Multifamily Sector Workshop California Public Utilities Commission October 21, 2011

1. Multifamily Sector Workshop California Public Utilities Commission October 21, 2011

2. Trends in Households Served in the Past 5 Years*(Renter vs. Owner)+ * 2006-2010 + Data source: Utility Annual Reports, Table TA 3 (2006-2008), LIEE Table A-8 (2009-2010)

3. Housing Types by Utility Service Territory+ Single-Family (SF), Multifamily (MF), and Mobile Home (MH) + Data source: Utility 2012-2014 Low Income Assistance Program Budgets and Applications, LIEE Table A-4.

4. Trends in Households Served in the past 5 years*(Housing Type)+ • *2006-2010 • + Data source: Utility Annual Reports, Table TA 3 (2006-2008), LIEE Table A-8 (2009-2010)

5. To derive the estimated eligible population for PY2012-2014, the utilities: • 1. Use the estimated number of income eligible households based on the estimates submitted in the • utilities’ annual Estimated Eligibility Update in December 2010. • 2. Add a 1% annual growth factor accounting for population growth and economic • conditions. • 3. Deduct the estimated number of households “unwilling or unable to participate” in the program, e.g. • were not interested, customers unable or unwilling to provide income documents, or property owner’s • waiver. • 4. Deduct the number of homes treated by the Energy Savings Assistance Program between 2002 through • year-end of the most current program year completed. • 5. Deduct the projected number of homes treated by the Energy Savings Assistance Program for the • current program year. • 6. Deduct the number of homes estimated to have been treated through LIHEAP in 2002 – 2007 per D.08-11-031 and projected to be treated by LIHEAP through 2020 based on 2002 – 2007 performance. • 7. After obtaining the homes remaining to be treated in the nine years up to and including 2020, assume • 1/3 will be treated during the 2012-2014 cycle. Data and Methodology Used to Determine Households to Be Served in 2012-2014

6. Civil Code Section 1941.1: Eligible Measures (Legal & Regulatory Framework) A dwelling shall be deemed untenantable for purposes of Section 1941 if it substantially lacks any of the following affirmative standard characteristics or is a residential unit described in Section 17920.3 or 17920.10 of the Health and Safety Code:    (a) Effective waterproofing and weather protection of roof and exterior walls, including unbroken windows and doors.    (b) Plumbing or gas facilities that conformed to applicable law in effect at the time of installation, maintained in good working order.    (c) A water supply approved under applicable law that is under the control of the tenant, capable of producing hot and cold running water, or a system that is under the control of the landlord, that produces hot and cold running water, furnished to appropriate fixtures, and connected to a sewage disposal system approved under applicable law.    (d) Heating facilities that conformed with applicable law at the time of installation, maintained in good working order.    (e) Electrical lighting, with wiring and electrical equipment that conformed with applicable law at the time of installation, maintained in good working order.

7. Decision 08-11-031 (pg. 39): Eligible Measures(Legal & Regulatory Framework) [N]o furnace repair and replacement or water heater repair and replacement work shall occur in violation of our holding in D.07-12-051 that heating and water heating in rented housing are the responsibility of the landlord: We are not convinced that utility ratepayers should assume the costs of appliance repairs and replacements. Section 1941.1 of the California Civil Code requires landlords to provide space heating and hot water to renters. California law also requires landlords to be responsible for certain household repairs, to assure the unit is habitable and to repair problems that make the unit uninhabitable.* It is the landlord’s responsibility to assure rental property is safe. *See Green v. Superior Court (1974) 10 Cal.3d 616 [111 Cal.Rptr. 704], which held that all residential leases and rental agreements contain an implied warranty of habitability. Under the implied warranty, the landlord is legally responsible for repairing conditions that seriously affect the rental unit's habitability. That is, the landlord must repair substantial defects in the rental unit and substantial failures to comply with state and local building and health codes.

8. Policies & Procedures Manual (§ 2.7.2): Eligible Measures(Legal & Regulatory Framework) • Rental units are not eligible for furnace replacements or major furnace repairs associated with the mitigation of NGAT failures. However, minor repairs and adjustments may be made to furnace Rental units are not eligible for furnace replacements or major furnace repairs associated with the mitigation of NGAT failures. However, minor repairs and adjustments may be made to furnaces if these actions would improve the performance of the system at a minimal cost. • Rental units are not eligible for water heater repairs and replacements associated with the mitigation of NGAT failures. However, services and adjustments may be made to water heaters if these actions would improve the performance of the system at a minimal cost. • Evaporative coolers and hard-wired fixtures may be provided without charge to either the tenant or the landlord. Refrigerator and air conditioner replacements may also be provided at no charge to either the tenant or the landlord, except in the instance where the landlord owns the refrigerator or air conditioning unit that is replaced and also pays the utility bill. In these instances, the utilities may make payments to installation contractors that cover only part of the cost of replacement. • The utilities may opt to provide, at a nominal charge to the landlord, evaporative coolers, refrigerator replacement, and replacement air conditioners and heat pumps.

