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DRAFT

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Agenda ID

16089ENERGY DIVSION RESOLUTION E-4885

December 14, 2017

R E S O L U T I O N

Resolution E- 4885. Approving Southern California Edison (“SCE”) Company’s Authorized California Alternate Rates for Energy (“CARE”) and Energy Savings Assistance (“ESA”) Programs Conforming Advice Letter (AL) 3585-E and Supplemental Advice Letter 3585-E-A filed in compliance with Decision D.16-11-022.

PROPOSED OUTCOME: Approves, subject to modification, Southern California

Edison Company’s CARE and ESA program Conforming Advice Letter 3585-E and Supplemental Advice Letter 3585-E-A filed in compliance with D.16-11-022.

Authorizes an additional $4,715,666 for the CARE program, an additional $61,014,364 in unspent ESA funds, and use of $3,570,051 in current funds (totaling $64,584,415) for the ESA program.1

SAFETY CONSIDERATIONS: The CARE and ESA programs are authorized and

operated under our policy to ensure the health, safety and comfort of low income customers living in the service territories of the Investor Owned Utility (“Utilities”).

ESA program weatherization services provide energy efficiency measures and education to improve the health, safety and comfort of participants.

ESTIMATED COST:

1 $61,014,364 in authorized unspent funds are from prior ESA program cycles 2009-2016 and $3,570,051 were previously authorized for SCE’s current 2017-2020 ESA program cycle. These combined funds, totaling $64,584,415, will be used to support the activities outlined in Decision D. 16-11-022.

198395651 1

Resolution E-4885 DRAFT December 14, 2017Southern California Edison Company AL 3585-E, 3585-E-A/SYG

Authorizes an additional $61,014,364 in unspent funds and use of $3,570,051 in current funds (totaling $64,584,415) for SCE’s ESA program. These funds were previously collected and would otherwise be returned to ratepayers or used to off-set future program expenses.

SCE’s new ESA program budget including the newly authorized unspent funds is $314,788,879 for the 2017-2020 program cycle. SCE’s new CARE budget is $1,949,962,379 for the 2017-2020 program cycle including subsidies and benefits.

By Advice Letter 3585-E filed April 3, 2017 and Advice Letter 3585-E-A filed on June 20, 2017.

__________________________________________________________

SUMMARY

This Resolution approves SCE’s California Alternate Rates for Energy (CARE) and Energy Savings Assistance (ESA) programs conforming Advice Letter 3585-E and Advice Letter 3585-E-A.

For the ESA program, this Resolution authorizes an additional $61,014,364 in unspent funds and use of $3,570,051 in current funds (totaling $64,584,415) in order to implement D.16-11-022 directives, which brings the total authorized ESA program budget to $314,788,879 for program years 2017-2020. This authorization includes:

1. $487,500 to fund additional regulatory compliance costs including audit and data transfer activity.

2. $4,000,000 for leveraging and coordination efforts with California Energy Commission, the Department of Community Services and Development & the Department of Water Resources.

3. $22,846,073 to fund Climate Zone 13 - Central AC and other AC related measures.

4. $11,399,256 to fund High Efficiency Clothes Washers.

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5. $18,000,000 to fund Multifamily Common Area Measures. 6. $7,851,586 to fund Tier II Powerstrips.

This Resolution denies SCE request for authority to include an additional $1,009,543 in unspent funds for program year 2020.

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This Resolution approves SCE’s ESA willingness to participate calculations, coordination efforts with CSD, and various multifamily assistance and outreach efforts. This Resolution also modifies SCE’s proposed household treatment goals and ESA savings goals to align with statutory requirements and D.16-11-022 directives.

Any remaining unspent funds not authorized in this Resolution shall be utilized to fund program and policy objectives adopted in D.16-11-022 and to offset the program collections that would otherwise have been required. These funds are not to be returned to ratepayers at this time.2

For the CARE program, this Resolution authorizes an additional $4,715,666 in unspent funds for SCE’s 2017-2020 CARE Program which brings the total authorized CARE program budget to $1,949,962,397 for program years 2017-2020. This authorization includes:

1. $24,285 to fund additional outreach efforts.2. $821,722 to fund processing, certification, and re-certification

costs.3. $(1,043,094) decrease for post enrollment verification costs. 4. $4,595,777 to fund Information Technology programming

initiatives. 5. $17,280 to fund pilots.6. $1,140,904 to fund Measurement and Evaluation efforts. 7. ($576,805) decrease for Regulatory Compliance expenses.8. $735,598 for General Administration expenses.

BACKGROUND

Energy Savings Assistance Program (“ESA”)

The ESA Program is an energy efficiency program that provides no cost weatherization services, energy efficiency measures, minor home repairs, and energy education to income- eligible program participants. The goal of the program is to reduce energy 2 D.16-11-022 p. 361

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consumption, resulting in bill savings, while also increasing the health, comfort, and safety of these households. Income eligibility for ESAP participation is also set at 200% or less of FPG. ESAP activities are funded by ratepayers as part of a statutory “public purpose program surcharge” that appears on monthly utility bills.

