LIEE PROGRAM

This section discusses the SMJU' proposals and Energy Division's recommendations for PY 2005 LIEE targets and administrative and program budgets.

The utilities were recently ordered to implement one-way balancing accounts for their LIEE programs. When ordering the utilities to establish the one-way balancing accounts, the Commission clarified, that as with the large utilities, under-expenditures (amounts less than the authorized budgets) in any given year are carried over to augment the next year's LIEE program budget. However, any expenditures over the authorized budgets are shareholder's responsibility.²⁷

The utilities are to ensure that all feasible measures that the program offers under LIEE are installed in each participant's home. This ensures that the participants in the program are receive a comprehensive treatment during one process, eliminating multiple times that installation crews are in their homes and preventing low-income families from missing work due to multiple appointments. This requirement also ensures that each participant acquires the maximum energy and bill savings from the program. By installing all feasible measures for each participant, it reduces overhead and administrative costs because all measures are installed in one visit rather than in repeated visits. In recognition that the selection of LIEE measures and services in the field can not be accurately predicted and reflected in the measure budget categories, utilities have been given fund shifting authority within the program categories of "Weatherization," "Energy Efficiency Measures" and Energy Efficiency Education."

The large utilities require that all LIEE participants are enrolled into CARE, if they aren't not already on the CARE rate. Any utilities that have not implemented this policy should be required to do so.

In R.0401-006, a measure assessment is underway and is being conducted by the four large energy utilities. Any measures added to the large utilities' programs should also be added to the SMJU programs. By the same token, any measures that are discontinued for the large energy utilities should also be discontinued for the SMJU.

Alpine

The Commission, in Decision 03-03-007, authorized Alpine to conduct its LIEE program through referrals as part of Pacific Gas and Electric Company's (PG&E) LIEE program, through PG&E's administrative contractor, Richard Heath and Associates (RHA). Consistent with that authority, on December 31, 2003, Alpine entered into an agreement RHA to provide energy efficiency services for Alpine.

This arrangement occurred as a result of a number of dedicated people from Alpine, Energy Division, RHA and PG&E all working together to iron out what sometimes seemed insurmountable details. Energy Division recommends that these efforts be recognized and praised.

RHA developed and implemented a leveraged weatherization program offering education, gas appliance safety testing, weatherization measures, minor home repair and furnace repair & replacement to eligible customers under Alpine's program. As part of the program with Alpine, RHA also provided pre-weatherization assessments, installation of weatherization measures, and post-weatherization inspections. In Alpine's and PG&E's overlapping territory, RHA also provides electric measures on PG&E's behalf, so that the integration of the two utilities LIEE programs reduces program costs and increases weatherization program efficiency.

Although Alpine's 23 low-income CARE customers were forwarded to RHA, in 2004, as LIEE eligible, nine (9) customers either did not qualify or refused participation in Alpine's LIEE program. The following table displays the results of LIEE outreach to the 23 CARE customers.

Table 46

Outreach Result	# of Customers
Successfully Treated	14
Customer Refusal of Program	2
Income Disqualification	2
Home Vacant	1
Customer Unreachable	3
Customer Refusal of Gas Measures	1
Total	23

According to Alpine, the methodology used for outreach included contacting customers first by sending a letter explaining the program, then follow-up occurred with a minimum of eight telephone calls at various times during the week, and the final attempt was a `cold call' visit to the customer's home. Alpine's efforts in contacting their `unreachable' low-income customers are exemplary.

Alpine states that developmental costs for LIEE were incurred during the long process to have the programs approved and implemented, as well as costs incurred for legal expenses. Alpine indicated that legal expenses are restricted (capped) to provide the utility with some protection from unbudgeted expenses while it assures that Alpine is current with legislative and Commission changes that affect LIEE.

Avista

Avista reports it contracts with Project Go to implement its LIEE program, and with Sierra Pacific to provide electric energy efficiency measures to its customers. Avista reports that construction and growth restrictions in the South Lake Tahoe area and the City of South Lake Tahoe's housing rehabilitation program is causing it to reach a set point for LIEE services.

