IV. Care Discount

The January 26^th ACR permitted Greenlining/LIF to present testimony on specific changes to the California Alternative Rates for Energy (CARE) program for eligible low-income residential customers.⁵⁴ Greenlining/LIF proposes to:

(1) Exempt CARE-eligible customers from the current surcharge and any increases that result from implementation of AB1X. Because low-income households often consist of multiple families living in sub-standard housing stock usage above 130% baseline exempted from rate increases under AB1X is often unavoidable;

(2) Increase the CARE discount from 15 to 25%, applicable to all Edison and PG&E customers, including PG&E's gas customers;

(3) Increase the CARE eligibility criteria from 150% to 175% of Federal poverty guidelines. The effect of increasing eligibility would allow a family of three to make up to $25, 000 and still qualify for the discount. Adoption of an increase in eligibility essentially acknowledges the reality of the high cost of living in California;

(4) Rule favorably on Greenlining/LIF's motion for Clarification of D.01-01-018 regarding application of the EPS exemption.

TURN supports these proposals, stating that Pub. Util. Code § 382 authorizes the Commission to ensure that the CARE program is funded at a level that will serve customers need and there are indications that customer need for such assistance is far higher than what is being provided today. CCSF also support Commission consideration of financial assistance programs for low-income customers.

ORA does not support further changes to the CARE discount during this phase of the proceeding because (1) CARE customers are already exempt from the 9% EPS increase applicable to residential customers; and (2) the Legislature is considering bills that increase the CARE discount.

CMTA shares the opinion of ORA and adds that CARE customers are already receiving an effective discount of 22.5% due to their exemption from the EPS and current CARE rates are 13% lower than they were in 1993. If additional discounts to CARE customers are adopted, non-CARE customers will be forced to bear the increased cost burden.

PG&E supports increasing the CARE discount level to 25% for the electric portion of CARE customer bills if the Commission adopts PG&E's requested two-cents per kWh increase in customer electric rates. Absent the Commission's adoption of a two-cents per kWh rate increase, PG&E supports continuation of the current discount and the exemption for CARE customers from the one cent per kWh increase (EPS) adopted in D.01-01-018.

PG&E states that it may be appropriate to revisit the income threshold for participation in the CARE program, as well as other issues raised by the Greenlining/LIF in its testimony, in the ongoing low-income proceeding where consistency can be assured between gas and electricity customers, and between the state's investor-owned utilities. Edison asserts that the Commission should either retain the current EPS exemption for CARE customers or increase the CARE discount, but not both.

Edison is opposed to raising the income eligibility guidelines for the CARE because over one-fourth of its residential customers would become eligible for CARE, placing substantial additional burdens on the remaining ratepayers to cover these costs due to the potential increase in spending to fund the program.

We find the record supports increasing the CARE discount from 15% to 25% and the eligibility levels from 150% of federal poverty guidelines to 175% for electric customers of PG&E and Edison. Low income households are struggling now to meet the cost of utility energy services, which includes both their electric and gas usage bills, and we recognize in this that electric rate increases may occur in the near future through other phases of this proceeding, including implementation of AB1X.

We do not extend these changes to gas customers of PG&E because the applications filed and noticed here address only electric issues. We recognize we need to quickly address similar CARE changes for gas customers of PG&E, SDG&E, and Southern California Gas Company and will move quickly to address the applicability of the Commission's decision to all jurisdictional utilities offering CARE discounts under the Commission's oversight.

We do not adopt Greenlining/LIF's proposal to exempt CARE customers from any increases that result from implementation of AB1X as that is an issue to be considered within the context of our implementation. AB1X does continue the exemption of CARE customers from the EPS based on its language that references rates in effect as of January 5, 2001, and we affirm that finding here.