California Alternate Rates for Energy (CARE)

The CARE Program is a low-income energy rate assistance program instituted in 1989, providing a discount on energy rates to low-income households with incomes at or below 200% of the Federal Poverty Guideline. Qualified customers consist of various individuals, including residents in single-family households, sub-metered residential facilities, non-profit group living facilities, agricultural employee housing facilities, and migrant farm worker housing centers.3 Eligible CARE Program participants receive a 30 to 35% discount on electric services and a 20% discount on natural gas service. CARE activities are funded by non-participating ratepayers as part of a statutory “public purpose program surcharge” that appears on monthly utility bills.

SCE CARE & ESAP 2015-2017 Program Application and D.16-11-022

SCE filed its 2015-2017 cycle application for approval of its Low Income CARE and ESA Program budgets on November 18, 2014. That application was consolidated along with the other Utilities’ applications into proceeding A.14-11-007. While a decision was pending in the proceeding, program funding was bridged for the 2015 and 2016 program years. On November 22, 2016, D.16-11-022 was issued, consolidating the applications, extending the program cycle to 2020, and approving a budget for 2017-2020. The Decision required SCE to file the instant conforming Advice Letter to adapt its proposed program activities and budgets to the requirements within, and provide clear and descriptive plans for how its low income programs would be executed for the new cycle. SCE was to propose new budgets, if needed, using unspent funds for each effort directed in the Decision.4

3 Pub. Util. Code § 739.2(a)(1)-(3)4 D.16-11-022 pp 37-38

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SCE CARE and ESA Program Conforming Advice Letter & Supplemental AL

On April 3, 2017 SCE filed AL 3585-E pursuant to D.16-11-022, which proposed updated CARE and ESA 2017-2020 program budgets and updated costs attributable to newly approved program measures. On April 10, 2017 Energy Division staff suspended AL 3585-E for the initial suspension period of 120 days, for staff review. After initial review ED staff requested additional information on program budgets and goals, noting gaps in the initial filing in a memorandum dated June 1, 2017. On June 20, 2017 SCE filed a supplemental advice letter, 3585-E-A, to provide certain additional information, as requested by Energy Division. Together the filings include, but are not limited to the following issues:

1. ESA Program Budgets through 2020, including use of Unspent Funds

2. ESA Program Household Treatment Goals through 20203. ESA Cost Effectiveness Projections through 20204. ESA Program Savings Targets through 20205. Collaboration Efforts with the Department of Community

Services and Development 6. Coordination Efforts with California Lifeline7. Multifamily Coordination Efforts8. New Willingness to Participate Population Estimate9. AB 793 Compliance Efforts 10. Low Income Audit Budgets

During the June 22, 2017 Pre Hearing Conference, SCE stated that they have approximately $124M (Million) in unspent funds.5 Of that amount, SCE proposes to utilize approximately $65.5M to carry out the various directives in the Decision, leaving approximately $59M in unspent funds to be used to offset future collections. SCE’s requested unspent funds allocation is included in Table 1.

5 A.14-11-007, PHC 2 Transcript dated, June 22, 2017 p. 10

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Table 1: SCE’s Proposal for Utilizing Unspent Funds for D.16-11-022 Directives

CategoryUnspent Funds Allocation

a. Additional Regulatory Compliance Costs $487,500b. Costs over Authorized Budget Amount $1,009,543c. Leveraging - CEC, CSD & DWR6 $4,000,000

d. Climate Zone 13 - Central AC and other AC related measures $22,846,073e. HE Clothes Washer $11,399,256f. Multifamily Common Area Measures $18,000,000

g. Powerstrip Tier II $7,851,586Total $65,593,958

On August 7, 2017, Energy Division staff suspended SCE’s Advice Letter for review and disposition in this Resolution.

Petitions for Modification (“PFM”) of D.16-11-022

On March 14, 2017, the Utilities filed a joint Petition for Modification of D.16-11-022, requesting clarification of the Decision language and modification of its ESA and CARE Program directives. The Utilities’ PFM made requests to change directives affecting their obligations to present ESA and CARE program activities in their conforming advice letters.

On April 4, 2017 California Housing Partnership Corporation, Natural Resources Defense Council, and National Consumer Law Center, (“CHPC et. al”) filed a separate PFM requesting clarification and modifications relating to implementation of the Multifamily and Mid-Cycle directives in the Decision.

The requests made in the Utilities’ PFM have an impact on both the telecommunications LifeLine program coordination efforts and the Department of Community Services and Development coordination efforts. Since these will be addressed in the PFM Decision, we defer to our final decision on the PFMs to direct any further compliance activities required by SCE.

6 CEC=California Energy Commission; CSD=Department of Community Services and Development; DWR=Department of Water Resources.

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NOTICE

Notices of AL 3585-E and 3585-E-A were made by publication in the Commission’s Daily Calendar. SCE states that copies of the Advice Letters were mailed and distributed in accordance with Section 4 of General Order 96-B.

PROTESTS

On April 24, 2017, Advice Letter 3585-E was timely protested jointly by Brightline Defense Project (“Brightline”) and The Greenlining Institute (Greenlining), and separately by the California Housing Partnership Corporation, Natural Resources Defense Council, and National Consumer Law Center, (“CHPC et. al”).

