6. Automatic Enrollment

We believe automatic enrollment of low-income electricity and natural gas customers into CARE is necessary to achieve our goal of 100% CARE penetration. The utilities report that 1,060,828 households currently qualify for but do not participate in the CARE program.³¹ Many of these households are likely to receive medical, food, or cash assistance from public benefit programs administered by California state agencies. As discussed further below, we adopt a program whereby households that participate in certain public assistance programs are automatically enrolled into CARE.

Automatic enrollment issues we address today include broadening eligibility requirements, preserving the confidentiality of customer information through Commission program administration, obtaining customer consent through provisional enrollment, allocation of costs associated with automatic enrollment, and coordination with ULTS.

6.1 Partner Agencies

Parties identified several public assistance programs with eligibility requirements compatible with the CARE income requirement of 175% or less of federal poverty guidelines. Most of these programs are administered by four departments under the auspices of the California Health and Human Services Agency. DHS administers Medi-Cal and Women, Infants and Children (WIC). California Work Opportunities and Responsibility to Kids (CALWORKS) and Food Stamps are administered by the Department of Social Services (DSS), Healthy Families by the MRMIB, and the LIHEAP are managed by DCSD.

Several of California's low-income food and medical assistance programs are coordinated so that a client who qualifies for one program automatically qualifies for other programs. For example, participants in CALWORKS and Food Stamps automatically qualify for no-cost Medi-Cal. Up to 60% of WIC clients also receive benefits from Medi-Cal and Food Stamps programs. Healthy Families is a health coverage program for children of low-income wage earners with incomes above the Medi-Cal guidelines, which may disqualify Healthy Families clients from participation in programs with lower income requirements.

Low-income households apply for these programs by completing an application at local county-operated welfare assistance offices. One standard application is used for Medi-Cal and Food Stamps; similar applications are used for Healthy Families and WIC. The applications request information about the number of household members, amount and sources of household income, and household expenses. The applicant must provide proof to support the information. The applicant is informed that the application may be selected for a random quality control review.

LIHEAP applicants undergo a similar process. Low-income utility customers complete an application at selected local government and nonprofit agency locations to qualify for any or all of three LIHEAP programs that provide weatherization and bill payment assistance. The LIHEAP programs also require the applicant to provide proof of income.

We elect to partner with the Medi-Cal, WIC, Healthy Families, and LIHEAP programs for three reasons: 1) program eligibility requirements most closely match the Commission CARE eligibility requirement of 175% or less of federal poverty guidelines; 2) each agency requires proof of income prior to enrollment; and 3) these programs provide the greatest number of household records with the least amount of duplication.

The majority of potential CARE customers will be automatically enrolled through participation in Medi-Cal, which provides public health insurance to low-income Californians. Maximum allowable income for no-cost Medi-Cal is generally up to 133% of federal poverty guidelines, which is well below the maximum CARE income requirement. Approximately 7.2% of Medi-Cal participants have incomes between 133% and 250% of federal poverty guidelines. The number of clients with incomes between 185% and 250% is about 2.6%.

WIC accepts clients with incomes up to 185% of federal poverty guidelines, or clients who participate in either Medi-Cal or Food Stamps programs. Healthy Families and LIHEAP provide services to clients with incomes up to 250% of federal poverty guidelines.

We recognize there may be client duplication among Medi-Cal and WIC at the lower income ranges, but these programs provide the broadest opportunity to reach customers with incomes between the no-cost Medi-Cal maximum income eligibility of 133% and our CARE income eligibility of up to 175% of federal poverty guidelines.

The Executive Director will begin immediate efforts to obtain partnership agreements with DHS, MRMIB, and DCSD. As soon as practicable after these agreements are finalized, the Assigned Commissioner will issue a ruling outlining additional implementation tasks and a schedule for completing them.