Avista does not propose any changes to its current authorized budget for LIEE and indicates that it expects to treat and weatherize approximately the same number of homes as it has in the past. Avista's LIEE program generally runs from August through November and is paused during winter months due to winter conditions.

PacifiCorp

PacifiCorp states that since the establishment of its LIEE program in 1986, it has weatherized over 1,750 homes. PacifiCorp reports it works with local non-profit organizations including the Del Norte County Senior Center in Crescent City, and the Great Northern Corporation in Weed to implement its LIEE program. PacifiCorp reimburses these agencies 50% of the cost of services, with an additional 15% to cover agency administrative expenses. PacifiCorp believes this method has been the most efficient in increasing enrollment.

PacifiCorp provides its qualified low-income residential electric customers with measures that include insulation and replacement windows (for dwellings with electric heating systems), showerheads for those with electric water heat, energy efficient refrigerators, and compact fluorescent lamps (CFL). PacifiCorp states that outreach activities remain challenging due to the rural and diverse nature of its service territory. PacifiCorp estimates that 40% of the eligible homes in its service area have been weatherized through their LIEE program.

Pursuant to both D.03-03-007 and D.03-12-016, PacifiCorp was to establish an energy efficiency education program.²⁸ In 2003, $9,891 was set aside for this purpose and $1,000 in 2004 as well. In addition, some or all of the carryover resulting from under-expenditures from prior years was also to be applied.

On February 2, 2004, PacifiCorp submitted a letter to the Commission indicating that the non-profit agencies that deploy its LIEE program provide LIEE participants one-on-one energy education. PacifiCorp notes that these agencies are note reimbursed separately for these services. Finally, PacifiCorp points out that it provides its Bright Ideas energy information booklets to the agencies to distribute to participants as well. Energy Division recommends that the Commission find that PacifiCorp is meeting the requirement to provide energy efficiency education to its LIEE participants.

Sierra

Sierra Pacific began contracting with Richard Heath and Associates (RHA) in 2004 to provide program services such as outreach and assessment, scheduling, installation, education and reporting of program results. Sierra Pacific anticipates it will contract with RHA for PY 2005. Sierra states it targets high density, low-income areas that also include low-income senior citizens complexes.

Among other measures, Sierra's LIEE customers currently receive weatherization services, if home is electrically heated, refrigerators, energy efficient lighting fixtures, CFL, evaporative cooler installation and wall/window air conditioning. Sierra Pacific provides and funds electric measures to its customers, while Avista and Southwest Gas offer gas measures.

Sierra Pacific's Heat Pump Program

Part of Sierra's allocation of SB5 funds was targeted for a geothermal exchange program pilot program. Pursuant to D.03-03-007, Sierra is to provide a specific cost breakdown within the measures category of the program and collect relevant information for the Commission's review of the pilot. Energy Division has reviewed expenditure information for this project, but has not reviewed any other information about this pilot.

Energy Division recommends that Sierra be required to submit a report to the Commission on the results of its pilot. The report should include, but not be limited to, energy and bill savings from the measure, along with a cost-benefit analysis, considering non-energy benefits, such as the comfort and safety of the home that received this measure. The report should also include recommendations on whether or not this measure should be considered for inclusion in the LIEE program.

Bear Valley

Up until 2002, Bear Valley did not have a LIEE program. Bear Valley provides LIEE customers with refrigerators, CFL, interior light fixtures, electric water heater insulation and pipe wrap, low-flow showerheads, and faucet aerators for homes with electric water heating, and insulation, weatherstripping, caulking and minor envelope repair for electrically heated homes.

Bear Valley indicates that it conducts the majority of its LIEE activity in the Summer/Fall months. Bear Valley intends to leverage with the Community Action Partnership of San Bernardino, who deploy LIHEAP in Bear Valley's area and RHA who are contracted to identify eligible customers, assess their LIEE energy efficiency needs, and install LIEE measures. In coordination with Southwest Gas, the natural gas provider within Bear Valley's service territory, Bear Valley assists in providing a comprehensive program to eligible customers.

SW Gas

Southwest Gas reports it plans to continue its contract with RHA and the Community Action Partnership of San Bernardino (formerly known as the San Bernardino County - Community Services Department) in 2005 to provide program services to customers. These services include outreach and assessment, scheduling, installation of efficiency measures, education and the reporting of program results.

