COM/DGX, ALJ/KLM/rbg Date of Issuance 12/24/2007

Decision 07-12-051 December 20, 2007

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking Regarding Policies, Procedures and Rules for the Low Income Energy Efficiency Programs of California's Energy Utilities.	Rulemaking 07-01-042 (Filed January 25, 2007)
Southern California Edison Company's (U338E) Application for Approval of SCE's "Change A Light, Change The World," Compact Fluorescent Lamp Program.	Application 07-05-010 (Filed May 10, 2007)

DECISION PROVIDING DIRECTION FOR LOW-INCOME
ENERGY EFFICIENCY POLICY OBJECTIVES, PROGRAM GOALS,
STRATEGIC PLANNING AND THE 2009-2011 PROGRAM PORTFOLIO
AND ADDRESSING RENTER ACCESS
AND ASSEMBLY BILL 2140 IMPLEMENTATION

Title Page

DECISION PROVIDING DIRECTION FOR LOW-INCOME ENERGY EFFICIENCY POLICY OBJECTIVES, PROGRAM GOALS, STRATEGIC PLANNING AND THE 2009-2011 PROGRAM PORTFOLIO AND ADDRESSING RENTER ACCESS AND ASSEMBLY BILL 2140 IMPLEMENTATION 22

1. Summary of Order 33

2. Background on LIEE Programs 55

2.1. LIEE Program History 55

2.2. Program Budgets, Energy Savings and Customers Served 88

3. Procedural Background 1010

4. The Context for Reviewing LIEE Policy Objectives and
Program Goals 1414

4.1. LIEE Policy Objectives 1919

4.2. LIEE Program Goals 2525

4.3. Strategies for Attaining Our LIEE Objectives and
Today's Adopted Programmatic Initiative 3131

4.3.1. A Longer Term Strategic Approach 3131

4.3.2. Integrating LIEE with Energy Efficiency Programs 3434

4.3.3. Leveraging Available Resources 3434

4.3.4. LIEE Program and Portfolio Focus: Cost-Effective Methodologies 3636

4.3.5. LIEE Program Implementation Strategies 3939

4.3.6. Marketing, Education and Outreach 4545

4.3.7. LIEE Budgets 4848

4.3.8. Cost-Benefit Methodologies 5353

4.3.9. The Ten Year "Go Back" Rule 5555

5. AB 2140 - CARE Discounts for Tenants of
Master-Metered Housing 5656

6. Renter Access to LIEE Programs 6363

6.1. Background on Renters who Qualify for LIEE 6565

6.2. Barriers to LIEE Participation by Renters 6565

7. NGAT Problems and Solutions 6868

8. Utilities' Comprehensive Long-Term Statewide Strategic Plan 7373

9. Applications for 2009-2011 LIEE Budgets and Programs 7575

10. SCE's Request for Approval to Increase its Budget
by $22 million to Distribute CFLs 7777

11. Next Steps 8282

12. Comments on Proposed Decision 8484

13. Assignment of Proceeding 8484

Findings of Fact 8484

Conclusions of Law 8787

ORDER 9090

Attachment A - Summary of Utility LIEE Programs

Attachment B - Low-Income Energy Efficiency Measures

Attachment C - Public Utilities Code Statutes Governing
Low-Income Energy Efficiency Programs and Policies

Attachment D - Density/Incidence

Attachment E - List of Questions

DECISION PROVIDING DIRECTION FOR LOW-INCOME
ENERGY EFFICIENCY POLICY OBJECTIVES, PROGRAM GOALS,
STRATEGIC PLANNING AND THE 2009-2011 PROGRAM PORTFOLIO
AND ADDRESSING RENTER ACCESS
AND ASSEMBLY BILL 2140 IMPLEMENTATION

This decision updates and expands our policy direction for the Low-Income Energy Efficiency (LIEE) programs provided by the Commission's regulated energy utilities. It is a companion to our recent decision Decision (D.)07-10-032 which set the stage for the next generation of energy efficiency in California.

