CPX Legislation Update for May 16, 2019

Note: The timing of this update coincides with committee meetings where several of the bills we are tracking will be heard. Therefore, this update will be revised on Friday, May 17.

We are monitoring about 28 energy and/or climate-related bills, not all of which directly impact Community Choice Energy. This is a very active and unusual session due to the catastrophic wildfires and the implications for the delivery utilities that have been found responsible in some instances. On April 12, Governor Newsom’s “Strike Force” released “Wildfires and Climate Change: California’s Energy Future” that challenged the Legislature to revise state laws on utilities’ wildfire liabilities, presenting lawmakers with a series of potentially controversial strategies to shield electric companies from growing costs fueled by the global climate crisis.

Bills we oppose:

AB 56 (Garcia) – Read our Letter of Opposition. This one is all about central procurement. As currently amended, the bill would authorize the CPUC to require an existing agency, the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), to undertake procurement of electricity to meet the State’s climate, clean energy, and reliability goals that are not satisfied by load-serving entities (LSEs). CCAs are working with the bill author to try to amend it to be only procurement for “residual” resources, meaning, procurement only when a CCA is unable to meet its procurement obligations. CalCCA and CCAs are negotiating. The bill is in Asm Approps and is being heard today, May 16.

AB 1584 (Quirk) This bill would expand CPUC authority over CCAs. It would allow the CPUC to set obligations for renewable energy “integration” and potentially for load management and demand response. It would require the CPUC to audit CCA compliance and allow the CPUC to buy any kind of resource it deems necessary to meet any un-procured resources and assign those costs to a CCA. This bill could effectively transfer significant planning and procurement rights from CCAs to the CPUC because all resources have some impact on renewable integration, which is a broad term meaning ensuring system reliability while increasing the percentage of energy from renewable sources. The bill is in Asm Approps and is being heard today, May 16.

SB 386 (Caballero) – Read our Letter of Opposition. This bill would allow Turlock, Modesto, and Merced Irrigation Districts to count their large hydro assets (dams) toward their Renewable Portfolio Standard (RPS) obligations. This would significantly impact progress with renewables. These Irrigation Districts will already be able to count their dams as carbon-free pursuant to state policy on decarbonization and mechanisms are in place to protect low-income communities. The bill has passed out of the Assembly and is in the Senate.

SB 155 (Bradford) – This bill expands CPUC’s authority over CCA procurement and Integrated Resource Plans. It was heard in the Senate Appropriations Committee on May 13, and was sent to the full Senate for a second reading.

Key Community Choice Energy-related bills to watch:

SB 350 (Hertzberg) – This bill would “authorize the CPUC to consider a multiyear centralized resource adequacy mechanism,” meaning, a central buyer, which would encroach on CCA statutory authority on procurement autonomy. The bill passed out of the Senate and is now in the Assembly Utilities & Energy Committee.

SB-520 (Hertzberg) – This bill empowers the CPUC to determine what load serving entity should serve as the provider of last resort (POLR), based on certain criteria, as outlined. Currently IOUs serve as the provider of last resort. The bill is in the Senate Appropriations Committee with a hearing date set for today, May 16.

SB 676 (Bradford) – Another bill that would expand CPUC authority over CCAs. This bill would empower the CPUC to establish targets for electric vehicle grid integration and would grant the CPUC authority over CCA electric vehicle grid reliability activities, removing CCA authority over their EV programs. The general concept of promoting smart EV charging is good, but removing CCA control would both slow down initiation and  implementation of CCA-driven EV programs and almost certainly add considerable ratepayer costs. The bill was heard in Senate Appropriations on May 13 and was sent to the Senate floor for a second reading, where the action happens, or not.

SB 774 (Stern) – This bill would require IOUs to collaborate with the the State’s Office of Emergency of Services (OES) and others to identify where back-up electricity sources may provide increased electrical distribution grid resiliency and would allow the IOUs to file applications with the CPUC to invest in, and deploy, microgrids to increase resiliency. As currently written, the bill would exclude all except IOUs from participating in microgrid development. Community Choice advocates are working with the bill author to amend the bill to include CCAs as participants.

Bills we support:

SB 288 (Wiener) “Solar Bill of Rights” – Read our Support Letter. If enacted as written, this bill will require a number of provisions to support the deployment of customer-sited solar and other distributed energy resources, specifically energy storage systems,. The bill will require electric utilities to establish standardized processes to interconnect to the electric grid, and require new rate designs and compensation to sell stored energy to the grid. SB 288 will be heard in the Senate Appropriations Committee today, May 16. For the latest visit the bill sponsor Solar Rights Alliance’s Solar Bill of Rights page.

SB 246 (Wieckowski) – Read our Support Letter. – This bill, if enacted as written, will impose an oil and gas severance tax of upon any operator for the privilege of extracting oil or fossil gas from the earth or water in California.

AB 684 (Levine) – Read our Support Letter. – Rules proposed in this bill would ensure that the infrastructure necessary for EV charging in multi-family dwellings is codified through multi-family building standards.

SB 255 (Bradford) – A Bradford CCA bill to support? SB 255 would require each CCA with gross annual revenues exceeding $1,000,000 to annually submit a plan to the CPUC for increasing procurement from small, local, and diverse business enterprises in all categories, including, but not limited to, renewable energy, energy storage system, and smart grid projects. The bill would also require CCAs to submit an annual report to the CPUC regarding their procurement from women, minority, disabled veteran, and LGBT business enterprises. (Note: Senator Steven Bradford is well-known among the Community Choice community as the author of 2014’s AB 2145, a bill that would have destroyed Community Choice if it had prevailed. It died in the Senate.)

For the complete list of bills we are monitoring click HERE.  Next CPX legislation update will be on Thursday, May 30.

 

CPX Regulatory Update for Thursday, May 16, 2019

Below is a numbered list of the regulatory proceedings we are tracking, followed by a summary of new developments for each of the proceedings, if any. Note that these are intended as very brief highlights of selected key actions and activities. For details on any of these proceedings, we suggest logging in to the relevant proceeding page on the CPUC’s website. An expedient way to do that is to click the links below or visit http://www.cpuc.ca.gov/documents/ 

Regulatory Proceedings we are monitoring:
  1. PG&E Safety Culture Investigation  15-08-019
  2. Power Charge Indifference Adjustment (PCIA)  17-06-026
  3. Resource Adequacy (RA) 17-09-020
  4. SB 790 IOU Code of Conduct 12-02-009
  5. Wildfire Cost Recovery  19-01-006
  6. PG&E Bankruptcy (no formal docket #)
  7. Integrated Resource Plans (IRP) 16-02-007
  8. Distribution Resource Plans (DRP) 14-08-013 
  9. Renewables Portfolio Standard (RPS) 18-07-003
  10. Integrated Distributed Energy Resources  14-10-003
  11. Direct Access 19-03-009
Closed proceedings that matter:

12. CCA Bond and Re-Entry Fees – 03-10-003 and 18-05-022

  1. CCA Rulemaking 03-10-003
Other non-adjudicatory activities:
  • Customer Choice Project
  • AB 2514 Implementation

 

  1. PG&E Safety Culture Investigation I. 15-08-019 – Two forums were held in this investigation in April. April 15 hearing can be found HERE, April 26 video is HERE. CPX staff attended both forums.