On July 10, 2017, supplemental Advice Letter 3585-E-A was protested jointly by The East Los Angeles Community Union, the Maravilla Foundation, the Association of California Community and Energy Services, the Energy Efficiency Council, and Brightline (“TELACU et. al”).

SCE responded to the protest of CHPC et al. on May 1, 2017; and to the protest of TELACU et al. on July 17, 2017. The following is a more detailed summary of the major issues raised in the protests and replies.

1. Joint Protest of CHPC et al.

CHPC et al., protested Advice Letter 3585-E on the grounds that it omits key details related to 1) submitting a budget proposal and details for establishing CSD’s Low Income Weatherization Program (LIWP) balancing account, (2) developing a technical assistance program for low-income multifamily energy efficiency retrofits in areas affected by the Aliso Canyon State of Emergency, and (3) the development and implementation of an owner affidavit process for multifamily whole building enrollment7 as required by the Decision.

2. Joint Protest of Greenlining and Brightline

7 CHPC, NRDC, and NCLC protest to SCE AL 3585-E p.1

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Brightline and Greenlining protested AL 3585-E on the grounds that it does not provide information necessary to determine if SCE’s request of $1M (Million) for CSD leveraging activities for both drought mitigation and LIWP programs is reasonable and conforms to the Decision. Brightline and Greenlining’s protest also states that AL 3585-E does not provide sufficient information to determine if the Decision’s eight percent reporting requirement was triggered and does not specify the amount of unspent funds that SCE has or what percentage will remain unspent8.

3. Joint Protest TELACU et al.

The Joint Protest of TELACU et al. is limited to the substance of the supplemental filing, specifically, the ratio between First-Time Treatments and Retreatments for the Energy Savings Assistance Program. TELACU et al. request that the Commission reject the proposed homes treated goal and direct SCE to meet with stakeholders to seek a method for targeting first time treatment in a manner that balances the statutory requirements of Public Utilities Code Section 382 (e) with the mandated goals in code section 2790 and the directives of D.16-11-022.9

SCE’s Reply to Protests

1. SCE’s Reply to Protests of CHPC et al.

In response to the protest of CHPC et al., SCE states that it solicited input from CSD to develop the ESA Program leveraging budget for CSD’s LIWP multifamily efforts. CSD provided SCE with an approximate number of units to be served (657 units/year), based on CSD’s current prospective projects. SCE then applied its average cost to treat a home and arrived at the requested annual budget of approximately $1M. While the cost estimates are not broken out by measure, SCE noted that it will track and report costs for this effort by measure in its existing Low-Income Monthly and Annual Reports.

8 Brightline and Greenlining protest to SCE AL 3585-E p.29 Joint Protest of TELACU, the Energy Efficiency Council, and Brightline to SCE AL 3585-E p.3.

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SCE’s also states that discussions with CSD are ongoing to identify and more accurately forecast measure installations.10

With respect to the owner or authorized representative affidavit form, SCE directed protesting parties to Section VI of AL 3585-E where the owner or authorized representative affidavit process is provided. SCE further clarifies that Decision (D.16-11-022) does not direct SCE to provide the owner or authorized representative affidavit form (“Form”) with the conforming Advice Letter and suggest the Joint Parties err in stating that the SCE omitted required information pursuant to the Decision.11

2. SCE’s Reply to Protest of Brightline and Greenlining

In response to the protest of Greenlining and Brightline, SCE provided the estimates associated with its proposed Low Income Weatherization Program coordination budget in their response as indicated above. As it relates to the eight percent unspent funds trigger, SCE responded that the Decision (D.16-11-022) states that “The unspent fund balances for each IOU are large, but fall below the unspent fund trigger.” The Decision did not direct SCE to report in its Conforming Advice Letter if SCE’s unspent funds balance exceeded the trigger. SCE claims it complied with the Decision and requests that the Commission approve AL 3585-E.12

3. SCE’s Reply to Protest of TELACU et al.

In response to TELACU et al.’s protest, SCE states that TELACU et al. mischaracterized its implementation of the go back rule and its supplemental advice letter which “estimates” the number of homes that would be newly treated versus go-backs. Moreover, SCE claimed that it did not propose eliminating services to previously served customers (go-backs) who have become eligible for new ESA services.

10 SCE Reply to CHPC et al. and Brightline and Greenlining protests to SCE AL 3585-E p.2-3.11 Reply to CHPC et al. and Brightline and Greenlining protests to SCE AL 3585-E p.212 Reply to Brightline and Greenlining protests to SCE AL 3585-E p.3

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SCE in its supplemental advice letter filing included the estimated numbers for both First-Time Treatments and Retreatments pursuant to the elimination of the Go-Back Rule. SCE’s estimates are based on participation rates for the ESA Program in the Aliso Canyon service area, where the Go-Back Rule has been suspended since early 2016.

