3. Procedural Background
The Commission adopted the Order Instituting Rulemaking (OIR or R.) 07-01-042 in January 2007 for the purpose of revisiting and refining policies, programs and practices of the utilities' LIEE programs and to implement legislation concerning CARE.
This rulemaking evolves from and builds on the work we began in previous proceedings, including associated decisions, such as D.06-12-036 and D.06-12-038. This rulemaking addresses several issues raised in those decisions and also issues interrelated with our general energy efficiency rulemaking, R.06-04-010. The OIR described the following twelve issues to be addressed in this proceeding:
1. Policy Objectives - As California's energy needs and demographics change, and energy efficiency markets and technologies evolve, we believe we should reconsider our policy objectives and priorities. For example, in the administration of LIEE programs, how important is equitable access by low-income communities to LIEE programs? Cost-effectiveness? LIEE programs as an energy resource? The safety and comfort of low-income customers? Technology development? The answers to these questions should guide the goals that are set and allocation of funds to program elements and technologies.
2. Goals-based Budgeting - D.06-12-038 stated the Commission's commitment to developing strategic goals for LIEE programs and then developing budgets accordingly. The Commission issued the "KEMA" needs assessment in late 2006, providing a foundation for this approach. Key issues we need to address include: How should the universe of LIEE participants be defined? Should criteria for program participation be changed or clarified? How should program priorities be set and defined in a given budget period? In developing program priorities, what should be the target populations? How should those priorities be translated into program goals and how should they be reflected in utility budgets?
3. Processes for Considering Program Improvements between Utility Budget Cycles - Our intent is to move to a three-year program funding cycle beginning in 2009. Currently, the utilities are required to meet with interested parties about program elements between budget cycles, as set forth in D.06-12-038. Is this an adequate way for the utilities to become informed about program issues and make program changes that are responsive to Commission objectives? If not, what type of forum or group is appropriate for this purpose and what type of authority or discretion should it have, if any?
4. Cost-benefit Models - What models are the utilities using now in their impact studies? Should those models be changed? How should cost-benefit analyses of low-income programs be applied? Should they be used to prioritize program elements? Improve them? Eliminate some? Are impacts on green house gasses appropriately reflected in the assessment of program benefits and, if not, how should they be reflected?
5. California Solar Initiative (CSI) Program - The Commission is conducting a rulemaking to implement its CSI, which provides various incentives for customers and businesses to install solar technologies. The Commission has determined that 10% of CSI funds should be set aside for low-income customers and projects. Since the issuance of that order, the California Legislature enacted AB 2723, which defines the low-income component of the CSI with more specificity. To what extent should LIEE be coordinated with the low-income portion of the CSI?
6. Evaluation, Measurement and Verification (EM&V) - What should EM&V study and measure? How often should such studies be conducted and used? How does the Commission's inclusion of LIEE results in energy efficiency goals affect program evaluation?
7. Integration of the LIEE program with Energy Efficiency Programs - The Commission has traditionally considered LIEE programs separately from other energy efficiency programs. Recently, the Commission included LIEE as part of the performance goals of the utilities and stated the Commission's intent to treat LIEE more as a resource program, which conceptually makes LIEE more like energy efficiency programs than a subsidy program. How, if at all, should the two programs be merged from the standpoint of budget and program review and management, procurement and for the purpose of strategic development?
8. Gas Furnace Programs and NGAT - What policies and practices should apply to gas furnace repairs and installations for low-income customers? What are the effects of Natural Gas Appliance Testing (NGAT) on program participation and how can the Commission balance safety and program participation objectives?
9. AB 2140 - AB 2140 requires the Commission to adopt, no later than January 1, 2008, a process for improving electric and gas utility CARE applications and outreach to tenants at master-metered properties, such as mobile home parks and apartment buildings. In this proceeding, the Commission will adopt the process required under AB 2140. What should the utilities do to implement this statute?
10. Renter Access - Some parties have raised concerns that some LIEE programs may not be adequately marketed or provided to tenants. What problems exist for renters in both single and multi-family dwellings and what steps should be taken?
11. Water Conservation Programs - In R.06-04-010, the Commission has begun a review of how water conservation programs can be developed to increase energy efficiency savings. Programs are needed that target low-income customers. What types of programs for low-income customers should be developed? What kinds of energy savings are possible from programs that target low-income water customers?
12. Program Management and Administration - Can any improvements be made in the current administration of LIEE programs? Should community-based organizations be more involved? How much involvement should the Commission have in ongoing program oversight? Can the Commission or the utilities do more to include input from low-income customers in program development and administration?18
Following a prehearing conference held in this proceeding on March 7, 2007, the assigned Commissioner issued a scoping ruling that set proceeding priorities and scheduled the review of issues relating to LIEE program objectives and priorities, renter access to LIEE programs, and the implementation of AB 2140 in the utilities' CARE programs (Items 1, 9 and 10 above).19 The assigned Commissioner subsequently solicited comments on NGAT issues (Item 8) and the programmatic implications of a recently-issued report administered by the Commission and conducted by KEMA.20
This decision addresses these issues as well as SCE's application for increased funding for CFL distribution, which was consolidated with this rulemaking. Future phases of this proceeding will address outstanding issues at the discretion of the assigned Commissioner and consistent with our findings here and in related proceedings.
18 OIR, California Public Utilities Commission, January 25, 2007.
19 Scoping Memo and Ruling issued March 28, 2007, R.07-01-042.
20 The report, titled "Final Report on Phase II Low Income Needs Assessment" was published on September 7, 2007. http://www.cpuc.ca.gov/PUC/energy/consumers/liee.htm