New Developments as of early May:

Next Steps: June 13, 2019 – Earliest vote on the Proposed Decision.

Background: In this case, Center for Climate Protection is a Party to the Proceeding due to the fact that the Commission invited suggestions on restructuring of California’s electricity system. Read our Opening Comments HERE. The investigation originated after the San Bruno incident, and has been reinvigorated due to the 2017/18 wildfires.

 

  1. Power Charge Indifference Adjustment (PCIA) (Proceeding #R.17-06-026)

New Developments:

On Monday April 29, 2019 Working Group 3 in the PCIA proceeding held a workshop regarding options to manage excess IOU resources. Working Group 3 is chaired by SCE, CalCCA, and Commercial Energy. Working Group 3’s topic is Portfolio Optimization and Cost Reduction, and Allocation or Auction Mechanisms. This workshop focused on sales of excess attributes, including RA, bundled RPS energy, and voluntary allocation. Future workshops will tackle GHG free energy, brown energy, and allocations.  In the future it is possible that the Working Group will discuss Total Portfolio Sales, whereby the IOU would put up for sale or auction all the resources in its portfolio and then buy back the resources they need. The IOUs are highly resistant to that idea.

Next Steps:

  • Mid June – Second working group 3 meeting.
  • June 24 – Progress report.

Background: Phase 2 of the PCIA proceeding has been underway since early 2019. Three working groups have been established to address various aspects going forward. The most important to Community Choice is Working Group 3 where opportunities for cost reduction are addressed. Group 3’s first report is expected in late June.

 

  1. Resource Adequacy – New Developments: On April 30 the CalCCA announced that the Track 2 Central Buyer Workshop will  be held on Wednesday, May 15, from 10am to 4pm. The topic of the workshop revolves around alternatives to a central procurement entity. The meeting will be held in the CPUC Auditorium in SF and remote participation is available via Zoom Meeting or by phone: 669-900-6833 Meeting ID: 466 484 7613 (Note: Since this workshop will have occurred the day before this update, we will post the recording, of available, in our next update).

Also see:

Background: The RA program is designed to provide adequate electric resources to CAISO to ensure safe and reliable operation of the grid, and to provide appropriate incentives for the siting and construction of new resources needed for reliability. This proceeding has been divided into three Tracks due to the complexity of the issues involved.

 

  1. SB 790 IOU Code of Conduct – No new developments. Background: Original CCA law, AB 117 stipulates that IOUs must “cooperate fully” with local governments pursuing Community Choice. In the mid-to-late 2000s, San Francisco, Marin, and the San Joaquin Valley experienced egregious disinformation campaigns waged by the incumbent utility for these jurisdictions against their efforts. The obstruction was documented in a series of California Senate Select Committee on Renewable Energy hearings in 2010 chaired by Senator Mark Leno. The result of the hearings was SB 790, which created an IOU Code of Conduct that prohibits IOUs from marketing against CCAs unless they establish a separate marketing division that does not use ratepayer funds, among other provisions.

 

  1. Wildfire Cost Recovery – New Developments: There is currently bill relavant to this proceeding making its way through the legislative process. AB 235 introduced by Chad Mayes (Dist. 42, Yucca Valley, R) The bill authorizes the CPUC, when determining recovery by an electrical corporation for costs and expenses arising from a catastrophic wildfire occurring on or after January 1, 2019, to consider the electrical corporation’s financial status and determine the maximum amount the corporation can pay without harming ratepayers or materially impacting the electrical corporation’s ability to provide adequate and safe service. It is very mmuch a work in progress and is being heard in the Assembly Appropriations Committee today (May 16, 2019).
  • May 2019 – Target date for CPUC approval of IOU Wildfire Mitigation Plans.
  • July 1, 2019 – Report from Commission on Catastrophic Wildfire Cost and Recovery.

Background: The CPUC’s R.19-01-006 is a proceeding to implement Public Utilities Code Section 451.2 regarding criteria and methodology for wildfire cost recovery pursuant to Senate Bill 901 (2018). Major questions include:

  • How much a utility can be required to pay out of pocket?
  • What are the costs that a utility can legitimately pass on to ratepayers?
  • What will be used as a cost recovery calculation methodology?

 

  1. PG&E Bankruptcy (Wildfires, restructuring, bankruptcy court, CA Senate oversight hearings, US District Court) In addition to the above proceedings, we are also keeping a close eye on the PG&E bankruptcy, which is playing out in four arenas: the bankruptcy court, the CPUC, the CA State legislature, and the Federal Energy Regulatory Commission (FERC).

New Developments as of early May:

  • PG&E’s Quarterly Earnings Report has revealed an SEC investigation. Statement by PG&E.
  • PG&E hires former TVA CEO Bill Johnson.
  • New board of directors members Richard Barrera, Jeffrey Bleich, Nora Mead Brownell, Fred Buckman, Cheryl Campbell, Michael Leffell, Kenneth Liang, Dominique Mielle, Meridee Moore, Kristine Schmidt and Alejandro Wolff join continuing directors Fred Fowler and Eric Mullins.
  • PG&E will propose increasing its Board to 15 directors at the Annual Shareholders Meeting.
  • US District Court Probation Order suspending dividends until PG&E complies with vegetation management and wildfire mitigation plan.

 

  1. Integrated Resource Planning (IRP) (Proceeding # R.16-02-007) – New development: On April 25 the CPUC unanimously approved a Proposed Decisionthat approves or certifies 20 individual LSE IRPs. Grants exemptions to 9 LSEs. Requires another 19 LSEs to refile their individual IRPs as Tier 2 advice letters, with additional information about the criteria pollutants associated with serving their load. It also adopts a Preferred System Portfolio to use as the basis for future planning and to transfer to the CAISO for use in its Transmission Planning Process (TPP) as the reliability base case and policy-driven base case. Lastly, it requires LSEs serving load in the territory of PG&E to include in their next IRPs a section addressing retirement of Diablo Canyon. The decision primarily relies on Community Choice agencies to procure the new clean energy resources the State needs over the next decade to achieve California’s renewable energy and GHG emissions reduction targets attributable to the State’s electricity sector. A video of the proceeding is HERE. Item 51 on the agenda. The CPUC’s action represents a major vote of confidence in the critical role CCAs are playing in California’s rapidly evolving energy system.

 

  1. Distribution Resource Plans – No update. Background: This proceeding consolidates numerous previous proceedings and seeks to establish policies and rules for IOUs to develop Distribution Resources Plan Proposals, and to evaluate the IOUs’ infrastructure and planning to incorporate distributed energy resources (DERs) into their systems. There are three parallel and concurrent Tracks in this proceeding. Track 1 concerns methodological issues. Track 2 concerns demonstration and pilot projects. Track 3 concerns policy issues.  Decisions have been issued on all three tracks, but there are still residual issues and new issues being addressed.

 

 

  1. Renewable Portfolio Standard – New developments:
  • May 31, 2019 – IOUs, ESPs, and CCA RPS procurement plans deadline.
  • June 28 – Comments on plans and coordination with IRP proceeding.
  • July 12 – Deadline for Motion to request evidentiary hearings.
  • July 12 – Reply comments on RPS plans.
  • August 1 – Updates to RPS procurement plans.
  • Fourth Quarter 2019 – Proposed Decision.

