6. Utility Applications

In their applications, the utilities propose the continuation of the PY1999 CARE program activities, including the CARE outreach program adopted per Res. E-3601. PG&E includes in its application a request to move from a once-a-year re-verification period for sub-metered tenants to a process that would allow for re-verification throughout the year. In PG&E's view, this modification would (1) allow for a more consistent and less confusing year-round effort and (2) reduce chances for inaccurate billing for master-metered accounts. SCE requests that the Commission revise the policy of limiting evaporative coolers to homeowners only, so that low-income renters may also benefit from one of the few efficient alternatives to refrigerated air conditioning in 2000. No parties oppose these modifications, and they should be adopted.

Generally, the utilities propose that their LIEE programs remain unchanged, except for the manner in which it is implemented through competitive bidding. Attachment 4 presents the utilities' proposed budgets for CARE and LIEE activities during PY2000.

We note that, in their briefs, SDG&E and SoCal take the position that current programs should not be subject to competitive bidding. We discuss their positions on this issue in Section 7.3. The following sections describe the utility proposals for competitive outsourcing as presented in the applications and utility testimony. The utility proposals vary in terms of what components of energy efficiency programs should be subject to competitive bidding, what criteria should be used to evaluate the bids and what consideration should be given to encouraging the participation of CBOs. We briefly describe the competitive outsourcing proposals below, by utility.

6.1 PG&E's Competitive Outsourcing Proposal

As discussed in Section 2.3 above, PG&E has been putting its low-income energy efficiency program ("Energy Partners Program") out to bid periodically since 1987. The most recent solicitation took place for PY1998, when SESCO won the bid over the incumbent RHA. In its application, PG&E proposes to outsource, via competitive bidding, the following low-income energy efficiency program activities: in-home energy education visits and energy efficiency audits, installation of weatherization measures, minor home repair (e.g., broken or cracked windows), replacement and installation of refrigerators, and installation of portable evaporative coolers.

Rather than entering into contracts with or directly managing the individual entities performing these activities, PG&E will solicit bids for an Energy Partners Program management firm to serve in a prime contractor role. In general, the management responsibility of this firm will include: program marketing and outreach, the determination of customer eligibility, the provision of all education and weatherization services and subcontracting with both private and non-profit entities for the delivery of program services.

PG&E proposes to retain in-house its inspection services, training programs, combustion appliance safety (CAS) testing, furnace replacement/repairs, and the attic ventilation pilot currently underway. Under PG&E's proposal, training for contractors working in the program will be done at PG&E's Stockton Training Center. PG&E's inspection process includes a pre-inspection of each home to determine the measures and quantities that are feasible, as well as a post-inspection process.

Similarly, PG&E personnel would conduct the CAS testing. Under PG&E's program, CAS testing is mandatory and involves conducting a pre-test for carbon monoxide levels and other potentially dangerous combustion byproducts on all combustion appliances in the home, including furnaces, stoves, ovens and gas dryers before a home is weatherized. If the combustion appliance fails the test, the appliance is shut-off and tagged and the home is unable to receive the infiltration measures until the appliance is repaired by the property owner. Improperly operating or inoperative furnaces would be repaired or replaced under PG&E's LIEE program. Only non-infiltration measures could be installed, until all of the tagged appliances are repaired or replaced.

In terms of bid evaluation, PG&E's RFP states that the bidder's proposal will be evaluated on a combination of factors, including, but not limited to:

PG&E's RFP also establishes a 30% CBO participation goal:


"Contractor shall strive to ensure that CBOs participate in the Energy Partners Program. The goal is that CBOs perform Energy Efficiency Services on a minimum of 30% of all homes to be weatherized. Contractor shall specify in its bid package how it intends to meet or exceed the goal. Contractor shall maintain effective and efficient channels for communicating and delivery services to low income customers through CBOs." (Exh. 3, Request For Proposal, Section 4.10 as modified by Exh. 19.)

In addition, PG&E's RFP establishes a 21.5% WMDVBE goal for subcontracts with the following breakdown: 15% Minority Enterprises, 5% Women Enterprises, and 1.5% Disabled Veteran Business Enterprises. To achieve these goals, the winning bidder is directed to include and encourage women and minority owned firms in the subcontractor selection process, include WMDVBE status as part of the proposal evaluation process and include equal opportunity purchasing policies in all contracts. (Exh. 3, Specific Conditions, Attachment G.)

6.2 SDG&E's Competitive Outsourcing Proposal

As discussed above, SDG&E has retained RHA as its program management contractor for both the energy education and weatherization components since the 1991 competitive bid. Under SDG&E's proposed RFP for PY2000, the winning bidder would serve as the program manager similar to the model that SDG&E and PG&E currently employ. Like PG&E, SDG&E proposes to retain the inspection function. Unlike PG&E, SDG&E includes training and carbon monoxide testing as part of its competitive solicitation.

However, SDG&E's carbon monoxide testing program, conducted as part of furnace operation inspections, is different from PG&E's program. SDG&E only tests for the presence of carbon monoxide near operating gas furnaces. SDG&E conducts the furnace operation inspection after weatherization work is completed. SDG&E's furnace program allows for minor repairs (under $120) to be completed by a licensed furnace technician at the time of the inspection. Repairs in excess of $120 are referred to a licensed heating, ventilation and air-conditioning contractor and the furnace is shut-off and tagged if the condition of the furnace presents a safety hazard.25 (Exh. 44, pp. 10-11.) SDG&E does not test for the presence of carbon monoxide near other gas appliances. In any event, SDG&E does not test for the presence of other potentially dangerous combustion byproducts other than carbon monoxide.

