3. Allocation of $5 Million LIEE Set Aside to the SMJU

Proposals to expand LIEE activities were submitted by Southwest Gas, Sierra Pacific, PacifiCorp, Bear Valley and Avista to more than double their normal program sizes for the rapid deployment period. These utilities are proposing to use LIEE funds to add additional measures to homes that would otherwise have received fewer measures through their own programs or through the Low Income Home Energy Assistance Program (LIHEAP) administered through DCSD. Southwest Gas proposes to weatherize additional homes as well and repair defective furnaces, and Sierra Pacific proposes to treat additional homes with heat pump installations. Table 1 presents a brief summary of the proposals to augment current LIEE programs and funding with the SBX1 5 set aside. A more detailed account of these proposals is presented in Attachment 2.

Table 1

SMJU Proposals For SBX1 5 LIEE Funds

UTILITY

CURRENT LIEE BUDGET

SBX1 5 LIEE FUNDING REQUEST

   

$'s REQUESTED

HIGHLITES

# of Customers To Benefit from New Funding

COST PER CUSTOMER

Alpine

$0

0

No LIEE Request

No LIEE Request

No LIEE Request

Avista

$80,489

$150,000

Storm windows and insulation as well as other Project Go identified measures

    

Mountain Utilities

$0

0

No LIEE Request

No LIEE Request

No LIEE Request

PacifiCorp

$69,000

$100,000

$100,000 for additional measures identified by its CBO such as refrigerator replacement, compact fluorescent lights (CFLs), water heater replacements and furnace repairs

100

$1,000

Sierra Pacific

$126,000

$733,900

Weatherization: $221,400 for additional Project Go identified measures such as refrigerator replacement and CFLs Heat Pumps for 50 homes to replace electric resistance heat: $512,500

135(1) 50(1)

$1,640 $10,250

Bear Valley

$0

$468,000

$468,000 for refrigerator replacement, CFLs and energy education

468

$1,000

Southwest Gas

$302,119

$1,365,000

$1,365,000 for furnace replacement, expanding measures in homes identified by its CBOs, and weatherizing additional homes

592 (2)

$1,976

West Coast Gas

$0

$0

No LIEE Request

N/A

No LIEE Request

TOTAL

$577,608

$2,816,900

   

Notes:

(1) 135 Homes for Weatherization program; 50 homes to receive Heat Pumps

(2) Per additional home (funds will also be expended for additional measures for previously identified homes)

Avista, PacifiCorp, Sierra Pacific, Bear Valley, and Southwest Gas propose to use SBX1 5 funds to expand the penetration of current LIEE program measures and/or offer additional energy efficiency measures to eligible low-income customers. With the exception of Sierra Pacific's heat pump program, the additional program measures have been authorized for inclusion in the LIEE program by D.01-05-033 and prior Commission decisions, or are currently provided under LIHEAP.

Sierra Pacific proposes to offer a renewable energy heat pump to low-income customers residing in areas that do not have access to natural gas and who currently utilize inefficient strip (such as baseboard) electric heat. The heat pump would draw hot and cold air from the ground to heat the house in the winter and cool it in the summer. Although the up-front costs to install the heat pump are relatively large, the energy and bill savings appear quite substantial: the heat pump is projected to use only as much energy as a room fan to heat and cool the house. A customer is expected to see heating and cooling costs reduced by up to 85%.

We agree with Energy Division that it is reasonable to explore this measure on a pilot basis in areas within Sierra Pacific's service territory (and within our jurisdiction) where there are no viable alternatives to assist low-income customers with their home heating and cooling loads. However, we expect a full accounting and reporting of energy and bill savings before this pilot is extended beyond the first 50 homes. In working with the smaller utilities on their reporting requirements (see below), Energy Division should ensure that Sierra Pacific collects sufficient information to assess the effectiveness of this measure. We will require Sierra Pacific to file an Advice Letter if it desires to continue this measure beyond the pilot period, which will end upon the completion of 50 installations.

We also share Energy Division's concern that many of the smaller utilities exist in climate zones where the installation period is short, typically through September only. By authorizing funding for their programs over two program years these utilities could begin rapid deployment now, but could also use the winter months to refine their programs and approach additional vendors, community-based organizations and customers who may wish to participate in the program in 2002. This also gives the smaller utilities time to approach the Commission through their traditional ratemaking processes and request ongoing funding increases for their LIEE programs so that there is program continuity in future years.

Mountain Utilities, Alpine and West Coast Gas did not submit proposals for either LIEE or CARE program funding. Mountain Utilities does not offer either program. The utility only has about 150 year round customers (and a total of 460 residential and commercial meters). The rest of the utility's customers are vacationers in second homes. Alpine has a CARE program, but none of its 461 residential customers have applied for and qualified for the program. Alpine does not offer a LIEE program. West Coast Gas serves approximately 560 residential customers, 14 of which are on its CARE rate. The company's service territory is the former Mather Air Force Base, and all of the housing is new construction. Although there are plans to build low-income housing on the base, which may increase the number of CARE customers, the need for LIEE appears limited at this time.

We believe that these utilities should give further consideration to offering both CARE and LIEE programs in their service territories. We direct Energy Division to continue to work with Alpine, Mountain Utilities, and West Coast Gas to obtain additional demographic information and explore the development of low-income assistance programs, program budgets and targeted outreach for their service territories, as appropriate. Within 30 days of the effective date of this decision, Energy Division shall file and serve its recommendations in this proceeding. We will set aside $100,000 out of the SBX1 5 LIEE funds and $5,000 of SBX1 5 CARE funds for this purpose.

Based on Energy Division's recommendations, we will authorize the allocation of the $4,900,000 out of the $5 million in SBX1 5 LIEE funds set aside for the SMJU as follows:

Table 2

Allocation of SBX1 5 Set Aside Funds To SMJU

As Energy Division points out in its report, our policy on standardization of LIEE program offerings would, under normal circumstances, require the SMJU to offer all of the same measures as the large utilities and use the standardized Policy and Procedure (P&P) and Weatherization Installation Standards (WIS) manuals. However, we acknowledge that this will not be feasible in a rapid deployment mode for the SMJU at this time. We will therefore adopt Energy Division's recommendation that these utilities be exempt from our standardization requirements for program year 2001. Nonetheless, we believe that these utilities will find the standardized P&P and WIS manuals invaluable in improving their programs, where their programs are similar to the large utilities. Much thought, planning and expertise went into the development of these documents. We direct the smaller jurisdictional utilities to implement appropriate portions of the standardized P&P and WIS for program year 2002 and beyond.

Energy Division will be entering into contracts with each of these utilities to encumber the SBX1 5 funds, as allocated above, well before March 31, 2002. Therefore, these funds will not revert to the general fund, as provided for under Section 11 of the statute.

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