Background: The RPS program implements SB 350 and SB 100 by requiring all LSEs to increase their procurement of renewable energy to 44% by 2024, 52% by 2027, 60% by 2030, and 100% by 2045.

 

  1. Integrated DER – No new developments. Recent ALJ Ruling directing responses to post-March 4-5, 2019 Workshop questions. Background: Since 2007, the Commission has sought to integrate demand side energy solutions and technologies through utility program offerings. Decision (D.07-10-032) directs that utilities “integrate customer demand-side programs, such as energy efficiency, self-generation, advanced metering, and demand response, in a coherent and efficient manner.” The Commission’s IDER Action Plan published in 2016 remains in draft form.

 

  1. Direct Access Rulemaking (SB 237) – No new developments.  On March 14, 2019 CPUC issued an Order Instituting Rulemaking (OIR) for proceeding R. 19-03-009 regarding implementation of Senate Bill 237 (SB 237 – Hertzberg) concerning expansion of the Direct Access (DA) program. DA is available to non-residential customers. Background: DA access was restricted after the energy crisis by SB 1X. DA access is currently capped and accessible via a lottery system, with 7,603 GWh of load on the waitlist. SB 237 increases the maximum total annual kilowatt-hours allowed under the DA program by a total of 4,000 GWh apportioned among the three IOU service territories. That increase must be implemented by June 1, 2019. SB 237 also gives CPUC until June 1, 2020 to provide the legislature with guidance on expanding DA access to all interested non-residential customers. The proceeding will have two phases to address the two mandates.

 

Closed proceedings that matter:

 

  1. CCA Bond Requirements and Re-entry Fees – No new developments. Background: Rulemaking R.03-10-003 was initiated in October 2003 to implement portions of AB 117 concerning Community Choice Aggregation. That Rulemaking is closed. One result of the proceeding was Decision 18-05-022 issued on May 31, 2018 which established reentry fees and financial security requirements applicable to CCAs as required by Public Utilities Code Section 394.25(e). The IOUs were ordered to provide a Tier 1 Advice Letter detailing their costs and to identify that in their general rate cases. CCA parties assert that the Advice Letters submitted by the utilities are overly broad and exceed the scope permitted in D.18-05-022 because they would impose liability on returning CCA customers over and above the CCA Bond amount, permit the utility to dictate whether financial instruments and arrangements were satisfactory, and require that particular agreements drafted by the utility be used to satisfy a financial security amount.

 

  1. CCA Rulemaking R.03-10-003 This was the original rulemaking that occurred between 2003 and 2005 to cross the Ts and dot the Is on CCA law.

 

Other regulatory matters:

 

Customer Choice Project. No update. This is an informal activity in progress that relates directly to CCAs, the California Customer Choice Project (formerly known as the “Green Book”). The Center submitted Comments on this matter in June 2018.

 

AB 2514 Energy Storage Mandate. Lastly, all LSEs in California are required to procure certain levels of storage under the Energy Storage Mandate in AB 2514. The CPUC oversees the implementation. Recent news is that due to CCA customers paying for IOU procurement of storage via nonbypassable charges, the obligation for CCAs to meet the mandate has been dismissed.

 

Peninsula Clean Energy Offers $4,000 Buyer Incentive For Purchase of Used Plug-in Hybrid Electric Cars

REDWOOD CITY, CA – May 15, 2019 – Income-qualifying residents of San Mateo County can receive a $4,000 incentive toward purchasing a used plug-in hybrid electric vehicle (EV) in a program announced by Peninsula Clean Energy (PCE), the County’s official electricity provider.

Peninsula Clean Energy’s DriveForward Electric vehicle purchase incentive is in partnership with the nonprofit Peninsula Family Service (PFS), whose long standing DriveForward program provides affordable interest rates on vehicle loans for those that qualify. By combining professional financial counseling and thoughtful budgeting, PFS helps participants end the cycle of economic dependence and build their lives on a stable financial foundation. Click here to watch a short video about the program.

“Used plug-in hybrid electric vehicles can provide affordable and reliable transportation for all members of our community who need a car to access better jobs or opportunities,” said Jan Pepper, Peninsula Clean Energy CEO. “Electric cars deliver additional savings to drivers by reducing maintenance and fuel costs compared to a gas-powered car.”

Peninsula Clean Energy’s incentive will make electric cars more accessible to residents who may not otherwise consider them as an option. Program eligibility is based on total household income, ranging from up to $48,560 for one person to up to $169,520 for a family of eight. Participants must live or work in San Mateo County, have a valid driver’s license, and have the income to cover the vehicle loan and maintenance and fueling expenses.

Eligible San Mateo County residents can apply for PCE’s incentive to help with the down payment on a used plug-in hybrid through the DriveForward vehicle loan program from Peninsula Family Service. Program participants must be able to plug in their EVs at their residence or place of employment.

Today’s announcement came at the Peninsula Family Service Thought Leader Series Event “The Future of Transportation: Clean Energy & Transformation” co-sponsored by Peninsula Clean Energy. More information is available at peninsulacleanenergy.com/DriveForwardElectric. San Mateo County residents interested in the program can also call 650.403.4300 ext. 4105.

About Peninsula Clean Energy
Peninsula Clean Energy (PCE) is San Mateo County’s official electricity provider. PCE (www.PeninsulaCleanEnergy.com) is a public not-for-profit local community choice energy agency that provides all electric customers in San Mateo County with cleaner electricity at lower rates than those charged by the local incumbent utility. PCE saves its customers an estimated $18 million a year. PCE, formed in March 2016, is a joint powers authority made up of the County of San Mateo and all 20 cities and towns in the County. PCE serves approximately 290,000 accounts.

About Peninsula Family Service 
Peninsula Family Service (PFS) strengthens the community by providing children, families, and older adults the support and tools to realize their full potential and lead healthy, stable lives. Each year, PFS supports 12,000 of our region’s most vulnerable children, families, and older adults. PFS brings early learning to the zip codes that need it most, helps families build a bridge over the safety net, and ensures older adults are thriving. Join PFS in strengthening our community by securing opportunity, financial stability, and wellness for all. Learn more at peninsulafamilyservice.org.

Peninsula Clean Energy Contact
Kirsten Andrews-Schwind
Peninsula Clean Energy
kandrews-schwind@peninsulacleanenergy.com
P: 650.260.0096

Peninsula Family Service Contact 
Theresa Myers
Peninsula Family Service
tmyers@peninsulafamilyservice.org
P: 650.403.4300 x4410

Community Choice Aggregation Drives Economic Development

The concept of community choice aggregation (CCA) has gained a lot of momentum since the enactment of California’s CCA-enabling legislation, AB 117 (Chapter 838, Statutes of 2002). Under the CCA model (also known as a community choice energy model), cities and counties buy and/or generate electricity for local government, residents and businesses and make key decisions about rates, what types of electricity to purchase and which programs to offer customers. Though reducing electricity costs and providing cleaner energy options for residents and businesses were the initial drivers leading cities to pursue CCA, elected leaders are now also looking at it as a means of economic opportunity and job creation for their communities.

