Application No.: Exhibit No.: Witnesses: A.1-- SCE-01 Joanne Aldrich Mark Wallenrod (U -E) Policy Considerations for Southern California Edison Company s 01-01 Low Income Programs & Ratemaking Proposal Before the Public Utilities Commission of the State of California Rosemead, California November 1, 01
SCE-01 Policy Considerations for Southern California Edison Company s 01-01 Low Income Programs & Ratemaking Proposal Table Of Contents Section Page Witness I. INTRODUCTION AND POLICY Considerations...1 M. Wallenrod A. Summary Proposal...1 1.. SCE s ESA Proposal Is Consistent With the Commission s Programatic Initiative...1 SCE s CARE Proposal Balances Expanding CARE Enrollment With Protecting Ratepayers... B. Testimony Structure... 1... Exhibit SCE-01 Considerations for Low Income Programs... Exhibit SCE-0 ESA Program Proposal... Exhibit SCE-0 CARE Program Proposal... C. D. Legislative Policy and Guidance for Low Income Programs... SCE s ESA and CARE Proposals Fulfill Commission Policy... 1...... Balance Delivery of Cost-effective Energy Efficiency with Health, Safety and Comfort Considerations... Affordable Rates for Customers... EE Measures for Eligible & Willing Customers... Compliance with Commission Directives and Policy Guidance... Program Design That Aligns with Customers Needs and Wants... Maintain Operational Flexibility to Achieve Commission Requirements in a Cost-Efficient Manner... -i-
SCE-01 Policy Considerations for Southern California Edison Company s 01-01 Low Income Programs & Ratemaking Proposal Table Of Contents (Continued) Section Page Witness II. SUMMARY AND OVERVIEW OF THE ESA AND CARE PROGRAMS AND BUDGETS PROPOSAL FOR THE 01-01 PROGRAM YEARS... III. COST RECOVERY AND RATEMAKING PROPOSAL...1 J. Aldrich A. B. Overview...1 ESA and CARE Administration Ratemaking Treatment...1 1.. Treatment of Prior ESA Program Cycle Unspent and Uncommitted Funds...1 Proposed Treatment of Annual ESA Unspent and Uncommitted Funds For This Cycle...1 C. D. Revenue Requirement and Rate Impacts...1 Cost Recovery Conclusion...1 IV. CONCLUSION...0 M. Wallenrod A. Summary Request...0 1.. ESA Program Request Summary...0 CARE Program Request Summary...1 B. Bridge Funding Estimates... Appendix A Witness Qualifications -ii-
SCE-01 Policy Considerations for Southern California Edison Company s 01-01 Low Income Programs & Ratemaking Proposal List Of Tables Table Page Table II-1 01-01 Requested Program Funding for Energy Saving Assistance Programs ($000)...1 Table II- 01-01 Requested Program Funding for CARE Administration ($000)...1 Table III- 01-01 Requested Program Funding for Energy Saving Assistance Programs and CARE Administration ($000)...1 Table III- Energy Savings Assistance and CARE Administration...1 1 -iii-
1 1 1 1 1 1 1 1 0 1 I. INTRODUCTION AND POLICY Considerations A. Summary Proposal In accordance with D.1-0-00, Southern California Edison Company (SCE) is filing its application for California Public Utilities Commission (Commission) authorization for program plans and budgets for the Energy Savings Assistance (ESA) and California Alternate Rates for Energy (CARE) Programs in 01, 01, and 01. It its application, SCE is requesting $0.00 million to fund its ESA Program and $. million to fund its CARE administration costs for the 01-01 program cycle. The annual funding for the ESA and CARE programs are shown in Table III-1 in Chapter III of this Exhibit (SCE-01). 1. SCE s ESA Proposal Is Consistent With the Commission s Programatic Initiative SCE s program funding proposal will continue progress toward achieving the Commission Programmatic Initiative of providing all eligible ESA Program customers the opportunity to participate in the ESA Program, and offering customers who wish to participate in the program all cost-effective energy efficiency measures in their residences by 00. SCE s ESA Program will continue to offer measures that are designed to help customers reduce their electricity use and save money on their electricity bills. SCE also will offer measures that address health, safety, and comfort considerations, in addition to providing resource benefits and greenhouse gas (GHG) reductions that benefit all Californians. Measures that will be offered include, but are not limited to, replacement refrigerators, weatherization of electrically heated homes, and measures that reduce electric hot water use. In hotter climates, SCE will offer replacement of cooling measures including central and room air conditioners and installation of evaporative coolers. SCE also proposes ESA Program process improvements that will deliver energy savings to more customers and increase customer awareness of opportunities to use less energy and reduce water use. 1
1 1 1 1 1 1 1 1 0 1. SCE s CARE Proposal Balances Expanding CARE Enrollment With Protecting Ratepayers SCE proposes to continue efforts in 01-01 to encourage all eligible and willing customers to participate in CARE while protecting ratepayers from subsidizing ineligible CARE participants. Through continued use of tools such as categorical eligibility, SCE will continue to market opportunities for customers to self-certify their eligibility and enroll into the CARE Program. Participating customers will be encouraged to use computers or smart-phones to enroll in CARE and recertify eligibility through SCE s website. SCE will continue to target high-use CARE customers (using 00% or above the baseline usage) for income verification to make sure that CARE funds are used only for eligible customers and only for lawful purposes. SCE s proposed CARE program includes continuation of the Community Help and Awareness of Natural Gas and Electric Services (CHANGES) pilot in 01-01 to determine the pilot s effectiveness in reaching limited English proficient (LEP) customers, as well as activities to support extreme-heat cool centers operated by counties within SCE s service area. B. Testimony Structure SCE s testimony in this application is presented in three volumes (or exhibits). Each exhibit is organized as described below, consistent with the structural template provided in D.1-0-00 (hereafter referred to as the Guidance Document). 1 Specific direction provided in the Guidance Document is included throughout the Exhibits in text boxes immediately preceding SCE s SCE s testimony on that particular guidance requirement. 1. Exhibit SCE-01 Considerations for Low Income Programs In this Exhibit, SCE presents an overview of its ESA and CARE program plans and budgets. Also described in this Exhibit is SCE s proposed ratemaking treatment for the costs of these programs. This Exhibit presents the information specified in Section I of the Guidance Document. 1 D.1-0-00, dated August 1, 01, Attachment Q, as modified by the October 1, 01 Proposed Decision in Application (A.) -0-01.
