8. Need for Expedited Consideration

Rule 77.7(f)(9) of the Commission's Rules of Practice and Procedure provides in relevant part that:


"...the Commission may reduce or waive the period for public comment under this rule...for a decision where the Commission determines, on the motion of the party or on its own motion, that public necessity requires reduction or waiver of the 30-day period for public review and comment. For purposes of this subsection, "public necessity" refers to circumstances in which the public interest in the Commission adopting a decision before expiration of the 30-day review and comment period clearly outweighs the public interest in having the full 30-day period for review and comment. "Public necessity" includes, without limitation, circumstances where failure to adopt a decision before expiration of the 30-day review and comment period...would cause significant harm to public health or welfare. When acting pursuant to this subsection, the Commission will provide such reduced period for public review and comment as is consistent with the public necessity requiring reduction or waiver."

We balance the public interest in quickly addressing these low-income assistance matters against the public interest in having a full 30-day comment cycle on the decision draft. We conclude that the former outweighs the latter. A reduced period for review and comment balances the need for parties' input with the need for timely action. Comments were filed by AARP, PG&E, SCE, SDG&E/SoCal, ORA, Roseville Telephone Company (Roseville) and by a group of small local exchange companies on June 10, 2002.43 Reply comments were filed by AARP, SCE, SDG&E/SoCal and Greenlining Institute/Latino Issues Forum and the LIOB on June 17, 2002.

In response to these comments, we make minor corrections and clarifications to the decision language, as well as the substantive changes discussed below. We note that Roseville and the small local exchange companies primarily comment on issues that we have referred to the ULTS proceeding, R.98-09-005, such as eligibility verification. We encourage these parties to participate actively in that proceeding to make their views known.

In its comments, SCE states that it "believes the intent of the Draft Opinion also applies the categorical eligibility concept to the utilities Low Income Energy Efficiency (LIEE) programs."44 SCE is mistaken. In effect, SCE is proposing that we eliminate our current requirements that LIEE utility contractors obtain and retain income documentation before enrolling customers into that program. We established that requirement in D.01-03-028 after careful consideration of various viewpoints and concerns.45 We have also expressed reservations about automatic enrollment of CARE eligible customers into LIEE because of the significant differences in income documentation requirements for these two programs.46 Nothing in today's decision is intended to extend automatic enrollment to the LIEE program or modify our prior orders regarding income documentation for LIEE. Once we have gained experience with automatic enrollment on the CARE side, we may consider SCE's proposal in a subsequent program planning cycle, where we can revisit the issues and concerns that are specific to categorical eligibility in LIEE. In the mean time, as SDG&E/SoCal points out in its comments, the customers enrolled in CARE as a result of automatic enrollment may serve as an excellent source of leads for the LIEE program.

ORA recommends in its comments that we perform a reasonableness review of rapid deployment program budgets in the upcoming PY2003 program planning cycle, because the program cost estimates presented in the draft decision were very preliminary. For the reasons discussed in this decision, we do not adopt this recommendation. However, in response to ORA's comments, we do remove the estimates of costs presented in the draft decision in recognition that the cost impacts of the program are extremely uncertain at this time.

In addition, in response to parties' comments on the impact of automatic enrollment on administrative budgets and overall program efficiency in reaching eligible customers, we clarify our expectation that the utilities will not sustain current cost levels for many activities associated with traditional CARE enrollments once automatic enrollment is up and running.

In their comments, several parties express concerns over the drop-off levels that some utilities are currently experiencing in the CARE program, and suggest ways that the automatic enrollment recertification process might address this issue. In response, we add language that articulates our goal of creating effective ways to recertify CARE customers through the electronic, paperless process available to us through the automatic enrollment program.