CCAs Use Two Basic Models

Two main CCA models currently operate in California. The first is a joint powers authority (JPA) model where cities and/or counties join to form a JPA, an independent public agency that operates the CCA on behalf of its member agencies. MCE (formerly Marin Clean Energy), Monterey Bay Community Power, Peninsula Clean Energy, Silicon Valley Clean Energy and Valley Clean Energy all operate using this model. When a JPA is formed, participating jurisdictions typically are represented on the JPA’s board of directors, which is made up of elected leaders from participating cities or counties. Many CCAs also have a community advisory committee, which often comprises volunteers who represent the participating agencies and labor and commercial, agricultural, industrial or other stakeholders.

The second option is a single jurisdiction model whereby a city or county individually establishes and operates a CCA as an enterprise fund within the jurisdiction. This model has the same benefits of the JPA model but differs in that the jurisdiction retains full program autonomy and control over all of the revenue. The single jurisdiction model offers more autonomy but it also has an inherent risk, as the single jurisdiction is responsible for any future liabilities. The City of Lancaster uses this approach.

In both models, the investor-owned utility (IOU), such as Pacific Gas and Electric (PG&E), Southern California Edison and San Diego Gas and Electric Company, collaborates with the CCA to deliver the electricity that the CCA purchases through the IOU’s transmission and distribution system. The IOU most often provides meter reading, billing, infrastructure maintenance and outage response services, while the CCA is solely responsible for the source and price of the electricity flowing to the resident’s home. Currently, under California Public Utilities Commission (CPUC) rules, a CCA can apply to administer its own energy efficiency programs to customers in its service area using ratepayer funds generated from the public goods charge (CPUC Code Section 381.1).

Though residents and businesses are automatically enrolled in a CCA when it is formed, existing law allows customers to opt out and remain with the existing IOU. CCAs are required to inform customers of the option to opt out.

 

Monterey Bay Community Power Offers Attractive Rates and Rebates

Monterey Bay Community Power (MBCP), one of the newest community choice energy providers to launch in California, operates using a JPA structure. MBCP started serving customers in spring 2018 and was explicitly designed as a carbon-free electricity service aimed at lowering energy-related greenhouse gas emissions in the areas it serves: Monterey, San Benito and Santa Cruz counties.

MBCP procures all of its electricity from carbon-free sources such as solar, wind and hydroelectric power. The JPA does not contract for any power produced from nuclear energy or any fossil-based sources. MBCP automatically enrolls its customers in a plan that provides them with 30 percent renewable energy at rates that match those of the incumbent utility, PG&E. The other 70 percent comes from large hydroelectric power stations, which are carbon-free but not considered renewable sources. MBCP also offers its customers a 100 percent renewable energy option for just one cent more per kilowatt-hour than PG&E rates.

In both options, customers receive a 3 percent rebate at the end of the year for savings realized during the year, which they can apply as a credit on their bill or donate back to MBCP to use for environmentally friendly programming. In its first year, MBCP returned over $4.4 million in rebates, with more than 65 percent going to commercial customers. MBCP assumes that these commercial customers will use the additional savings to bolster community and economic development by reinvesting in their businesses, employees or community.

In addition to the rebate monies donated back by customers, MBCP sets aside 2 percent of its gross annual revenue for community programs. Initial community programming includes funding an electrification strategic plan, electric vehicle incentives and a partnership with GRID Alternatives, a nonprofit organization that provides solar installations and solar job training to low-income communities.

Santa Cruz County Supervisor Bruce McPherson, one of the driving forces behind MBCP, says phase two of the community programming will focus on distributed energy and microgrids that will help drive economic development in the region. He says, “Monterey Bay Community Power is community-owned and operated, so our residents directly benefit from the employment opportunities, rebates and clean power projects we provide.”

 

Pico Rivera Innovative Municipal Energy Uses a Hybrid Approach

The City of Pico Rivera’s demographics are very different from that of many other CCA communities — as is its rationale for starting its CCA, called Pico Rivera Innovative Municipal Energy (PRIME). It uses a hybrid combination of the JPA and single jurisdiction models, whereby PRIME receives buying power and general advice from the City of Lancaster’s CCA.

Ninety percent of Pico Rivera’s community is Hispanic or Latino, with the median household income roughly 25 percent below the state average. In addition, Pico Rivera has a large senior and veteran population, most of whom are on fixed incomes. Mayor pro Tem Gustavo Camacho says that providing residents with much-needed financial relief was one of the major motivations behind creating PRIME. “The ability to have local control of our rates and provide customized local programming is very important to us,” says Mayor pro Tem Camacho. “We are constantly reinventing ourselves and looking for innovative ways to provide lasting value to our community.”

According to Camacho, a renewable energy business development director, the City of Pico Rivera has been proactive in promoting power alternatives, resource conservation and smart energy consumption, and now it seeks to showcase the benefits of these efforts to its residents through the city’s PRIME programs.

Pico Rivera is focusing much of its programming on education, with an emphasis on youth. The city has also recently contracted with a consulting firm to conduct an energy assessment of its service territory. PRIME General Manager Katherine Hernandez says the assessment will “help map out the next 15 to 30 years of projects in Pico Rivera, ranging from distributed energy resources to virtual power plants and innovative collaborative procurement strategies.”

Challenges and Opportunities

Nineteen CCA programs now operate in California, serving more than 10 million customers. Many more are in the planning stages. The growing popularity of CCAs in California has affected the traditional IOU-based model of providing electricity services and the IOUs.

A major issue facing both CCAs and IOUs is the Power Charge Indifference Adjustment (PCIA). The PCIA is effectively an exit fee set by the CPUC that all departing customers would pay the IOUs when they leave the utilities’ services and become part of a CCA. The purpose is to make the utility whole or “indifferent,” so that customers leaving an IOU do not burden the remaining customers with costs that were previously incurred to serve those who left the IOU. This fee is set each January and fluctuates depending on the difference between the IOU’s actual portfolio costs and the market value of the IOU’s portfolio. The subject of some disagreement over the methodology used to establish the PCIA, this growing uncertainty and the PCIA’s recent increases could have a major impact on the low rates CCAs have been able to offer customers and the extra money they are able to set aside for local programming that supports economic development.

The second issue is the Resource Adequacy (RA) requirement, established by the CPUC, that both IOUs and CCAs must meet. The IOUs and CCAs are required to procure adequate resources in advance to ensure reliability of the power grid. In 2018, the CPUC adopted a resolution to resolve the problem of “double procurement.” Both the CCAs and the IOUs were purchasing RA for the same customers due to out-of-sync regulatory processes. That has now been resolved and the CCAs, along with many other stakeholders, support the CPUC adopting a multi-year RA framework that will bring greater certainty to the RA market and allow the state to forecast reliability.

What the Future Holds

As CCAs grow in number and sophistication, and the complex cost structures and policies continue to evolve, cities engaged in CCAs must continue to think holistically about the value CCAs bring to the community. Being the lower-cost alternative may not be a realistic long-term message. CCA operators may have to adjust their operations and marketing, not only to meet the renewable goals set forth by SB 350, the Clean Energy and Pollution Reduction Act (Chapter 547, Statutes of 2015) and SB 100, but also to meet the social and economic development goals of the communities they serve.