This exhibit consists of four Chapters: Chapter I provides an overview of SCE s Income Qualified Programs proposal and the legislative background and policy considerations that guide the delivery of SCE s ESA and CARE Programs and SCE s proposal for 01-01; Chapter II summarizes SCE s proposals for the ESA and CARE Programs for the 01-01 program cycle; and Chapter III describes SCE s cost recovery proposal, forecast of revenue requirement, and ratemaking proposal for the 01-01 ESA and CARE programs. 1 1 1 1 1 1 1 1 0 1. Exhibit SCE-0 ESA Program Proposal In Exhibit SCE-0, SCE presents the details of its ESA Program proposal for the 01-01 period, as set forth in Section II of the Guidance Document, describing SCE s proposed program goals, budget, and program delivery and implementation plans, including SCE s marketing and outreach plans.. Exhibit SCE-0 CARE Program Proposal In Exhibit SCE-0, SCE presents the details of its CARE proposal for the 01-01 period. This Exhibit addresses all of the requirements set forth in Section III of the Guidance Document, describing SCE s proposed CARE program goals, budget, and program delivery and implementation plans, including SCE s marketing and outreach plans. In addition, this Exhibit describes SCE s proposals regarding coordination between CARE and the Lifeline Program, as well as SCE s Cooling Center proposals. C. Legislative Policy and Guidance for Low Income Programs Legislative policy guiding the development and delivery of the CARE and ESA Programs spans nearly 0 years and is embodied in the California Public Utilities (Cal. Pub. Util.) Code described in this section: SCE has incorporated these legislative policies and guidance or requirements into consideration in the development of SCE s ESA and CARE funding proposals. Cal. Pub. Util. Code
1 1 1 1 1 1 1 1 0 1 Cal. Pub. Util. Code directs that the Investor Owned Utilities (IOUs) shall administer the ESA and CARE Programs. This code section encourages the IOUs to leverage authorized funds with other funding available through state and federal sources. This code section also directs the IOUs to work with state and local agencies, Community Based Organizations (CBOs), and other entities to support efficient and effective program delivery. Moreover, the IOUs are to encourage local employment and job skill development and maximize participation by eligible customers. The IOUs are directed to reduce energy consumption and bills, and to target upper-tier and multifamily customers, including those living in facilities operated by affordable housing providers in order to achieve longterm permanent reduction in electricity usage at the dwelling units. CARE is to be allocated on an equal cents per kilowatt hour basis to all customer classes. In Exhibit SCE-0, SCE describes its partnerships with CBOs, the California Department of Community Services and Development (CSD) and other partners to leverage the trust and resources these entities bring and the workforce they provide to deliver these services to customers. In Exhibit SCE-0, SCE describes CARE outreach strategies featuring community events, community forums, and partnerships with CBOs and local groups through the Commission authorized Capitation program that pays a fee to CBOs and other community organizations for helping customers successfully enroll in the CARE program. Cal. Pub. Util. Code 1. Cal. Pub. Util. Code 1. declares the intent of the Legislature to; 1) protect and strengthen the current network of community service providers by directing that any evaluation of the effectiveness of the ESA Program shall be based not solely on cost criteria, but also on the degree to which the provision of services allows maximum program accessibility to quality programs to low-income communities by entities that have demonstrated performance in effectively delivering services to the communities; and ) to make sure that high quality programs are delivered to the maximum number of eligible participants at a reasonable cost. SCE s extensive partnership with CBOs in delivering the ESA Program is described in Exhibit SCE-0. Cal. Pub. Util. Code
1 1 1 1 1 1 1 1 0 1 Cal. Pub. Util. Code requires that programs provided to low-income electricity customers, including, but not limited to, targeted energy-efficiency services and the CARE Program shall be funded at not less than 1 authorized levels based on an assessment of customer need. This code section also requires the Commission to make sure low income ratepayers are not jeopardized or overburdened by monthly energy expenditures. The assessment of need is to be conducted every third year. SCE s ESA and CARE Programs are funded at levels that signficantly exceed the 1 authorized levels. SCE describes in Exhibits SCE-0 and SCE-0 how it has incorporated findings from the 01 Low Income Needs Assessment into its upcoming program designs for the 01-01 ESA and CARE Programs. Cal. Pub. Util. Code.1 Cal. Pub. Util. Code.1 requires the Commission to establish CARE rates for electric utilities with more than 0,000 accounts, with an effective discount from 0 percent to percent from the same billed usage as non-care customers to address requirements in Cal. Pub. Util. Code, as revised in Assembly Bill (AB) enacted in 01. Income eligibility is set at 00 percent of federal poverty guidelines and eligibility for one-person households is set at the income guideline for twoperson households. The