6.2 Eligibility Requirements

Currently, low-income households qualify for CARE if they meet certain income and household size criteria, based on 175% of the federal poverty guidelines. To implement automatic enrollment, we find it necessary to broaden CARE's eligibility requirements so that low-income customers qualify for CARE either if the household meets the current CARE eligibility criteria, or when the household participates in one of our automatic enrollment partner programs. We recognize that automatic enrollment of Medi-Cal, WIC, Healthy Families, and LIHEAP clientele could result in CARE enrollment of customers whose incomes exceed the Commission's income eligibility requirement. However, we believe this number is insignificant compared to the number of eligible customers with incomes within the CARE requirement.

6.3 Other State and Utility Data Matching Programs

Parties indicate that other states are implementing automatic enrollment, citing programs in Texas, Idaho, Oregon, New York, Vermont, Montana, and Massachusetts. At least two states adopted legislation requiring social service agencies to either simultaneously enroll low-income customers in utility discount programs, or transmit customer eligibility information to either the utility or the state utility regulatory agency. Other states formed cooperative partnerships between social service agencies, the utilities, and the regulatory agency to facilitate provision of low-income services. The utilities point out that although automatic enrollment programs are underway in other states, most notably New York and Texas, specific data on cost, participation levels and operations is not generally available. The utilities recommend obtaining further information to compare the automatic enrollment experiences in other states.

The state of Texas has authorized two automatic enrollment efforts. In 1998, the Public Utilities Commission of Texas (PUCT) implemented an automatic enrollment program to enroll Texas Department of Human Services (TDHS) clients into a bill discount program for low-income users of local telephone service. DHS periodically transmits the names and telephone numbers of its clientele to the local telephone companies. To date, at least one telephone company, Verizon, has enrolled over 20,000 of its customers from 97,222³² customer records provided by DHS.

In January 2002, the PUCT simultaneously implemented a discount program for low-income electric customers and an automatic enrollment program to accelerate customer participation. Customers who receive certain public benefits from the TDHS are automatically enrolled in the electric bill discount program.³³ The automatic enrollment program is administered under the auspices of the PUCT. The administrator matches a DHS client's address with utility meter addresses obtained from the entity that manages Texas' transmission grid, the Electricity Reliability Council of Texas (ERCOT). In anticipation of automatic enrollment and electric restructure in Texas, ERCOT standardized the service addresses of all meters within its service territory. ERCOT, DHS, the program administrator, the utilities, and electric service providers signed agreements to protect customer confidentiality.

Preliminary data obtained by Energy Division from the PUCT energy program administrator indicates that to date, out of 623,000 households receiving public benefits and served by participating electric service providers and utilities, approximately 460,000 households were successfully identified for automatic enrollment with their energy service provider. Due to the success of the electric automatic enrollment program, the PUCT plans to shift operation of the telephone discount automatic enrollment program from the telephone companies to the PUCT administrator.

SCE and SoCal are conducting a joint CARE automatic enrollment project. Between December 2001 and March 2002 SCE and SoCal exchanged the names and addresses of new CARE customers in their respective service areas. SoCal provided SCE with the names and addresses of 72,049 new CARE customers. Approximately 18,031 customers were outside of SCE's service territory. Of the remaining 54,018 customers, SCE matched 37,071 customers. About 20,626 customers already received the CARE discount; the remaining 16,445 were enrolled in CARE.

SCE compared its customer records with SoCal records at one of three levels of customer information:

Level 1 - Customer's first and last names and service address

Level 2 - Customer's last name and service address

Level 3 - Service address

SCE automatically enrolled matches made at Levels 1 and 2 into CARE. A letter and CARE application were mailed to Level 3 households.

6.4 Impact of Automatic Enrollment on CARE Penetration

It is impossible to provide reliable estimates of the impact of automatic enrollment on CARE penetration levels at this time. However, we note that in 2001, approximately 5.5 million individuals, or 1.9 million households participated in Medi-Cal, WIC, Healthy Families and LIHEAP. Up to 80% of these households are served by at least one investor-owned utility.³⁴ Although a portion of these households may already be enrolled in CARE, the potential for automatic enrollment to dramatically increase CARE enrollments is evident.