In addition, CCAs bring the benefits of transparency and local control to the communities they serve. Residents and business owners can connect directly with the CCA governing board and staff, eliminating the need to travel to San Francisco and try to navigate the CPUC system for their voices to be heard. CCAs post their board agendas on their websites, and meetings are open to the public. Because CCAs must comply with the Brown Act, their work is transparent.

At the same time, CCAs are playing an increasingly critical role in California’s clean energy future. Community choice programs are now the main drivers of new renewable energy projects in California, according to the CPUC, and those projects are creating green jobs and revenue sources for communities statewide.

“CCAs are committed to providing reliable service, clean energy at competitive rates, and innovative programs that benefit people, the environment and the economy in communities throughout California,” says Beth Vaughan, executive director of the California Community Choice Association, a CCA trade group. “We look forward to seeing more CCAs launch in California, bringing a host of benefits to communities large and small.”


How to Establish a CCA

Cities and counties must follow a specific process set forth in law and regulation to establish a CCA, which ultimately must receive certification from the California Public Utilities Commission. This process starts with the adoption of an ordinance to establish a CCA, followed by the creation of a business plan or feasibility study. The city or county must then submit a statement of intent and an implementation plan to the CPUC. Within 90 days from filing, the CPUC will certify the plan, and a start date will be set by which the CCA can launch. At the time of launch, all CCAs are required to have sufficient funds to compensate ratepayers for IOU re-entry fees should the CCA have to terminate services for some reason.

Some cities are also joining CCAs already in existence. For example, the cities of San Luis Obispo and Morro Bay recently joined Monterey Bay Community Power.

Cities and counties considering whether to form a CCA often first establish an advisory committee and conduct a thorough analysis of the feasibility, costs and benefits. This enables local elected officials to make informed decisions about whether and how to proceed.


Related Resources

California Community Choice Association

https://cal-cca.org

California Public Utilities Commission Resource Adequacy Program

http://www.cpuc.ca.gov/General.aspx?id=6130

Monterey Bay Community Power

https://www.mbcommunitypower.org/


Karalee Browne is a program manager for the Institute for Local Government and can be reached at kbrowne@ca-ilg.org.

 

Community Choice Aggregation Drives Economic Development, by Karalee Browne, Western City, May 1, 2019.

CPX Regulatory Update, May 2, 2019

Updates for Thursday, May 2, 2019

Below is a numbered list of the regulatory proceedings we are tracking, followed by a summary of new developments for each of the proceedings, if any. Note that these are intended as very brief highlights of selected key actions and activities. For details on any of these proceedings, we suggest logging in to the relevant proceeding page on the CPUC’s website.

Regulatory Proceedings we are monitoring:

  1. PG&E Safety Culture Investigation I. 15-08-019
  2. Power Charge Indifference Adjustment (PCIA)  R.17-06-026
  3. Resource Adequacy (RA) R.17-09-020
  4. Wildfire Cost Recovery R. 19-01-006
  5. CCA Code of Conduct R.12-02-009
  6. Distribution Resource Plans (DRP) R.14-08-013 
  7. Integrated Resource Plans (IRP) R.16-02-007
  8. CCA Bond and Re-Entry Fees – 03-10-003 and D.18-05-022
  9. Renewables Portfolio Standard (RPS) 18-07-003
  10. Integrated Distributed Energy Resources  R.14-10-003
  11. And a new one: Direct Access R.19-03-009

1. PG&E Safety Culture Investigation I. 15-08-019  New Development: The second of two public forums was held on April 26. That video is HERE. The video of the April 15 hearing can be found HERE. Background: In this case, Center for Climate Protection is a Party to the Proceeding. Read our Opening Comments HERE. The investigation originated after the San Bruno incident, and has been reinvigorated due to the 2017/18 wildfires.

2. Power Charge Indifference Adjustment (PCIA) (Proceeding #R.17-06-026) – New Development: Working Group Three (Portfolio Optimization and Cost Reduction, and Allocation and Auction) held their first Working Session on April 29, Co-Led by SCE, Commercial Energy, and CalCCA. The presentation can be downloaded HERE. Background: Phase 2 of the PCIA proceeding is underway. Three working groups have been established to address various aspects going forward. The most important to Community Choice is Working Group 3 where opportunities for cost reduction will be addressed. Working Groups and co-chairs in Phase 2: Group 1. Benchmark true-up and related issues – PG&E, CalCCA; This group has been meeting and released a Progress Report on March 20, 2019; Group 2. Prepayment – SDG&E, AreM/DACC – First report expected in late May; Group 3. Portfolio Optimization & Cost Reduction – SCE, CalCCA – First report expected in late June.

3. Resource Adequacy – New Development: On April 30 the California Community Choice Association (CalCCA) announced that the Track 2 Central Buyer Workshop will  be held on Wednesday, May 15, from 10am to 4pm. The topic of the workshop revolves around alternatives to a central procurement entity. The meeting will be held in the CPUC Auditorium in SF and remote participation is available. Background: The RA program is designed to provide adequate electric resources to CAISO to ensure safe and reliable operation of the grid, and to provide appropriate incentives for the siting and construction of new resources needed for reliability. This proceeding has been divided into three Tracks due to the complexity of the issues involved.

4. Wildfire Cost Recovery – No new developments to report since the Scoping Memo was published on March 29 and the April 12 ALJ ruling extending of the deadline to April 24 for comment/reply. A staff report and corresponding workshops are underway. Parties continue to file comments and several new parties have been granted status. Target date for report from Commission on Catastrophic Wildfire Cost and Recovery is July 1, 2019. Background: The CPUC’s R.19-01-006 is a proceeding to implement Public Utilities Code Section 451.2 regarding criteria and methodology for wildfire cost recovery pursuant to Senate Bill 901 (2018). Major questions include:

  • How much a utility can be required to pay out of pocket?
  • What are the costs that a utility can legitimately pass on to ratepayers?
  • What will be used as a cost recovery calculation methodology?

5. Code of Conduct – No new developments. However, please see our Legislation page as there is a bill currently in the legislature, AB 1362, that would demolish the Code of Conduct. Background: Original CCA law, AB 117 stipulates that IOUs must “cooperate fully” with local governments pursuing Community Choice. In the mid-to-late 2000s, San Francisco, Marin, and the San Joaquin Valley experienced egregious disinformation campaigns waged by the incumbent utility for these jurisdictions against their efforts. The obstruction was documented in a series of California Senate Select Committee on Renewable Energy hearings in 2010 chaired by Senator Mark Leno. The result of the hearings was SB 790, which created an IOU Code of Conduct that prohibits IOUs from marketing against CCAs unless they establish a separate marketing division that does not use ratepayer funds, among other provisions.

6. Distribution Resource Plans – No update. Background: This proceeding consolidates numerous previous proceedings and seeks to establish policies and rules for IOUs to develop Distribution Resources Plan Proposals, and to evaluate the IOUs’ infrastructure and planning to incorporate distributed energy resources (DERs) into their systems. There are three parallel and concurrent Tracks in this proceeding. Track 1 concerns methodological issues. Track 2 concerns demonstration and pilot projects. Track 3 concerns policy issues.  Decisions have been issued on all three tracks, but there are still residual issues and new issues being addressed.