discount shall reflect charges not paid by CARE customers, including payments by customers for the California Solar Initiative or payments to the Department of Water Resources, and any discounts in the fixed charge. The Commission is to work with the IOUs in setting penetration goals, and shall authorize recovery of all administrative costs determined to be reasonable through a balancing account mechanism. The Commission shall examine methods to improve enrollment, participation, and the application process, and the IOUs shall use a joint application for CARE and the Family Energy Rate Assistance (FERA) program. The Commission is directed to work with the Low Income Oversight Board (LIOB) to meet the objectives in this section. CARE shall be made available to nonprofit group living facilities. AB, enacted in 01 established requirements for high-use CARE customers that are similar to requirements adopted by the Commission in D.1-0-0. An IOU may require proof of income eligibility for CARE customers above 00 percent to 00 percent of baseline usage and may
1 1 1 1 1 1 1 1 0 1 require such customers to participate in the ESA Program. The IOUs must require proof of income eligibility for CARE customers above 00 percent of baseline and must require such customers participate in the ESA Program. Customers above 00 percent of baseline in any given month must reduce usage below 00 percent of baseline or be removed from the rate. Customers shall not be removed from CARE if participation in the ESA Program is denied by a landlord. SCE s CARE Program as described in Exhibit SCE-0, operates within the income guidelines set forth in this statute. SCE describes extensive outreach efforts to enroll customers on the CARE rate and verify high-use customers in Exhibit SCE-0. Cal. Pub. Util. Code. Cal. Pub. Util. Code. provides the Commission shall not deny CARE eligibility for a residential user of gas or electric service who is a submetered resident of tenant served by a mastermeter customer on the basis that some residential units in the master-meter facility are not submetered. SCE accepts and processes applications from submetered tenants. SCE s recertification and verification processes for these customers is described in Exhibit SCE-0. Cal. Pub. Util. Code 0 Cal. Pub. Util. Code 0 Code directs the Commission to require IOUs to perform home weatherization services for low-income customers. Importantly, this code section states that "weatherization" may include, where feasible, attic insulation, caulking, weatherstripping, low flow showerhead, water heater blanket, door and building envelope repairs that reduce air infiltration, or other building conservation measures, energy-efficient appliances, and energy education programs determined by the Commission to be feasible. The feasibility must take into consideration for all measures both the cost-effectiveness of the measures as a whole and the policy of reducing energy-related hardships facing low-income households. In Exhibit SCE-0, SCE describes the provision of traditional weatherization measures, and an extensive range of appliances including, but not limited to HVAC and lighting,
1 1 1 1 1 1 1 1 0 1 D. SCE s ESA and CARE Proposals Fulfill Commission Policy SCE s ESA and CARE proposals detailed in Exhibits SCE-0 and SCE-0 are designed to fulfill the Legislatures s and the Commission s policies and goals for Income Qualified Programs. SCE s proposals are also compliant with all statutory and regulatory requirements. In addition to the legislative policy and guidance, SCE has identified six principles that guided the development of its ESA and CARE Program proposals. A key principle guiding the development of the ESA and CARE Programs is to make sure an appropriate balance is achieved between portfolio cost-effectiveness and the health, safety and comfort of SCE s customers. Another key consideration is to have rates that are affordable for customers and that the right measures are delivered to eligible and willing customers. 1. Balance Delivery of Cost-effective Energy Efficiency with Health, Safety and Comfort Considerations SCE has developed a balanced portfolio in 01-01 including cost effective energy efficiency measures that will save energy, reduce customer bills, and address health, safety, and comfort for customers, particularly customers in climate zones where extreme summer heat is prevalent and energy intensive cooling is essential. Resource measures include replacement of refrigerators and existing incandescent lighting. Weatherization measures assist customers to reduce heating and cooling costs, as well as address customers health, safety, and comfort by reducing air infiltration. Replacement of room and central air conditioners in extreme climate zones also address health, safety, and comfort in climate zones where cooling use is essential. The portfolio has been designed to focus on cost-effective energy savings measures, while still providing cooling measures to those regions most in need. For 01-01, the measure mix has been updated to reflect changes in the availability and cost of technologies as well as codes and standards. SCE s ESA Program measures are described in Exhibit SCE-0.. Affordable Rates for Customers A key consideration for SCE is to keep rates affordable for all customer classes, including residential low income customers eligible for the CARE Program. To make sure electricity is available at affordable rates to qualifying low income customers, the CARE rate provides at least a 0
