ATTACHMENT A
Follow Up Comments by the
Insulation Contractors Association
On the LIOB
November 21 Workshop
Robert E. Burt
Executive Director
4153 Northgate Blvd. # 6
Sacramento, CA 95834
Phone: 916 568-1826
e-mail: bburt@macnexus.org
November 25,2003
Introduction
The Insulation Contractors Association (ICA) herewith presents follow up comments on
the LIOB November 21 Workshop. We believe that very important issues were discussed
and we commend the Commission for calling for the free-flowing Workshop process,
with its easy public access, for this discussion. We believe that the already-established
framework for the Needs Assessment Study is excellent, so our comments on that matter
are brief.
I.
Regulatory Authority Issues
A.
As a fundamental introductory point, we must emphasize that the Commission has
no authority over many of the actors vital to most solutions to the issues presented by the
problem of CO from non-IOU appliances So we must accept that negotiation will be
essential.
B.
Natural gas not originating from our major utilities can come from two sources:
small utilities under CPUC authority and municipal natural gas utilities. For the issues we
have before us, there are problems in dealing with either one. The small gas utilities
under CPUC authority have limited resources, both in dollars and people. The municipal
utilities are proudly independent and go out of their way to ensure that they are not under
CPUC authority. Further, they have always strongly resisted any legislative effort to
place them under any statewide regulatory authority. So there can be no casual
assumption that the measures we may feel free to recommend for CPUC-directed gas
utility action on these issues will be feasible for the small CPUC-regulated gas utilities.
Further, we must be ready to negotiate with the municipal gas utilities, which would
probably mean that either we pay them for the effort or secure their permission for our
contractors to do the work.
II.
CO
A.
The low-income CO impact is significant. The adverse effect of CO on humans is
that the CO molecule, once in the body (primarily via the lungs) joins with a hemoglobin
molecule in the blood and renders it incapable of its function: to carry oxygen to all the
myriad parts of the body that need it. The immune system recognizes this nonfunctional
hemoglobin molecule as enemy and, in the course of time, eliminates it. The body must
replace the lost hemoglobin. This points to a special low-income impact of CO poisoning.
Many low-income people have immune systems that are not at optimum level, due to illhealth or age. Further, their ability to replace vital blood components may not be at
optimum level for the same reasons. So chronic CO exposure has a greater adverse effect
on them than on the general population. It is not widely known, but continuous exposure
to low level CO produces chronic flu-like symptoms. The lower health level common
among low-income people makes this a greater hazard in their case.
B.
One of the most important issues addressed in the Workshop was the issue of
non-IOU appliances. The issue of how we address appliances that burn non-IOU fuel
and happen to generate CO is a vexed one. It easily divides into two questions: 1) what
LIEE measures a home with non-IOU appliances should receive and 2) what is to be
done when such an appliance is a CO hazard.
i) LIEE service to homes with non-IOU appliances We believe it logical that,
where IOU-provided fuel is the primary source of home heating, that the home should
receive full weatherization, even if there is a non-IOU appliance present. Clearly, the
presence of a non-IOU appliance does not render weatherization infeasible. Similarly, in
warm climate zones, where a home is electric air-conditioned, that home should also be
LIEE weatherized. The rationale for these recommendations is simple: each pays a
serious electric bill and the class of non-low-income people subject to the same
conditions contribute significantly to the PGC.
On the other hand, if the home receives its primary heat from a non-IOU fuel and
does not have significant electric air conditioning costs, then only non-weatherization
measures should be provided.
In either event, ambient CO testing should be standard, simply as a safety
measure for the health of our customers, partly because (as discussed above) they are
more prone to adverse CO effects than is the general population.
ii) Action for failure by non-IOU appliances If, as we recommend, we are to
routinely test for ambient CO, it seems reasonable that, where we find dangerous levels
of CO, we will then take the trouble to find the cause, meaning that we will frequently
find a non-IOU appliance at fault.
The basic policy issue is: what do we do if the dangerous appliance is non-IOU?
It is true that the fuel burned in that appliance contributes nothing to the PGC. On the
other hand, we would not be there if the householder were not our customer, most often
with a substantial annual electric bill. As noted above, the non-low-income people so
situated do contribute to the PGC. The basic public policy question is the degree of
hardship we should impose on such a customer in order to ensure CO safety.
a) Red-tag and walk? On the one hand, we could red-tag the appliance,
explaining to the customer the nature and reason for the action. By definition, these
people are low income, meaning that such an action could impose a severe hardship; at
the very least, doing without an important service while seeking economical repair. We
could hope that an area LIHEAP provider has the funds to fix the problem. This
alternative would make us just slightly better than Pontius Pilate. The Commission cannot
reasonably adopt this alternative without investigation of the likelihood that we would
create a severe hardship for our customer, or considering the extent to which we would
create a funding hardship for the local LIHEAP providers. We do not know the extent of
their funds reasonably allocated to such usage and the other reasonable demands on those
funds. This question is complicated by the fact that their circumstances vary. Some
providers have LIHEAP funds all year and others have exhausted them by summer. It is
true that LIHEAP contracts allow generous margins, but the CBOs who do LIHEAP
count on those profits to fund other vital aspects of their work otherwise unfunded or
inadequately so. At present, the number of ‘red-tag and walks’ presented to these people
must be smaller than would be the case if we accepted the obligation of always testing
and then leaving non-IOU fueled appliances to be fixed by others.