SCE’s supplemental advice letter stated it would not deny previously served customers from program participation, provided that the ESA contractor runs a Duplicate Measure Research Inquiry (DMRI) to determine whether previous participants are eligible for new ESA measures. While SCE’s marketing strategies are designed to target segments that may have the highest populations of underserved customers (based on low income eligibility estimates), SCE responds to all customers that are willing to participate in the ESA program.13

DISCUSSION

Energy Division has reviewed SCE’s CARE and ESA program Conforming Advice Letter 3585-E and Supplemental Advice Letter 3585-E-A filed in compliance with D.16-11-022. This section addresses the protests received and authorizes a new ESA budget for SCE. This section also addresses additional program elements as directed in D.16-11-022 including, SCE’s household treatment goals, energy savings targets, willingness to participate calculations, coordination efforts with the CSD, and various multifamily assistance and outreach efforts. Finally, this section approves a new CARE budget for SCE.

1. Protests

CHPC et al. protested SCE’s conforming advice letter as non-compliant for failure to provide key details based on SCE’s supplemental filing, this protest is moot, and is therefore dismissed.

Brightline and Greenlining’s protest of SCE’s advice letter, on grounds that the utility does not disclose its total unspent funds and does not report on the eight percent unspent funds trigger established in the Decision, is rejected as erroneous. The Commission agrees with SCE that the Decision did not require the utility in the advice letter to notify the Commission about whether its unspent

13 SCE reply to TELACU et al. protest to SCE AL 3585-E. p.2-3

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funds exceeded eight percent of the authorized budget. Instead, that information must be reported in the utility’s monthly and annual reports, as well as its quarterly report to the Low Income Oversight Board as required by D.16-11-022. 14 Therefore, the Brightline and The Greenlining protest is rejected.

14 D.16-11-022 p. 40

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Finally, in TELACU et al.’s protest, they claim that the ratios of first-time to the retreatment homes violates D.16-11-022 directives and is not legal under Public Utility Code. The Commission has not legally erred in permitting the Utilities to follow the prioritization requirements directed in our Decision, as these requirements will ensure accountability and service for all eligible ESA customers. Additionally, we dismiss the argument that ESA contractors will be required to turn away eligible households based on retreatment ratios, as the Utilities are directed to treat all eligible households, and must base program eligibility on statutory criteria, not prioritization models. TELACU et al. do not demonstrate that eligible participants will be harmed by SCE’s prioritization ratio, as participants will either be in the first time or retreatment categories and will be eligible for service in either case. Therefore, TELACU et al.’s protest of SCE’s advice letter on legal grounds is rejected.

The following section describes how SCE substantiated its request to use additional unspent funds to implement Decision directives.

2. SCE’s Proposed and Approved Allocation of Unspent Funds

At the time D.16-11-022 was issued, the Utilities were carrying a total balance of approximately $400 million in unspent funds accumulated since 2009.15 Of that amount, SCE’s unspent fund balance was $125.2M.16 Due to the unprecedented amount in unspent funds balances accumulated by the Utilities, the Decision authorized new ESA program measures and directives to be paid for with unspent funds.17 The Utilities were required to file advice letters detailing plans and budgets for the expenditure of unspent funds for each effort or new measure directed in the Decision. In its initial advice letter, SCE provided sparse details for use of unspent funds with little justification provided as to how these estimates were determined. Energy Division staff requested supplemental information from SCE to justify its additional budget requests.

15 D.16-11-022 p.39 16 SCE Low Income Oversight Board Meeting Presentation, November 22,

2016 17 D.16-11-022 p.358

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In response, SCE submitted the following additional funding requests, along with assumptions used for the various Decision directives. As further discussed, we approve SCE’s request with modifications.

Table 2: SCE’s Approved Allocation of Unspent Funds via Resolution E-4885

Category RequestedApprove

da. Additional Regulatory Compliance Costs $487,500 $487,500b. Costs over Authorized Budget Amount $1,009,543 $0

c. Leveraging - CEC, CSD & DWR18 $4,000,000$4,000,0

00

d.Climate Zone 13 - Central AC and other AC related measures $22,846,073

$22,846,073

e. HE Clothes Washer $11,399,256$11,399,

256

f. Multifamily Common Area Measures $18,000,000$18,000,

000

g. Powerstrip Tier II $7,851,586$7,851,5

86

Total $65,593,958$64,584,

415

Unspent Funds Budget Approval by Category

a. Regulatory ComplianceIn 2016, the Commission initiated audits of the CARE and ESA programs for program years 2013-2015. The total cost for the audits across the four Utilities was $625,000. SCE’s portion was 30%, or $187,500. To cover future audit costs, SCE requests to increase its ESA Regulatory Compliance Budget by $93,750 in 2017. SCE has also projected an additional $187,500 in 2019 Regulatory Compliance funds to cover future audit expenditures during the remaining program cycle. This amount will also be split equally among its CARE and ESA budgets in the amount of $93,750 each, to be paid out of unspent funds.19

In addition, SCE requests to increase its ESA Regulatory Compliance Budget by $300,000 in 2017 pursuant to D.16-11-022 ordering paragraph 93, which directs the Utilities to use unspent funds to upgrade their existing customer Energy Savings Assistance Program

18 CEC=California Energy Commission; CSD=Department of Community Services and Development; DWR=Department of Water Resources.19 Supplemental Conforming Advice Letter 3585-E-A, filed June 20, 2017

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workflow databases to allow for monthly data transfers to the Commission’s Energy Division (or its consultants).

