Multifamily Sector Workshop California Public Utilities Commission October 21,

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

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

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

Data and Methodology Used to Determine Households to Be Served in To derive the estimated eligible population for PY , 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 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 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 cycle. 5

Eligible Measures (Legal & Regulatory Framework) Civil Code Section : 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 or 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. 6

Eligible Measures (Legal & Regulatory Framework) Decision (pg. 39): [N]o furnace repair and replacement or water heater repair and replacement work shall occur in violation of our holding in D 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 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. 7

Eligible Measures (Legal & Regulatory Framework) Policies & Procedures Manual (§ 2.7.2): 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. 8

Eligible Measures (Table 5-1 from P&P Manual) 9 Measure 1 PG&E Avail. to Renters SDG&E Avail. to Renters SCE Avail. to Renters SCG Avail. to Renters SFMFMHSFMFMHSFMFMHSFMFMH HVAC Heating System Repair & Replace CZ – 1,2,3,4,5,6,8,9, 10,11,12,13,14, 15,16 √ √ √ Gas Furnace Repair/Replace - CZ -7, 10 √ √ Gas Furnace Repair/Replace - CZ -15 √ Forced Air Unit Standing Pilot Light Conversion - All CZ √√√√ √√√√ Furnace Clean & Tune - CZ 5, 6, 8, 9, 13 & 16 √ √√ - CZ 7 √√√ - CZ 10, 14 & 15 √√√ √ √√ Room A/C Replace - CZ 10 √√√√√√√√ - CZ 11 & 12 √√√ √ - CZ 13 √√√√ √√√√ - CZ 14 & 15 √√√√ - CZ 16 √ √ Central A/C Replace - CZ 13 √√√ √√ - CZ 14 & 15 √√√√

Eligible Measures 10 Central A/C Tune- up - CZ 2 √ √ √ - CZ 4, 11, 12, 13, & 16 √√√√ - CZ 7, 10 √√√√ - CZ 6, 8, 14, 15 Central A/C Services - All CZ √ √√√ Heat Pump - CZ 13, 14 & 15 √√√√ Evaporative Coolers - CZ 10, 11, 12, 13, 14, 15 & 16 - CZ 10 √ √√√ √√ - CZ 11 & 12 √ √√ Measure 1 PG&E Avail. to Renters SDG&E Avail. to Renters SCE Avail. to Renters SCG Avail. to Renters SFMFMHSF MF MHSFMFMHSFMFMH - CZ 13 & 16 √ √ √ √ √√ - CZ 14 & 15 √ √√ Evaporative Coolers Maintenance – All CZ √√√√ Envelope and Air Sealing Measures 2 - CZ 1, 2, 11 & 12 √√√√ - CZ 3 √ √√ - CZ 4 √√√√ √√√√ - CZ 5 √√√√ - CZ 6 √√√ - CZ 7 - Except Electric Heated Mobile Homes √√√√ - CZ 8 √√√√√√√ √ - CZ 9 √ √√√√√ √ - CZ 10 √√√√√√√√√√√ √ - CZ 13 √√√√ √√√√√√√ √

Eligible Measures 11 Measure 1 PG&E Avail. to Renters SDG&E Avail. to Renters SCE Avail. to Renters SCG Avail. to Renters SFMFMHSF MF MHSFMFMHSFMFMH Envelope and Air Sealing Measures 2 - CZ 14 √ √√√√√√√√√ √ - CZ 15 √ √√√ √√√ √ √ - CZ 16 √√√√ √ √√√√√ √ Duct Sealing - CZ 1, 2, 3, 11 & 12 √ √√ - CZ 4 & 5 √ √√ √√ √ - CZ 6 √ √ - CZ 7 √ √√ - CZ 8 √√ √ - CZ 9 √√ √ - CZ 10 √ √√√√ √√ √ - CZ 13 √ √ √ √√√ √√ √ - CZ 14 √√√ √√√ √ - CZ 15 √√√ √√ √ - CZ 16 √ √√ √√ √√ √ Attic Insulation CZ 1 & 11 √ √ - CZ 2, 3, 4, & 12 √√√ - CZ 5 √ √ √√√ √