The major substantive changes to the draft decision relate to our selection of meaningful benchmarks for penetration rates. In its comments, SCE requests the Commission to recognize that, until the effects of automatic enrollment and updated Census data are known, the 4-year benchmarks proposed in the draft decision may not be realistic and may therefore need to be revised for future years.47 PG&E also expresses concern that the future calculation of eligible population may be adjusted upwards-without revisiting the benchmark percentages for program penetration rates at the same time.48

In order to address this issue effectively, we modify the draft decision in two ways: First, instead of establishing penetration rate benchmarks for each of the years from 2002 through 2005, we establish a benchmark for each utility only for PY2002. In doing so, we adopt a benchmark for SCE that reflects the fact that SCE has already (as of May 2002) substantially exceeded its 2001 penetration rate of 88%. Second, we require the utilities to present their updated information on eligible CARE customers based on the 2000 Census joint distribution data in a timely fashion. In this way, we will be able to consider the impacts of the Census data updates and of automatic enrollment on penetration rates as we establish meaningful benchmarks for future years. Finally, we note that several parties and the LIOB identify issues that may need to be addressed in greater detail as we proceed with program implementation, such as how to identify for recertification purposes those customers who no longer participate in the partner programs through which they became automatically eligible for CARE. As discussed in today's decision, the Assigned Commissioner will identify further implementation tasks for the program, with a reasonable timetable for resolving the most critical path issues first.

Findings of Fact

1. As of February 2002, the rapid deployment efforts of SDG&E, SCE, PG&E and SoCal resulted in approximately 420,000 new customers being enrolled in the CARE program, net of decreases in enrollment due to customers moving out of the service area or failing to recertify.

2. Rapid deployment during 2001 increased the number of homes weatherized under the LIEE program in PG&E, SDG&E, SCE and SoCal's service territories by more than 50,000, and at least another 50,000 were provided other energy efficiency measures during the year, such as efficient refrigerators, air conditioners or compact fluorescent lights.

3. The penetration rates regularly calculated by the telecommunications utilities (e.g., Verizon and Pacific Bell) measure the number of households that have basic phone service, rather than the penetration rate for the ULTS program. Data presented during workshops indicates that the penetration rate for the ULTS program (i.e., the number of program participants relative to the number that are eligible) is approximately 70%.

4. As discussed in this decision, SCE, SDG&E, PG&E and SoCal's methodology for calculating penetration rates would be improved by completing certain sensitivity tests currently underway, and by updating the 1990 Census data on household size and income relationships with the 2000 Census data when it becomes available in fall, 2002. Introducing additional methodological refinements at this time could divert limited resources from this updating task. Some of the refinements proposed by the utilities during workshops overlap with the recommendations presented in the Phase 1 report of the Needs Assessment Study, which are currently under consideration by the Commission.

5. Avista utilizes a simplified method of applying Census information may overestimate its eligible CARE population.

6. Southwest Gas utilizes a method of estimating CARE eligible population that cross-checks independent survey information against current Census data.

7. The calculation and reporting of ULTS penetration rates by the telecommunications utilities could be improved in several ways, as discussed in Energy Division's workshop report. These improvements should be considered in the ULTS proceeding, R. 98-09-005.

8. Over one million low-income customers are eligible for, but do not participate in, the CARE program.

9. The utilities' proposed penetration rates do not acknowledge that the fundamental goal of the program should be to reach 100% of low-income customers that are eligible for, and desire to participate in, the CARE program.

10. 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.

11. 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.

12. Penetration rate benchmarks for PY2002 of 63% for PG&E, 75% for SDG&E, 70% for SoCal, 89% for Southwest and 50% for Avista represent substantial improvements over the 2001 penetration rates achieved by these utilities and moves each of them at a meaningful pace towards our goal of 100% penetration. At the same time, these benchmark levels recognize that the pace towards achieving our goal will differ among the utilities for the reasons discussed in this decision. Avista's penetration rate benchmark for 2002 recognizes 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).

13. Setting SCE's 2002 benchmark at the level recommended by SCE (88%) represents a expectation that SCE cannot improve upon its 2001 performance, despite the fact that SCE reports a penetration rate of 91% as of May, 2002. A benchmark of 93% for the entire year is a reasonable standard for SCE, for the reasons discussed in this decision.

14. It is prudent to base post 2002 performance benchmarks on penetration rate information that incorporates 2000 Census data on joint household income and size, which will be available in special tabulations this fall. They should also reflect the impact of automatic enrollment on program participation. The utilities proposed penetration goals for 2003 and beyond do not incorporate either of these factors, and their net impact on utility penetration rates are uncertain at this time.