Today we clarify that the complementary objectives of LIEE programs are to provide an energy resource for California, consistent with our "loading order" that establishes energy efficiency as our first priority, while reducing low-income customers' bills and improving their quality of life. We commit to expand LIEE programs by making them available to more customers, improving their cost-effectiveness and designing them in ways to make them a reliable energy resource. To achieve these objectives, we adopt a programmatic LIEE initiative to provide all eligible LIEE customers the opportunity to participate in LIEE programs and to offer those who wish to participate all cost-effective energy efficiency measures in their residences by 2020. We provide direction for implementation of this initiative through a collaborative process, utilized both in the overall energy efficiency strategic plan ordered by D.07-10-032 as well as the upcoming applications by the utilities for their 2009-2011 LIEE program portfolios.

This decision also addresses outstanding issues relating to access to LIEE programs by residents who rent their living spaces, natural gas appliance testing (NGAT) problems, and the requirements of Assembly Bill (AB) 2140, which directs the utilities to implement certain program elements of their respective electricity rate discount programs, otherwise known as California Alternative Rates for Energy (CARE) programs. Finally, this decision addresses Southern California Edison's (SCEs) application for approval of authority to spend an additional $22 million to distribute compact fluorescent lamps (CFLs) to its customers.

1. Summary of Order

This order sets a new course for LIEE programs in California. Recognizing the changes in energy markets and the environment, and the needs of low-income individuals and the larger community, we conclude that our LIEE program can only meet California's needs with a change in emphasis. We commit to changing the way we approach LIEE programs by adopting the follow policies and program guidance:

· The complementary objectives of LIEE programs will be to provide an energy resource for California while concurrently providing low-income customers with ways to reduce their bills and improve their quality of life;

· LIEE programs should emphasize opportunities to save energy;

· LIEE programs should be designed to take advantage of all cost-effective energy efficiency opportunities;

· LIEE programs should include measures that may not be cost-effective but that may promote the quality of life of participating customers;

· LIEE programs should emphasize effective ways to inform customers of the benefits to themselves and their communities of conservation and energy efficiency measures, as well as the way energy efficiency promotes environmental values and reduces greenhouse gases;

· LIEE programs should be integrated with other energy efficiency programs to allow the utilities and customers to take advantage of the resources and experience of energy efficiency programs, promote economies of scale and scope, and improve program effectiveness; and

· LIEE programs should take advantage of other resources, such as federally funded programs, local efforts, the work of businesses and publicly-owned utilities.

We also adopt a broadly-stated programmatic initiative as follows:

To provide all eligible customers the opportunity to participate in the LIEE programs and to offer those who wish to participate all cost-effective energy efficiency measures in their residences by 2020.

We provide further guidance to utilities in their development of a comprehensive long-term statewide strategic plan as directed in D.07-10-032. The strategic plan will assist them in achieving the programmatic initiative. We direct the utilities to propose programs and budgets for their 2009-2011 LIEE applications that will help them move toward this programmatic initiative and the strategic plan.

We are motivated to change our approach to LIEE programs in part because more than 5.5 million households qualify for utility low-income programs and many of those households are barely able or unable to pay their energy bills.¹ Utility rates have increased substantially in recent years and may continue to climb as the costs of fuel and infrastructure go up. However, only about 3% of qualified customers are able to take advantage of LIEE programs every year at current budget levels.²

At the same time, we have underscored our commitment to reducing greenhouse gasses and improving the reliability of the state's energy infrastructure. Energy efficiency programs are the best way to meet our commitment to both of these goals.

Finally, in light of our strategic direction for LIEE programs and energy efficiency programs generally, we state our intent to initiate a dialogue regarding SCE's proposal to spend $22 million on a program to distribute six CFLs to each of 926,000 households. This dialogue between interested parties will hopefully resolve some of the concerns raised by the parties and help develop a program that is integral to other, more comprehensive programs to promote long term, enduring energy savings.

¹ LIEE Annual Reports, 2006, for Pacific Gas and Electric Company (PG&E), SCE, San Diego Gas & Electric Company (SDG&E), and Southern California Gas Company (SoCalGas).

PG&E:   http://www.ligb.org/DOCS/PG&E%202006%20Low%20Income%20Energy%20Efficiency%20Programs%20Annual%20Report%205-1-07.pdf

SCE:   http://www.ligb.org/DOCS/ACF1C51.pdf

SDG&E:   http://www.ligb.org/DOCS/SDGE%20Low%20Income%20Energy%20Efficiency%20Programs%20Annual%20Summary%20and%20Technical%20Appendix%205-1-07.pdf

SoCalGas:   http://www.socalgas.com/regulatory/efficiency/2006annualreport/2006LIEEAnnualReport.pdf

² Ibid.