1 1 1 1 1 1 1 1 0 1 percent discount on electricity bills. Consistent with Commission direction, SCE seeks to enroll all eligible CARE customers on the rate. Affordability also is promoted by providing measures through the ESA Program that save energy and reduce customers bills. The CARE program includes considerations so that the rate subsidy is efficiently provided to only eligible customers. For example, high-use CARE customers above 00 percent of baseline must enroll in the ESA Program to remain on the CARE rate, and eligibility verification has been improved to be more effective in removing ineligible customers from the CARE rate.. EE Measures for Eligible & Willing Customers SCE is currently on track to meet the Comission s ESA goal of treating all eligible and willing customers by 00, and SCE s 01-01 proposed ESA budget and approach will continue the program toward that goal. SCE has developed partnerships with CBOs, private contractors, other utilities and agencies to promote installation of EE measures to all eligible and willing customers. SCE continues to implement efficiency improvements, as well as to improve leveraging with other utilities and agencies to maximize the opportunity to provide customers with measures. In Exhibit SCE-0 SCE proposes policy revisions, based on experience gained in delivering the program, that will help deliver maximum benefits to eligible customers. These proposals address barriers to participation and also include solutions to respond to the clear fact that the number of untreated homes is declining.. Compliance with Commission Directives and Policy Guidance SCE s proposals described in Exhibits SCE-01, SCE-0, and SCE-0 comply with Commission directives and guidance provided most recently in D.1-0-00 in areas such as cost effectiveness analysis and service to multifamily tenants and property owners. Substantial guidance also has been provided in D.1-0-0, and D.0--01. For example, in D.1-0-0 the Commission established a policy to address verification of high-use CARE customers to maintain the integrity of the CARE Program.In D.0--01 the Commission adopted homes treated goals in order to facilitate There are also numerous prior Commission decisions, resolutions, and rulings that SCE has incorporated into its ESA and CARE Programs.
1 1 1 1 1 1 1 1 0 1 offering all eligible and willing customers the opportunity to participate in the ESA Program and receive all feasible measures by 00. Given the extensive Legislative and Commission guidance and requirements, SCE recommends that the Energy Division in conjunction with the IOUs develop a policy manual to be adopted by the Commission that for the ESA Program would guide policy in place of numerous sequential decisions that, at times, conflict with prior directives. This is a best practice that is used by the Commission for complex programs such as the California Solar Initiative. Absent the development of a separate policy manual, enhancing the Statewide Energy Savings and Assistance Program Policy and Procedures Manual, that currently has a stronger focus on field operations to address policy issues not covered in that manual, would be a reasonable alternative.. Program Design That Aligns with Customers Needs and Wants Programs such as ESA and CARE will only be successful if customers understand their value and the Programs address real customer needs. SCE s CARE program is successful because it provides an easily understood benefit to customers most in need of affordable electricity. SCE s ESA Program has achieved significant success in delivering useful energy-saving measures to customers along with information that can assist them in making decisions that will help reduce their energy bills. SCE will continue to leverage new technologies, including introduction of light-emitting diodes (LEDs) for incandescent bulb replacmeents as described in Exhibit SCE-0. SCE proposes policy modifications and measure adjustments that will enhance customer acceptance and participation in the ESA program, and prevent inadvertent denial of feasible measures to customers based on existing policies.. Maintain Operational Flexibility to Achieve Commission Requirements in a Cost- Efficient Manner SCE has an obligation to deliver the ESA and CARE Programs to customers most in need as comprehensively and efficiently as possible. SCE s proposals described in Exhibits SCE-01, SCE- 0, and SCE-0 are designed to achieve energy and bill savings with this goal in mind. SCE has considered many recommendations that have been made by parties in prior low income program
proceedings and within studies conducted in the most recent program cycle. SCE s proposals for ESA and CARE incorporate recommendations that can enhance cost effective service delivery, increase value to customers, and minimize administrative costs that increase costs borne by non-participating ratepayers while provide little or no value to participating customers. An example of bringing increased efficiency and better service through the ESA Program is SCE s planned enhancements to the Schedule Manager and Routing Tool (SMART) that will provide appointment reminders and scheduling options to minimize missed appointments. SCE s SMART enhancements are described in Exhibit SCE-0 and will provide increased convenience and value to customers.
