating at least five minutes.

    _ Third CO sample:

      - Forced-air units-inside the register nearest the supply plenum.

      - Non-ducted units-in the atmosphere just above the heat exchanger.

Draft Tests

    _ Visual (non-instrument) test

    _ Tactile test

(END OF ATTACHMENT 3)

ATTACHMENT 4

Reporting Requirements Manual Working Group Recommendations

The Reporting Requirements Manual (RRM) Working Group recommendations are summarized below. Note that "RRM2" refers to the document used for reporting costs and effects from energy efficiency programs (including low-income energy efficiency) administered by the utilities since January 1, 1998. These recommendations are presented under the specific unresolved issue(s) that they address, as identified in the Assigned Commissioner's April 28, 2000 ruling.

· "The need for and how to report `reduction in hardships' associated with the low-income energy efficiency programs, such as comfort levels, employment, safety and security."

· "The need by LIAB to have utilities provide information on specific outreach efforts, on enrollments and on certifications and discounts on a requested and timely basis, rather than in an annual report."

· "Modifications to cost-effectiveness tests, such as use of a Modified Participants Test and narrative describing the limited applicability of the economic tests to low-income programs."

· "What are the information needs for the future? Should the RRM include information from past annual reports for CARE reporting? Should the RRM include tables that summarize major decisions/changes, total number of electric and gas customers, average number of customers for the year, eligibility levels that underlie penetration level computations, average consumption of CARE and non-CARE residential customers, information on certification procedures, etc.?"

· "Whether to break out administrative cost categories by function, rather than by labor, non-labor and contract categories."

· "How to specifically define administrative vs. implementation costs, internal and out-sourced costs."

· Other Recommendations

(END OF ATTACHMENT 4)

29 Joint Reply RRM Working Group Report, November 15, 2000, p. 3. 30 Assigned Commissioner's Ruling, dated April 28, 2000, p.2. Whereas interested parties were not required to attend, the Assigned Commissioner did directed the LIAB to participate in the meetings/workshops in order to avoid duplication of effort between the two groups. 31 Assigned Commissioner's Ruling, April 28, 2000, p. 2. 32 RRM Report, pp. 12-13. 33 SESCO/ICA Joint Comments, p. 5. We note that there is a discrepancy between the RRM Report, which indicates that ICA concurs with the proposed definition, and the comments submitted jointly by SESCO and ICA that object to the definition. We cannot explain this discrepancy, and can only assume that ICA's position on this issue is best reflected in the more recently filed joint comments. In the future, any such discrepancies should be discussed and clarified in parties' comments. 34 Assigned Commissioner's Ruling, April 28, 2000, p. 6. 35 D.00-07-020, Ordering Paragraph 7. 36 See RRM Working Group Report, p. 15; LIEE Standardization Report, Phase 2, p. 6-2. 37 Assigned Commissioner's Ruling, April 28, 2000, p. 6. 38 See D.00-07-020, mimeo., pp. 111-116. 39 SESCO/ICA Comments, October 31, 2000, pp. 10-11. 40 Assigned Commissioner's Ruling, April 28, 2000, p. 3. 41 The results of the analysis indicated that no insulation should be added; however, the net benefit of adding R-11 was only marginally negative, so R-11 is used here. 42 Analysis results indicate a level of R-11, but R-19 was used for consistency with Title 24 minimum value.

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