BILL ANALYSIS �
AB 922
Page 1
Date of Hearing: May 24, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 922 (Patterson) - As Amended: May 8, 2013
Policy Committee: Utilities and
Commerce Vote: 15-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY This bill requires the California Public Utilities
Commission (PUC) to authorize an electrical or gas corporation
to verify, by the submission of proof of income, the continuing
eligibility of a participant in the California Alternative Rates
for Energy (CARE) program regardless of the means by which the
participant was first enrolled into the program. This bill also
prohibits the PUC from establishing penetration goals.
FISCAL EFFECT
Increased costs to the PUC of over $150,000 to fulfill the
required post-enrollment verification.
COMMENTS
1)Purpose . According to the author, California ratepayers spent
$1.3 billion in 2012 to provide subsidies to CARE enrollees in
2012. PG&E's random audits of a sample of CARE enrollees in
2010 led to the subsequent disenrollment for ineligibility of
56.41% of those audited. In 2012, 68.27% of those audited
were dropped for ineligibility. The other investor owned
utilities have had similarly high results in 2012 ranging from
39 to 49% of those audited being dropped.
This bill is intended verify ratepayers are not overpaying for
these subsidies, and that those individuals and families who
are truly in need are the ones being served.
2)Background. The CARE program is a low-income energy rate
assistance program that
dates back to 1980s and is aimed at providing eligible
low-income households a 20% discount on their electric and
AB 922
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natural gas bills. The program is funded by non-participating
ratepayers as part of a statutory public purpose program
surcharge that appears on their monthly utility bills. Over
the years, CARE has delivered much-needed energy-related bill
savings through the CARE discount rate to a significant number
of low income households.
Eligibility for the CARE discount is based on the number of
persons living in the home and total annual household income.
Current enrollment practices rely on customer self-reporting
of income or self-reporting of enrollment by virtue of another
low-income public benefits program such as Temporary
Assistance for Needy Families, Medi-Cal or Medicaid.
Over the past three years, the investor-owned utilities spent a
combined total of $3.3 billion in CARE discounts.
3)PUC Decision 12-08-044. In 2012, the PUC issues a decision
awarding approximately $5 billion to continue low-income
programs. The PUC found the CARE program had a high
attrition rate and that the program may need to be modified to
ensure the discount rates are not unlawfully diverted to
ineligible customers.
During the proceeding, the PUC considered removing the 90%
penetration goal but received objection from consumer advocate
groups concerned that investor-owned utilities would reduce
marketing efforts to low-income customers without the goal.
Analysis Prepared by : Jennifer Galehouse / APPR. / (916)
319-2081