Parties Comment on Proposed Decision Authorizing PIPP Pilot Programs

The following is a brief snapshot of Parties' Opening Comments:

CalCCA:

• CalCCA supports the Commission’s implementation of the Percentage of Income Payment Plan (PIPP) pilot program to test whether such a program can: (1) reduce the number of low-income households at risk of disconnection; (2) encourage participation in energy saving and energy management programs; (3) increase access to essential levels of energy service; and (4) control program costs.
• CalCCA supports many aspects of the Proposed Decision and appreciates the Commission’s acknowledgment of the benefits of including in the 48-month pilot both investor-owned utilities ("IOUs") and CCAs that choose to participate. In addition, the recovery of electric costs of IOUs and participating CCAs through the Public Purpose Programs Charge (PPPC) is appropriate for this public benefit program.
• CalCCA recommends revising the customer eligibility criteria to include current arrearage/late payment information, rather than recurring disconnections prior to the COVID-19 pandemic, to better reflect changed circumstances as a result of the pandemic.
• CalCCA recommends that if the Proposed Decision’s eligibility criteria are retained, clarify the time period and number of eligible “recurring disconnections."
• CalCCA recommends specifying that the line-item bill credit should be applied to the entire bill by the IOU proportionally to the IOU and CCA charges.
• CalCCA recommends revising the IOU and CCA reporting frequency to eight months after the pilot launch and every 12 months thereafter, to allow for more robust data to inform the reports.
• CalCCA recommends requiring the PIPP working group and evaluator to study and report on mechanisms to include low-income master-metered customers in the PIPP.

CforAT and NCLC:

• The PD’s endorsement of a PIPP benefit calculation that provides a variable credit each month rather than a predictable, fixed billed amount calculated at the time of enrollment is more complex to administer.
• The PD’s proposed adoption of PG&E’s recommended customer exclusions (i.e., customers who do not have Smart Meter, who are billed through the Advance Billing System, or who are enrolled in any other pilot) from PIPP pilot participation should be rejected.
• The PD should be revised to set a fixed, designated bill – not a monthly bill credit. Under the bill credit approach in the PD, rather than calculating a PIPP amount at the time of enrollment based on the customer’s monthly income and the associated benefit cap (established at 4% in the PD, in contrast to a two-tier proposal of 4% and 2.5% in the prior straw proposal), the PD proposes to calculate the PIPP credit each month as the lower of (a) the difference between the bill cap and the actual (volumetric) bill, or ( b) zero if the actual volumetric bill is lower than the bill cap. Instead, CforAT/NCLC continue to endorse our proposal set out in comments on the 2021 Straw Proposal Ruling, which recommended that the PIPP Pilots should be structured so that pilot participants will be charged a set monthly amount based on a calculation made at the time of enrollment, with a comparison run at that time to evaluate whether the customer would benefit from the PIPP in comparison to their CARE and/or Medical Baseline bill.

SDG&E:

• SDG&E proposes the PD be modified to include a standardized bill cap at 6% of a customer’s income. This proposal aligns with various out-of-state PIPP programs referred to in this proceeding, with gross income requirements for previously established Commission programs like CARE and ESA, and other reliable reports and articles that cite to numbers in the 6-10% ranges in similar policy discussions. The evaluation report is the appropriate place for analysis of whether a lower bill cap is appropriate.
• All pilot participants should be income verified prior to enrollment. For purposes of the Pilot, SDG&E believes the CARE post-enrollment process to be insufficient. SDG&E is concerned with the quality of the information obtained from the PIPP Pilot, and the CARE Program heavily relies on self-certification (honor system) for program enrollment and recertification wherein a customer states they meet program qualifications with no requirement to provide income documentation.
• SDG&E proposes a slight modification to the PD to clarify that participants will not be required to verify their income if a CARE income verification has been completed within the last 2 years.
• SDG&E proposes that the PD be modified to clarify that categorical eligibility does not satisfy the income verification requirements for the 0-100% FPG tier. Furthermore, since CARE income verification rules do not verify income for the 0-100% FPG level, the PD should clarify that this rule only applies to those customers requesting to participate at the 101-200% FPG PIPP tier.
• SDG&E requests that the PD be modified to state that after initial enrollment in the PIPP Pilot, the PIPP recertification date should be the same as the CARE recertification date – even if it results in PIPP recertification sooner than expected.
• SDG&E has requested modification of the PD to require commencement of PIPP Pilot ME&O no sooner than July 2022 due to conflicts with other utility obligations and activities.
• With a total program cap of 1,000 between SDG&E and its two CCAs, it is not clear how to handle a scenario where SDG&E enrolls eligible customers as part of bundled service and then transfers a larger number of enrolled customers than allowed by the CCA’s cap (it’s proportional share) because of their subsequent transition to CCA service as part of the San Diego Community Power launch. Accordingly, SDG&E requests that the Commission modify the PD to clarify how the allocation mechanism should work if utility customers transfer during the PIPP pilot enrollment period. SDG&E suggests that as long as a total of 1,000 customers are enrolled, the proportional share within the service territory should be a target and not a cap, and worked out in consultation with the CCA during the planning for the joint implementation plan.
• SDG&E believes that the current requirement to “contract with community-based organizations that serve eligible high recurring disconnection rate zip codes and currently conduct outreach for ESAP and/or LIHEAP to conduct outreach, intake and enrollment for the pilots” is overly prescriptive and may not allow the utilities enough flexibility to leverage current existing, and successful, partner networks.
• A similar requirement to engage with CBOs to perform outreach is included under “Energy Usage” in Attachment A, but it is unclear how this outreach requirement specifically ties to energy usage. SDG&E recommends the discussion regarding CBO outreach is best suited for the “Marketing, education and outreach” section and proposes that the “Energy Usage” section be modified to state that “The PIPP Pilot will not include an energy usage cap. The high usage rules for the CARE program will apply to PIPP participants.”