Based on the experience in other states, we expect to enroll the majority of CARE-eligible households through automatic enrollment during the initial two months of clearinghouse operation. We expect subsequent annual automatic enrollment levels to decrease and level out over time. The status reports we discuss in Section 6.7 below will allow us to track the number of new enrollees and the contribution of this program to CARE penetration levels.

6.5 Commission Administration and Customer Confidentiality

The Commission, rather than the utilities, will administer the agency data exchange for automatic enrollment. Commission administration is necessary to ensure confidentiality of all client information provided through our agency partnerships with DHS, MRMIB, and DCSD. Commission administration will allow the partner agencies to comply with state and federal legal requirements associated with preserving client confidentiality. It also affords low-income consumers greater opportunity to maximize their participation in beneficial public assistance programs.

DHS maintains client information in one central location, the Medi-Cal Eligibility Database System (MEDS). California's fifty-eight counties provide client information to MEDS from each county's individual data system. Client records for the Healthy Families program are also stored in MEDS. MEDS is accustomed to frequent data exchange and transfer functions.

DCSD currently utilizes a database to administer the CARE program for Avista, Pacific Power and Light Company, Sierra Pacific, and CARE-comparable low-income discount programs for municipal utilities. DCSD also makes direct assistance payments to all the investor-owned utilities on the customer's behalf. Similar to MEDS, the DCSD database is capable of data merging and transfer applications.

The Commission will act as a clearinghouse to identify electronic matches between agency and utility customer records. The clearinghouse will compare the names and addresses of customers currently not receiving CARE with client information from Medic-Cal, WIC, Healthy Families, and LIHEAP. A reasonable match of customer name and address must be made between agency and utility customer information prior to enrollment. We adopt the approach used in the data exchange program between SoCal Gas and SCE: the customer's last name and address must match to achieve enrollment status.

Once a match is made, a notification and consent procedure similar to that proposed by AARP will be applied. The Commission will forward the customer's name and address to the utility for provisional enrollment. The utility will contact the customer by mail. The mailing will inform the customer of the benefits of the CARE program and how to contact the utility for additional information. The customer will have 30 days to notify the utility if the customer does not wish to receive the CARE discount. If the customer does not contact the utility to cancel provisional enrollment, the customer will be automatically enrolled in CARE and will receive the CARE discount effective the next billing cycle.

As in the SCE/SoCal automatic enrollment project, we expect some addresses-only matches between utility and partner agency records. If the clearinghouse achieves an address-only match between agency and utility records, the utility will be alerted to mail a CARE application and a letter inviting the household to apply for CARE.

Beginning 90 days of the effective date of this decision, the utilities will submit the names and addresses of customers currently not receiving CARE to the Commission on a monthly basis. After the initial months of automatic enrollment, it may be practicable to decrease the frequency of submissions, or to require the utilities to submit the names of both CARE and non-CARE customers. The Assigned Commissioner may modify the frequency and content of the utility data submissions, as appropriate. We clarify, as requested by the utilities in their comments, that these submissions do not need to include the names of customers who are not eligible for CARE by reason of their rate class. Energy Division will conduct meetings with the utilities and our partner agencies to develop data transfer and matching protocols.

6.6 Recertification of Automatic Enrollment Customers

Currently, CARE customers receive a discount for two years. After two years on the program, customers are required to recertify their eligibility. The utility automatically contacts the customer for recertification. AARP and the utilities recommend a one-year recertification period to ensure continued eligibility of customers who are automatically enrolled versus those customers who applied to CARE via other mechanisms. AARP points out that many social services programs require annual certification, and that information obtained from more frequent certification could assist the Commission with monitoring the effectiveness of the automatic enrollment program. AARP suggests modifying the partner agencies' applications to allow customers to apply for CARE, Medi-Cal, Healthy Families, or other public benefit programs simultaneously.

At this time, we decline to adopt a two-tier recertification process. We believe the eligibility screening performed by DHS, MRMIB, and DCSD provides a level of scrutiny that equals or exceeds the utilities' screening process. Further, we anticipate that the automatic enrollment program will allow us to move towards the goal of recertifying a majority of CARE customers through this electronic, paperless process. Accordingly, whether enrolled through traditional or automatic means, CARE customers will receive the CARE discount for two years, and may recertify through either new or continued participation in our partner agency programs or through the utility's automatic two-year recertification process. We will consider refinements to the utilities' traditional recertification process as we proceed with the implementation of automatic enrollment.