1 II. SUMMARY AND OVERVIEW OF THE ESA AND CARE PROGRAMS AND BUDGETS PROPOSAL FOR THE 01-01 PROGRAM YEARS In the Summary and Overview sections of the applications, the investor-owned utilities (IOUs) must provide a brief descriptive introduction of the ESA and CARE Programs and a summary of the utility s requests, including proposals and budgets associated with the 01-01 cycle applications and an overview of the service area. The IOUs may also include any further information that is relevant for consideration in their respective budget applications. The framework and guidelines outlined below must be followed as closely as possible to allow for ease of application review and analysis. SCE s application and supporting testimony address several policy considerations that are addressed in greater detail in Chapter I of this Exhibit. 1 1 1 1 1 1 1 0 Balance delivery of cost-effective energy efficiency with health, safety, and comfort considerations; Affordable rates for customers; Energy efficiency measures for eligible and willing customers; Compliance with Commission directives and policy guidance; Design programs that align with customers needs and wants; and Maintain operational flexibility to achieve Commission requirements in a cost-efficient manner. 1 SCE and its ESA service providers have over 0 years of experience in delivering energy efficiency to low income customers along with innovations in the delivery of cooling measures and lighting that has resulted in energy and bill savings to participating customers. SCE s systems and policies encourage awareness, enrollment, and ongoing participation in CARE for eligible customers most in need of affordable electric bills. SCE proposes to continue the ESA Program in 01 with the same measure mix as authorized in D.1-0-0. Maintaining the same measure mix in 01 is consistent with Commission direction provided for the 01 bridge period in D.1-0-00. In 01-01, SCE is introducing new measures to increase cost effectiveness and benefits to customers. SCE proposes a homes treated goal for 01-01
1 1 1 1 1 1 1 1 0 1 that will enable SCE to maintain a steady pace and a stable ESA workforce to achieving the Commission s Programmatic Initiative to offer the ESA program to all willing customers by 00. SCE s first priority is to offer the program to dwellings that have not been treated. However, while attempting to enroll these customers, SCE has found nearly one-third have already participated in the program. For 01-01, SCE proposes that homes that have received prior services through ESA be assessed for additional feasible measures. In Exhibit SCE-0, SCE describes a new approach for delivering services to multi-family properties that leverages on the provision of a single point of contact to present the full array of ESA and energy efficiency offerings to property owners and tenants, and responds to guidance received from the Commission in D.1-0-00. SCE proposes elimination of the modified Three Measure Minimum Rule to enable all income-eligible enrolled customers to receive easy-to-install measures, such as LED lamps, during the initial assessment. SCE also proposes to augment energy education to increase awareness of the California drought and opportunities to reduce water usage. SCE will continue activities toward maintaining high CARE penetration while seeking to make sure participants are eligible for the program in a manner consistent with direction provided in D.1-0- 0 and D.1-0-00. In addition to continuing the high-use verification activities ordered in D.1-0- 0, SCE proposes to minimize attrition by allowing SCE s Call Center representatives to help CARE customers re-certify eligibility over the phone when the customer contacts the Call Center for another matter. SCE describes efforts to leverage outreach with mobile Lifeline customers in Exhibit SCE-0, and will be incorporating Cool Centers as part of its CARE program budget in 01 01. SCE also includes funding for CHANGES in 01 01, subject to a favorable evaluation of the program, and Commission direction to continue the program. The costs for the ESA and CARE Programs are provided in Table II-1 (ESA) and Table II- (CARE) below. These costs form the basis of SCE s cost recovery and ratemaking proposal described in Chapter III of this Exhibit. 1
Table II-1 01-01 Requested Program Funding for Energy Saving Assistance Programs ($000) Table II- 01-01 Requested Program Funding for CARE Administration ($000) Line No Description Authorized Forecast 01 01 01 01 1 Outreach $,1 $,000 $,000 $,000 Processing, Certification, Recertification $ $ 0 $ 0 $ 0 Post Enrollment Verification $ 1, $ 1,0 $ 1,0 $ 1,0 IT Programming $ 1,000 $ 00 $ 1,00 $ 1,00 Cool Centers $ - $ $ 1 $ 1 CHANGES $ 1 $ 0 $ $ Measurement and Evaluation $ 0 $ 0 $ 0 $ 0 Regulatory Compliance $ $ 0 $ 0 $ General Administration $ $ $ $ 0 CPUC Energy Division $ $ $ $ Total $,00 $,0 $,1 $,1 1
III. COST RECOVERY AND RATEMAKING PROPOSAL 1 1 A. Overview In this Application, SCE requests funding for the ESA Program and CARE administration expenses, which now include cool center-related expenses, for the 01-01 program cycle. As shown in Table III- below, during the 01-01 program cycle, SCE is requesting $0.00 million to fund its ESA Program and $. million to fund its CARE administration costs, including cool center program activities, for a total 01 01 program cycle proposed revenue requirement in this Application, including Franchise Fees and Uncollectibles expense (FF&U), of $. million. The revenue requirement impact of SCE s funding request in this Application is a net decrease of $1. million from the ESA and CARE administration amounts authorized in D.1-0-0 and D.1-0-00 for the 01-01 program cycle. Customers will see an annual average program cycle decrease of $.1 million per year, as shown below in Table III-. D.1-0-00 revised the authorized amounts for CARE administration expenses for the 01-01 program cycle. 1
