1 Investor-Owned Utility LIEE-CARE Budget Applications Presentation to the LIOB San Diego Gas & Electric Company Southern California Edison Company Southern California Gas Company Pacific Gas and Electric Company San Diego, CA June 5, 2008

2 Overview Review of 2009 – 2011 LIEE-CARE Program and Budget Applications Common Utility Proposals SDG&E Application SCG Application SCE Application PG&E Application Statewide Strategic Plan Update

3 Common Proposal: Program Achieves 25% of Programmatic Initiative  Methodology and factors considered to determine estimated number of customers to be served between  Starting Point: Estimated number of eligible LIEE customers  Subtracted from the starting point include:  Number of households served by LIEE 2002 thru 2008 (actuals plus estimate for 2008)  Estimated number of households unwilling to participate (10%)  Number of households served by LIHEAP/DOE 2002 thru 2008 (actuals plus estimate for 2008)

4 Common Proposal: Ten Year Rule The utilities agreed on the following modifications/exceptions to be added to "Section 2.8 Previous Participation" of the LIEE P&P Manual: New cost effective measures or technologies that were not previously available in the LIEE program at the time the utility treated a home shall be made available for those qualifying customers In the event a key program eligibility requirement now makes a customer eligible for measures previously not offered at the time the utility treated the home, the utility shall make available those cost effective measures for qualified customers. This modification gives the utilities full flexibility to return to homes that have been treated in the past and to provide the customers with cost effective measures that were either not available at the time the home was treated, or were not offered due to a condition that has now changed.

5 D directed that a statewide brand be developed for the LIEE program that all utilities would use as a tag line along with each utility’s own LIEE program name. Utilities are in the process of contracting with an Ad Agency to develop and present several potential: Statewide program descriptions/taglines Statewide program names Potential program descriptions and names will be tested in focus groups conducted in all four utility service territories in multiple languages. The Joint Utilities expect to present a recommendation to the Commission by July 14, Common Proposal: Single Statewide Marketing Tagline

6 Common Proposal: Measurement and Evaluation (M&E) Studies Statewide StudiesTotal Cost Impact Evaluation of the 2010 LIEE Program $600,000 Process Evaluation of the 2009 LIEE Program $250,000 Non-Energy Benefits Study$300,000 Refrigerator Degradation EUL Study* $200,000 LIEE Household Segmentation Study** $200,000 Total$1,550,000 * Joint study funded between the three electric utilities: PG&E, SCE and SDG&E. ** Joint study funded between SCE and PG&E.

7 SoCalGas & SDG&E

8 SoCalGas & SDG&E: Program Goals SoCalGas & SDG&E proposed audit based, customized approach is primarily designed to: Focus on the achievement of energy savings Reduce low-income customers’ bills Improve cost effectiveness Address health, comfort and safety issues. Proposed program is aligned with the Strategic Plan. To achieve maximum energy savings, the proposed LIEE program puts additional focus on highest energy users, without excluding those eligible customers who have lower energy consumption.

9 SoCalGas & SDG&E: Cost Effectiveness A primary goal is to improve the cost effectiveness of the LIEE program in PY SDG&E SoCalGas

10 SoCalGas & SDG&E: Program Design Customized Energy Audit Proposed program design provides a customized and detailed customized energy audit that creates a personalized energy-use profile for each customer. Plan is to use an audit tool to compare a customer’s usage to that of neighbors with homes of similar size, construction, and occupancy. Audit tool will include customer usage patterns, appliance information, and other pertinent household information that will help identify the highest savings opportunities.

11 SoCalGas & SDG&E: Program Design Customized Energy Education Proposing to implement a new and innovative approach to customer energy education. Based on the results of the customized audit, energy education tailored to the individual customer will consist of the following: Measures to be installed and associated energy savings; Customer-generated goals related to energy use; Potential benefits to the customer and the environment and economy; Potential improvements to health, comfort, safety, and quality of life; and Comparison of energy usage patterns of households with similar characteristics.

12 SoCalGas & SDG&E: Program Design Customer Rewards Designed to reward customers who are able to consistently maintain a reduction in their overall energy consumption. This element will analyze customer energy usage after LIEE measures are installed and the energy usage will be compared to the same timeframe during the previous year. Two Reward levels – Platinum & Gold The Platinum Level Incentive will be awarded to customers who reduce their energy consumption by 20% or more. The Gold Level Incentive will be awarded to customers who reduce their energy consumption by 10% to 19% Customers may receive up to two rewards in one year during the first year of program participation.