15. Within 30 days from the effective date of this decision, the utilities shall augment their 2003 CARE program plans (filed on July 1, 2002) a proposed scope of study for evaluating the results of automatic enrollment, and associated budget.

16. The CARE penetration benchmarks adopted today may need to be further refined in future program planning cycles when the results of the Low Income Needs Assessment Study currently underway are available.

17. Achieving the 100% penetration rate goal described in this decision is expected to increase CARE rate subsidy costs, depending on the number of new customers enrolled through the program. The utilities and the Commission will incur one-time and ongoing costs for program start-up and implementation, which may be offset by reductions in traditional outreach costs and other administrative costs.

18. Automatic enrollment of low-income customers into CARE is a necessary component of a strategy to achieve the program penetration goal described in this decision.

19. Automatic enrollment has been implemented in other states, including Texas, Idaho, Oregon, New York, Vermont, Montana and Massachusetts. Under the Texas program, preliminary data indicates that 460,000 out of 623,000 households receiving public benefits from social programs were successfully identified for automatic enrollment with their energy service provider.

20. The Medi-Cal and WIC programs administered by DHS, the Healthy Families program administered by MRMIB, and the Energy Assistance Programs administered by DCSD ("partner programs") share certain characteristics that make them prime candidates for partnership in the automatic enrollment program. These are: 1) their program eligibility requirements most closely match the Commission-adopted CARE eligibility requirement of 175% of the 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.

21. The majority of potential CARE customers will be automatically enrolled through participation in Medi-Cal. The maximum allowable income for no-cost Medi-Cal is generally up to 133% of federal poverty guidelines. The number of clients with incomes between 133% and 250% of federal poverty guidelines is approximately 7.2%. The number between 185% and 250% is about 2.6%.

22. The number of households that are eligible for the partner programs and whose income might exceed the Commission's current income eligibility requirements for CARE is insignificant compared to the number of eligible customers with incomes within the CARE requirement.

23. As discussed in this decision, CARE eligibility requirements need to be broadened to implement the automatic enrollment program we adopt today.

24. The potential for automatic enrollment to dramatically increase CARE enrollments is evident: In 2001, approximately 5.5 million individuals, or 3.4 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.

25. Based on the experience in other states, the majority of new CARE enrollments through automatic enrollment are likely to occur during the initial two months of clearinghouse operation. Subsequent annual automatic enrollment is expected to decrease and level out over time.

26. The eligibility screening process performed by DHS, MRMIB, and DCSD for their programs equal or exceeds the utilities' screening process for CARE. Therefore, a two-tier recertification process is not warranted.

27. Commission administration of the automatic enrollment program, as described in this decision, is necessary to ensure confidentiality of all client information provided through the agency partnerships with DHS, MRMIB, and DCSD.

28. The monitoring and evaluation reports described in this decision are needed to track the effectiveness of the automatic enrollment program we adopt today.

29. Random verification of customers whose eligibility has been established under the partner programs could result in qualified low-income customers dropping out of the CARE program unnecessarily, and would increase administrative costs needlessly.

30. A bill insert is the most logical method to provide all utility customers with advance information about the Commission's automatic enrollment program.

31. The phone utilities do not currently conduct any post-enrollment verification of customer eligibility under the ULTS program. A recent study mandated by the Commission indicates that 30% of ULTS participants are not eligible for the program, and an additional 12% may or may not be eligible.

32. Based on the estimates presented in this proceeding, PG&E, SCE, SDG&E and SoCal will have sufficient LIEE funding from PGC collections, carryovers and one-time SBX1 5 funds to cover rapid deployment costs during PY2002.

33. PG&E, SCE, SDG&E and SoCal project significant shortfalls in funding from current rates and SBX1 5 one-time appropriations to cover CARE rapid deployment costs through 2002.

Conclusions of Law

1. The rapid deployment programs adopted for SCE, SDG&E, SDG&E and SoCal in D.01-05-033 should continue until further Commission order. As discussed in this decision, the ratemaking implications of continuing rapid deployment of CARE during 2002 is being addressed in a separate ratemaking proceeding.

