6. Use of SBX1 5 CARE Funding For Bill Arrearages

During the workshops, SDG&E, SoCal and several other participants proposed that a portion of the SBX1 5 CARE appropriations be used to assist customers in reducing energy bill balances they owe to the utilities either by bringing arrearages to zero or to a reduced level.¹¹ Since this proposal would significantly modify the scope of the CARE program that the utilities have administered in the past and the rapid deployment program plans approved by D.01-05-033, we address it in today's decision.

Although the language of SBX1 5 allows the use of Section 5(a)(2) funding to assist customers experiencing difficulty paying their energy bills, it does not specify the form of assistance to be provided. Moreover, nothing in the language of the statute or Legislative history dictates that the CARE program should be expanded to include bill arrearage payment assistance.

In considering this issue, we acknowledge that a bill arrearage assistance program could help prevent the shut-off of service to some low-income customers, thereby mitigating or avoiding concerns of health and safety for these customers. Using SBX1 5 funds for this purpose would also enable low-income customers to budget for increased future utility bills without the added burden of making payments on past-due amounts. However, we believe that using the funds to expand participation in CARE provides longer term benefits to customers.

Also, there simply is not enough funding provided by SBX1 5 to offer bill arrearage assistance and address the growing shortfall between rate collections and CARE discount subsidies. Consistent with our goals and those of the Legislature, the CARE discount program has been expanded in terms of discount levels, eligibility and outreach efforts so that many more low-income customers receive immediate assistance in managing their bills. As discussed above, the shortfall in collections is much greater than the supplemental CARE funding made available via SBX1 5. Therefore, to also fund a bill arrearage assistance program at this time would require pulling back on outreach efforts for the CARE discount program so that funds could be diverted to pay bill arrearages, or raising electric and gas rates to nonparticipating ratepayers even further, or both. We do not find these options acceptable.

Moreover, there are other programs and activities available to assist low-income customers with their bill arrearages and potential shut-off of service. DCSD's LIHEAP program includes a program to pay down energy bills, and SBX1 5 appropriated an additional $120 million to supplement this and other LIHEAP programs. The utilities work in coordination with DCSD to ensure that customers who are participating in the DCSD payment program do not have their gas or electric service shut-off while payment arrangements are being made. In addition, subsequent to the passage of SBX1 5, the Governor signed ABX1 3, which directs the utilities to take certain actions to address nonpayment and potential disconnection of service among low-income customers. These include providing such customers with CARE information and other assistance programs (e.g., the LIHEAP home energy assistance program), and providing information about individual payment arrangements that allow customers to pay the amounts due over a reasonable period of time. It also directs the utilities to try to enroll these customers in the CARE and payment plan programs before further nonpayment or disconnection actions are taken.

In view of the above, we believe using limited SBX1 5 CARE appropriations to initiate and fund a bill arrearage assistance program would not be as effective as applying the funds to expanding participation in CARE. Accordingly, we do not approve that portion of Sierra Pacific's proposed program that would be used for this purpose. (see Attachment 2.)