CPUC OKs $3.6B for Low Income Customers, Plus PG&E Ruby Pipeline

Regulators approved investor-owned utility programs to direct $3.6 billion of ratepayer money over the next three years to subsidize struggling customers’ utility bills and improve their home energy efficiency. On a unanimous vote November 6, the California Public Utilities Commission agreed to give Pacific Gas & Electric, Southern California Edison, Southern California Gas, and San Diego Gas & Electric a total of $2.6 billion to offset one-fifth of their low-income customers’ energy bills. The commission allocated another $1 billion for energy efficiency measures in residences that house people living below the poverty line to curb avoidable energy use from inefficient furnaces, water heaters, air conditioners, and other appliances, and to seal leaky windows and ducts. The approved program subsidies--which mark a significant increase--are expected to produce larger energy savings and decrease greenhouse gases while improving the quality of life of the low income households, CPUC member Dian Grueneich said. The utilities are directed to report on the savings from the energy efficiency programs because their previous estimates were found to be faulty. “Therefore, going forward, we require [investor-owned utilities] to report more accurately the impact” of replacing old appliances and furnaces with new models, Grueneich’s decision states. The decision ramping up funding directs the utilities to expand the reach of their assistance through the California Alternate Rates for Energy and Low Income Energy Efficiency programs. The penetration target is 90 percent of low-income residences, which represents 4.85 million households. One-hundred percent coverage of qualified ratepayers is the goal for 2020. The decision aims to ease the application process for qualifying households and expand consumer education. It also directs the utilities to focus on neighborhood outreach, not just a few houses at a time, and to base effective measures on the housing type and not on the occupant’s energy use. The main focus of these triennial programs is poor ratepayers who consume large amounts of energy. These customers are the most vulnerable to power shutoffs, something regulators hope to limit. Utilities are directed to have 100 percent installation of efficient compact fluorescent light bulbs by next January. The utilities also are supposed to discontinue giving away compact fluorescent bulbs because studies show that up to 30 percent of the free bulbs are not installed. Commissioner John Bohn noted that decreased energy use means that the subsidies also will decrease. He added that the bulk of the program money will go to small businesses that implement the energy efficiency measures. The regulators also rejected SDG&E’s request to get rid of the rate cap put in place during the 2000-01 energy crisis to protect ratepayers that use low amounts of energy. Although some of the commissioners said the cap on utility bills of customers whose use is within 130 percent of the baseline level was an inequitable cross subsidy, they insisted that the Legislature should make the decision about the life of the cap. CPUC president Mike Peevey said the price constraint impacted the effectiveness of so called “smart meters” and dynamic pricing, which inform ratepayers of the real time cost of energy during the day. Commissioner Rachelle Chong added that the inability to respond to shifting power prices and curb use at peak periods affects the state’s ability to cut greenhouse gases. The rate freeze is expected to be in play for the next seven to 12 years. The Department of Water Resources stepped into to procure needed power for the state when the utilities were financially disabled. Until the DWR contracts end, many presume the rate cap will remain in effect. In other news, the CPUC approved PG&E’s natural gas pipeline project that would ship gas from the Rockies to the California-Oregon border. Regulators approved 15 year deals beginning in 2011 that would send 375,000 decatherms a day in the Ruby and Redwood pipeline projects. Of that, 250,000 would be used to meet core customer demand and the other 125,000 would be used for the utility’s electric fuels department. For the first four months of the contract, 250,000 decatherms would be sent to the utility’s electric fuels division. The pipeline project fixed costs are estimated at $106.5 million. Controversy over the deal arose because PG&E was attempting to buy a stake in the Ruby pipeline prior to negotiating a firm capacity agreement, raising conflict of interest issues. Concerns were raised about violations of the commission’s affiliate transaction rules, which govern interactions between utility parents and subsidiaries. Commissioner Timothy Simon, however, insisted there was no violation of the affiliate transaction rules or “adverse consequences to ratepayers.” He added, “There is no better deal for ratepayers.”

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CPUC OKs $3.6B for Low Income Customers, Plus PG&E Ruby Pipeline

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