Legislative funding establishes California Arrearage Payment Program ("CAPP")

Background

Assembly Bill ("AB") 128, The budget Act of 2021, provides State appropriations of $993.5 million to be allocated by the California Department of Community Services (“CSD”) through the CAPP. AB 135 provides additional direction to CSD on implementation of CAPP and specified that $694,953,250 million of the total appropriation is reserved for all distribution customers of IOUS, including customers served by a CCA. California's Gov't Code Sec. 16429.5 clarifies CAPP implementation and requirements.

CSD has issued its first CAPP Program Notice (CAPP - PN) No. 2021-01 providing the implementation and administration of the program.

1. Phase 1 - Quantify total residential energy arrearages statewide along with other data points outlined in the Utility Survey.
2. Phase 2 - Submit a CAPP application on behalf the energy utility’s residential and commercial customers eligible for CAPP assistance.
3. Phase 3 - Apply CAPP benefits directly to eligible residential and commercial customer accounts in order of priority as defined in Government Code Section 16429.5.
4. Phase 4 - Submit required reports to CSD to confirm the outcome of delivered CAPP benefits.

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CAPP Program Overview

Eligibility:

• Eligible Utilities - Public, investor-owned, and electric cooperative utilities
• Eligible Customer - Residential and commercial energy utility customers (active and inactive) with past-due balances of 60 days or more on their energy bill during the COVID-19 pandemic relief period covering March 4, 2020​​ through June 15, 2021

Utility Company Requirements & Responsibilities:

• Utilities must apply directly to CSD on behalf of eligible customers.
• Utilities must submit CAPP Utility Survey informing CSD of utility arrearage amounts by customer type.
• After the Utility Survey submittal, the utility must submit an application for funding request.
• 90 Day Protection - An energy utility shall not disconnect a CAPP recipient’s utility service, regardless of balance owed after applying a CAPP benefit, for 90 days after a CAPP benefit is applied.
• ‍Notice of Available Payment Plans - If a customer has a remaining balance after a CAPP benefit is applied, the utility shall notify the customer of the option to enter into an extended payment plan with late fees and penalties waived. The utility shall not discontinue service to the customer while the customer remains current on the repayment plan.‍
• Reporting Requirement - Within six months of a utility's receipt of its CAPP allocation, the utility shall submit all reporting required by the department detailed in a program notice.

Benefit Delivery and Prioritization of Eligible Customers:

• Energy utilities must disburse benefits to eligible customers within 60 days of receiving CAPP funding.
• Energy utilities will prioritize CAPP assistance to eligible customer accounts in the following order: 1) Active residential customers with past due balances who are at risk of disconnection due to nonpayment; 2) Active residential customers with past due balances; 3) Inactive residential customers with past due balances; and 4) Commercial customers with past due balances.

Fund Disbursement :

• Funds will be disbursed within 30 days of application approval or CSD shall disburse funds no later than January 31, 2022.
• Utilties must use existing CPUC proportional payment processes to allocate any partial payments made by customers to the utility in proportion to their respective shares of the outstanding customer charges.
• Utilties must credit funding received through CAPP against customer charges owing the utility and other load-serving entities serving the customer in proportion to their respective shares of customer arrearages.

Implementation Overview & Next Steps

• July 19, 2021 - CSD issued Utility CAPP Program Notice 2021-01 (General Overview of CAPP)
• August 2, 2021 -CSD released CAPP Utility Survey due within 30 days of issuance
• Sept 2, 2021 - CAPP Utility Survey Responses Due
• TBD - CSD's issuance of CAPP Program Notice 2021-02 (Communication of survey instructions)
• TBD - CSD's issuance of CAPP Program Notice 2021-03 (Communication of survey results and utility allocation determinations)
• October 4, 2021 - Release of CAPP Application due within 60 days
• December 6, 2021 - CAPP Application Due
• January 31, 2022 - CAPP funds fully disbursed