STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

May 29, 2001

TO: PARTIES OF RECORD IN APPLICATION 00-11-009 ET AL.

This is the draft decision of Administrative Law Judge (ALJ) Gottstein. It will be on the Commission's agenda at the meeting on June 14, 2001. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Pursuant to Rule 77.7(f)(9), comments on the draft decision shall be filed within seven days of its mailing and no reply comments will be accepted.

In addition to service by mail, parties should send comments in electronic form to those appearances and the state service list that provided an electronic mail address to the Commission, including ALJ Gottstein at meg@cpuc.ca.gov. Finally, comments must be served separately on the Assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious methods of service.

/s/ LYNN T. CAREW

Lynn T. Carew, Chief

Administrative Law Judge

LTC:k47

Attachments

ALJ/MEG/k47 DRAFT Item 5

6/14/2001

Decision

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Compliance Application of Pacific Gas and Electric Company for Approval of Year 2001 Low Income Programs, in Compliance with Ordering Paragraph 4 of Decision 00-09-036. (U 39 M).	Application 00-11-009 (Filed November 6, 2000)
Application of Southern California Gas Company (U 904-G) For Authority to Continue Low Income Assistance Programs and Funding Through 2001.	Application 00-11-011 (Filed November 6, 2000)
Application of San Diego Gas & Electric Company (U 902-E) For Authority to Continue Low Income Assistance Programs and Funding Through 2001.	Application 00-11-012 (Filed November 6, 2000)
Southern California Edison Company Compliance Application for Approval of Year 2001 Low Income Program Plans.	Application 00-11-020 (Filed November 6, 2000)

INTERIM ORDER:

PY 2001 SHAREHOLDER INCENTIVE MECHANISM

FOR LOW INCOME ASSISTANCE PROGRAMS

AND OTHER COMPLIANCE ISSUES

TITLE PAGE

INTERIM ORDER: PY 2001 SHAREHOLDER INCENTIVE MECHANISM

FOR LOW INCOME ASSISTANCE PROGRAMS AND OTHER

COMPLIANCE ISSUES 1

1. Introduction and Summary 2

2. Procedural Background and Scope of Decision 3

3. Discussion 5

3.1 PY 2001 Shareholder Incentive Mechanism 6

3.1.1 History of LIEE Shareholder Incentive Mechanism 6

3.1.2 PY 2000 Incentive Mechanism and Proposed Updates 8

3.1.3 Adopted PY 2001 Incentive Mechanism 10

3.1.4 Ratemaking Treatment for PY 2001 Incentives 18

3.2 Ratemaking Treatment For CARE Administrative Costs 20

3.3 Compliance Information Filed Pursuant to D.00-09-036 24

3.3.1 Attic Ventilation Pilot 24

3.3.2 Tracking CARE Outreach Pilot 25

3.3.3 Program Monitoring and Evaluation Procedures 27

4. Comments on Draft Decision 27

Findings of Fact 28

Conclusions of Law 31

ORDER 33

Attachment 1: Acronyms/Abbreviations

Attachment 2: Summary of Consensus Reached At March 22, 20 Workshop

Attachment 3: Proposed PY 2001 Shareholder Incentives

1. Introduction and Summary¹

This decision addresses several compliance issues related to low-income assistance programs for program year (PY) 2001. These programs are administered by Pacific Gas and Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), Southern California Edison Company (SCE) and Southern California Gas Company (SoCal).² They consist of the California Alternate Rates For Energy (CARE) program, which provides rate assistance in the form of energy bill discounts, and the Low-income Energy Efficiency (LIEE) program, which provides weatherization and energy efficiency services to eligible customers.

By Decision (D.) 01-05-033, issued on May 3, 2001, we addressed issues related to the rapid deployment of these low-income assistance programs in the coming months. We adopted program budget levels that included one-time funding augmentations from unspent carryover balances and funds recently authorized by the Legislature. The following issues are addressed in today's decision: 1) the shareholder incentive mechanism for PY 2001, 2) cost recovery treatment for CARE administrative expenses and 3) the utilities' compliance submittals in response to D.00-09-036.

We deny PG&E and SCE's request to modify cost recovery for CARE administrative costs at this time, and retain the current practice of authorizing these expenditures on a forecasted basis for these utilities. By D.01-05-033, we recently augmented PY 2001 budgets for CARE outreach to help facilitate the rapid deployment of the CARE program in the coming months.

Finally, we find that that the utilities have complied with the filing requirements of D.00-09-036 by submitting information on the stand-alone attic ventilation pilot, the CARE outreach pilot and procedures for monitoring program quality, cost-efficiency and customer satisfaction.

Although this decision completes our consideration of PY 2001 program planning issues, this proceeding will remain open to monitor the rapid deployment of low-income assistance programs, pursuant to D.01-05-033.