BILL ANALYSIS Ó 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 922 - Patterson Hearing Date:
July 2, 2013 A
As Amended: May 24, 2013 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities Commission
(CPUC) to establish the California Alternate Rates for Energy
(CARE) program which provides a discount for electric and gas
service for customers whose incomes are below 200% of the
federal poverty guideline levels and limits the rate structure
for CARE customers to no more than three tiers. The CPUC is
required to set penetration rates for the electrical or gas
corporation (IOUs) and examine methods to improve enrollment and
participation.
Current law limits rate increases for CARE customers, until
January 1, 2019, to no more than the annual percentage increase
in the CalWORKS program, not to exceed 3% annually, and
thereafter requires that CARE customers receive at least a 20%
rate discount for service.
Current law and decisions of the CPUC require CARE electric
customers with electric usage at 400%-600% of baseline in any
monthly billing cycle to undergo post enrollment verification
and, if not previously enrolled in the program, apply for the
energy efficiency assistance program within 45 days of notice.
This bill requires the CPUC to authorize an IOU to verify, by
the submission of proof of income, the continuing eligibility of
a participant in the CARE program regardless of the means by
which the participant was first enrolled into the CARE program.
BACKGROUND
California Alternate Rates for Energy (CARE) - The CARE program
was designed to provide a 20 percent discount on monthly gas and
electric bills to income-qualified customers at their primary
residence and is funded through a rate surcharge paid by all
other utility customers. The income cap on CARE eligibility is
up to 200% above Federal Poverty Guidelines, which are updated
annually in June. Income guidelines are determined by the total
number of persons in the household and total combined annual
income. The program limits for June 1, 2013 through May 31,
2014 are:
--------------------------------
| Household | Care Income |
| Size | Limit |
|--------------+-----------------|
| 1 | $22,980 |
|--------------+-----------------|
| 2 | $31,020 |
|--------------+-----------------|
| 3 | $39,060 |
|--------------+-----------------|
| 4 | $47,100 |
|--------------+-----------------|
| 5 | $55,140 |
|--------------+-----------------|
| 6 | $63,180 |
|--------------+-----------------|
| 7 | $71,220 |
|--------------+-----------------|
| 8 | $79,260 |
|--------------+-----------------|
| Each |$8,040 |
| additional | |
--------------------------------
CARE programs are reviewed and modified by the CPUC every three
years for the subsequent three-year cycle. The CPUC completed
its last review of the program in August 2012 and at that time
approved a $3.8 billion program budget for all three IOUs for
the 2012-2014 cycle. That proceeding also called for
strengthening the IOU's Post Enrollment and Post
Re-certification Income Verification (PEV) process to ensure
that the CARE program benefits are limited to only those
eligible customers for whom it was designed.
The CARE Program provides two ways for a customer to enroll in
the program, (1) Categorical Eligibility and Enrollment process,
and (2) self-certification process. The Categorical Eligibility
and Enrollment process enables low-income customers to enroll in
the CARE Program through an expedited process such that if the
applicant is enrolled in one of the approved low-income programs
(e.g. TANF or MediCal) that has already verified the applicant's
income, then by providing such proof, they are automatically
deemed eligible for and enrolled in CARE. Similarly, the
self-certification process allows the CARE applicants to enroll
by attesting to their income eligibility. In both instances,
income verification occurs after the enrollment.
Selection of customers for income verification is based on a
computer stratified selection model that targets enrollees who
have the probability of being ineligible in the program based on
basic probability factors, inputs, populations and costs
targets. Customers who are selected for income verification
must provide proof of income if they were enrolled in CARE
through self-certification. Customers who have been income
verified by a qualifying categorical eligible low income program
may submit proof of continued enrollment in a categorical
program in response to the utility's income verification
request. If a customer fails to provide all the available
income documentation when selected for PEV, they are removed
from the CARE program, no back charges or penalties are
assessed.
COMMENTS
1. Author's Purpose . AB 922 would allow for all CARE
customers to be treated equally and potentially be subject
to post-enrollment verification regardless of how they
initially enrolled. Currently only those who are enrolled
by income self-certification can be subject to post
enrollment verification. This bill would not change how
individuals enroll in CARE; however the categorical
enrollees would be added to the pool of enrollees who could
be subject to verification post-enrollment. Currently, the
only documentation that IOU's are allowed to ask for from
categorical enrollees is a letter stating that they are in
fact enrolled in a public assistance program, however there
is no way to verify if that information is current and
accurate. In order to maintain fairness and the integrity
of the CARE program, CARE customers who enrolled
categorically should not be favored over the household
income enrollees.
2. Changing Rules Midstream . At the heart of this bill is
the author's intention to require a different verification
of income for customers enrolled in the CARE Program as a
result of eligibility in one of the approved low-income
programs (e.g. TANF or MediCal) than that required to
initially enroll. The CPUC vetted this issue in its 2012
CARE program review and ordered that CARE customers who are
categorically enrolled must only provide verification that
they are still eligible for the other low-income program.
The utility is not authorized to request income
verification through such means as tax returns. The
author's intent in this bill is to override the CPUC's
decision.
Although it may seem logical and appropriate for an
enrolled CARE customer to provide a tax return, for
example, as proof of eligibility in CARE, the CPUC long ago
established a different route to eligibility for some
customers.
The Categorical Eligibility and Enrollment Program permits
a low-income customer to be deemed income qualified and
therefore eligible for the CARE Program benefits if they
are also enrolled in one or more of a pre-approved list of
governmental low-income programs such as TANF. It assumes
that the other approved low-income assistance program has
already verified that customer's income and that the
verified income level is aligned with the CARE income
threshold of 200% of the federal poverty guidelines. In its
2012 review of the program, the CPUC recognized that many
of the programs pre-approved for categorical eligibility
have income levels, definitions of income, and other income
eligibility criteria that are not in alignment with the
CARE income threshold and initiated reviews to modify the
program which are still pending.
With this bill, the CARE enrollee would be told they are
eligible because of their concurrent eligibility in another
program, but when later asked for income verification by
the IOU would be booted out - through no fault of their own
- because the program's eligibility requirements are not
aligned. The provisions of this bill seem unfair until the
CPUC can better align the income eligibility of categorical
program and the CARE program.
ASSEMBLY VOTES
Assembly Floor (70-4)
Assembly Appropriations Committee (16-0)
Assembly Utilities and Commerce Committee
(15-0)
POSITIONS
Sponsor:
Author
Support:
None on file
Oppose:
California Public Utilities Commission
Division of Ratepayer Advocates
The Greenlining Institute
The Utility Reform Network
Kellie Smith
AB 922 Analysis
Hearing Date: July 2, 2013