13 SoCalGas & SDG&E: Program Design Customer Segmentation Identify those neighborhoods that have a high density of customers who have a high likelihood of meeting the LIEE program’s eligibility guidelines. Group the identified potentially eligible customers into tiers based on their household energy usage To achieve maximum energy savings as soon as possible, usage levels of customers will be prioritize. The expected number of households within each segment to be reached (PY 2009 – 2011) is approximately: SoCalGas - 172,000 at or below baseline allowance and 171,000 above baseline allowance SDG&E - 20,000 high users, 21,000 medium users, 19,000 low users

14 SoCalGas & SDG&E: Program Design Blue text SDG&E only Measures shown in Red text are proposed new measures

15 SDG&E: Program Design

16 SoCalGas & SDG&E: Marketing Education & Outreach Customer Segmentation Marketing & Outreach Targeted Direct Mail Cross Promotion Blasts Canvassing Advertising Community Events Coordination with Local Agencies Customer Contact Centers Brochures Telemarketing On-Line Request Form

17 SoCalGas & SDG&E: Integration & Leveraging Integration with Energy Efficiency – e.g., Mobile Home, Innovative Outreach and Measure Program. Ltg Exchange, etc LIHEAP Potential Opportunities Implement a structured referral system Track customer referral in the program database and measures installed by LIEE or LIHEAP. Provide LIHEAP contractors serving the SoCalGas service territory access to SoCalGas’ LIEE database Strategic Partnership with Imperial Irrigation District to provide low income customers in the overlapping service territories those measures offered by each utility Strategic Partnership with Metropolitan Water District to leverage funds for the direct installation of HE clothes washers. Cities, local communities & schools– continue to partner with these entities to conduct local events CSI - coordinate efforts with the SF and MF program administrators to ensure that homes receiving CSI measures have received LIEE measures

18 SoCalGas: Pilot HE Forced Air Unit Furnace SoCalGas proposes to offer a natural gas high-efficiency FAU furnace pilot to customers with high space heating needs during the winter season. The pilot will replace existing, inefficient operational natural gas FAU furnaces with high-efficiency units that have an efficiency rating of at least 92%. The pilot will be implemented for approximately 250 customers and the installations will occur after the winter season. Bill analysis will be used to determine the cost effectiveness for each installation and the results will be evaluated to determine if this potential measure will be offered in upcoming program years to customers with high space heating needs.

19 SDG&E: Pilots Smart Meters - IHD & PCT In Home Display (IHD) pilot - to customers with Smart Meters as part of the energy education process to help customers know their actual energy usage beginning in 2010 Programmable Communicating Thermostat (PCT) pilot - beginning in PCTs are thermostats that can receive price or electric system reliability signals, and can be programmed by a customer to automatically reduce energy consumption through thermostat set-point adjustments.

20 SoCalGas & SDG&E: Proposed LIEE Budgets

21 SoCalGas & SDG&E CARE Application Propose same residential program requirements for Sub-Metered Two year recertification cycle Anniversary date renewal Fixed Income Recertification Propose two year recertification cycle for Expanded CARE Facilities Propose to include Section 8 & Public Housing in Categorical eligibility Continue of four year recertification using probability modeling Expand phone enrollment, 3rd party outreach and leveraging opportunities Telephone Enrollment  Continuation of Recertification Telephone Enrollment  Addition of Inbound Telephone Enrollment

22 Southern California Edison Low Income Energy Efficiency Program Proposal

23 Customer Segmentation Mild/Temperate Climates Zones Hot Climate Zones Customers receive all eligible measures High use customers targeted

24 ME&O CARE ZIP7 Data Sharing Mobile Energy Units Energy Education Kits Targeted Direct Mail Cross Promotion Web-based Enrollment Media Advertising Community Events Coordination with Local Agencies

25 Integration with Energy Efficiency Home Energy Efficiency Rebates (HEER) Multifamily Energy Efficiency Rebate Program (MFEER) California New Homes Program (CANHP) Comprehensive Mobil Home Program (CMHP) Home Energy Efficiency Surveys (HEES) Efficient Affordable Housing (EAH) WE&T School Program

26 Integration with EE, cont… Mobil Energy Unit (MEU) Community Language Outreach Program (CLEO) Energy Leader Partnership (EL) Summer Discount Plan (SDP) Advanced Metering Infrastructure (AMI) Medical Baseline Energy Assistance Fund (EAF)

27 SCE Application – Program Budget Program Year HomesBudgetMWhMW ,243$53,594,00029, ,24354,783,00032, ,243$56,633,00033, Years225,729$165,010,00095,

