BILL ANALYSIS �
SB 1207
Page 1
Date of Hearing: August 8, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1207 (Fuller) - As Amended: May 25, 2012
Policy Committee:
UtilitiesVote:12-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill authorizes Investor Owned Utilities (IOUs) to take
certain actions regarding participants in the California
Alternative Rates for Energy (CARE) program whose usage exceeds
400% or 600% of baseline in any monthly billing cycle.
Specifically, this bill:
1)Authorizes IOUs to undertake the following, pursuant to
procedures adopted by the Public Utilities Commission (PUC),
with respect to CARE customers whose usage exceeds 400% of
baseline.
a) Require proof of income eligibility.
b) Require participation in an energy savings assistance
program that includes a residential energy audit, and
condition continued enrollment in CARE on this
participation.
c) Require notification as to whether the residence is
rented and identify the landlord. The IOU may share any
evaluation and recommendation relative to the residential
structure that is made as part of an energy audit with the
landlord of the CARE customer.
2)Requires IOUs to implement (1)(b) and (1)(c) above for CARE
customer whose usage exceeds 600% of baseline.
3)Authorizes IOUs, pursuant to procedures adopted by the PUC, to
remove the CARE customer from the program if, after the
completion of a residential energy audit, the customer's
SB 1207
Page 2
monthly usage continues to exceed 600% of baseline.
FISCAL EFFECT
One-time special fund costs of about $150,000 for one position
to reopen the current 2012-2014 CARE and Energy Savings
Assistance Program proceeding in order to specifically address
provisions in this bill relating to gas corporations and
landlords, �Public Utilities Reimbursement Account].
COMMENTS
1)Purpose . According to the author, "SB 1207 seeks to reduce
the amount of costs that are shifted to non-CARE customers by
reducing the fraud within the program and providing incentives
to CARE customers to conserve. It maintains the essence of
the CARE program for those low-income individuals who are
legitimately qualified for the program and provides the
utilities with a tool to recognize and identify high energy
users who may need energy efficiency assistance."
2)CARE program offers income-qualified customers a discount of
20% or more off their monthly gas and electric bill at their
primary residence. The program is fully funded by a surcharge
paid by non-CARE customers. Qualifications for the discount
are based on household size and annual income. Utility
customers can enroll by self-certifying through the utility's
website, mail, or over the telephone. Customers may be
automatically enrolled in CARE if they are enrolled in a
public assistance program such as Medicaid, Medi-Cal, or
Temporary Assistance for Needy Families (TANF).
Due to the large number of CARE customers, the IOUs conduct
post-enrollment verification (PEV) annually for one to five
percent of the enrolled CARE customers. These customers are
selected either randomly or based on a computer-stratified
selection model that targets certain customers. In some
cases, nearly half of customers fail to respond to the PEV in
a timely basis, which ultimately results in their termination
from the CARE program.
In 2011, PG&E conducted PEV on 161,000 (11%) of CARE
customers. According to their data, about 42% of customers who
go through the PEV process are removed from CARE. Reasons for
termination range from documentation showing they are
SB 1207
Page 3
ineligible, requests to be removed instead of providing
qualifying documentation, and failure to respond. The IOUs
and other stakeholders presented evidence in the 2012-2014
CARE Budget Applications proceeding suggesting that a small
percentage of customers may be consuming large amounts of
energy under the CARE rate for illegitimate reasons. A PUC
Proposed Decision, issued on May 4, 2012, orders IOUs to
implement program changes that are similar to those contained
in this bill.
Analysis Prepared by : Israel Salas / Chuck Nicol / APPR. /
(916) 319-2081