Southwest Gas also works with electric utilities, whose service territories overlap with Southwest Gas, to implement its low-income programs. These utilities include Sierra in the northern California region and Bear Valley and Southern California Edison Company in Southern California.

West Coast

Pursuant to D.03-12-016, OP 7, West Coast Gas was directed to include updated information on all the residential housing stock and associated gas appliances within its service territory and whether it continues to meet Title 20 and Title 24 energy efficiency requirements. West Coast Gas currently does not have a LIEE program and states that the residential housing stock is new and all homes and major gas consuming appliances meet current California energy efficiency standards. Further, West Coast Gas points out, that in 2003, 80% of its customers consumed gas at the Baseline rate level.

West Coast Gas asserts that all natural gas LIEE efforts beyond energy efficiency information materials would not be cost-effective at this time. West Coast Gas requests that no funds be budgeted for LIEE. West Coast Gas indicates that it will refer any CARE customer requesting LIEE services to a local Sacramento County Agency. In D.03-03-007, the Commission ordered West Coast Gas to establish this referral program.

Energy Division agrees with West Coast Gas that all natural gas LIEE efforts, beyond energy efficiency information materials, would not be cost effective at this time.. Due to the unique situation of West Coast Gas, Energy Division recommends that the utility continue to keep the Commission apprised of their housing stock and the residential gas appliances in their area through their annual reports and any applications regarding the low-income programs. In addition, Energy Division recommends that West Coast Gas continue to refer CARE customers to a local County Agency for energy efficiency information and programs.

LIEE Goals

In D.03-03-007, the Commission defines "treated homes" as residences that receive LIEE measures or energy education services, and the subset of those treated homes that receive weatherization measures as "weatherized homes." Not all homes in the LIEE program are weatherized because it may not be feasible to install weatherized measures, or certain homes may already be weatherized. The following table shows the number of homes treated (T) and weatherized (W) annually as reported by the SMJU, as well as those proposed by the utilities for PY 2005.

Table 47

LIEE Treated (T) and Weatherized (W) Homes
Utility	2003 Authorized In D.03-12-016		2003 Actual		2004 Authorized In D.03-12-016		2004 Utility Projected		2005 Utility Proposed
	T	W	T	W	T	W	T	W	T	W
Alpine	N/A	N/A	N/A	N/A	20	20	14	14	16	16
Avista	80	80	83	83	80	80	80	80	90	90
PC	50	198	92	92	98	98	70	70	70	70
Sierra	N/A	175	160	151	250	145	119	28	119	28
BVES	580	N/P	N/A	N/A	410	82	80	0	85	17
SWG	1,242	852	760	516	586	415	586	415	550	400
Totals	1952	1305	1,485	1,015	1,444	840	1,439	835	1,061	731

Sierra expresses concern that will be unable to reach its 2004 LIEE goals established in D.03-12-016 due to changes in the low income qualifications, the SBX1 5 funds reversion, difficulty in conducting targeted outreach and mandated policy and procedure changes. Sierra states it will meet with RHA throughout August and September to discuss 2004 and 2005 program expectations. Sierra requests it be allowed to submit 2004 and 2005 goals after convening with RHA.

Based on the goals proposed by the utilities, it appears that the utilities are intending to stay-the-course. That is they intend to treat and weatherize the approximate number of homes in PY 2005 as they did in 2004, although not at the same level as when they had SB5 funds. For the large energy utilities, the Commission ordered that program expenditures and goals should continue at the level when SB5 funds were available. However, due to their limited resources and in some case a limited number of customers, Energy Division recommends that, unlike the large utilities, the SMJU's proposed goals for LIEE be adopted as proposed.

LIEE Budgets and Expenditures

In D.03-12-016, the Commission recognized that there was a possibility that unspent SB 5 funds might be reverted to the General Fund. In the event the funds were rescinded, the Commission authorized the SMJU to file emergency applications to modify the adopted program targets and budgets, rise rates, or a combination of both, in order to continue their LIEE programs at a reasonable level of effort to serve their low-income customers in PY 2004. As mentioned earlier in this report, the SB 5 funds were rescinded.