UCAN:

• The PD allows California Community Choice Aggregators (“CCAs”) the option to participate in the PIPP pilots. At this juncture, it is far from clear whether the CCAs will exercise this option when PIPP pilots are initiated after the Commission’s final decision in this phase of R.18-07-005. If large numbers of the CCAs decline to participate in the PIPP pilots the results of the pilots may be skewed in unforeseeable ways.
• It is legal error to give CCAs the option to participate in the PIPP pilots. Under section 453(a) and (b) of the Pub. Util. Code utilities are prohibited from providing services on a preferential basis or engaging in discrimination on the individual characteristics of the customer. The PD’s proposed language conditions eligibility for enrollment in the PIPP pilot based on the discretionary decision of CCAs to participate in the pilots. The benefits of the PIPP pilots should be available to a broad spectrum of utility customers that meet the income and CARE participation criteria that are proposed in the PD; it should not be a function of an accident of geography regarding whether a given low-income ratepayer is served by a CCA or a traditional investor-owned utility.
• To avoid the problem of disparate eligibility for the PIPP pilots depending upon the decision of a CCA to participate in the program the PD could be modified in two ways: 1) mandate that all CCAs be required to make their CARE customers eligible for enrollment in a PIPP pilot; or 2) limit eligibility for PIPP pilots to CARE customers being served by traditional IOUs, i.e., those that do not have a CCA in place.
• A 48-month pilot program would extend until 2027 at which point the Commission presumably will decide whether the PIPP should be offered to all eligible low-income customers, or if it should be discontinued or otherwise modified. The PD’s decision to establish a 48-month evaluation period ignores the very real crisis that utility arrearage payments already represent to millions of vulnerable California low-income customers.

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The following is a brief snapshot of Parties' Reply Comments:

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CalCCA:

CalCCA recommends that the Commission adopt the PD's allowance of CCA participation in the PIPP Pilot.

• UCAN’s proposal to exclude CCAs altogether is inherently flawed and would result in the exact result that UCAN fears. Excluding CCAs from the PIPP pilot would prevent a substantial number of eligible customers from benefitting from the PIPP pilot. In addition, excluding CCA customers would result in incomplete PIPP pilot data, rendering any evaluation of the pilot less effective in determining whether and how to implement a long term PIPP.

• UCAN argues that providing CCAs the option to participate in the PIPP constitutes legal error based on Public Utilities Code sections 453(a) and (b), which prohibits utilities from providing service on a preferential or discriminatory basis.4 Notwithstanding that CCAs are not “utilities” under the Public Utilities Code, the decision of a CCA over whether to participate in the PIPP pilot has nothing to do with preferential or discriminatory practices, but rather is related to the ability of CCA to participate, or whether its governing board has authorized participation.

CalCCA recommends that the Commission should delay the commencement of the PIPP Pilot in SDG&E's territory to no sooner than July 1, 2022. If large numbers of the CCAs decline to participate in the PIPP pilots the results of the pilots may be skewed in unforeseeable ways. Moreover, the potential eligibility of an individual household for participation in a PIPP pilot will be (in part) a function of where they live and whether their CCA (if one exists where they live) opts to participate in the PIPP pilots, rather than whether they otherwise qualify for inclusion in a pilot.