2. The penetration rate methodologies used by the energy utilities are reasonable, subject to the modifications and updates described in this decision.

3. The penetration rate benchmarks adopted today are reasonable and should be adopted. They acknowledge the differences among utilities, and at the same time reflect our commitment to move at a meaningful pace towards 100% CARE penetration.

4. The automatic enrollment program described in this decision is reasonable and should be adopted. With the implementation of automatic enrollment, low-income customers should be eligible to participate in CARE under the current CARE income/household size guidelines or if the household participates in Medi-Cal, Healthy Families, WIC or one of the three energy assistance programs administered by DCSD.

5. For the reasons discussed in this decision, the utilities should exclude automatic enrollment customers from their random post-enrollment verification process.

6. Partnering with the ULTS program under automatic enrollment should be deferred 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. As discussed in this decision, coordination of other types of customer outreach strategies between ULTS and CARE programs should proceed without delay.

7. The Commission clearinghouse costs under automatic enrollment should be allocated in proportion to each utility's estimated eligible unenrolled CARE population. The utilities should track all other costs associated with the program (e.g., subsidy costs and utility administrative costs) in a memorandum account or in their CARE balancing account, as appropriate, pending Commission action on A.02-04-031 et al.

8. In order to move forward with automatic enrollment as expeditiously as possible, this order should be effective today.

9. The period for public review and comment on the draft decision should be reduced, pursuant to Rule 77.7(f)(9).

INTERIM ORDER

IT IS ORDERED that:

1. The method currently used by Southwest Gas Company (Southwest) to estimate California Alternate Rates For Energy (CARE) penetration rates, as described in its February 1, 2002 pre-workshop comments in this proceeding, is approved without modification.

2. As discussed in this decision, Energy Division shall ensure that the CARE Needs Assessment Study is designed to obtain income and household size data specific to Avista Utilities' (Avista) service territory for the purpose of estimating the number of CARE eligible homes. This data shall be used to update Avista's penetration rates and to evaluate Avista's achievement of the CARE penetration benchmarks set forth in this decision.

3. Energy Division shall work with Avista and Southwest Gas to develop a consistent format for reporting CARE penetration on an annual basis. Avista and Southwest Gas shall submit this information in the annual CARE reports required by Decision (D.) 89-07-062.

4. Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), San Diego Gas & Electric Company (SDG&E) and Southern California Gas Company (SoCal), collectively referred to as "the utilities", shall make the following improvements to the methodology adopted in D.01-03-028 for calculating CARE penetration rates:

The utilities shall jointly file report on the results of the tests/analyses required under (a) above, and any proposed refinements to methodology, no later than November 1, 2002. As described in this decision, they shall update the number of eligible customers in their service territories using the 2000 Census data required under (b) above with their January, 2003 status report. The report should present a calculation of penetration rates that reflects this updated information and the new enrollments due to automatic enrollment, to date.

5. The goal of the Commission is to reach 100% of low-income customers who are eligible for, and desire to participate in, the CARE program. To this end, we establish the following PY2002 minimum benchmarks for program penetration, by utility: PG&E-63%, SDG&E-75%, SCE-93%, SoCal-70%, Southwest-89% and Avista-50%.

6. The automatic enrollment program for CARE described in this decision is adopted. Under this program, customers of PG&E, SCE, SDG&E and SoCal shall be enrolled into CARE when they participate in any of the following programs:

With the implementation of automatic enrollment, low-income customers shall be eligible to participate in CARE if they meet the current CARE income/household size criteria or if the household participates in any one of the programs listed above.

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

8. The Commission shall serve as the clearinghouse to identify electronic matches between partner agency and utility customer records, as described in this decision. Beginning 90 days from the effective date of this decision, the utilities shall submit the names and addresses of customers currently not receiving CARE to the Commission on a monthly basis. The frequency and content of these data submissions may be modified by the Assigned Commissioner, as appropriate. These submissions should not include the names of customers who are not eligible for CARE by reason of their rate class. Energy Division shall conduct meetings with these utilities to develop data transfer and matching protocols.