Table III- 01-01 Requested Program Funding for Energy Saving Assistance Programs and CARE Administration ($000) 01-01 01 01 01 Total for Program Cycle 01-01 Program Cycle D.1-0-0 & As Proposed in Program Proposed D.1-0-00 Application 1--XXX Cycle Changes (1) () () () () = + + () = - 1 Average Annual Program Cycle Change 1. Total ESA Budget Funding Amount 1,,0,,0 0,00 (1,) (,). Total CARE Administrative Budget Funding Amount 0,,0,1,1,, 1,1 including Cool Centers. Total ESA & CARE Authorized/Requested Budgets,1, 0,1 0,, (1,) (,). Franchise Fees & Uncollectibles (FF&U) 1/, 1, () (). Total Authorized/Requested Revenue Requirement 1,00, 1, 1,, (1,) (,1) 1/ Current FF&U authorized in SCE's 01 GRC (D.1--01); to be updated with the authorized FF&U rate in SCE's 01 GRC Commission decision. 1 1 1 1 1 As shown on Table III- above, assuming the Commission adopts SCE s 01 ESA funding request of $.0 million in this Application, SCE will include in its Public Purpose Programs revenue requirement and Public Purpose Programs Charge (PPPC) rate levels $. million (including FF&U) in 01. This represents an increase of $.0 million from the 01 ESA authorized revenue requirement of $. million currently in rate levels as authorized in D.1-0-0. In addition, assuming the Commission adopts SCE s 01 CARE administration funding request of $. million in this Application, SCE will include in its Public Purpose Programs revenue requirement and PPPC rate levels, $. million (including FF&U) in 01. This represents an increase of $0. million from the 01 revenue requirement of $.0 million in CARE administration funding as authorized in D.1-0-00, and includes $, in cool center program funding currently in rate levels as authorized in D.1-0-0. B. ESA and CARE Administration Ratemaking Treatment SCE currently recovers its authorized ESA, CARE Administration, and cool center-related revenue requirements through the operation of the Public Purpose Programs Adjustment Mechanism (PPPAM). SCE proposes no change to the currently-approved ESA ratemaking as previously 1
1 1 1 1 1 1 1 1 0 1 authorized. SCE s current ratemaking associated with its ESA Program includes: 1) the recovery of the Commission-authorized ESA revenue requirement through the operation of the PPPAM, and ) the comparison of the authorized ESA revenue requirements with actually incurred ESA expenses in the Energy Savings Assistance Program Adjustment Mechanism (ESAPAM). In addition, SCE proposes no change to the currently-approved CARE Balancing Account (CBA) ratemaking as previously authorized. SCE s operation of the CBA currently accounts for: (1) the difference between CARE discounts provided to CARE-eligible customers and CARE surcharges billed to non-care customers; () the difference between the authorized CARE and Family Electric Rate Assistance (FERA) administrative costs which, beginning in 01, includes the cool center program-related expenses, and actual incurred CARE and FERA administrative expenses; () recorded costs associated with the CARE automatic enrollment program; and () recorded costs associated with the Energy Division s audit of the CBA. SCE currently recovers the CARE administration revenue requirements and the cool centers revenue requirements through the PPPC. Pursuant to D.0-1-0, SCE transfers the December 1 st balance recorded in the CBA to the PPPAM. Therefore, annually SCE either returns to or recovers from customers the over/under-collected CBA balance through the operation of the PPPAM. In this Application, SCE proposes to include cool center program expenses during the 01-01 program cycle in the CARE administration funding request. The cool center program costs may be reviewed by the Commission, along with all entries recorded in the PPPAM and CBA, in SCE s annual April 1 Energy Resource Recovery Account (ERRA) Review application. The year-end PPPAM and CBA balances are currently consolidated in SCE s PPPC revenue requirement and included in PPPC rate levels in the subsequent year through SCE s annual ERRA Forecast proceeding. In SCE s annual January 1 rate consolidation advice letter, SCE sets forth its See D.0-0-0, D.0-1-0, D.0-1-0, D.0--01, and D.1-0-0. See D.0-0-0, D.0-1-0, D.0-1-0, D.0--01, D.1-0-0, and D.1-0-00. 1
1 1 1 1 1 1 1 1 0 1 related revenue requirement for that year. Currently, SCE has proposed to include the balances in the PPPAM and CBA in rates through its January 1 consolidated revenue requirement change, and not as part of the ERRA Forecast proceeding revenue requirement. If SCE s proposal is adopted by the Commission, SCE will begin to include the PPPAM and CBA balances in rates on January 1 of each year. 1. Treatment of Prior ESA Program Cycle Unspent and Uncommitted Funds SCE will file a Tier Advice Letter in November 01 setting forth its proposal to return to customers on January 1, 01, unspent and uncommitted funds (currently estimated to be approximately $ million) from prior ESA Program cycles.. Proposed Treatment of Annual ESA Unspent and Uncommitted Funds For This Cycle SCE proposes to file an annual advice letter in the fourth quarter of each year that will identify the estimated amount of unspent and uncommitted authorized funds (if any) related to the ESA Program during the current year, and request authority to use 0 percent of those unspent and uncommitted ESA funds as a source to reduce the ESA revenue requirement to be collected in rate levels in the following year, subject to applicable fund shifting rules. The remaining percent of those unspent and uncommitted ESA Program funds will be used as a source of funds for that year s final true-up and any remaining unspent or uncommitted funds will be rolled over into the following year s advice letter. SCE requests Commission approval in this Application of this annual advice letter process to serve as the appropriate procedural vehicle to return to customers any current year ESA unspent and uncommitted funds, thus reducing the ESA revenue requirement included in the PPPC rate level in the subsequent year. See SCE s proposal in its ERRA Forecast proceeding, A.1-0-0, Exhibit SCE-1, Ch. I, p., and Ch. VII, pp. 0-1. 1
1 1 1 1 1 1 1 C. Revenue Requirement and Rate Impacts SCE s ESA Program will require $0.00 million in budget funding for the 01-01 program cycle, as described in earlier chapters of this exhibit. This request represents budget funding of $.00 million in 01, $. million in 01, and $.0 million in 01. Based on the 01-01 program cycle annual average amount, this request is a decrease of $. million from SCE s 01-01 authorized program cycle annual average amount (or $. million including FF&U). The administration of SCE s CARE program, including cool center-related costs, in the 01-01 program cycle will require $. million in budget funding. This request represents budget funding of $. million in 01, $.1 million in 01, and $.1 million in 01. Based on the 01-01 program cycle annual average amount, this request is an increase of $1.1 million from SCE s 01-01 authorized CARE program cycle annual average amount (or $1.1 million including FF&U). Based on the 01-01 program cycle annual average amount for both the ESA and CARE administration programs, SCE s request in this Application is a decrease of $.1 million from SCE s 01-01 authorized program cycle annual average amount. Table III- below presents the impact of the 01 revenue change by customer group related to the ESA and CARE program funding request in this Application. This results in a 0.0% decrease in bundled service customers average rates from the rates that are in effect today. Table III- Energy Savings Assistance and CARE Administration System Bundled Customer Group Current Revenues ($000) ESA and CARE Change ($000) % Change Current Rates ( /kwh) 01 ESA and CARE Rates ( /kwh) Residential,,1-1, -0.0% 1.0 1.0 Lighting - Small and Medium Power,,1-1,00-0.0% 1.1 1.1 Large Power,1, - -0.0% 1.0 1.0 Agricultural and Pumping,1-1 -0.0% 1. 1. Street and Area Lighting 1, - -0.0% 1. 1. Standby,1 - -0.01%.. Total 1,0,1 -,1-0.0% 1. 1. 1