Attic Insulation 12 Eligible Measures Measure 1 PG&E Avail. to Renters SDG&E Avail. to Renters SCE Avail. to Renters SCG Avail. to Renters SFMFMHSF MF MHSFMFMHSFMFMH - CZ 13 √√√√√√√√ √ - CZ 9 √√ √√√ √ - CZ 6, 8 √ √ √ √ √ - CZ 7 √ √ - CZ 10 √√ √ √ √ √ - CZ 14, 15 √ √ - CZ 16 √ √ √√ √√ √ Water Heating Measures Water Heater Conservation Measures - All CZ 3 √√√ √√√√√√√√√√√√√ Water Heater Replacement - Gas - All CZ √√√ √√√ √ √ Tankless Water Heater - Gas - All CZ √√√ High Efficiency Clothes Washer - All CZ √√√ √√√ √√ √√√√ Thermostic Shower Valve - All CZ √√√√ Lighting Measures CFL Lighting - All CZ √√√ √ √√√√√√√√ Interior Hard wired CFL fixtures - All CZ √√√ √ √√√√ Exterior Hard wired CFL fixtures - All CZ √ √ √ √√√

Lighting Measures 13 Eligible Measures Measure 1 PG&E Avail. to Renters SDG&E Avail. to Renters SCE Avail. to Renters SCG Avail. to Renters SFMFMHSF MF MHSFMFMHSFMFMH Torchiere - All CZ √√√√√√√√√√ Occupancy Sensors - All CZ √√√√ LED Night Light - All CZ √√√√ Refrigerators Refrigerators - All CZ √√√√ √√√√√√√√ Pool Pumps Pool Pumps - All CZ √√ Other Microwave Ovens - All CZ √√√√ √√√√ Minor Home Repairs - All CZ 4 √√√√ √√√√√√√√√√√√ 1 All measures are available to homeowners and renters except where shown in Table Includes Caulking, Outlet Cover Plate Gaskets, Weather-Stripping Doors. For the purposes of qualifying a home for the Program, these measures count as a single measure. 3 Includes Low Flow Showerheads, Water Heater Blanket, Faucet Aerators, Water Heater Pipe Insulation. For the purposes of qualifying a home for the Program, these measures count as a single measure. 4 There are multiple sub-measures included under minor home repairs. Minor home repairs are constituted by services that either reduce infiltration (e.g., window repairs), mitigate a hazardous condition, or accommodate the installation of Program measures (e.g., attic venting). For owner occupied, furnace repairs and replacements fall under the category of minor home repairs, and are provided only when necessary to mitigate NGAT fails and pursuant to the installation of infiltration-reduction measures. Water heater repairs and replacements are also considered minor home repairs, and are provided only to mitigate NGAT fails or to replace leaking water heater tanks. For the purposes of qualifying a home for the Program, all minor home repairs (combined) count as a single measure.

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

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

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 (effective May 3, 2007). In D , 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 , 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.” Income Definitions 16

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: Income Definitions 17

Comparison of Energy Savings Assistance Program and WAP Income Inclusions and Exclusions General CategoryESAWAP Wages/Salaries: Interest/Dividend Income: Interest, dividends, and other net income of any kind from real or personal property Spousal Support Child Support  Grants Gifts: Contributions or gifts received from organizations or from persons not residing in the dwelling  Allowances: General Stipends Public Assistance Payments Social Security 18

Comparison of Energy Savings Assistance Program and WAP Income Inclusions and Exclusions General CategoryESAWAP Pension/Retirement: amounts received from pensions, annuities, insurance policies, retirement funds, disability or death benefits Rental Income Self-Employment Income and Cash Payment from Other Sources Employment-Related, Non-Cash Income  Unemployment & Disability Income: Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation, and severance pay Asset Sale Income: Personal income earned by the sale of assets, such as stocks or real property (includes capital gains)  Liquid Assets: Checking accounts, savings accounts, most stocks, money market instruments and government bonds  Loans/Borrowed Money  19

Comparison of Energy Savings Assistance Program and WAP Income Inclusions and Exclusions General CategoryESAWAP Strike Benefits from Union Funds Receipts from Estates and Trusts Gambling and Lottery Winnings College Scholarships  Net Royalties Veteran’s Benefits Training Stipends Lump-Sum Inheritances, One-Time Insurance Payments, or Injury Compensation  Military Family Allotments 20

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.