9. Eligible Measures (Table 5-1 from P&P Manual)

10. Eligible Measures

11. Eligible Measures

12. Eligible Measures

13. Eligible Measures

14. Expenses by Renter vs. Owner (2009-2010)+ + Data source: Utility Annual Reports, LIEE Table A-8 (2009-2010)

15. Measures Provided to Owners vs. Renters by Cost (2009-2010)+ + Data source: Utility Annual Reports, LIEE Table A-8 (2009-2010)

16. Income Definitions Energy Savings Assistance Program When determining income eligibility, the Energy Savings Assistance Program assesses total household income. For purposes of the program income eligibility, income is defined as: “all revenues, from all household members, from whatever source derived, whether taxable or non-taxable, including, but not limited to: wages, salaries, interest, dividends, spousal support and child support, grants, gifts, allowances, stipends, public assistance payments, social security and pensions, rental income, income from self-employment and cash payments from other sources, and all employment-related, non-cash income.” GO 153 Section 2.1.52. (effective May 3, 2007). In D.99-07-016, the Commission determined that household income includes “income derived from such assets, such as interest and dividend, and income derived from the gain from their sale.” D.99-07-016, at Ordering Paragraph (“OP”) 3. In the same decision, the Commission determined that household income excludes “liquid assets,” “borrowed monies, or [] monies transferred from one checking, savings, or similar account to another account.”

17. Income Definitions Weatherization Assistance Program When determining income eligibility, the Weatherization Assistance Program (“WAP”) assesses annual gross income. At its most basic level, the WAP definition of annual income is comprised of the types of household incomes that are included in the definition, and excluded from the definition. WAP’s income definition includes: money, wages and salaries before any deductions; net receipts from non-farm or farm self-employment (receipts from a person's own business or from an owned or rented farm after deductions for business or farm expenses), regular payments from social security, railroad retirement, unemployment compensation, strike benefits from union funds, worker's compensation, veteran's payments, training stipends, alimony, and military family allotments; private pensions, government employee pensions (including military retirement pay), and regular insurance or annuity payments; dividends, interest, net rental income, net royalties, periodic receipts from estates or trusts, and net gambling or lottery winnings. WAP’s income definition excludes: capital gains; any assets drawn down as withdrawals from a bank, the sale of property, a house, or a car; one-time payments from a welfare agency to a family or person who is in temporary financial difficulty; tax refunds, gifts, loans, lump-sum inheritances, one-time insurance payments, or compensation for injury, non-cash benefits, such as the employer-paid or union-paid portion of health insurance or other employee fringe benefits, food or housing received in lieu of wages, the value of food and fuel produced and consumed on farms, the imputed value of rent from owner-occupied non-farm or farm housing, and such Federal non-cash benefit programs as Medicare, Medicaid, Food Stamps, school lunches, child support payments, college scholarships, housing assistance and combat zone pay to the military. See Department of Energy, 2009 Poverty Income Guidelines and Definition of Income, Weatherization Program Notice 09-5, available at: http://www.waptac.org/data/files/website_docs/government/guidance/2009/wpn%2009-5%20pigs.pdf.

18. Comparison of Energy Savings Assistance Program and WAP Income Inclusions and Exclusions

19. Comparison of Energy Savings Assistance Program and WAP Income Inclusions and Exclusions

20. Comparison of Energy Savings Assistance Program and WAP Income Inclusions and Exclusions

21. Recommendation • The utilities recommend that the Commission adopt the Energy Upgrade California (EUCA) program to serve multifamily property owners because the EUCA program: • Dovetails with other utility, state and local retrofitting efforts; • Is an integrated approach that will allow the utilities to better serve customers living in multifamily residents; • Combines multiple funding sources, and thus does not overburden ratepayers; • Offers property owners more control and flexibility; • Will serve all segments of multi-family, including low income, moderate income and market rate buildings; and • Is consistent with existing statutes, regulations, and Commission policies.