5. Interim CARE Penetration Benchmarks

As discussed in Section 3, the utilities have dramatically increased the number of CARE enrollments during 2001. However, all parties agree that further improvements in program penetration are needed. The utilities have proposed the following goals for CARE enrollments over the next four years:

		Utility Proposed Penetration Goals
	PG&E	SCE	SDG&E	SoCal	Avista	Southwest
2002	63%	88.0%	75.0%	70.0%	50.0%	89.0%
2003	74%	88.0%	78.0%	76.0%	57.0%	90.0%
2004	83%	88.0%	82.0%	81.0%	59.0%	92.0%
2005	84%	88.0%	85.0%	85.0%	61.0%	94.0%

In their December 19, 2001 filings the utilities discuss the types of outreach activities they plan to employ to reach these penetration rates, which include the continued use of community outreach contractors, targeted non-English language media marketing, and bill inserts. More specific information regarding PY2002 CARE outreach activities has been submitted in A.02-02-034 et al.

We note that no party has raised objections to the utility proposals for penetration goals, either in written comments, during public workshops or at the February 8, 2002 status conference. However, we do not believe that these proposals recognize that, fundamentally, the goal for this program should be to reach 100% of low-income customers who are eligible for, and desire to participate in, the CARE program. The utilities report that over one million low-income customers meet the CARE eligibility criteria but are not currently participating in the program.²⁹ Our goal is to enroll each and every one of these customers who wants to participate.

We recognize that the utilities will not reach this goal at the same pace, given differences in demographic characteristics and the magnitude of the eligible low-income population within each service territory, as well as differences in where each utility stands today with respect to program penetration. We also recognize that the law of diminishing returns applies to CARE outreach efforts over time, i.e., it becomes increasingly difficult to enroll additional customers, the closer the utility moves towards achieving 100% participation.

In consideration of these factors, we establish minimum benchmarks for PG&E, SDG&E, SoCal, Southwest and Avista for PY2002 at the levels proposed by these utilities in their filings: PG&E-63%, SDG&E-75%, SoCal-70%, Southwest-89%, Avista-50%. These benchmarks represent substantial improvements over the 2001 penetration rates achieved by these utilities and move each of them at a meaningful pace towards our goal of 100% penetration. At the same time, the benchmark levels we establish today recognize that the pace towards achieving our goal will differ among the utilities for the reasons discussed above. An additional consideration in establishing Avista's penetration rate benchmark for 2002 is the recognition that the denominator of the equation (eligible population) is based on a method that is likely to overestimate the number of eligible population (thereby underestimating actual program penetration), as discussed in Section 4. We will consider establishing higher benchmarks for Avista in the future when we obtain income and household size data specific to Avista's service territory during Phase 2 of the Needs Assessment Study.

For SCE, we adopt a minimum PY2002 benchmark of 93% because we believe that SCE should improve on, and not just maintain, its 2001 88% penetration rate. In fact, SCE's has recently reported that, as of the end of May, its penetration rate is now at 91%. This appears to be at least in part due to the steps that SCE has taken this year to improve its recertification notification process, as described in its comments.³⁰ In this context, a benchmark of 93% for the entire year is a reasonable standard, particularly in light of the impact we expect automatic enrollment to have on program participation.

The minimum PY2002 benchmarks we adopt today reflect our continued commitment to improving CARE enrollment and participation, consistent with SBX2 2 and the program objectives we have articulated in prior Commission decisions. We will continue to closely monitor penetration rate performance. We also intend to establish minimum penetration rate benchmarks for future program years. However, the utilities' proposed penetration goals for 2003 and beyond do not reflect the impact of updating their eligible customer base with 2000 Census data when it becomes available this fall. Nor does it reflect the impact that automatic enrollment (see below) will have on new CARE enrollments as we implement the program.

We cannot predict at this time the net effect of incorporating these factors into the ratio that produces the utility's penetration rates. This information is likely to affect our thinking on what the appropriate performance benchmarks should be in future years. Therefore, we do not believe it is prudent to establish minimum benchmarks beyond 2002 at this time. As we obtain the information we need over the next few months, we will use it to establish meaningful benchmarks for 2003 and beyond.

The benchmarks may also need to be refined when the results of the Low Income Needs Assessment Study currently underway are available. In addition, they may need to be revisited over time in response to changes in demographics, as suggested at the February 8, 2002 prehearing conference (PHC). Several parties recommended that, in the consideration of CARE penetration goals, we should look at penetration levels in terms of ethnic and elderly demographic groups. The issue was raised out of a concern that the utilities' penetration and outreach efforts might not be in line with changes in demographics over time. By ruling dated May 9, 2002, the Assigned Commissioner directed that the Needs Assessment Study address this issue, and that it be considered by the LIOB.