9. The utilities shall track customers who are automatically enrolled in CARE under the program and report on the number of customers successfully matched, enrolled and recertified. As discussed in this decision, the utilities shall also submit expenditure information on automatic enrollment. The utilities shall work with Energy Division in developing an appropriate format for reporting this information, and shall include it in the monthly rapid deployment reports until further notice by the Commission or Assigned Commissioner.

10. The utilities shall file annual status reports on automatic enrollment until further notice by the Commission or Assigned Commissioner. The Energy Division shall work with the utilities to develop the format, content and filing dates for these reports. The utilities shall include in their 2003 CARE program plans (due July 1, 2002), a scope of study for evaluating the results of the first 12 months of the automatic enrollment program, and an associated budget.

11. The utilities shall provide utility customers with advance information about the Commission's automatic enrollment program via a bill insert, as described in this decision. The utilities shall begin immediately to work with the Energy Division in developing the appropriate text and be prepared to include the insert in bills upon approval. We delegate to the Assigned Commissioner the review and approval of the bill insert text. Within 30 days from the date of this decision, the Assigned Commissioner shall issue a ruling setting forth the approved text.

12. The Assigned Commissioner shall prioritize and clarify by ruling any additional implementation issues that may need to be addressed over time as the Commission gains experience with CARE automatic enrollment.

13. The costs of the Commission clearinghouse function shall be reimbursed by PG&E, SCE, SDG&E and SoCal in proportion to each utility's currently estimated eligible, unenrolled CARE population, as follows:

14. Pending Commission action on Applications (A.) 02-04-031 et al., the utilities shall track all costs related to automatic enrollment in a memorandum account or in an existing CARE balancing account, as appropriate. These include the 20% CARE rate subsidy costs, utility administrative costs, and the Commission's clearinghouse costs.

15. As discussed in this decision, the Low Income Oversight Board (LIOB) shall hold public meetings for targeted outreach to specific telephone utility service areas for the purpose of coordinating customer outreach between CARE and Universal Lifeline Telephone Service (ULTS). LIOB shall report its 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 shall 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.

16. Energy Division's recommendations for improvement to ULTS penetration rate calculations and eligibility verification, as presented in the April 2, 2002 Workshop Report on CARE and ULTS Penetration Rates, shall be considered in the ULTS proceeding, R.98-09-005.

17. Within 30 days from the effective date of this decision, PG&E, SCE, SDG&E and SoCal shall augment their PY2003 CARE program plans filed in A.02-04-031 et al. with a proposed scope of study for evaluating the results of automatic enrollment, and associated budget.

18. The Assigned Commissioner may, for good cause, modify the due dates set forth in this decision.

19. All reports and other submittals required by this decision shall be filed at the Commission's Docket Office and served electronically on all appearances and the state service list in this proceeding. U.S. mail service of the comments is optional, except that one hard copy of each document shall be mailed to Judge Meg Gottstein at the State Office Building, Room 5044, 505 Van Ness Avenue, San Francisco, California, 94102. In addition, if there is no electronic mail address available, the electronic mail is returned to the sender, or the recipient informs the sender of an inability to open the document, the sender shall immediately arrange for alternate service (regular U.S. mail shall be the default, unless another means-such as overnight delivery-is mutually agreed upon.)

Current service lists for this proceeding are available on the Commission's web page, www.cpuc.ca.gov.

This order is effective today.

Dated July 17, 2002, at San Francisco, California.

Attachment 1 to D0207033

Attachment 7 to D0207033

Attachment 3-6 to D0207033

Table 1 to D0207033

43 Calaveras, Cal-Ore, Ducor, Evans, Foresthill, Happy Valley, Hornitos, Kerman, Pinnacles, Ponderosa, Sierra, Siskiyou, Volcano and Winterhaven Telephone Companies filed joint comments. 44 SCE Comments on Draft Interim Opinion, June 10, 2002, p. 8. 45 See D.01-03-028, pp. 12-15. 46 See D.01-05-033, p. 43, footnote 36. 47 SCE Comments on Draft Decision, p. 7. 48 PG&E Comments on Draft Decision, p.

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