SDG&E proposes to issue two separate RFPs: one for its energy education program and one for its weatherization program. A bidder may bid on one or both of the RFPs. Each RFP lists four major categories of evaluation criteria: (1) experience, (2) marketing plan, (3) technical qualifications, and (4) cost; and lists some of the detailed evaluation criteria under each of the above criteria. (Exh. 41, pp. 8-11; Exh. 42, pp. 7-10.)

With regard to CBO participation, SDG&E's RFP does not include a specific percentage goal. However, bidders will be evaluated based on (among other things) their ability to market the program to low-income communities, work with community-based organizations, their ability to provide local employment, development of job skills and training, and provide service to non-English speaking and culturally diverse customers. (Exh. 41, p. 9; Exh. 42, p. 8.) Moreover, as a minimum experience requirements, SDG&E would require that bidders have "no less than two years providing weatherization services to low-income communities within Southern California." (Exh. 41, Attachment B, p. 2.)

Like PG&E, SDG&E has a stated policy of promoting WMDVBE participation and establishes the following goals: 5% Women Enterprises, 15% Minority Enterprises, and 0.5% Disabled Veteran Enterprises. SDG&E requires its contractors and suppliers to "use best efforts to ensure that these enterprises have the maximum practicable opportunity to participate" in the program. (Exh. 41, Section 4.)

6.3 SCE/SoCal Joint Competitive Outsourcing Proposal

SCE and SoCal propose a partnered low-income energy efficiency bid program for PY 2000, where one RFP is issued for all of SCE's and SoCal's weatherization services and relamping services, including outreach. The program would provide referrals of potential eligible customers to SCE's evaporative cooler program and refrigerator replacement program. A second joint RFP would be issued for inspection of energy efficiency installations. All training of contractors under the joint program would be conducted by SoCal at its training center. SCE and SoCal share components of the prime contractor role under the joint program, securing the necessary contracts for program operations and delivery of services.

Under the joint RFP for weatherization, energy education and relamping, proposals will be evaluated based on a price component and the following non-price criteria:

Under this program, SoCal provides a safety inspection of furnaces and appliances (e.g., carbon monoxide testing) upon request, but does not routinely conduct such inspections before or after the installation of filtration measures. (Exh. 50, p. 8.) SoCal does not test for the presence of other potentially dangerous byproducts other than carbon monoxide.

Under the joint inspection RFP, proposals will be evaluated based on two scores made up of a price component and technical component. The RFP does not provide the total maximum points available, or the relative weighting between the two components. Criteria for the scoring of technical qualifications are given as: (1) length of experience in providing energy efficiency inspection services to low-income customers, (2) financial stability as indicated by Dunn & Bradstreet, (3) quality of contractors as indicated by two references, and (4) organization and staffing, including multi-lingual capabilities of staff.

With regard to WMDVBE participation, SCE and SoCal encourage the winning bidders to subcontract with WMDVBE businesses. To ensure that small minority businesses are able to compete, they allow bidders to utilize one or more of the ZIP codes to bid on aspects of both utilities' service areas.

6.4 SoCal's Separate Competitive Outsourcing Proposal

Two components of SoCal's current program would be bid out separately: furnace repair or replacement services and energy education workshops. SoCal would retain the prime contracting and administration functions of these components.

SoCal's evaluation criteria for energy education workshops include three components: bid price, technical qualifications, and marketing plan. For each regional area, a maximum bid price score would be awarded to the bid with the lowest price per participant. Other bids would be scored comparatively against the lowest bid to develop a bid price component score.

The technical qualifications component would be scored based on the following evaluation criteria: length of experience in successfully providing energy efficiency and conservation services to low-income customers, financial stability, organization and staffing and quality of contractors work as indicated by references. In evaluating and scoring the marketing plan, SoCal would look at the bidders description of methods for soliciting and enrolling eligible low-income customers, completeness and effectiveness of training materials and workshop lesson plans and accessibility of training facilities to be used.

For SoCal's furnace repair/replacement RFP, bids are evaluated based on price, technical qualifications, and customer service/satisfaction components. The first two components are similar to those described above for SoCal's energy education workshops. Points for the customer service/satisfaction component are assigned based on documented achievement of customer service and satisfaction goals in the past and a well-directed achievable plan for the PY2000 program.

6.5 SCE's Separate Competitive Bidding Proposal

SCE proposes to bid out separately its evaporative cooler installation and refrigerator replacement program. SCE's furnace replacement program will not be competitively bid out. Instead, SCE proposes to secure quotes from local contractors on a case-by-case basis. SCE would serve in the prime contractor role for these programs.

For SCE's evaporative cooler installation and refrigerator replacement programs, bidders will be scored based on their Price Proposal (maximum 50 points) and Contractor Profile (maximum 50 points). Within the Price Proposal, the bidders are given a "raw price" score, based on actual unit prices bid, and a "competitive price" score, based on the relationship between the raw price and the average price of all bidders. The closer the raw price is to the average, the higher the competitive price score (and vice versa).

The Contractor Profile score is calculated from the evaluation of 11 criteria, including: demonstrated experience delivering programs and services to low-income populations, ability to utilize and employ local residents and provide local job training, number of years experience providing services to low-income communities and providing residential evaporative cooler installation or moving of heavy furniture or appliances, and contractor performance based on references.

25 Another difference is that SDG&E performs minor furnace repairs in renter occupied low-income units, whereas PG&E's program has no provision for repairing or replacing faulty furnaces if the customer is not the homeowner.

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