7. Integrated Resource Planning (IRP) (Proceeding # R.16-02-007) – New development: On April 25 the CPUC unanimously approved a Proposed Decision that approves or certifies 20 individual LSE IRPs. Grants exemptions to 9 LSEs. Requires another 19 LSEs to refile their individual IRPs as Tier 2 advice letters, with additional information about the criteria pollutants associated with serving their load. It also adopts a Preferred System Portfolio to use as the basis for future planning and to transfer to the CAISO for use in its Transmission Planning Process (TPP) as the reliability base case and policy-driven base case. Lastly, it requires LSEs serving load in the territory of PG&E to include in their next IRPs a section addressing retirement of Diablo Canyon. The decision primarily relies on Community Choice agencies to procure the new clean energy resources the State needs over the next decade to achieve California’s renewable energy and GHG emissions reduction targets attributable to the State’s electricity sector. A video of the proceeding is HERE. Item 51 on the agenda. The CPUC’s action represents a major vote of confidence in the critical role CCAs are playing in California’s rapidly evolving energy system.

8. CCA Bond Requirements – No new developments. Background: Original CCA law, AB 117 stipulates that IOUs must “cooperate fully” with local governments pursuing Community Choice. In the mid to late 2000s, San Francisco, Marin, and the San Joaquin Valley experienced egregious disinformation campaigns waged by the incumbent utility for these jurisdictions aimed at their efforts. The obstruction was documented in a series of California Senate Select Committee on Renewable Energy hearings in 2010 chaired by Senator Mark Leno. The result of the hearings was SB 790, which created an IOU Code of Conduct that prohibits IOUs from marketing against CCAs unless they establish a separate marketing division that does not use ratepayer funds, among other provisions.

9. Renewable Portfolio Standard – No new developments. Background: The RPS program implements SB 350 and SB 100 by requiring all LSEs to increase their procurement of renewable energy to 44% by 2024, 52% by 2027, 60% by 2030, and 100% by 2045.

10. Integrated DER – No new developments. Recent ALJ Ruling directing responses to post-March 4-5, 2019 Workshop questions. Background: Since 2007, the Commission has sought to integrate demand side energy solutions and technologies through utility program offerings. Decision (D.07-10-032) directs that utilities “integrate customer demand-side programs, such as energy efficiency, self-generation, advanced metering, and demand response, in a coherent and efficient manner.” The Commission’s IDER Action Plan published in 2016 remains in draft form.

11. Direct Access Rulemaking (SB 237) – No new developments.  On March 14, 2019 CPUC issued an Order Instituting Rulemaking (OIR) for proceeding R. 19-03-009 regarding implementation of Senate Bill 237 (SB 237 – Hertzberg) concerning expansion of the Direct Access (DA) program. DA is available to non-residential customers. Background: DA access was restricted after the energy crisis by SB 1X. DA access is currently capped and accessible via a lottery system, with 7,603 GWh of load on the waitlist. SB 237 increases the maximum total annual kilowatt-hours allowed under the DA program by a total of 4,000 GWh apportioned among the three IOU service territories. That increase must be implemented by June 1, 2019. SB 237 also gives CPUC until June 1, 2020 to provide the legislature with guidance on expanding DA access to all interested non-residential customers. The proceeding will have two phases to address the two mandates.

PG&E Bankruptcy. In addition to the above proceedings, we are also keeping a close eye on the PG&E bankruptcy, which is playing out in four arenas: the bankruptcy court, the CPUC, the CA State legislature, and the Federal Energy Regulatory Commission (FERC).

Customer Choice Project. This is an informal activity in progress that relates directly to CCAs, the California Customer Choice Project (formerly known as the “Green Book”). The Center submitted Comments on this matter in June 2018.

AB 2514 Energy Storage Mandate. Lastly, all LSEs in California are required to procure certain levels of storage under the Energy Storage Mandate in AB 2514. The CPUC oversees the implementation. Recent news is that due to CCA customers paying for IOU procurement of storage via nonbypassable charges, the obligation for CCAs to meet the mandate has been dismissed.

CPX Legislative Update for May 2, 2019

We are monitoring about 25  energy and/or climate-related bills, not all of which directly impact Community Choice Energy. Things change rapidly, right up to the date of publication, and we do our best to provide the latest information.

This is a very active and unusual session due to the catastrophic wildfires and the implications for the delivery utilities that have been found responsible in some instances. On April 12, Governor Newsom’s “Strike Force” released “Wildfires and Climate Change: California’s Energy Future” that challenged the Legislature to revise state laws on utilities’ wildfire liabilities, presenting lawmakers with a series of potentially controversial strategies to shield electric companies from growing costs fueled by the global climate crisis.

Bills we oppose:

AB 56 (Garcia) – Read our letter of opposition. The bill would authorize the CPUC to require an existing agency, the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), to undertake procurement of electricity to meet the State’s climate, clean energy, and reliability goals that are not satisfied by load-serving entities (LSEs). It would authorize CAEATFA to undertake procurement consistent with specified objectives and to manage the resale of electricity for its contracted resources and would provide for the reduction in procurement compliance obligations for LSEs for the electricity procured by CAEATFA. The bill would impose a nonbypassable charge for recovering revenue from retail end-use customers of LSEs  collected on the basis of usage. Although the bill was amended on April 10, we remain in opposition pending further review. The key concern is the degree to which it ensures procurement autonomy and is only authorized to procure “residual” assets when LSEs are not able to meet their obligations. AB 56 was voted out of the Assembly Energy Committee on April 24 (Ayes: 6; Noes: 2; Abstain: 3) and was referred to the Assembly Natural Resources Committee. No hearing date is set at this time.

AB 1362 (O’Donnell) – Read our Letter of Opposition to AB 1362. In 2011 SB 790 was enacted as the result of egregious obstruction from PG&E against cities and counties in PG&E service territory that were attempting to form Community Choice agencies. SB 790 (Leno, 2011) established a Code of Conduct that prohibits IOUs from using ratepayer funds to market against CCA formation. AB 1362 would render the Code of Conduct meaningless by applying the requirements equally to all load serving entities. The bill passed out of the Assembly Utilities and Energy Committee on April 24 on a 13-0 vote with two abstentions (Watch and find the agenda here). The bill was referred to the Assembly Appropriations Committee with no hearing date set as of this update.

SB 155 (Bradford) – This bill imposes specific requirements concerning the plans for electricity procurement by LSEs regulated by the CPUC. The bill is unnecessary and expands CPUC authority in an inappropriate way. The CPUC already has the ability to enforce compliance with its RA program. Issues such as this can be taken up in the RA and IRP proceedings. SB 155, if enacted as written, will force CCAs to prematurely lock in procurement decisions as far as ten years into the future, hampering their ability to innovate. This can also increase costs to wholesale electricity customers and increase reliance on natural gas in the long-term. the bill passed out of the Assembly Energy Committee unanimously on April 24 (Watch and find the agenda here), and is on to the Senate.