None of the SMJU filed emergency applications to modify their adopted program targets and budgets, rise rates, or a combination of both, in order to continue their LIEE programs at a reasonable level. Consequently, most of the SMJU have excessive levels of carryovers of under-expenditures. Energy Division recommends that these balances be amortized over the ensuing years.

While some of these utilities have limited resources, Energy Division nevertheless recommends that the Commission admonish these utilities for not filing their applications and allowing this situation to occur.

The tables on the following pages show the SMJU authorized LIEE budgets and carryover under-expenditures for PY 2003 and PY 2004. These tables do not reflect any carryovers from years prior to 2003..

Table 48

Comparison of LIEE Programs Across Years
	2003 Authorized		2003 Spent			2004 Authorized		2004 Spent		Total Unspent Funds
	Ratepayer Portion	SB 5 Portion	Ratepayer Portion	SB 5 Portion	2003 Unspent Funds	Ratepayer Portion	SB 5 Portion	Estimated Spent	Estimated Unspent
Alpine
Outreach	$0	$0	$0	$0	$0	$0	$0	$396	($396)	($396)
Inspections	$0	$0	$0	$0	$0	$0	$0	$1,970	($1,970)	($1,970)
General	$0	$0	$0	$0	$0	$0	$0	$13,649	($13,649)	($13,649)
Subtotal Admin	$0	$0	$0	$0	$0	$0	$0	$16,015	($16,015)	($16,015)
Weatherization	$0	$0	$0	$0	$0	$0	$0	$4,163	($4,163)	($4,163)
Measures	$0	$0	$0	$0	$0	$0	$0	$4,102	($4,102)	($4,102)
Energy Education	$0	$0	$0	$0	$0	$0	$0	$1,370	($1,370)	($1,370)
Subtotal Program	$0	$0	$0	$0	$0	$0	$0	$9,635	($9,635)	($9,635)
Total Program	$0	$0	$0	$0	$0	$0	$25,000	$25,650	($650)	($650)
Avista
Outreach	$0	$0	$1,295	$0	($1,295)	$2,000	$0	$4,595	($2,595)	$7,190
Inspections	$0	$0	$1,723	$0	($1,723)	$1,500	$1,500	$2,483	$517	$3,466
General	$0	$0	$5,083	$5,012	($10,095)	$5,708	$12,819	$14,454	$4,073	$23,200
Subtotal Admin	$0	$0	$8,101	$5,012	($13,113)	$9,208	$14,319	$21,532	$1,995	$33,856
Weatherization	$0	$116,000	$75,234	$50,827	($10,061)	$29,266	$0	$59,097	($29,831)	$88,928
Measures	$80,340	$0	$0	$98,012	($17,672)	$38,706	$84,481	$0	$123,187	($38,706)
Energy Education	$1,640	$0	$1,295	$0	$345	$4,800	$0	$4,694	$106	$4,588
Subtotal Program	$81,980	$116,000	$76,529	$148,839	($27,388)	$72,772	$84,481	$63,791	$93,462	$54,810
Total Program	$81,980	$116,000	$84,630	$153,851	($40,501)	$81,980	$98,800	$85,323	$95,457	$54,956

