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A state program that’s supposed to help low-income residents save energy to reduce environmental impacts and make their monthly utility bills more affordable is falling increasingly short of its goals. Ironically too, the Energy Savings Assistance Program (ESAP) appears to be dumbing down energy efficiency work and often paying poverty wages instead of building up the state’s green workforce. The program is reaching more households, but data show that over the years it’s delivering less and less energy savings, according to filings by consumer advocates and various reports tracking the program’s accomplishments. As a result, utilities contend they need to boost spending on the ratepayer-funded program by 27 percent. The program is available to low-income customers. At the same time, utilities maintain they must increase energy bill subsidies for low-income residents, in part because savings have not been as great as hoped. The dilemma is slowing the California Public Utilities Commission as it weighs investor-owned utility plans to spend $998 million on the energy savings program in 2012-14, up from $783 million in 2009-11. To buy time to untangle the complex issues, the commission is eyeing six months of bridge funding at current levels for low-income efficiency work beginning in January. CPUC administrative law judge Kimberly Kim wrote in a proposed decision Oct. 11 that the bridge funding is needed to keep the energy efficiency program going until regulators can refine it, which is anticipated by April. Kim’s proposed decision also would provide another six months of funding for the California Alternate Rates for Energy program (CARE), which provides ratepayer-funded discounts for households with annual incomes up to 200 percent of the federal poverty level. Funding would continue over the first six months of 2012 at today’s level, which authorizes $902 million/year for energy bill discounts. Utilities want to increase CARE spending in 2012-14 to an average of $1.2 billion/year. This would bring total spending for the two low-income programs for the next three years to $4.7 billion, up from $3.7 billion over the last three years. The problem, according to Division of Ratepayer Advocates attorney Mitchell Shapson, is that CARE, energy efficiency assistance, and other low-income programs, are not making “energy affordable enough.” As a result, the division and other consumer advocates complained to CPUC commissioner Tim Simon earlier this year that CARE customers have high disconnection rates, particularly in Pacific Gas & Electric and Southern California Edison territories. The division notes that in 2010, California saw 586,000 disconnections for non-payment of energy bills despite record high energy bill assistance subsidies. Shapson maintains that low-income households continue to struggle in paying their utility bills because the CPUC began pressuring utilities in 2009 to enroll more customers in CARE--at least 90 percent of those who are eligible--and provide energy efficiency updates to a growing number of low-income households. In essence, this spread the available money over a greater number of residents, diluting its benefits on a per household basis. The commission wants all 4 million CARE households updated for energy efficiency by 2020. Utilities are planning to upgrade 327,000 households in the coming three years. The division estimates that in 2010 annual benefits/low-income household ranged between $286 and $402, while the energy efficiency updates installed on 200,000 low-income homes saved customers an average of $50/year. Data show that the amount of energy savings per dollar spent in low-income households has declined since 2005, according to a letter by consumer advocates to Simon. “It is costing more per unit of energy saved,” according to those advocates. The efficiency spending for low-income homes also appears to be pushing the wages of workers installing new lighting and other energy saving measures lower, according to Carol Zabin, attorney for The Donald Vial Center on Employment in the Green Economy. Zabin explained that’s because utilities award contracts for energy efficiency upgrades based on low cost instead of best value, which “forces the price contractors can pay for labor down.” The result is a low-skilled workforce that can undertake only simple measures that save little energy, compared to a skilled workforce capable of achieving high levels of energy efficiency through whole house or building analysis and measures. Some energy efficiency workers in the program get piece rate pay amounting to $50-$70/day, according to Zabin.

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