28 LIEE Savings & Benefits

29 Cost Effective Measure Offering Cost-effectiveness- First criteria considered in the review of potential measures Efficient lighting Refrigerator replacement Evaporative cooler installation Central air conditioner maintenance Pool pump replacement

30 Non-Cost Effective Measures In evaluating measures that were not cost- effective, SCE was guided by Commission intent to “… continue to authorize funding for measures that serve important social objectives but may not be cost-effective, as long as they serve our primary objective of reducing energy use and promoting other values such as participants’ quality of life Central Air Conditioners Window/Wall Air Conditioners

vs 2009 LIEE Program Measures Measure 2008 Annual Annual Refrigerator Replacement16,90020,000 Room Air Conditioner Replacement1, Evaporative Cooler Installation6,7008,000 Central Air Conditioner Replacement1,7504,050 Central Heat Pump Installation Weatherization1,3501,375 Compact Fluorescent Bulbs194,000338,000 Torchiere Replacement4252,475 Porch Light Fixture Replacement Pool Pump Replacement2001,250 Duct Testing and Duct Sealing1,7504,000 Evaporative Cooler Maintenance4,0002,000 HVAC Maintenance1,500

32 SCE 2009 – 2011 Application  Planned Proposal Recommendations: o Same residential program requirements for sub-metered tenants Two-year certification for CARE Expanded Programs Probability Model for recertification Multilingual program awareness campaign Spanish, Chinese, Korean, Vietnamese, and Cambodian Work with Public Housing Authority and Section 8 agencies within SCE service territory to incorporate CARE application into agency intake process Expanded outreach CARE/FERA Administrative Budget Requested $4.2 Current 2008 Budget $5.5 million for PY 2009 $5.4 million for PY 2010 $5.5 million for PY 2011

33 PG&E’s Low Income Energy Efficiency and CARE Program Proposals PG&E Low Income Oversight Board June 5, 2008 San Diego, CA

LIEE Program Year Budget Homes Treated KWKWHTherms 2007$75,336,93863,3195,41027,554,1911,208, $112,702,00080,0006,504 32,512,129 1,402, $152,011,000110,0008,933 44,619,059 1,910, $157,625,000110,0008,949 44,734,832 1,928, Total$422,338,000300,00024,38689,386,4035,241, shows actual program results results are estimates. Budget includes REACH PLUS.

LIEE Represents a Significant Program Expansion Increased families served Increased funding 9 new pilot programs 5 new program studies 2 new measures New segmentation and outreach approaches New partnerships, leveraging, and integration opportunities

LIEE Program Delivery Strategy PG&E will offer the LIEE program through a multi-layered approach that considers: energy use, climate zone and housing type. This approach makes some less cost ‑ effective measures available based on a customer’s electric and/or gas use. Customers with the highest energy use also offer the greatest opportunity to save energy. Helps customers: who save money on their bill Helps all California ratepayers: who benefit as decreases in energy use strengthen the State’s energy resources and decrease GHG emissions.

37 LIEE for PG&E Electric Customers MeasureLow UserMedium UserHigh User Energy Education Screw in CFL Interior HWD Light Occupancy Sensor Refrigerator Torchiere Evaporative Cooler  Window/Wall AC  Exterior HWD Light  Attic Insulation 1  AC Tune-Up  Door Weather-stripping 2  Caulking 2  Attic Access Weather-stripping 2  Minor Home Repairs 2   Available to all qualifying customers   Maybe available to qualifying customers based on climate zone and/or housing type  Maybe available to customers based on need 1 Attic Insulation - Feasible if the customer cools the home with a Central Air Conditioner. 2 Weatherization - Feasible if the customer’s home is All Electric.

38 LIEE for PG&E Gas Customers MeasureLow UserHigh User Energy Education Water Heater Blanket Low Flow Showerhead Faucet Aerator Pipe Insulation Door Weather-Stripping  Attic Access Weather-Stripping  Attic Insulation  Utility Gaskets  Caulking  Duct Test/Seal  Minor Home Repair  Furnace Repair/Replacement 1  Water Heater Repair/Replacement 1    Available to all qualifying customers   Maybe available to qualifying customers based on climate zone and/or housing type  Maybe available to customers based on need 1 Available to qualifying home owners.

39 Nine LIEE Pilots Meals on Wheels – Deliver microwaves to those customers who receive meals and don’t have a microwave (80% more efficient than ovens). High Efficiency Washing Machines – Deliver high efficiency washing machines to households with 5 or more members. Test the viability of this measure. Habitat for Humanity – Join with humanitarian home builder and rehab partner to create more energy efficient low-income housing.