	2003 Authorized		2003 Spent			2004 Authorized		2004 Spent		Total Unspent Funds
	Ratepayer Portion	SB 5 Portion	Ratepayer Portion	SB 5 Portion	2003 Unspent Funds	Ratepayer Portion	SB 5 Portion	Estimated Spent	Estimated Unspent
Bear Valley
Outreach	$0	$0	$0	$3,448	($3,448)	$0	$2,500	$0	$2,500	($948)
Inspections	$0	$0	$0	$0	$0	$0	$0	$0	$0	$0
General	$0	$0	$0	$46,359	($46,359)	$0	$5,397	$51,000	($45,603)	($91,962)
Subtotal Admin	$0	$0	$0	$49,807	($49,807)	$0	$7,897	$51,000	($43,103)	($92,910)
Weatherization	$0	$1,813	$0	$55,056	($53,243)	$0	$4,797	$4,000	$797	($52,446)
Measures	$0	$390,779	$0	$172,805	$217,974	$0	$346,788	$20,000	$326,788	$544,762
Energy Education	$0	$17,400	$0	$7,028	$10,372	$0	$12,300	$2,240	$10,060	$20,432
Subtotal Program	$0	$409,992	$0	$234,889	$175,103	$0	$363,885	$26,240	$337,645	$512,748
Total Program	$0	$409,992	$0	$284,696	$125,296	$0	$371,782	$77,240	$294,542	$419,838
PacifiCorp
Outreach	$0	$0	$0	$0	$0	$185	$500	$0	$685	$685
Inspections	$0	$0	$6,751	$0	($6,751)	$4,000	$4,000	$4,000	$4,000	($2,751)
General	$0	$0	$22,720	$15,563	($38,283)	$26,603	$6,347	$23,000	$9,950	($28,333)
Subtotal Admin	$0	$0	$29,471	$15,563	($45,034)	$30,788	$10,847	$27,000	$14,635	($30,399)
Weatherization	$79,550	$109,450	$0	$72,997	$116,003	$13,500	$11,000	$90,000	($65,500)	$50,503
Measures	$18,891	$12,000	$0	$0	$30,891	$66,897	$67,103	$0	$134,000	$164,891
Energy Education	$9,891	$0	$0	$0	$9,891	$0	$1,000	$0	$1,000	$10,891
Subtotal Program	$108,332	$121,450	$0	$72,997	$156,785	$80,397	$79,103	$90,000	$69,500	$226,285
Total Program	$108,332	$121,450	$29,471	$88,560	$111,751	$111,185	$89,950	$117,000	$84,135	$195,886

	2003 Authorized		2003 Spent			2004 Authorized		2004 Spent		Total Unspent Funds
	Ratepayer Portion	SB 5 Portion	Ratepayer Portion	SB 5 Portion	2003 Unspent Funds	Ratepayer Portion	SB 5 Portion	Estimated Spent	Estimated Unspent
Sierra
Outreach	$0	$0	$5,910	$5,497	($11,407)	$12,500	$12,500	$6,000	$19,000	$7,593
Inspections	$0	$0	$406	$0	($406)	$0	$3,000	$3,000	$0	($406)
General	$0	$0	$341	$3,725	($4,066)	$0	$0	$13,997	($13,997)	($18,063)
Subtotal Admin	$0	$0	$6,657	$9,222	($15,879)	$12,500	$15,500	$22,997	$5,003	($10,876)
Geothermal				$288,238	($288,238)			$203,127	($203,127)	($491,365)
Weatherization	$0	$0	$64,131	$111,373	($175,504)	$58,750	$44,833	$90,000	$13,583	($161,921)
Measures	$0	$0	$0	$0	$0	$0	$94,834	$0	$94,834	$94,834
Energy Education	$0	$0	$12,869	$0	($12,869)	$28,750	$44,833	$4,000	$69,583	$56,714
Subtotal Program	$100,000	$0	$77,000	$399,611	($376,611)	$87,500	$184,500	$297,127	($25,127)	($401,738)
Total Program	$100,000	$1,056,572	$83,657	$408,833	$664,082	$100,000	$200,000	$320,124	($20,124)	$643,958
Southwest Gas
Outreach	$0	$0	$0	$27,634	($27,634)	$20,000	$0	$20,000	$0	($27,634)
Inspections	$0	$0	$5,584	$26,456	($32,040)	$15,000	$0	$15,000	$0	($32,040)
General	$0	$0	$6,486	$35,644	($42,130)	$201,200	$0	$213,362	($12,162)	($54,292)
Subtotal Admin	$0	$0	$12,070	$89,734	($101,804)	$236,200	$0	$248,362	($12,162)	($113,966)
Weatherization	$460,000	$641,554	$390,002	$500,709	$210,843	$319,360	$0	$374,200	($54,840)	$156,003
Measures	$0	$962,666	$0	$797,532	$165,134	$341,160	$0	$341,160	$0	$165,134
Energy Education	$40,000	$0	$34,810	$0	$5,190	$39,840	$0	$38,000	$1,840	$7,030
Subtotal Program	$500,000	$1,604,220	$424,812	$1,298,241	$381,167	$700,360	$0	$753,360	($53,000)	$328,167
Total Program	$500,000	$1,604,220	$436,882	$1,387,975	$279,363	$936,560	$0	$1,001,722	($65,162)	$214,201
Grand Total	$790,312	$3,308,234	$634,640	$2,323,915	$1,139,991	$1,229,725	$785,532	$1,627,059	$388,198	$1,528,189

PY 2005 LIEE Budget Proposals and Recommendations

The following table presents the utilities' budget proposals compared with estimated in expenditures in 2004 and PY 2004 Authorized.