b) Go ahead and fix it? At the other extreme, we could expend some of
our always-too-small PGC funds to fix the problem for our customer. We speculate that
the repair costs for this alternative would probably not be small, at least partly because
the non-IOU appliances would normally be of a wide variety and the homes are outside
of cheap service range. Without solid pilot action to determine the actual costs this
course would impose (either on our program or upon the LIHEAP providers), we are not
in a position to make a serious judgment. Such a pilot would have to recognize that there
are three habitats that primarily generate this problem: mountain, desert and other rural
areas insufficiently densely populated to support gas service.
iii) Yes, further study is needed Neither choice is attractive. Courses of action in
between would almost certainly require subjective judgments, reasonably second-guessed
and therefore very difficult to budget. Unless others are much better informed than we, it
seems the italicized comments above prevent a reasonable final recommendation on this
issue at this time. We therefore believe that the first action on this issue would need to be
a serious pilot program to determine the full nature of the cost and an effort to explore
the full capability of LIHEAP providers to cover this cost. In the event that information
exists to determine these data without a pilot program, those who possess it should speak
up.
iv) Make the propane providers pay? An alternative, suggested by the natural
gas PGC process, would be legislative action to cause a tax to be assessed upon the
propane providers which would pay for the repair of propane appliances which fail. First,
we should realize that such s proposal could not address the whole problem, since
propane is not the only non-IOU fuel. It must also be recognized that such a proposal
would face legislative difficulties. Without some process for propane vendors to take part
in the regulation of the action, taxation without representation would be a valid
complaint. Further, to the extent that the added cost of propane would generate demand
for wood, whose appliances also generate CO, it would create a class of appliances
without a funder, since we cannot tax all wood sources. There would also be a tendency
to expand the use of more dangerous fuels, such as gasoline (already taxed, but not for
this purpose).
v) Funding
a) Gas utilities may need revenue recovery provisions. When PG&E
started its current NGAT program, ICA complained. Briefly stated; we said that NGAT
testing had been a gas utility function since they were created and, therefore, such testing
should not be at the expense of the PGC. The Commission agreed. PG&E then received a
regular O&M funding allocation for this effort. The ICA no longer has the resources to
carefully cover GRCs, so we do not know whether utilities, other than PG&E, have been
provided funds to cover these costs. Even though the scale of NGAT testing authorized
under the most recent Commission Decision on this subject is considerably less than that
of the original PG&E program, the PG&E precedent should be followed and other gas
utilities should receive such funding allocation to avoid the use of PGC funds for this
purpose.
a) Note that SCE is a special situation. If it is ordered that there be
testing for CO in all LIEE sites where there is a combustion gas appliance, then this
places SCE in a difficult position. Unlike gas utilities, SCE has never had any NGAT
process, nor the need for one. But is it certain that there would be appliances that produce
combustion gas effluents on the premises of its LIEE sites. There would be four
situations: where those appliances were fueled by SoCalGas; where they were fueled by
South West Gas; where they were fueled by a gas municipal utility and where they are
fueled by a non-utility source. SCE’s past filings indicate no desire to pick up
responsibility for CO testing. If testing were required, SCE would have to negotiate some
arrangement to cover each of these different situations. In much of the SCE territory,
some expansion of its current mutual agreement with SoCalGas would probably be
satisfactory. In the case of South West Gas, some arrangement with the good offices of
the CPUC might be provided. Natural gas munis have no particular incentive to do more
for SCE LIEE customers than they do for their own other customers, which would
certainly not include routine LIEE testing. Probably the most logical solution would be to
contract this work for the muni areas and for the areas where an outside fuel is used (such
as propane). LIHEAP providers are geographically limited, so there would need to be
multiple contracts if they were used. The SCE administrative and monetary burden would
probably be lighter if a single contractor were selected. Each of these alternatives would
result in costs for SCE for which there is presently no provision for recovery. So any
action to require CO testing for all LIEE customers would require provision for SCE,
both to recover any costs and, where dealing with CPUC regulated entities, for joint
agreements.
III.
A
Needs Assessment
Census
i) The low-income housing stock is not a stable entity. Membership can be
long-term or brief, depending upon circumstances. Housing can move into membership
simply by age or by deterioration of a neighborhood. Rarely, housing can move out when
‘gentrification’ becomes a profitable action for a neighborhood. So it should not be
assumed that the data derived from the census in this study is representational for any
period much past when it was collected.
In passing, this means that the approximately 1.5% of the eligible stock PGCfunded work can serve in a given year probably does not make a serious dent in the need.
This is empirically demonstrated by the fact that contractors have no difficulty finding
eligible homes every year. That is why we strongly support the Study provision to
provide a mechanism for periodic updating.
ii) Past fraud makes our databases poor A primary concern is that caution
should be used with use of existing databases. The ZIP program was seriously abused by
operators who de facto arranged for the customer to receive an interest-free loan from the
utility and no actual energy efficiency was accomplished. There is no substitute for
physical inspection.
B
Hard-to-reach Many hard-to-reach populations can only be contacted by
entities who have already worked with them and established a level of trust and
understanding of the subject group. This is especially true dealing with groups who fear
immigration officials. Where an entity aspires to receive Needs Assessment funds for this
type of confidential census-type contacts (or other face-to-face work), we believe there is
no substitute for hard-nosed analysis of the actual past services provided by that entity. In
passing, contractors tell me that the lines at check-cashing and ‘advance payday’
locations are an excellent place to locate the working poor.
We observe that purporting to represent minorities has become the basis for many
lucrative careers in this country (usually by means of non-profit organizations). There is
no automatic reason to believe that an entity which says it represents a group actually has
confidential connections with a significant fraction of that group.
Respectfully submitted,
Robert E. Burt, Executive Director