SB 386 (Caballero) – This bill would allow Turlock, Modesto, and Merced Irrigation Districts to count their large hydro assets (dams) toward their Renewable Portfolio Standard (RPS) obligations. This would significantly impact progress with renewables. Amendments were made at the April 24 Senate Energy Committee meeting, and the bill remains in that committee. These Irrigation Districts will already be able to count their dams as carbon-free pursuant to state policy on decarbonization. We are drafting a letter of opposition.

Key Community Choice Energy-related bills to watch:

SB 350 (Hertzberg) – This bill would “authorize the CPUC to consider a multiyear centralized resource adequacy mechanism,” meaning, a central buyer, which would encroach on CCA statutory authority on procurement autonomy. The bill passed out of the Senate Energy Committee on March 27 unanimously. The bill passed from the Senate to the Assembly on a 37-0 floor vote on April 25. It is now in the Assembly.

SB-520 (Hertzberg) – This bill would authorize the CPUC to develop threshold attributes for a load-serving entity to serve as a provider of last resort to provide electrical service to retail end users in California. This bill was heard in Senate Energy on April 24, voted out, referred to Appropriations, and has been set for a hearing on May 6 at 10:30 a.m.

Bills we support:

SB 288 (Wiener) “Solar Bill of Rights” – Read our Support Letter. SB 288 passed its first hearing on April 10 in the Senate Energy Committee, with a vote of 11-0. Next up is Senate Appropriations Committee in May, followed by a Senate floor vote in June. For the latest visit the bill sponsor Solar Rights Alliance’s Solar Bill of Rights page.

SB 246 (Wieckowski) – Read our Support Letter. – Severance tax on oil and gas extracted from California.

AB 684 (Levine) – Read our Support Letter. – Rules proposed in this bill would ensure that the infrastructure necessary for EV charging in multi-family dwellings is codified through multi-family building standards.

SB 255 (Bradford) – A Bradford CCA bill to support? Senator Steven Bradford is well-known among the Community Choice community as the author of 2014’s AB 2145, a bill that would have destroyed Community Choice if it had prevailed. It died in the Senate. SB 255 would require each CCA with gross annual revenues exceeding $1,000,000 to annually submit a plan to the CPUC for increasing procurement from small, local, and diverse business enterprises in all categories, including, but not limited to, renewable energy, energy storage system, and smart grid projects. The bill would also require CCAs to submit an annual report to the CPUC regarding their procurement from women, minority, disabled veteran, and LGBT business enterprises.

For the complete list of bills we are monitoring click HERE.

Renewed PG&E Safety Investigation Initiated in first of two CPUC forums

On Monday April 15 the first of at least two public forums was held to “explore whether changes to [PG&E’s] corporate governance, management, structure, and ownership are needed to ensure the safe provision of electric and gas service to Northern Californians.”

Will Abrams, a wildfire victim, addresses the Commission, April 15, 2019.

This is juxtaposed against the statement in the governor’s Strike Force report “Wildfires and Climate Change: California’s Energy Future,” released the previous Friday, which stated that “PG&E is a textbook example of what happens when a utility does not invest in safety after numerous deadly reminders to do so over many years. Even today, PG&E is taking advantage of the bankruptcy process to promote the interests of investors over fire victims and other stakeholders.” It then went on to declare that “after years of mismanagement and safety failures, no options can be taken off the table to reform PG&E, including municipalization of all or a portion of PG&E’s operations; division of PG&E’s service territories into smaller, regional markets; refocusing PG&E’s operations on transmission and distribution; or reorganization of PG&E as a new company structured to meet its obligations to California.”

So it is a fair guess that yes, changes are needed.

The Forums are part of the CPUC’s PG&E Safety Culture Investigation I. 15-08-019. The Center for Climate Protection is a Party to this Proceeding and our opening comments in proceeding can be found HERE. Our comments focus largely on a set of questions posed in the Order Instituting the Investigation by the Commission about possible changes to the electricity system. They asked “should some or all of PG&E be reconstituted as a publicly owned utility or utilities? Should PG&E be a ‘wires-only company’ that only provides electric distribution and transmission services with other entities providing generation services? If so, what entities should provide generation services?” Our comments attempt to provide some answers that make sense for a safe, reliable, decarbonized 21st Century electricity system.

The hearing and PG&E’s defense of its selection of new Board members was reported on by San Francisco’s local ABC affiliate KGO as well as nationally by the Washington Post.

To view the entire six-hour session, click HERE.

The Commissioners hear testimony from wildfire victims, April 15, 2019

The next Forum, on April 26, will include panels more focused on possible future changes to PG&E structure with a panel on “Aligning Corporate Governance with Ratepayer Interests” and a panel on “Alternatives to Corporate Governance.” Attend on April 26, 2019, 9am–1pm, California Public Utilities Commission Auditorium, 505 Van Ness Avenue San Francisco, or via call-in number: 800-857-1917; Passcode: 92105. The Forum will also be webcast at: www.adminmonitor.com/ca/cpuc

 

 

CPX Regulatory Update April 18, 2019

Updates for Thursday, April 18, 2019

Below is a numbered list of the regulatory proceedings we are tracking. An update summary for each of the proceedings, if any, follows.

Regulatory Proceedings we are monitoring:

  1. PG&E Safety Culture Investigation I. 15-08-019 (In this case, Center for Climate Protection is a Party to the Proceeding). Read our Opening Comments HERE.
  2. Power Charge Indifference Adjustment (PCIA)  R.17-06-026
  3. Resource Adequacy (RA) R.17-09-020
  4. Wildfire Cost Recovery R. 19-01-006
  5. CCA Code of Conduct R.12-02-009
  6. Distribution Resource Plans (DRP) R.14-08-013 
  7. Integrated Resource Plans (IRP) R.16-02-007
  8. CCA Bond and Re-Entry Fees – 03-10-003 and D.18-05-022
  9. Renewables Portfolio Standard (RPS) 18-07-003
  10. Integrated Distributed Energy Resources  R.14-10-003
  11. And a new one: Direct Access R.19-03-009

1. PG&E Safety Culture Investigation I. 15-08-019 The Center for Climate Protection is a Party in this investigation. The investigation originated after the San Bruno incident, and has been reinvigorated due to the 2017/18 wildfires. New developments include: The first of two public forums was held on April 15 and the second is scheduled for April 26. The video of the April 15 hearing can be found HERE. A brief summary published in CPX E-news on April 18 is HERE. More info about the forums is HERE.

2. Power Charge Indifference Adjustment (PCIA) (Proceeding #R.17-06-026) – Phase 2 of the PCIA proceeding is underway. Three working groups have been established to address various aspects going forward. The most important to Community Choice is Working Group 3 where opportunities for cost reduction will be addressed. Working Groups and co-chairs in Phase 2: Group 1. Benchmark true-up and related issues – PG&E, CalCCA; This group has been meeting and released a Progress Report on March 20, 2019; Group 2. Prepayment – SDG&E, AreM/DACC – First report expected in late May; Group 3. Portfolio Optimization & Cost Reduction – SCE, CalCCA – First report expected in late June.

