CA Utility Spending Decreases Slightly for Low-Income Programs

February 22 - California's four major utilities spent almost $1.51 billion in ratepayer funds on two mandated low-income programs in 2012. Both programs came in under their 2011 totals, especially the energy efficiency program, which dropped 11 percent. Overall, the combined total for both programs dropped 4.5 percent in 2012.

California's utilities continue to administer the low-income electric and gas rate discount (CARE or California Alternate Rates for Energy and the Energy Savings Assistance Program (ESAP), the low-income energy efficiency program. The four major utilities participating in both programs are San Diego Gas and Electric (SDG&E), Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and Southern California Gas Company (SCG).

In August 2012, the California Public Utilities Commission (CPUC) finalized the two programs' budgets for the three-year cycle of 2012-2014. The total budget approved for CARE totaled almost $3.8 billion, a 43 percent increase from the previous three-year cycle. The commission retained its 90 percent penetration/enrollment goal of all eligible households. It directed the utilities to aggressively engage in outreach activities, while also taking measures to make sure only eligible households are enrolled in the program.

For 2012, the CPUC had approved CARE discount spending of $1.18 billion. The utilities surpassed that amount, spending nearly $1.21 billion. These totals include only the money for rate discounts, not the various administrative costs built into the overall program budgets. Approximately 4.9 million households received the CARE discount of 20 percent on their electric and natural gas bills in 2012.

Funding for ESAP during the 2012-2014 cycle totaled about $1.1 billion, an increase of 27 percent from the previous three years. The commission encouraged the utilities to surpass the targeted goal of reaching one third of the remaining eligible households. The California Long-Term Energy Efficiency Strategic Plan calls for 100 percent of eligible and willing households to be served by 2020.

While the utilities initially planned to treat about 366,500 households in 2012, they ended up only reaching approximately 287,000. The CPUC chalked this up to its belief that, as the program continues, it becomes more difficult to identify and target eligible homes. ESAP has already serviced more than a million homes since 2009.

As the second year of the current cycle begins, the oversight of low-income assistance and other utility-related monies has been called into question. In late February 2013, a legislative report questioned the CPUC's management and auditing of "balancing accounts," including those dealing with low-income assistance. The Legislative Analyst's Office told lawmakers that state auditors should investigate if CPUC is properly overseeing the accounts.

"There is a possibility ratepayers were overcharged," said Tiffany Roberts, a senior fiscal and policy analyst with the Legislative Analyst's Office. "There is a possibility they were undercharged. We really don't know."

Sources: CPUC, media reports, Low-Income Oversight Board

Page last updated: November 11, 2013