40 Nine LIEE Pilots (con’t) City of San Jose – Partnering with City of San Jose’s strong neighborhood initiative program to assist in serving low income customers. City of San Joaquin (Fresno County) – Partner with City to provide services to low income customers. Energy Education Workshops – Continue to look for more efficient ways to perform group educations with CBOs.

41 Nine LIEE Pilots (con’t) SmartAC – Leverage PG&E’s demand response programs to educate low-income customers about air conditioning cycling options. SmartMeter™ – Focus on educating low income customers on the value of AMI and how it can help them lower their utility bills. Online Training for LIEE Implementation Crews – Explore more efficient training options and reduce crew in-class training time by 50%.

CARE Program Proposed the same residential program requirements for Sub-Metered tenants Proposed two-year certification for CARE Expanded Programs Proposed a survey of customers not responding to Recertification and Post- Enrollment Verification requests CARE Administration budgets requested: ($7,732,000 current 2008 budget) $8,761,000 for 2009 $9,216,000 for 2010 $9,521,000 for 2011

43 In Conclusion PG&E’s LIEE and CARE application represents a thoughtful balancing of: LIEE as an energy resource Cost-effectiveness Increased funding without overburdening non- Low Income customers Innovation & experimentation Improving available information Retention of valuable program elements Health, Safety and Comfort for LIEE customers

44 PG&E Low Income Programs Testimony Internet links to PG&E's Application and Testimony for Approval of the Low Income Energy Efficiency and CARE Programs and Budget: Application 11/Pleadings/PGE/2008/LowIncomeProgPY09- 11_Plea_PGE_ pdf 11/Pleadings/PGE/2008/LowIncomeProgPY09- 11_Plea_PGE_ pdf Testimony 11/Testimony/PGE/2008/LowIncomeProgPY09- 11_Test_PGE_ pdf 11/Testimony/PGE/2008/LowIncomeProgPY09- 11_Test_PGE_ pdf

45 California Energy Efficiency Strategic Plan (CEESP): Update of the Low Income Strategies Presentation to the LIOB San Diego Gas & Electric Company Southern California Edison Company Southern California Gas Company Pacific Gas and Electric Company San Diego, CA June 5, 2008

46 LIEE Strategic Plan Update The California Energy Efficiency Strategic Plan (CEESP) was filed 6/2/08 ACR from Commissioner Grueneich dated 5/5/08 delayed filing of the CEESP from 5/15 until 6/2/08 CEESP posted online at: The LIEE Sector is addressed in Section 2 of the Plan, along with the Residential Sector Still treated as a unique market sector Places it where belongs and includes low income in the context of the residential sector

47 Six Low Income Strategies Develop customer segmentation to improve program delivery Pursue collaboration and leveraging of other programs Integrate LIEE programs with Energy Efficiency and other demand-side programs Promote the growth of a trained LIEE workforce by developing LIEE workforce training requirements Specify and employ program elements that emphasize long-term and enduring energy savings Specify and deploy Marketing, Education, and Outreach (ME&O) for LIEE program consistent with energy efficiency strategies

48 1) Develop customer segmentation to improve program delivery …increasing the opportunities for program participation and energy savings 1.1: Identify customer sectors or segments using dimensions such as energy use, geographic locations 1.2: Develop and implement a plan to achieve 25% customer participation by : Improve program delivery

49 2) Pursue collaboration and leveraging of other programs 2.1: Increase collaboration and leveraging with other low income programs and services

50 3) Integrate LIEE programs with Energy Efficiency and other demand-side programs 3.1: Coordinate and communicate between LIEE, EE and DSM programs to achieve service offerings that are transparent for the customer 3.2: Leverage deployment of advanced metering (AMI) to inform and empower low income customers

51 4) Promote the growth of a trained LIEE workforce by developing LIEE workforce training requirements …aiming training at low income, minority and other disadvantaged communities 4.1: Integration with the Workforce, Education and Training (WE&T) strategy in the CEESP 4.2: Continuation of existing training resources 4.3: Coordination with existing and potential resources for training related to LIEE program needs

52 5) Specify and employ program elements that emphasize long-term and enduring energy savings 5.1: Improve customer knowledge on energy and environmental issues and improve their use of energy 5.2: Provide low income customers with measures that result in the most savings in the LIEE program

53 6) Specify and deploy ME&O for LIEE program consistent with energy efficiency strategies 6.1: Develop the use of a recognizable and trustworthy Brand/Tagline for California’s Low Income Energy Efficiency 6.2: Market LIEE program using segmentation and social marketing