STATE CALIFORNIA PUBLIC UTILITIES COMMISSION 505 VAN MESS AVENUE SAN FRANCISCO. CA 94102-3296 March 23, 2020 VIA Erik B. jacobson Director, Regulatory Relations Paci?c Gas 6.: Electric Company PO Box 770000 Mail Code B23A San Francisco, CA 9417? Laura Genao Director, State Regulatory Affairs Southern California Edison 601 Van Ness Avenue, Suite 2030 San Francisco, CA 94102 Dan Marsh Manager, Rates 6.: Regulatory Affairs Liberty Utilities (California) 933 Eloise Avenue South Lake Tahoe, CA 96150 Keith Switzer Vice President of Regulatory Affairs Bear Valley Electric Service Golden State Water Company 630 East Foothill Boulevard San Dimas, CA 91773 GAVIN NEWSOM, Govemor Clay Faber Director, Federal 8: CA Regulatory San Diego Gas 6: Electric Company 8330 Century Park Court San Diego, CA 92123-1548 Ronald van der Leeden Director, Regulatory Affairs Southern California Gas Company 555 W. Fifth Street, GT 1406 Los Angeles, CA 90013?1011 Etta Lockey Vice President, Regulation Paci?c Power 825 NE Multnomah, Suite 2000 Portland, OR 97232 Valerie Ontiveroz Regulatory Manager, California Southwest Gas Corporation 5241 Spring Mountain Road Las Vegas, NV 89193?8510 SUBJECT: Assurances to Energy Savings Assistance (BSA) contractors during the COVID 19 pandemic I write to you in response to Governor Gavin Newsom's proclamation of a state of emergency in California due to the spread of COVID-19. I request that you act on the assurance to the Energy Savings Assistance (EBA) contractors described in this letter immediately; the measures described in this letter will be submitted to the CPUC for a vote in the near future. Marc1123, 2020. Page .2 On March 4, 22020, Governor Nzewsom declared a. State of Emergency-in California related to COVID-19. OniMarch 1:2, 2020,- Grivernor Newsom issued anew Eaecutiv?e' Order recognizing that indiidduals eXp'os?e'd to COVID- 19 may 'be unable to report to 1110111; due. to illness or quarantines, and ordering numerous measures including social distancing. 0'11 March 16, 2020,- Govcmor Newsom issued. an Executive Order requesting that the CPUC monitor the measures undertaken by public and private utility providers to implement customer service protections .in responsete 19.011 March '19, 2020, Governor. New'som otdisre?d all rc?sid?nts to heed State- public health directives, including the Order for all individuals living in the state. to [stay home 'or' at their place of residence encept as. needed to maintain continnitjr of operations at the federal critical sectors ?3tay at Home? order). As of March 23, all four large Investor Owned Utilities (IOUs) have suspended activities. requiring facets-face customer visits to: implement their ne'rgy. Savings Assistance (EBA) programs. We understand the IOUS. are taking these actions in an effort to follow the guidance of local, state. and federal government, health, and emergency response agencies. On March .18, 2,2020, recognizing ?many- ESA contractors economic necessity, issuing htyoff notices to ESA-worhers-Iatthis time,? The Union et. a1. ?led 111?joint Emergency Motion requesting. to""direct the to Continue payments to ESA contractor's sot-hat their workers can. for food, housing, and-healthca're until the program-- is able to restart.?3 Iris clear that die-response. .to-COVlDii?? will be extremely disruptive to all Californians?and wiil-inipact many Californians' ability to work, includingthe-contractor. community delivering 13891 programs and-other Energyr Division programs. Due to the size. of _.the ESA program workforce and its dependence on the ESA1 program handing, the large fraction of this workforce which are small and community based organizations . workforcesath: job. 111111.. 2.020.. E311-lhevsehald..treattueut goals-.111e.CPUC.- . . requests Paci?c Gas and. Electric-Company, Southern California Edison,- Southern C'alifomia Gas Company, and San Diego Gas tit-Electric to provide speci?c assurance to help ensure the economic stability of the ESAprograln?s- workforce. In addition, IOUS should-maximiae effort to-shi'ft {tom activities- to virtual mechanisms? As but. no later than 24 hours upon reCeip't cit?"this letter, the. four large IOUs-are requested to offer-and discuSs-wi'th eligible contractor's an_'advance payment of 30 days, as ?jirther described below; If acceptable. to the P'riine Contractors], and Prime Contractor are requested to take'ac?on to implement ivith no further-guidance needed from Should-the Prime I Paci?c Gas and EleCttic, Southern. Califomia Gas, Southern California Edison, and San Diego Gas dc Electric 2 IF LACU er. a1. ,Jom Emergency Motion ?led to proceedingA 1-9-11- DUB ?Application of Paci?c Gas and Electric. for. Approval ofEnergv Savings Assistance and California Alternate Rates for Energy Programs and Budgets for 2021-2026 Program Years? on. March i8, 2132i] 3 lUUs also reported to CPUC Energy Division via email. on. March 219 of their comm'uniCat-ions with their implementer contractors vendors to Energy division state that contractor invoices for completed wodt .xviil continue to be processed and. paid b} IOUs sduring- this time. We expect IUUs to aliide 11} this measure as weil March 23, 20-121} Page 3' Contractor find this Solution uhacteptable, and have a practicable solution "as an alternative this should be proposed by the Contractors 101.13 to. the. Director of the CPUC Energy Division within three. days of receipt of ?1113 letter and 13 subject to approval. The a?dvancc'should- he effered'te eligible contractors, those entities that-have been directed by the IOUs to to 13011113419 and hold existing contracrs ?rim-the IOU's to in 2020:. in the meannme, the the ESA Program Administrators,- iinrilementor's, and contractors should continue. to coordinate on potential longer-ten-n measures that may be implemented to ensure the programs-and the workforces. I anticipate that the measures deSctibedin this letter will-bebronght-b'efore the CPUC so it can and that anticipated-acdon may also be the vehicle-for any additional longermterm. mechanisms. The specifics of the measures'l am asking you to implement are as follows: Ifoer a, 30?day advance-payment to each eligibleentity holding the prime. contract with the ICU [hereafter referred to as Prime Contractor]. - The advance payment should- cover the labor costs tplus costs critical to sustaining. the employer?s contribution Ito health care premium). 