Background

By D.01-05-033, the Commission adopted a rapid deployment strategy for the utilities' low-income assistance programs during the energy crisis. These programs consist of direct weatherization and energy efficiency services under the Low-Income Energy Efficiency (LIEE) program and rate assistance under CARE.

Currently, qualifying households receive a 20% rate discount under CARE and are also exempt from the 1-cent and 3-cent 2001 electric rate surcharges.² In order to increase program outreach, D.01-05-033 authorized the utilities to pay "capitation fees" to low-income assistance organizations of up to $12 per CARE enrollee. In addition, the Commission directed the utilities to increase non-English radio and print advertising and to take other steps to increase program participation in both CARE and LIEE. For this purpose, the Commission augmented the annual funding for these programs that was collected via the Public Goods Charge (PGC) with available funding from prior year unexpended budgets and one-time supplemental funds appropriated by SB X1 5.³

By D.01-05-033, the Commission directed that rapid deployment of low-income assistance programs continue "until further Commission order" ⁴ and initiated a monthly reporting process to monitor the utilities' progress. The Assigned Commissioner and Administrative Law Judge (ALJ) held public status conferences on July 11, 2001 (San Francisco), August 28, 2001 (Los Angeles) and February 8, 2002 (San Francisco) to discuss the results of the utilities' rapid deployment efforts. The utilities reported that the funding established in D.01-05-033 would cover their LIEE rapid deployment efforts through 2002. However, for the CARE program, they reported that current funding levels would be insufficient to cover the expected costs of rate subsidies and administrative costs through the rest of the year.⁵

In response to this information, the Assigned Commissioner directed the utilities, as follows:

"The Commission will need to address these shortfalls through a ratemaking proceeding. By today's ruling, I direct the utilities to file applications describing their proposed CARE administrative activities and budgets for 2002, by expenditure category, and estimated rate subsidy costs through the end of 2002. The filings should include a detailed description of the basis for these projections, as well as the utilities' proposals for ratemaking treatment of anticipated shortfalls...

"I note that Senate Bill X[2] 2 authorizes the recovery of CARE program administrative costs through a balancing account mechanism, provided that the Commission determines these costs to be reasonable. In their filings, the utilities should provide enough documentation of their planned expenditures and activities to facilitate a "before the fact" evaluation of reasonableness (via pre-approval of the expenditures and associated budgets by Commission decision) and propose specific procedures to employ an "after the fact" reasonableness review of such expenditures.⁶

On April 18, 2002, the utilities filed applications describing their proposed CARE administrative activities, budgets and ratemaking treatment to cover anticipated shortfalls in their rapid deployment plans during 2002. The Office of Ratepayer Advocates (ORA) and AARP filed comments on the applications.

By ruling dated April 26, 2002, the ALJ requested supplemental written information on the utilities' ratemaking proposals, which the utilities jointly filed on May 10, 2002. The ALJ questioned utility representatives on these submittals during the May 16, 2002 prehearing conference (PHC). In addition, the ALJ directed the utilities to supplement their applications with additional narrative and tables on their 2002 program expenditure proposals. The Assigned Commissioner issued a scoping memo pursuant to Article 2.5 of the Commission's Rules of Practice and Procedure on May 30, 2002.

The utilities filed their supplemental information on June 4, 2002 and ORA filed a response on June 19, 2002. In its response, ORA stated that it did not contest the utilities proposed 2002 CARE budgets. However, ORA made recommendations regarding SCE's proposed ratemaking treatment for CARE-related expenditures. In response to these recommendations, SCE filed a reply on June 26, 2002 withdrawing certain elements of its ratemaking proposal. The ALJ held a phone conference call on July 2, 2002 with ORA and SCE in order to assess whether there were any remaining contested issues. ORA stated that there were not.

SDG&E and SoCal filed errata to their budget tables on July 12 and again on July 15, 2002. At the request of the ALJ, PG&E submitted revisions to its CARE subsidy calculations on July 15, 2002 to reflect the same treatment of surcharge exemptions as the other utilities' tables.

On July 17, 2002, the Commission issued D.02-07-033 in Rulemaking (R.) 01-08-027. Among other things, the decision established minimum CARE penetration rate targets for PY2002 by utility and adopted a CARE automatic enrollment program. The automatic enrollment program will enroll customers of PG&E, SCE, SoCal, and SDG&E into CARE when they participate in the following partner agency programs: Medi-Cal, and Women, Infants and Children administered through the California Department of Health Services, Healthy Families administered by the Managed Risk Medical Insurance Board, or the Energy Assistance Programs administered by the Department of Community Services and Development. As described in D.02-07-033, the Commission will administer the agency data exchange for automatic enrollment and serve as the clearinghouse to identify electronic matches between agency and utility customer records. The implementation of automatic enrollment is on an expedited schedule.