We believe AARP's suggestion to modify the applications of DHS, MRMIB, and DCSD to allow customers to apply for CARE when they apply for other public benefit programs has merit. We will refer this issue to the Assigned Commissioner for further consideration as an implementation task.

6.7 Monitoring Program Effectiveness

To gauge program effectiveness, parties suggest the Commission receive reports on the number of successful and failed matches and confirm customer eligibility through a random post-enrollment verification process.

We believe random verification of customers whose eligibility has been thoroughly established by our partner agencies would be duplicative, thereby adding unnecessary administrative costs to the automatic enrollment program. Moreover, this additional step for customers who have already been income-qualified could result in qualified low-income customers dropping out of the CARE program unnecessarily. The utilities should exclude automatic enrollment customers from the random post-enrollment verification.

We will direct the utilities to track those customers who are automatically enrolled in CARE, and report on the number of customers successfully matched, enrolled, and recertified. This information should be included in their monthly rapid deployment reports until further notice by the Commission or Assigned Commissioner.

We recognize the need to assess the contribution of automatic enrollment towards achieving our objectives of enrolling all eligible low-income customers into CARE. To this end, we direct the utilities to file annual status reports on automatic enrollment until further order by the Commission or Assigned Commissioner. The Energy Division shall work with the respondent utilities to develop format, content, and filing dates for the annual status reports. This information will allow us to track the number of new enrollees and evaluate the contribution of automatic enrollment to our penetration goals. We direct the utilities to include in their PY2003 CARE program plans (due July 1, 2002) a proposed scope of study for evaluation of the first twelve months of automatic enrollment, and associated budget.

As we move forward with CARE automatic enrollment, we expect that Energy Division, LIOB, utilities and interested parties may identify additional program and implementation issues that need to be addressed. We delegate to the Assigned Commissioner the task of prioritizing and clarifying these issues by ruling, if and when such a need arises.

6.8 Bill Insert

Utility customers should be provided with advance information about the automatic enrollment program directly from the Commission. The most logical method to accomplish this is with a bill insert. The bill insert should state that the Legislature has authorized the Commission to establish CARE penetration goals and to examine methods to enhance CARE enrollment. The bill insert should state that the Commission has selected automatic enrollment as an effective way to achieve its' CARE enrollment goals. The insert should advise customers that if they participate in Medi-Cal, WIC, Healthy Families, or LIHEAP programs, they are eligible for CARE, may be automatically enrolled in CARE, and may receive a letter from the utility informing them of their provisional enrollment in CARE. The bill insert will explain the benefits of CARE. We delegate the task of preparing this bill insert to the Energy Division, in consultation with the utilities and the Public Advisor's Office. The bill insert shall be prepared and approved by way of a ruling from the Assigned Commissioner no later than 30 days from the effective date of this decision.

6.9 Program Costs and Funding

The utilities and the Commission will incur one-time and ongoing costs for program start-up and implementation. The utilities will also incur subsidy costs due to the increase in CARE enrollment.

Parties identified general automatic enrollment cost categories; none of the parties provided estimates on specific costs to implement automatic enrollment.

The utilities each provided subsidy and administrative costs incurred in PY2001 for CARE program activities in their respective May 1, 2002 Annual CARE Progress Reports. Administrative costs include categories for outreach, processing, certification verification, billing system programming, measurement and evaluation, regulatory compliance, CPUC staff funding, and other unspecified administrative costs. All utilities provided annual and average-per-person rate discount costs. PG&E also included electric surcharge exemption costs.

We note that several of the reported administrative cost subcategories are likely to decrease once the automatic enrollment program is underway. As more customers are enrolled via automatic enrollment, the utilities will not sustain current cost levels for many activities associated with traditional CARE enrollments, such as extensive outreach, CARE application processing, and random post-enrollment verification.

