LIOB Update LIEE/CARE Program

1. LIOB UpdateLIEE/CARE Program February 28, 2006 Pacific Gas and Electric Company San Diego Gas and Electric Southern California Gas Company Southern California Edison

2. LIEE

3. LIEE Program Objective Funded through a public purpose program charge levied on customers’ utility bills, the Low Income Energy Efficiency program offers energy-saving and no-cost home improvements to income-qualified residential single-family, multi-family, and mobile home customers in addition to certain non-profit group living facilities on non-residential rates.

4. History • Programs established at all utilities in the 1980’s • Original Focus for gas services – insulation  Wx measure (Big 6) • Electric services focused on lighting and cooling measures • 2001 Energy crisis led to the inclusion of electric measures • Standardization process began in 2000 • Efforts to leverage with other programs (LIHEAP) & work with CBOs

5. Legislation / Decisions • SB845 • Required all California investor owned IOUs to conduct low income energy efficiency programs. • PUC Code - Section 2790 • Requires an electrical or gas corporation to perform home weatherization services for low-income customers (Big 6) • D.00-09-036 • Beginning of LIEE Standardization • D.01-03-028 • 10 year go back rule, income documentation, initial CO testing requirements, reporting requirements manual, etc

6. Legislation / Decisions • D.01-05-033 • Rapid deployment – 2001 energy crisis, SBX 1-5 dollars made available • D.01-06-010 • Income guidelines increased from 150% to 175% and 200% • D.02-12-019 • Stay the course of RD – budgets doubled to tripled from prior base budgets, RD measures continued on a pilot basis • D.03-11-020 • NGAT adopted, new mix of measures

7. Legislation / Decisions • D.05-04-052 • Adopted PY2005 programs and budgets • D.05-10-044 • Winter Initiative – increased income guidelines for both LIEE and CARE to 200%, added measures for winter period (central forced air furnaces, leaky water heaters, refrigerator go backs) • D.05-12-026 • Adopted PY2006 programs and budgets – added new measures (duct seal and repair, central air conditioners in select climate zones), required PY2006 budget augmentation applications by 4/14/06 and PY2007-2008 program applications 7/1/06

8. Customer & Structural Eligibility Customer Outreach & Relations Pre-Installation Contacts Measures Minor Home Repair Installation P&P Inspections Contractor Eligibility Natural Gas Appliance Testing Policy & Procedures Weather Installation Standards Manual

9. Income Documentation • Income guidelines • FPG level is changed annually and provided by CPUC. • Types of income • All income is considered, including taxable and non-taxable, child support, spousal support, disability or veteran’s benefits, rental income, social security, pensions and all social welfare program benefits before any deductions are made. • Verification of income • Income documentation is reviewed, recorded, copied and stored.

10. Household Eligibility • 10 Year Go Back Rule • Space heating fuel source • Owners vs. Renters • Dwelling Type (SF, MF, MH) • Meter Type (MM, SM, and Indiv. Meter) • Need for Services (3 measure minimum, etc)

11. Attic Insulation Low Flow Showerheads Water Heater Blankets Door Weatherstripping Caulking Outlet Gaskets Faucet Aerators Pipe Wrap Evaporative Coolers Duct Testing and Sealing Refrigerator Replacement Evaporative Cooler Covers Hard-Wired Compact Fluorescent Thread-In Compact Fluorescent HE Window/Wall Air Conditioners Minor Home Repairs HE Central A/C Measures

12. NGAT • Combustion appliance testing is conducted for all homes that receive infiltration reduction measures. • Homes with non-IOU space heating are not eligible for infiltration reduction measures (exception: PG&E service area). • Complexities

13. Current State • Winter Initiatives • 200% FPG • Some customers able to self certify • Replace 65 AFUE furnaces with 80 or 92. Applicable to owners and renters • Replace leaky water heaters • 2004 P&P and WIS in effect (exception: CPUC approved new measures)

14. California Alternate Rates for Energy (CARE) ProgramReview

15. CARE Program Overview CARE Program History • D. 89-07-062 and D.89-09-044 • CARE (formerly LIRA) program was mandated by state legislation, SB 987, in 1987 and implemented in 1989 • Originally offered a 15% discount to residential customers at or below 150% of the Federal Poverty Guidelines. • D. 92-02-024; D. 94-12-047 • Program modified to provide discount to qualified group living facilities in 1992 pursuant to housing shelters and agricultural employee housing facilities • Changed program name to California Alternate Rates for Energy • D. 99-07-016, and D. 00-09-036 • Standardized sources of income to determine CARE eligibility • Ordered utilities to standardized methodology for determining program eligibility