The above requests align with decision directives and guidance provided by Energy Division staff and is hereby approved.

b. Costs over Authorized Budget Amount SCE's projected subtotal program budget for 2020 is $66,076,643, which exceeds funding amount currently authorized in D.16-11-022 for 2020 ($65,064,100) by approximately 1.5%. As a result, SCE projects that it will need an additional $1,009,543 from unspent funds to cover anticipated costs beyond the existing authorized budget for PY 2020. SCE’s request to use $1,009,543 in unspent funds to cover anticipated expenses does not indicate which specific decision directives it intends to implement with this additional funding. Therefore this request is denied due to lack of clarity.20

c. Leveraging with CSD’s Low Income Weatherization program

CSD provided SCE with a unit count projection of 657 units in 2017, based on current prospective projects. Based on the unit count of 657, SCE applied its average cost to treat a home ($1,215) and allocated an annual budget of $1M through 2020.

SCE also indicates that in-unit measure eligibility for projected units, as well as the policies and procedures that guide installation of these measures, are still being discussed with CSD. While there is no accurate way of forecasting the mix of measures potentially feasible for installation at each of CSD’s prospective projects, it is anticipated that the forecasted budget is sufficient. Additionally, the forecasted budget provides flexibility to make adjustments based on actual measures installed.

D.16-11-022 directed the Utilities to deploy drought mitigation funds for hot water measures currently offered by the ESA Program – namely, low flow showerheads, water heater blankets, water heater pipe insulation, thermostatic shower valves, tub diverters, faucet aerators, and thermostatic tub spouts to be installed by CSD efforts. The Decision also directed the Utilities to use projected installation

20 This amount has been deducted from the miscellaneous budget category.

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rates and work with CSD to calculate the projected funding level for this effort.21

SCE’s request for an annual budget of $1M for CSD coordination activity is justified and therefore approved.

d. Additional Measures Table A-2 of SCE’s advice letter filed April 3, 2017 provides the assumptions SCE used to calculate the new measure budgets for Central Air Conditioner (“AC”), and other AC related measures in Climate Zone 13; High Efficiency Clothes Washers; and Tier II Power Strips, as authorized in the Decision. Because these amounts represent new program measures ordered by the Decision, SCE did not anticipate or plan for these costs in its original budgetary filings. SCE is using unspent funds for these new measures instead of authorized budget funds as directed in the Decision.22

i. Climate Zone 13 - Central AC and other AC related measures

D.16-11-022 approved the use of unspent funds in SCE’s service territory to offer central air conditioners in Climate Zone 13 to address the health, safety, and comfort of ESA clients, and offer an alternative to water-dependent evaporative coolers. In response, SCE requested $22,846,073 for Central AC and other AC related measures in climate zone 13. This estimate aligns with decision directives, as well as costs associated with this measure as provided in SCE’s budget assumptions, and is therefore approved.23

ii. High Efficiency Clothes WashersOrdering paragraph 30 (d) of D.16-11-022 directed SCE to offer high efficiency clothes washers as a measure in the areas affected by Aliso Canyon, to reduce use of energy, including natural gas for water heating, and water. In response, SCE requested$11,399,256 for high efficiency washer installations, 21 Decision 16-11-022 ordering paragraph 3122 Supplemental Conforming Advice Letter 3585-E-A, filed June 20, 201723Decision 16-11-022 Ordering Paragraph 26 of D.16-11.022 orders SCE to offer the choice of evaporative coolers and central air conditioners in Climate Zone 13. The Utilities seek modification of this directive in the Joint PFM filed March 24, 2017 to align with current ESA Program policies for Central AC and Evaporative Cooler installations.

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which allows for approximately 12,000 units. This aligns with decision directives, as well as cost associated with this measure as provided in SCE’s budget assumptions, and is therefore approved.

iii. Multifamily Common Area MeasuresSCE’s request for an additional $18M for Multifamily common area measures is approved as it aligns with guidance provided in D.16-11-02224, which directs IOUs to fund ESA Program common area measures for multi-family buildings dedicated to providing affordable housing to low-income Californians in deed restricted, government and non-profit owned multi-family buildings, subject to a cap of $80M of unspent funds pro-rated by each utility. SCE’s request for $18M request in unspent funds is also consistent with the authorized prorated amount specified in D.16-11-022.25

iv. Powerstrip Tier IISCE requested $7,851,586 for Tier II Powerstrips which allows for installation of approximately 102,000 units. This aligns with cost associated with this measure as provided in SCE’s budget assumptions and is therefore approved.

3. New ESA budgets, 2017-2020

Tables 3 and 4, below, provide a summary of what D.16-11-022 authorized, what SCE requested in its Advice Letters, and what this Resolution approves, (including unspent funds). Any remaining unspent funds should be used to offset future collections.