Pending Commission action on the utilities' applications for PY2002 CARE program ratemaking treatment (A.02-04-031 et al.), we authorize the utilities to track costs related to automatic enrollment in a memorandum account or in an existing CARE balancing account, as appropriate. These costs include the CARE discount, administrative costs, and the Commission's clearinghouse activities. Commission clearinghouse costs will be allocated in proportion to each utility's currently estimated eligible, unenrolled CARE population, as follows:

Utility	Estimated Eligible Unenrolled CARE Population	Percentage of Total Eligible Unenrolled CARE Population
SCE	96,729	9%
PG&E	494,030	47%
SDG&E	75,100	7%
SoCalGas	394,969	37%
Total	1,060,828	100%

Increased costs related to the 1-cent and 3-cent surcharge exemption will be tracked consistent with procedures adopted by the Commission in the PY2002 CARE ratemaking proceeding.

In its comments on the draft decision, ORA recommends that we review preliminary cost estimates associated with implementing automatic enrollment for reasonableness in the upcoming program planning process for 2003.³⁵ That process was initiated by the filing of utility applications on July 1, 2002. However, in all likelihood, our program review for 2003 will not be completed before automatic enrollment is well underway and costs are already incurred. Given this timing issue, ORA's recommendation is simply not workable. Nor are we persuaded that such a review would be useful, since there will continue to be considerable uncertainty with respect to program costs until we gain more experience with actual program implementation. Nonetheless, we will need to track utility expenditures on automatic enrollment carefully as we implement this new program over the next few months. The utilities should work with Energy Division in developing an appropriate format for reporting program expenditure information, and include it in the monthly rapid deployment reports until further notice by the Commission or Assigned Commissioner. We expect the annual status reports to detail actual program expenditures as well. In addition, the evaluation study discussed in Section 6.7 should consider those costs in assessing the effectiveness of automatic enrollment during the first twelve months of implementation.

6.10 Coordination with ULTS

Pursuant to PU Code Section 739.1 (c), the Commission is examining methods to improve CARE enrollment and participation, determine the most effective means of using CARE and ULTS information to increase CARE enrollment, and ensure that a ULTS customer consents prior to enrollment.

In D. 01-05-033, we declined to adopt automatic enrollment of ULTS customers into CARE, noting the differences in eligibility criteria among the programs: "For example, multiple customers within a household may qualify for ULTS. In contrast, under the CARE program, income from all members of the home is considered to determine eligibility."³⁶ We recognized the need to explore further coordination and leveraging strategies between ULTS and CARE, and directed Energy Division to schedule and facilitate meetings with energy and telephone utilities.

Through these meetings, and through written comments, parties and meeting participants have identified issues which merit further consideration prior to adopting an automatic enrollment program with ULTS in the near-term.

A recent study mandated by the Commission in D.91-07-056 estimates that 30% of ULTS participants are not eligible for ULTS. The study estimates that an additional 12% may or may not be eligible. To support its findings, the study estimates that while approximately 2.13 million households are ULTS-eligible, approximately 3.5 million customers participate in ULTS. The study notes that "self-certification may no longer be sufficient, and consideration might be given to approaches used in other states that tie ULTS qualifications to other social service benefits programs."³⁷

We believe the ULTS study results and the disparities between ULTS and CARE merit further attention before including ULTS. At a minimum, we do not include ULTS in the automatic enrollment program adopted today. We defer further consideration of ULTS participation in the automatic enrollment program until the Commission determines the extent to which ineligible customers are enrolled in ULTS, and whether to revise the telephone utilities' self-certification and post-enrollment verification procedures.

Coordination of other types of customer outreach strategies between the ULTS and CARE programs should commence without delay. We direct the LIOB and interested parties to develop recommendations for targeted outreach to specific telephone utility service areas. We will leave it to the LIOB to hold public meetings on this issue, and to report their recommendations within 120 days from the effective date of this decision in the form of a report to the Commission. Comments are due 30 days thereafter. LIOB's report should summarize the positions of parties and participants in the public meetings, present the pros and cons of options considered and discuss the rationale for LIOB's recommendations.