1 1 1 1 1 1 1 1 0 1 SCE estimates the value of the CARE rate discount to participating customers at $ million in 01, $ million in 01, and $ million in 01. SCE will implement the revenue requirement changes in rate levels at the time of the next regularly scheduled rate change after the Commission renders a decision in this Application. This rate change may also include the true-up for any over- or under-collection that may accrue in the PPPAM due to the time lag between the date the Commission authorizes the 01 ESA and CARE administration revenue requirements and the date SCE implements these revenue requirements in rate levels. D. Cost Recovery Conclusion SCE requests approval of its 01, 01, and 01 program budgets, plans and ratemaking for the Energy Savings Assistance Program and CARE administration expenses, which includes cool center program-related expenses. Specifically, SCE requests: 1. Approval of $.0 million in 01, $. million in 01, and $.0 million in 01 for the Energy Savings Assistance Programs, for a total of $0.00 million for the ESA programs budget for the 01-01 program cycle;. Approval of $. million in 01, $.1 million in 01, and $.1 million in 01 for the CARE program administration, which include the cool center-related expenses, for a total of $. million for the CARE administration budget for the 01-01 program cycle;. Continuation of the currently approved ratemaking procedures for the recovery of the Commission authorized ESA and CARE revenue requirements through the operation of the PPPAM and the PPPC; and. Commission authorization to file an annual advice letter in the fourth quarter of each year that will identify, if any, the amount of unspent and uncommitted authorized funds related to the ESA programs during the current year, and to use those unspent and uncommitted ESA funds as a source to reduce the ESA authorized revenue requirement collected in rate levels in the following year. 1
IV. CONCLUSION 1 1 A. Summary Request Summarize your utility s requests seeking the Commission s approval as part of the CARE and ESA Programs and budgets for the 01, 01, and 01 PYs. SCE s application for continuation of the ESA and CARE programs in 01-01 is supported by the policies addressed in this exhibit. SCE supports its proposed ratemaking treatment for the ESA and CARE programs in 01-01 in Chapter III of this exhibit, and provides additional support for its 01-01 ESA and CARE funding requests in Exhibits SCE-0 and SCE- 0, respectively. SCE also requests approval of its 01-01 program plans, budgets, and policy revisions for the ESA and CARE programs, as set forth herein before. 1. ESA Program Request Summary SCE seeks approval of the following specific ESA-related requests: 1 1 1 1 Proposed modifications to eligible measures and program policies; Addition of efficient fan controls for central air conditioners as a new measure and installation criteria; Replacement of refrigerators and second refrigerators that are at least 1 years old; 1 Retirement of spiral CFLs in favor of LED A-Lamps beginning in 01; 1 0 1 Addition of LED Reflector Downlights as a new measure; Addition of thermostatically controlled shower valves as a new measure; Approval of SCE s Multifamily Implementation Strategy; Authorization to treat,000 homes in 01 and,000 homes in 01 and 01; Development of a policy manual for the ESA program; Authorization to propose new measures and identify funding mid-cycle through the Advice Letter process; 0
Elimination of the Modified -Measure Minimum Rule to allow installation of easyto-install measures, and provision of energy education for all customers determined to be income eligible at time of enrollment; Elimination in 01-01 of the required property owner $00 co-payment for installation of central air conditioners and heat pumps in renter-occupied units; Provision of energy education to all income eligible customers at time of enrollment; and Authorization to install additional measures in homes that have been previously treated through the ESA Program. CARE Program Request Summary SCE seeks approval of the following specific CARE-related requests: 1 1 1 1 1 1 1 1 0 1 Implement requested enhancements to the CARE High Usage and Appeals process; Leverage Enrollments with California Lifeline Program; Leverage CARE communications with customers as a way to obtain customer information necessary to maintain compliance with state and federal telephone and electronic communication laws and maintain appropriate consumer protections; Create an SCE.com Verification Portal webpage; Provide an e-mail option for CARE letter reprints or as a follow up to a paper request; Conduct focus groups to better understand why customers do not initially reply to recertification and PEV requests; Partner directly with the.org to leverage CARE awareness; Allow customer service representatives to recertify customers over the phone; Provide customized usage reports to CARE customers with high usage; Approve SCE's modified Cool Center approach; Remove cool centers exemption from rotating outages; and Extend the due date from December 1 to February 1 of the following year for the annual CARE eligibility estimates filing. 1
B. Bridge Funding Estimates Provide your utility s potential bridge funding estimates for your utility s ESA and CARE Programs, in the event that a decision on the applications for the 01-01 ESA and CARE Programs is not adopted before January 1, 01. Provide your utility s bridge funding estimates for a delay of months, months, months and 1 months for both the CARE and ESA Programs to continue without disruption. As D.1-0-00 adopted 01 bridge funding for the ESA and CARE Programs, this section is no longer applicable.