Table 3: Summary of Requested Annual and Approved ESA Program Budgets2017 2018 2019 2020 2017-2020

Approved via D.16-11-022 $62,375,617 $62,540,498 $63,791,300 $65,067,100 $253,774,515SCE Proposed in Supplemental AL $70,740,828 $79,106,455 $81,481,677 $84,469,462 $315,798,422Approved via Resolution E- 4885 $70,740,828 $79,106,455 $81,481,677 $83,459,81

9 $314,788,879

24 Decision 16-11-022 ordering paragraph 4325 D.16-11-022 p.209

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Table 4: SCE’s Approved ESA Program Budgets, via Resolution E-4885ESA Program Budget

2017 2018 2019 2020 2017-2020

Appliances $19,877,351 $20,600,293 $21,628,600 $22,713,446 $84,819,690Domestic Hot Water $27,143 $29,612 $31,348 $32,633 $120,736

Enclosure $188,160 $206,446 $218,022 $228,441 $841,069HVAC $21,373,954 $23,701,595 $24,897,305 $26,134,620 $96,107,474Maintenance $91,665 $96,417 $100,220 $105,347 $393,649Lighting $2,647,334 $1,929,586 $1,013,054 $531,767 $6,121,741Miscellaneous $2,842,731 $2,508,593 $2,631,912 $1,755,172 $9,738,408In Home Education $1,322,070 $1,388,162 $1,457,578 $1,530,461 $5,698,271

Customer Enrollment $4,071,924 $4,275,486 $4,489,283 $4,713,762 $17,550,455

Energy Efficiency Subtotal

$52,442,332 $54,736,190 $56,467,322 $57,745,649 $221,391,493

Training Center $493,828 $516,064 $539,344 $563,710 $2,112,946Inspections $1,051,652 $1,100,363 $1,151,406 $1,204,880 $4,508,301Marketing and Outreach $950,000 $950,000 $950,000 $950,000 $3,800,000

Measurement and Evaluation Studies

$226,250 $91,250 $91,250 $91,250 $500,000

Regulatory Compliance $450,856 $464,382 $478,313 $492,663 $1,886,214

General Administration $3,926,101 $4,001,434 $3,879,027 $3,958,948 $15,765,510

CPUC Energy Division $60,000 $60,000 $60,000 $60,000 $240,000

Compliance Costs $393,750 - $93,750 - $487,500

Multi-Family $4,500,000 $4,500,000 $4,500,000 $4,500,000 $18,000,000Leveraging $1,000,000 $1,000,000 $1,000,000 $1,000,000 $4,000,000Climate Zone 13 Central AC and AC related

$2,824,460 $6,348,570 $6,666,260 $7,006,783 $22,846,073

HE Clothes Washer $1,434,053 $3,160,850 $3,318,844 $3,485,509 $11,399,256

Powerstrip Tier II $987,546 $2,177,352 $2,286,161 $2,400,527 $7,851,586

Subtotal $18,298,496 $24,370,265 $25,014,355 $25,714,270 $93,397,386TOTAL PROGRAM COSTS

$70,740,828 $79,106,455 $81,481,677 $83,459,919 $314,788,879

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4. Additional Program Elements Directed in D.16-11-022

i. ESA Program Household Treatment Goals through 2020

Decision 16-11-022 directed the IOUs to re-calculate and estimate the new remaining eligible population using a revised approach and willingness and feasibility to participate factor.26 In response, SCE projected 322,123 total remaining eligible and willing households through 2020 in its service area.27

While SCE’s proposed household treatment goals are consistent with D.16-11-02228, they are insufficient to meet the statutory program goal which requires an opportunity for all willing and eligible customers to participate in low income energy programs by December 31, 2020.29

Specifically, SCE anticipates treating 234,940 households through 202030 (157,410 1st treatments and 77,530 retreatments). SCE’s 1st time treatment projections falls short of the statutory goal by 164,713 homes.

In an effort to resolve this discrepancy, SCE’s ESA Program 1st time 2018-2020 household treatment goals have been adjusted upward to account for treatment for all remaining and eligible households. SCE is directed to file a clear plan within 30 days to use remaining unspent funds, if necessary, to treat this population and propose new retreatment estimates as warranted.

Table 5: SCE ESA Program Household Treatment Goals2017 2018 2019 2020 Total

1st Time treatments 36,522 93,251 95,168 97,182 322,123

Retreatments 0 0 0 0 0Total 36,522 93,251 95,168 97,182 322,123

26 D.16-11-022 p. 28027 SCE Conforming Advice Letter 3585-E Attachment C – Table VIII 28 D.16-11-022 p.27929 Pub. Util. Code § 382 (e)30 SCE supplemental Conforming Advice Letter 3585-E –A Table B-I