16. CARE Program Overview • D.01-05-033 • Allocated an additional $15 million statewide for CARE program funds • Authorized CARE Capitation efforts • D.01-06-010 • Increased Income Guidelines to 175% of the FPG • Increased discount from 15 to 20% • Exempted CARE customers from tier three rate increases (electric only) • Established CARE goals at 100% of customers willing to participate • D.02-07-033 • CARE Automatic Enrollment for participants of LIHEAP, WIC, Medical and Healthy Families adopted • Confidentiality issues Federal program have restricted AE to the Low Income Home Energy Assistance program managed by the Department Community Services Confidentiality issues with Federal program have restricted AE to the Low Income Home Energy Assistance program manages by the Department Community Services and Development.

17. CARE Program Overview (cont.) • D.02-12-019 • Rapid deployment strategy adopted to provide for increased funding PY2003 CARE Program activities • D.05-04-052 and D.05-05-019 • Granted funding for utilities PY2005 low income programs • Two-Year funding cycle for 2006-2007 approved • Cool Centers funding approved • Excluded requirement that all residents in migrant housing centers be eligible for CARE • D.05-10-044 • Winter Initiatives (11/01/05 – 4/30/06) • CARE/LIEE income thresholds increased from 175% to 200% of poverty level • Enrollment and recertification on to CARE by phone is approved • No shut-off of services to customers paying 50% of current bill • CARE participants are not to be removed for non-response to recertification or income verification during the winter months

18. Conditions for ParticipationIndividually Metered Residential Customer • The utility bill is in applicant’s name and the address must be the applicant’s primary residence. • Applicant cannot be claimed on another person’s income tax return, other than spouse. • The total yearly household income meets CARE income guidelines. • Customer may be asked to verify his/her income. If no reply or found not eligible customer may receive corrected billings. • Customers will be reminded to recertify their CARE eligibility every two years.

19. CARE Program Income Guidelines • Eligibility is based on annual household income and number of residents in household. Household SizeIncome Limit 200% 1 or 2 $27,700 3 $26,600 4 $32,000 5 $37,400 6 $42,800 Each additional household member$ 6,700

20. Wages or Salaries Interest or Dividends from: Savings Accounts, Stocks or Bonds, or Retirement Accounts Unemployment Benefits Rental or Royalty Income Scholarships, Grants, or other Aid for Living Expenses Spousal Support Disability Payments Workers Compensation Social Security, SSI, SSP Pensions Insurance Settlements Legal Settlements TANF (AFDC) Child Support Cash and/or other Income CARE Program Qualifications Income Sources Include:

21. CARE Program Processes • Application • Applications are obtained either by customer request or as a result of utility outreach • Applications are processed and enrolled, returned for additional information, or disqualified based on the program guidelines • Post-Enrollment Verification (PEV) • Participants are randomly selected • Customers required to return income verification documents • Recertification • Participants are required to certify to their eligibility every two years • Sub-metered customers are required to certify to their eligibility annually • Group living facilities, migrant farmworker housing centers, and agricultural employee housing facilities must recertify eligibility annually

22. CARE Statewide Participation

23. Statewide CARE Customer Benefits

24. CARE Program Outreach • Utilities continue to increase outreach efforts in order to increase enrollment and meet the Commission’s goal of 100% participation • Outreach is directed to reach all qualified customers, including the non-English speaking, seniors, the disabled, group living facilities and agricultural employee housing facilities and migrant farmworker housing centers. • Utilities outreach efforts included: • Annual bill inserts • Utility Call Centers and field personnel • Utility website • New customer welcome packets and other company brochures • Quarterly bill messages • Utility data sharing in joint service territories

25. CARE Program Outreach (cont.) • Utilities’ outreach efforts (cont.) • Participation in community events • Contracts with community agencies to enroll qualified customers • A door-to-door enrollment • Multi-lingual television, newspaper and radio advertising campaign • Leveraging with other utility assistance programs • Targeted direct mail campaigns • Community partnerships