Appendix A Witness Qualifications
1 1 1 1 1 1 1 1 0 1 SOUTHERN CALIFORNIA EDISON COMPANY QUALIFICATIONS AND PREPARED TESTIMONY OF JO ANNE ALDRICH Q. Please state your name and business address for the record. A. My name is JoAnne Aldrich, and my business address is 1 Rush Street, Rosemead, California. Q. Briefly describe your present responsibilities at the Southern California Edison Company. A. I am currently the Manager of Revenue Forecasts and Balancing Accounts in SCE s Regulatory Operations Department. I am responsible for forecasts of authorized revenues for recovery in rate levels and oversee the operation of the balancing and memorandum accounts, as well as the Energy Resource Recovery Account (ERRA) Review and Forecast of Operations annual applications. Q. Briefly describe your educational and professional background. A. I earned a Bachelor of Science degree in Business Administration from California State University at Los Angeles. I have been employed by Southern California Edison Company since 1 performing various responsibilities in numerous positions throughout the company. I transferred to my current management position in 00. I have previously testified before the California Public Utilities Commission. Q. What is the purpose of your testimony in this proceeding? A. The purpose of my testimony in this proceeding is to sponsor portions of Southern California Edison Company s (U -E) Testimony in Support of its Application for Approval of its Energy Savings Assistance (ESA) and California Alternate Rates for Energy (CARE) Programs and Budgets for Program Years 01-01, preliminary marked as Exhibit SCE-01, titled Policy Considerations for Southern California Edison Company s 01-01 Low Income Programs & Ratemaking Proposal, as identified in the Table of Contents thereto. Q. Was this material prepared by you or under your supervision? A. Yes, it was. A-1
Q. Insofar as this material is factual in nature, do you believe it to be correct? A. Yes, I do. Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best judgment? A. Yes, it does. Q. Does this conclude your qualifications and prepared testimony? A. Yes, it does. A-
1 1 1 1 1 1 1 1 0 1 SOUTHERN CALIFORNIA EDISON COMPANY QUALIFICATIONS AND PREPARED TESTIMONY OF MARK WALLENROD Q. Please state your name and business address for the record. A. My name is Mark Wallenrod, and my business address is Walnut Grove Avenue, Rosemead, California. Q. Briefly describe your present responsibilities at the Southern California Edison Company. A. I am currently the Director of Demand Side Management (DSM) Program Operations in SCE s Customer Service organization. In this capacity, I am responsible for managing SCE s portfolio of energy efficiency, demand response, distributed generation, and income qualified programs. Q. Briefly describe your educational and professional background. A. I received a Master of Science degree in Energy Management and Policy from the University of Pennsylvania in Philadelphia, PA. In fulfillment of this degree, I completed coursework at the Wharton School, Moore School of Engineering, and School of Public and Urban Policy. I received a Bachelor of Science degree from Dickinson College in Carlisle, PA. I have been with SCE for 0 years and have worked in various analytical, supervisory, and management positions in the Regulatory Policy and Affairs, Research, and Customer Service Departments. I have previously testified before the California Public Utilities Commission. Q. What is the purpose of your testimony in this proceeding? A. The purpose of my testimony in this proceeding is to sponsor portions of Southern California Edison Company s (U -E) Testimony in Support of its Application for Approval of its Energy Savings Assistance (ESA) and California Alternate Rates for Energy (CARE) Programs and Budgets for Program Years 01-01, preliminary marked as Exhibit SCE-01, titled Policy Considerations for Southern California Edison Company s 01-01 Low Income Programs & Ratemaking Proposal, as identified in the Table of Contents thereto. Q. Was this material prepared by you or under your supervision? A. Yes, it was. A-
Q. Insofar as this material is factual in nature, do you believe it to be correct? A. Yes, I do. Q. Insofar as this material is in the nature of opinion or judgment, does it represent your best judgment? A. Yes, it does. Q. Does this conclude your qualifications and prepared testimony? A. Yes, it does. A-