1-. The?payment should be caltulated'hy the IOU asitht: average monthiy pay (average .over the 2019 program year for BSA program. work) re die-Prime Centractori- - - ins-this calculation by the 1011} may exceed labor co'stsan'd overhead costs needed-to sustain- ='tl_1a_t_ labor (assuming a 70 percent to 30 percent labor cost to material cost-Split), the Prime- Contractor-' can choose to accept a. smaller advance payment-sum. - - The IOU-and Prime Cb??ac'tot should trac'kthe balance of this advance payment over time as thenPrime'Contracto'rworks to decrement this ?net funds advanced balance? to" zero. a The Prime Contractor should zero?out thenetjfunds advanced balance by-a date negotiated with the IOU but no sooner-than. December '31, .2020. if necessary, alcontract extension shall be negotiated iwith the- Ptiirie Contractors; giving- a minimum. oIfgsixI months after the I lifting of- Oideis limiting face- face work II . I- After fate? to? face activity restrictions are lifted and the Prime Contractor is again able to charge. hours for E511 iinplemeiitaIion activides at a' rate similar to pre?re?strittion levels the Prime Contractor should report. the hours and the amount that would normally be invoiced. for the. work performed, along with an actual amount invoiced to the utility1 which will be decremented to incrementally bring the funds advanced balance to zero-.I I The Prime Contractor has discretion to set the schedule and increments by which they- wili reach a zero funds. advance balance by the negotiated ?date but the planned schedule should be. reported to the IOU 3.0 days after the date the restrictions are lifted. It is?. the responsibility of-the Piime C'ontraCtor to strictly manage anequitahle. distribution cit-any advance payments to workers. impactedihy' the suspension of activities related to and to ensure?iris used toward the; intended purpose;.to sustain skilled workersin their positions as ESA- contractors. A Prime. Contractor that manages the flow of funds will have the workers on .board- tol'r'ap'idiy :r'amp?iip and invoice IOUs performed restrictions are lifted to resume. earning pro?ts and quickly zero?out the. netfun'd's-advanced balance. lnkeeping with this =responsihility, guidance to the 'Piime Contractor, is as follows: March 23, 2020 Page 4 The advance payments should not be used to pay for company profits, any materials, or other ancillary costs not related to sustaining the workforce (thus, if the Prime Contractor accepts the full amount the IOU offers, the funds advanced are expected to sustain workers for beyond a 30 day period, given that under normal circumstances the amount of funds invoiced for cover these other costs}. 0 The Prime Contractor should offer advance payments to their eligible sub?contractors and pass through advance payment to those subcontractors that accept advance payment. I The Prime Contractor is to track advance payments made to sub-contractors and put measures in place to assure they in turn equitably distribute this advance payment to workers impacted, adhering to the same prohibitions described above. 0 Prime Contractors are to manage tracking and reporting to the IOU holding their contracts for employees of the Prime Contractor and for eligible sub?contractor entities the Prime Contractor advances funds to. reports should be accompanied by signed affidavits of a corporate director or officer (or equivalent) of the Prime Contractor attesting to the accuracy of the reports. 0 Specific tracking and reporting includes, but is not limited to, the amount of funds advanced, the number of workers these funds sustained and for how long, at what salaryf hourly rate, and the employer costs for condoning the employees? bene?ts. 0 Records tracking these employee data should be updated on a weekly basis. Should federal or state government assistance be made available to Prime Contractors, or Prime Contractors recover lost funds from business insurance claims and/ or Small Business Administration, the Prime Contractors are expected to accelerate the rate at which they zero?out their net funds advanced balance. Any future aid to Prime Contractors is uncertain until government relief programs are developed and launched, and I would expect any aid offered to be taken into consideration by the CPUC in the coming weeks when it explores longer?term options that may be appropriate and necessary. This letter is also addressed to Small Municipaljurisdictional Utilities implementing BSA programs to guide them if they opt to participate in offering advance payments to their eligible Prime Contractors. The Director of the Energy Division may recommend adjustments to the above guidance as necessary with such modi?cations being included in the resolution placed before the CPUC regarding this letter. Sincerely, Alice Executive Director CC: See next page. March 23,2020 Page 5 CC: Ptesid?nt Marybel Batj GPUC CP UC. Comr?ssionst 1321mm Guzman. Accves .CPUC "C'Dmrni'?sionerl?ia?e Randolph CPUCTCO'mmissio?ct Clifford R?cht'schaffe?n. CPUC :Ccinm?ssionet (Bene?t-are Sl?jdina M?ljram' 'EbkE, Deputy Echutive. Dirgctor, CPUC Lucian Fillet, DCputy 'ExeCuIive Directori- CPUC Edward Executive Dimmer, CPUC 'Haz?l Miranda, {if "Government Affairs Dir?cfor, CPUC Service List and