• SDG&E raises the potential for conflicts between the PIPP pilot’s current schedule and the transfer of customers from SDG&E to SDCP. In addition, SDG&E points out that new California Alternate Rates for Energy (CARE) income eligibility guidelines will be available as of June 1, 2022, creating the potential for even more customer confusion. As a result, CalCCA requests that the Commission adopt SDG&E’s proposal for the PIPP pilot to begin in SDG&E’s territory no sooner than July 1, 2022.
• In addition, CalCCA requests that the Commission allow SDCP to participate in the PIPP pilot if it is participating in AMP as of the time it begins residential service.

CalCCA recommends that the Commission define the rules for a new or expanded CCA for which customers already enrolled in the PIPP Pilot by the IOU are transferred to CCA service.

• In the case of a transfer of customers from an IOU to a CCA after the initial enrollment for the PIPP, SDG&E proposes that the proportional share should be a target and not a cap (as long as the total customers enrolled in the IOU service territory is capped as set forth in the PD). CalCCA requests that the Commission adopt SDG&E’s proposal not only for SDG&E’s territory, but for any situation in which a CCA is newly established or has expanded its territory during the PIPP pilot.
• For new CCAs to which PIPP enrolled customers are transferred, the Commission should also allow an exception to the requirement that a CCA be participating in AMP at the time of the issuance of the Decision, but should rather require a new CCA to be participating in the AMP when its begins residential service.

CalCCA recommends that income verification should be required for all PIPP Pilot customers prior to enrollment.

• CalCCA supports SDG&E’s proposal that instead of utilizing the CARE post-enrollment verification processes in which the utility verifies a minimal percentage of the self-verifying customers, that all PIPP pilot customers be required to verify their income prior to enrollment in the PIPP pilot. Verification of all customers, whether in the 0-100 percent FPL category or the 101-200 percent FPL category, will not only ensure accurate data for proper evaluation of the success of the PIPP in lowering disconnections, but will also ensure true eligibility for all customers needing the assistance.
• In addition, CalCCA supports SDG&E’s proposal to clarify alignment of the PIPP verification and CARE certifications to allow a customer to get verified for PIPP, and then recertify when the CARE certification is due.

CalCCA recommends the Commission reject PG&E's request to only have administrative costs in excess of its budget reviewed for reasonableness.

• CalCCA agrees with the Commission that given the wide variation in types and values of administrative costs, all such costs should remain subject to reasonableness review.

CalCCA recommends UCAN's request to shorten the Pilot from 48 months to 24 months should be rejected.

• Given that the enrollment alone of PIPP pilot customers will take at least 6 months, data adequate for a determination of whether to roll out the PIPP to all eligible customers must be robust and be based on years, and not months, of data.
• In addition, given the substantial impact of the COVID pandemic, 48 months gives adequate time for a post-COVID “adjustment” for the economy which will allow for a better indication of the program’s likely success.

SDG&E:

• PG&E’s comments on the PD’s misstatement of fact underscores SDG&E concern regarding a 4% bill cap. Accordingly, the Commission should establish a minimum 6% bill cap for the Pilot, as supported by SDG&E in this proceeding, given the lack of evidence on the record in support of a 4% bill cap.
• SCE’s comments regarding cost-sharing require establishment of cost-sharing percentages. SDG&E supports SCE’s request for modification of the PD to state that all IOUs—not just PG&E—may include Evaluator and Working group Facilitator costs in their respective memorandum accounts. However, the Commission should establish cost-sharing percentages as well. SDG&E recommends a cost-sharing percentage relative to each IOUs respective share of the 15,000 statewide customer-enrollment target equal to 33% for PG&E and SCE (5,000/15,000), 27% for SoCalGas (4,000/15,000), and 7% for SDG&E (1,000/15,000).
• UCAN’s request to shorten the Pilot period misunderstands the purpose of the Pilot. The overarching purpose of the Disconnections Order Instituting Rulemaking (OIR) is to adopt “rules and policies to reduce disconnections and improve reconnection processes and outcomes for disconnected customers.” Further, the PD authorizes the PIPP Pilot to test “whether a PIPP program can (i) reduce the number of low-income households at risk of disconnection, (ii) encourage participation of energy saving and energy management programs, (iii) increase access to essential levels of energy service, and (iv) control program costs.”7 None of these stated goals relates specifically to reducing arrearages related to COVID.

UCAN: 

• SDG&E’s recommendation to increase the percentage of income devoted to energy utility bills from 4% to 6% is inappropriate and unnecessary.
• PG&E’s proposal for pre-approval of a set level of administrative costs that would foreclose a reasonableness review violates the section 454 of the Pub. Util. Code that requires the Commission to find utility costs to be justified. The Commission should reject the temptation to pre-approve utility expenditures; doing so undermines the dictates of section 454.
• PG&E’s proposed 60/40 split between electric bills and natural gas has no apparent evidentiary basis.
• CalCCA’s proposal to revise eligibility criteria to include customer with high arrearages or a history of late payments may complicate the enrollment process.