Table 49

Comparison of PY 2005 Utility Proposed with PY 2004
	2005 Utility Proposed	Increase (Decrease) in 2005 Proposed Over 2004 Spent	Increase (Decrease) in 2005 Proposed Over 2004 Authorized
Alpine
Outreach	$500	$104	$500
Inspections	$2,500	$530	$2,500
General	$10,903	($2,746)	$10,903
Subtotal Admin	$13,903	($2,112)	$13,903
Weatherization	$5,000	$837	$5,000
Measures	$5,000	$898	$5,000
Energy Education	$3,000	$1,630	$3,000
Subtotal Program	$13,000	$3,365	$13,000
Total Program	$26,903	$1,253	$1,903
Avista
Outreach	$2,000	($2,595)	$0
Inspections	$1,500	($983)	($1,500)
General	$5,708	($8,746)	($12,819)
Subtotal Admin	$9,208	($12,324)	($14,319)
Weatherization	$67,972	$8,875	$38,706
Measures	$0	$0	($123,187)
Energy Education	$4,800	$106	$0
Subtotal Program	$72,772	$8,981	($84,481)
Total Program	$81,980	($3,343)	($98,800)
Bear Valley
Outreach	$2,500	$2,500	$0
Inspections	$1,500	$1,500	$1,500
General	$12,250	($38,750)	$6,853
Subtotal Admin	$16,250	($34,750)	$8,353
Weatherization	$825	($3,175)	($3,972)
Measures	$63,000	$43,000	($283,788)
Energy Education	$2,750	$510	($9,550)
Subtotal Program	$66,575	$40,335	($297,310)
Total Program	$82,825	$5,585	($288,957)

	2005 Utility Proposed	Increase (Decrease) in 2005 Proposed Over 2004 Spent	Increase (Decrease) in 2005 Proposed Over 2004 Authorized
Outreach	$0	$0	($685)
Inspections	$4,000	$0	($4,000)
General	$23,000	$0	($9,950)
Subtotal Admin	$27,000	$0	($14,635)
Weatherization	$90,000	$0	$65,500
Measures	$0	$0	($134,000)
Energy Education	$0	$0	($1,000)
Subtotal Program	$90,000	$0	($69,500)
Total Program	$117,000	$0	($84,135)
Sierra
Outreach	$2,000	($4,000)	($23,000)
Inspections	$1,000	($2,000)	($2,000)
General	$20,000	$6,003	$20,000
Subtotal Admin	$23,000	$3	($5,000)
Weatherization	$73,000	($17,000)	($30,583)
Measures	$0	$0	($94,834)
Energy Education	$4,000	$0	($69,583)
Subtotal Program	$77,000	($220,127)	($195,000)
Total Program	$100,000	($220,124)	($200,000)
Southwest Gas
Outreach	$20,000	$0	$0
Inspections	$30,000	$15,000	$15,000
General	$168,000	($45,362)	($33,200)
Subtotal Admin	$218,000	($30,362)	($18,200)
Weatherization	$465,000	$90,800	$145,640
Measures	$145,000	($196,160)	($196,160)
Energy Education	$32,000	($6,000)	($7,840)
Subtotal Program	$642,000	($111,360)	($58,360)
Total Program	$860,000	($141,722)	($76,560)

Energy Division recommends that with the finding of the reasonableness of the utilities' targets, that the utilities' PY 2005 proposed budgets be adopted. Depending on the amortization of the carryovers, the authorized levels may need some adjusting.

²⁷ See D.03-03-007, p. 40 and OP 11.

²⁸ See D.03-12-016, p. 18 and OP 5.