BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 1207|
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THIRD READING
Bill No: SB 1207
Author: Fuller (R)
Amended: 5/25/12
Vote: 21
SENATE ENERGY, UTIL. & COMMUNIC. COMM. : 12-0, 4/24/12
AYES: Padilla, Fuller, Berryhill, Corbett, De Le�n,
DeSaulnier, Emmerson, Kehoe, Pavley, Rubio, Simitian,
Wright
NO VOTE RECORDED: Strickland
SENATE APPROPRIATIONS COMMITTEE : 7-0, 5/24/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
SUBJECT : California Alternate Rates for Energy program
SOURCE : Author
DIGEST : This bill authorizes investor owned utilities
(IOUs) to take certain actions on participants of the
California Alternative Rates for Energy (CARE) program
whose usage exceeds 400% and 600% of the baseline in any
monthly billing cycle including requesting proof of income
eligibility for the program, conducting a residential
energy audit, and requiring participation in an energy
savings assistance program. This bill requires procedures
by electrical or gas corporations to be consistent with
procedures adopted by the Public Utilities Commission
(PUC).
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ANALYSIS : Existing law requires the PUC to establish the
CARE program which provides a discount for electric and gas
service for customers whose incomes are below 200 percent
of the federal poverty guideline levels and limits the rate
structure for CARE customers to no more than three tiers.
The commission is required to set penetration rates for the
IOUs and examine methods to improve enrollment and
participation.
Existing 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
three percent annually, and thereafter requires that CARE
customers receive at least a 20 percent rate discount for
service.
This bill authorizes IOUs, for CARE customers whose usage
exceeds 400 percent of baseline in any monthly billing
cycle, to require:
Proof of eligibility regardless of whether the customer
was automatically enrolled based on eligibility for
another assistance program or was self-enrolled;
A residential energy audit and condition continued
enrollment on participation in the audit; and
If the customer rents, to notify the utility of the
landlord's identity.
This bill authorizes IOUs, for CARE customers whose usage
exceeds 600 percent of baseline for 120 days, to remove
CARE customers from the program.
This bill requires CARE customers whose usage exceeds 600
percent of baseline for an unspecified time frame, to
participate in a residential energy audit, conditions
further participation in the program on the audit, and
requires the customer to lower usage within 120 days of an
audit or be terminated from the program.
This bill authorizes an IOU to require back payment from a
CARE customer who is later determined to be ineligible for
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the program for the difference between the cost of service
with the CARE discount and service for non-CARE customers.
This bill requires IOUs to immediately terminate a CARE
customer from the program for two years if they are found
to have defrauded the utility in any program or tampered
with the utility meter.
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 percent 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 as follows:
------------------------------
| Household | Care Income |
| Size | Limit |
|-------------+----------------|
| 1 to 2 | $31,800 |
|-------------+----------------|
| 3 | $37,400 |
|-------------+----------------|
| 4 | $45,100 |
|-------------+----------------|
| 5 | $52,800 |
|-------------+----------------|
| 6 | $60,500 |
|-------------+----------------|
| Each |$7,700 |
| additional | |
------------------------------
Customers can enroll by self-certifying eligibility through
an IOU website, mail, or over the phone. Automatic
enrollment occurs if the customer is already enrolled in
one of several means-tested state or federal assistance
programs such as Temporary Assistance for Needy Families,
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MediCal or Medicaid. Community based organizations are
also paid capitation fees of up to $15 per enrollment. The
IOUs conduct a post enrollment verification process (PEV)
for 1-5 percent of the enrolled CARE customers. Selection
of those PEV'd are either random for some IOUs, or based on
a computer stratified selection model that targets certain
customers. 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.
The PUC directed the IOUs to achieve a 90 percent
penetration rate for participation of eligible customers in
the CARE program, which is approximately 4.9 million
households. According to the PUC CARE penetration rates
are:
-------------------------------------------------------------------------------------------------------
|IOU | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | *2011 |
-------------------------------------------------------------------------------------------------------
|--------+------+------+-----+------+----+-----+-----|
|PGE | 68% | 74% | 69% | 74% |86% | 93% | 90% |
|--------+------+------+-----+------+----+-----+-----|
|SCE | 73% | 78% | 75% | 83% |89% | 97% | 99% |
|--------+------+------+-----+------+----+-----+-----|
|SDGE | 61% | 65% | 69% | 74% |80% | 83% | 85% |
|--------+------+------+-----+------+----+-----+-----|
|SoCalGas| 67% | 73% | 75% | 84% |88% | 93% |93% |
| | | | | | | | |
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* 2011 figures are based on IOU December 2011 monthly
reports and have yet to be finalized.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, potential
one-time costs of $150,000 from the Public Utilities
Commission Utilities Reimbursement Account (special fund)
in 2013-14 for a proceeding.
SUPPORT : (Verified 5/24/12)
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California Chamber of Commerce
County of Humboldt
Division of Ratepayer Advocates
Greenlining Institute (if amended)
League of California Cities
Pacific Gas and Electric Company
San Diego Gas & Electric Company
Sempra Energy Utilities
Southern California Edison (if amended)
Southern California Gas Company
TURN (The Utility Reform Network) (if amended)
RM:nl 5/25/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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