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The Commission directed the utilities to treat households based on income eligibility, with a focus on 1) households that have never received ESA treatment (“first-time”), and 2) households that have received ESA treatment since 2002 (“retreatment”), including additional prioritization factors.31 Additionally, while our program goals comply with Public Utilities Code, the Commission reserves discretion to administer the program activities under code in the best interests of our low income consumers. As acknowledged in our Decision, the Commission may “evaluate the effectiveness of [our] policy and program changes to reduce energy hardships while considering cost-effectiveness, and determine what changes are merited to achieve those objectives.”32

ii. ESA Cost Effectiveness Projections D.16-11-022 directed the utilities to file updated cost effectiveness values in their conforming advice letters, utilizing updated factors.33 SCE was required to file supplemental cost effectiveness numbers, due to omission of cost effectiveness values projected through the program cycle. SCE filed the ESA program cost effectiveness calculations shown in Table 6, which are approved. However, we note that work in the Cost Effectiveness working group is still underway and that these values may change pending any updates adopted or direction given by the Commission as a result of the working group’s recommendations, or the Commission’s work on cost effectiveness in general. Additionally, we reiterate that these values are used for information purposes only at this time.

Table 6SCE ESA Program Cost Effectiveness Projections

ESACET (w/ Admin)

TRC (w/o Admin)

PY 2017 0.48 0.47PY 2018 0.44 0.42PY 2019 0.5 0.44PY 2020 0.52 0.44

iii. ESA Program Savings Targets

31 See Decision p.278-279.32 Id. at p28033 D.16-11-022 at p.38

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D.16-11-022 proposed savings targets for the ESA program for 2017 and 2018, to be increased by 5% for 2019 and 2020.34 SCE was directed to update savings goals in its conforming advice letter.35 Instead, SCE proposes reduced energy savings goals based on projected annual installation quantities. SCE notes that these estimated savings do not include potential savings from efforts such as CSD leveraging, multifamily common area measures, and retreatment and indicates there is no accurate way of calculating savings from these efforts. Additionally, SCE anticipates program savings from LEDs will decrease rapidly as replacement incandescent bulbs become less available to in the market.36 We disagree with SCE’s proposed savings targets and justification for lowering them. D.16-11-022 not only approved new measures, but also removed caps on measures, and eliminated the modified 3 Measure Minimum rule, all efforts that would lead to generating greater energy savings. Therefore, we have modified SCE’s savings target to align with what was ordered in the Decision. 37

Table 7SCE ESA Savings Target

Utility

Annual Utility Portfolio-Wide Electric Savings Target (GWh)

Per D.16-11-022 30.8New 2017 30.8New 2018 30.8New 2019 32.34New 2020 32.34

iv. CSD Collaboration Activities D.16-11-022 directed SCE to file coordination plans/referral process between the ESA program and CSD’s Low Income Weatherization program for identified customers with high energy burden and non-

34 D.16-11-022 p. 5035 D.16-11-022 p.37-3836 SCA supplemental advice letter 3585-E, filed June 20th 201737 D.16-11-022 p. 50

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utility fuel sources. While some of this effort is pending the Utilities’ PFM to D.16-11-022, we conditionally approve SCE ’s proposed collaboration activities with CSD.

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v. Multifamily ActivitiesD.16-11-022 directed SCE to develop and implement an owner or authorized representative affidavit process for qualifying multifamily properties to receive common area measures.38 The Decision references the development of the process, and affidavit form, but does not direct SCE to include copies of the form in its advice letter. In its original advice letter, SCE provided scarce details regarding the process. However, in its supplemental filing, SCE further described how its Single Point of Contact model would work with building owners to implement the affidavit process and filed a draft affidavit form under confidential seal with the Energy Division.

vi. Willingness to Participate Population D.16-11-022 directed the Utilities to refile their eligible population estimates based on modifications in the Decision including the newly adopted willingness and feasible to participate factor of 60%.39 SCE filed the information in Table 9, which are consistent with Decision directives and are approved.

Table 9: SCE Remaining Eligible 2020 Population as of 2017Line No.

SCE LI Customers Parameter

1 1,528,64

8Eligible 2020

2 198,72

3Minus Unwilling 2020

3 856,01

7Minus ESAP Already Treated through 2016

4 151,78

5Minus LIHEAP Treated

5 322,12

3Total Remaining To Treat 2017-2020

6 80,53

1Implied Annual Goal 2017-2020

5. California Alternate Rates for Energy (CARE) Program Budgets through 2020

SCE is requesting a total increase of $4,715,666 for CARE 2017-2020 program years as reflected below in Table 10.

38 D.16-11-022 p.199-200, OP4639 D.16-11-022 p272-273

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Table 10SCE CARE Administrative Budgets & Subsidies

2017 2018 2019 2020 TotalAuthorized via D.16-11-022

$464,298,306

$488,745,726

$493,633,184

$498,569,515

$1,945,246,731

Conforming AL $467,855,297

$489,405,077

$493,998,034

$498,703,989

$1,949,962,397

SCE’s CARE budget for 2017-2020, also provided in Attachment B, requests funding adjustments in the following budget categories.

1. Marketing and Outreach - $24,285 for increased marketing and outreach costs to fund processing, certification and recertification costs as directed in D.16-11-022.40

2. Post Enrollment Verification - $(1,043,094) decrease for post enrollment verification costs.

3. Information Technology (IT) - $4,595,777 for IT programming.41 4. Pilots - $17,280 to fund pilots.5. Measurement and Evaluation - $1140,904 to fund Measurement

and Evaluation efforts. 6. Regulatory Compliance - ($576,805) decrease for Regulatory

Compliance expenses.42

7. General Administration - $735,598 for General Administration expenses.

To comply with specific directives of D.16-11-022 and ensure SCE’s CARE program continues to provide bill payment relief to qualified low income customers, SCE is requesting an additional $4.7M for the 2017-2020 program cycle as reflected above. These initiatives include additional leveraging, coordination and outreach efforts, increased verification, IT upgrades and programming, data transfers, and program audits. Of the protests received, none contested or addressed SCE’s request for additional funding to support CARE initiatives. SCE’s proposed budget increase of $4.7M to implement CARE related

40 D.16-11-022 ordering paragraphs 49, 70, 89 and 90.41 D.16-11-022 ordering paragraph 86 42 D.16-11-022 ordering paragraphs 95, 96 and 98

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directives specified in D.16-11-022 is justified and hereby approved.

COMMENTS

Public Utilities Code section 311(g)(1) provides that this resolution must be served on all parties and subject to at least 30 days public review and comment prior to a vote of the Commission. Section 311(g)(2) provides that this 30-day period may be reduced or waived upon the stipulation of all parties in the proceeding.

The 30-day comment period for the draft of this resolution was neither waived nor reduced. Accordingly, this draft resolution was mailed to parties for comments, and will be placed on the Commission's agenda no earlier than 30 days from today.

FINDINGS

1. D.16-11-022 directed SCE to file a conforming advice letter within 60-days of the Decision’s November 21, 2016 effective date.

2. On December 22, 2016, Pursuant to CPUC Rule of Practice and Procedure 16.6, the four investor-owned utilities (IOUs) submitted a joint letter to the Executive Director requesting an extension of time to file the conforming advice letter.

3. On January 12, 2017, the Executive Director of the CPUC granted the request of the four IOUs for an extension of time to comply with the advice letter directive in D.16-11-022.

4. D.16-11-022 directed SCE’s advice letter to include budgets that corresponded with program costs for approved measures, penetration goals, cost effectiveness values, new eligibility estimates and Willingness to Participate calculations, and any other updated factors subsequent to the programmatic changes sought in the Decision.

5. D.16-11-022 required SCE’s advice letter to include a multifamily owner or authorized building representative affidavit process for specified multifamily buildings, as well as a budget proposal for coordination efforts with the California Department of Community Services and Development’s Low Income Weatherization Program (LIWP).

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6. D.16-11-022 directed SCE’s conforming advice letter to include details on a referral process between the IOUs and CSD’s Weatherization Program and outline any program funding requests for proposed drought mitigation leveraging efforts with external water agencies.

7. SCE’s filed household treatment goals and energy savings targets for the remaining years of the program funding cycle require further adjustment.

8. SCE’s proposed budgets largely correspond with program costs for the approved measures, penetration goals, cost effectiveness values, and any other updated factors subsequent to the programmatic changes sought in the Decision.

9. SCE’s filed cost effectiveness projections and Willingness to Participate calculations for the remaining years of the program funding cycle are reasonable.

THEREFORE IT IS ORDERED THAT:

1. SCE’s Advice Letters AL 3585-E and AL 3585- E-A are approved, with the following adjustments to SCE’s the Energy Savings Assistance savings targets:

SCE ESA Savings Target

Utility

Annual Utility Portfolio-Wide Electric Savings Target (GWh)

Per D.16-11-022 30.8New 2017 30.8

New 2018 30.8New 2019 32.34

New 2020 32.34

2. $61,014,364 in unspent funds and use of $3,570,051 in current funds (totaling $64,584,415) is authorized for the Energy Savings

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Assistance (ESA) Program to implement program directives ordered by the Commission in D.16-11-022.

3. $1,009,543 for additional anticipated costs beyond SCE’s authorized budget is denied due to lack of clarity and justification.

4. SCE’s total ESA program budget, including the newly authorized unspent funds is $314,788,879 for program years 2017-2020.

5. SCE’s total CARE program administrative budget is increased by $4,715,666 from the amount authorized in D.16-11-022.

6. SCE’s total combined CARE budget for program years 2017-2020 is $1,949,962,397 including subsidies and benefits.

7. Any remaining unspent funds not authorized in this Resolution shall be utilized to fund program and policy objectives adopted in D.16-11-022 and to offset the program collections that would otherwise have been required. These funds shall be used to achieve ESA program and policy objectives and are not to be returned to ratepayers at this time.

8. SCE’s ESA Program 1st time 2018-2020 household treatment goals have been increased to account for treatment for all remaining and eligible households.

9. SCE is directed to file a plan within 30 days to use remaining unspent funds, if necessary, to treat the remaining untreated population and propose new retreatment estimates as warranted.

10.SCE’s cost effectiveness projections and new eligibility estimates based on the updated willingness and feasible to participate factor are approved.

This Resolution is effective today.

I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held on December 14, 2017; the following Commissioners voting favorably thereon:

_____________________TIMOTHY J. SULLIVAN

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Executive Director

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