3. Resource Adequacy

New Development: Comments filed on Workshop and Track 3 proposals by CalCCA, PG&E, and CAISO

Recent activity:

  • April 4 – CAISO files draft local and flexible RA Reports

Next Steps:

  • April 18 (today) – Comments due on draft CAISO reports
  • May 1 – CAISO files final local and flexible RA reports
  • May 8 – Comments on final CAISO reports
  • Proposed Decision expected some time in late May

4. Wildfire Cost Recovery

New Developments:

  • March 29, 2019 – Scoping Memo published
    • Staff report and corresponding workshops underway

Key Documents:

Major Issues:

  • How much a utility can be required to pay out of pocket?
  • What are the costs that a utility can legitimately pass on to ratepayers?
  • What will be used as a cost recovery calculation methodology?

Recent activity:

  • April 12 – ALJ ruling on comment/reply due date schedule extensions

Next Steps:

  • April 26 – Comments on staff report due
  • May 3 – Reply comments on staff report due
  • Late May 2019 – Target date for CPUC approval of IOU Wildfire Mitigation Plan
  • July 1, 2019 – Target date for report from Commission on Catastrophic Wildfire Cost and Recovery

5. Code of Conduct – No regulatory update. However, please see our Legislation page as there is a bill currently in the legislature, AB 1362, that would demolish the Code of Conduct.

Background: Original CCA law, AB 117 stipulates that IOUs must “cooperate fully” with local governments pursuing Community Choice. In the mid-to-late 2000s, San Francisco, Marin, and the San Joaquin Valley experienced egregious disinformation campaigns waged by the incumbent utility for these jurisdictions against their efforts. The obstruction was documented in a series of California Senate Select Committee on Renewable Energy hearings in 2010 chaired by Senator Mark Leno. The result of the hearings was SB 790, which created an IOU Code of Conduct that prohibits IOUs from marketing against CCAs unless they establish a separate marketing division that does not use ratepayer funds, among other provisions.

6. Distribution Resource Plans – No update. Background: This proceeding consolidates numerous previous proceedings and seeks to establish policies and rules for IOUs to develop Distribution Resources Plan Proposals, and to evaluate the IOUs’ infrastructure and planning to incorporate distributed energy resources (DERs) into their systems. There are three parallel and concurrent Tracks in this proceeding. Track 1 concerns methodological issues. Track 2 concerns demonstration and pilot projects. Track 3 concerns policy issues.  Decisions have been issued on all three tracks, but there are still residual issues and new issues being addressed.

7. Integrated Resource Planning (IRP) (Proceeding # R.16-02-007) On March 18 a Proposed Decision (PD) adopting a Preferred System Plan (PSP) and proposing a Statewide Renewables Procurement Track was issued. This PD includes a couple of pages of questions to be addressed that make it clear that the Commission is considering impinging on CCA statutory procurement authority. The new PSP rejects the adoption of combined IRPs from the state’s utilities and power providers. The new proposal aims to create a statewide “procurement track” for generation capacity, significantly changing the IRP protocols that currently guide the state’s power providers. If accepted by the California Public Utilities Commission (CPUC), the proposal will empower state regulators to establish the design of this new procurement track. Other notable developments in the PD include the finding that the load-serving entities’ IRP plans in aggregate are not sufficient to meet California’s GHG emission reduction goals. The PD does not call out which LSEs are responsible for this shortcoming. Unfortunately, this finding strengthens the case for centralization of procurement. Also, several CCA IRPs were not certified, largely because of insufficient quantification of emissions and the lack of long term procurement commitments, which the PD refers to as “aspirational.” An “All Parties” meeting is taking place today, April 4, and opening comments are due April 7 on the Proposed Decision adopting the PSP. A ruling on this PD could come as early as the April 25 voting meeting.

8. CCA Bond Requirements No update. Background: Original CCA law, AB 117 stipulates that IOUs must “cooperate fully” with local governments pursuing Community Choice. In the mid to late 2000s, San Francisco, Marin, and the San Joaquin Valley experienced egregious disinformation campaigns waged by the incumbent utility for these jurisdictions aimed at their efforts. The obstruction was documented in a series of California Senate Select Committee on Renewable Energy hearings in 2010 chaired by Senator Mark Leno. The result of the hearings was SB 790, which created an IOU Code of Conduct that prohibits IOUs from marketing against CCAs unless they establish a separate marketing division that does not use ratepayer funds, among other provisions.

9. Renewable Portfolio Standard – No update. Background: The RPS program implements SB 350 and SB 100 by requiring all LSEs to increase their procurement of renewable energy to 44% by 2024, 52% by 2027, 60% by 2030, and 100% by 2045.

10. Integrated DER – Recent ALJ Ruling directing responses to post-March 4-5, 2019 Workshop questions. Background: Since 2007, the Commission has sought to integrate demand side energy solutions and technologies through utility program offerings. Decision (D.07-10-032) directs that utilities “Integrate customer demand-side programs, such as energy efficiency, self-generation, advanced metering, and demand response, in a coherent and efficient manner.” The Commission’s IDER Action Plan published in 2016 remains in draft form.

11. Direct Access Rulemaking (SB 237) And there is a new proceeding to pay attention to. SB 237 and Direct Access Rulemaking. On March 14, 2019 CPUC issued an Order Instituting Rulemaking (OIR) for proceeding R. 19-03-009 regarding implementation of Senate Bill 237 (SB 237 – Hertzberg) concerning expansion of the Direct Access Program (DA). DA is available to non-residential customers. DA access was restricted after the energy crisis by SB 1X. DA access is currently capped and accessible via a lottery system, with 7,603 GWh of load on the waitlist. SB 237 increases the maximum total annual kilowatt-hours allowed under the DA program by a total of 4,000 GWh apportioned among the three IOU service territories. That increase must be implemented by June 1, 2019. SB 237 also gives CPUC until June 1, 2020 to provide the legislature with guidance on expanding DA access to all interested non-residential customers. The proceeding will have two phases to address the two mandates.

Much is also going on regarding wildfire liability, PG&E bankruptcy, and a few other non-docketed affairs:

PG&E Bankruptcy. In addition to the above proceedings, we are also keeping a close eye on the PG&E bankruptcy, which is playing out in four arenas: the bankruptcy court, the CPUC, the CA State legislature, and the Federal Energy Regulatory Commission (FERC).

Customer Choice Project. This is an informal activity in progress that relates directly to CCAs, the California Customer Choice Project (formerly known as the “Green Book”). The Center submitted Comments on this matter in June 2018.

AB 2514 Energy Storage Mandate. Lastly, all LSEs in California are required to procure certain levels of storage under the Energy Storage Mandate in AB 2514. The CPUC oversees the implementation. Recent news is that due to CCA customers paying for IOU procurement of storage via nonbypassable charges, the obligation for CCAs to meet the mandate has been dismissed.

For more on Community Choice-related regulatory issues, including the full list of proceedings we are monitoring, and a list of abbreviations and acronyms, visit our CPX Regulatory Matters Page.

 

CPX Legislative Update – April 18, 2019

Every other week during each legislative season we endeavor to post a summary of the status of selected bills with our position noted if any. Occasionally there will also be calls to action in these posts and on our legislative page urging support, opposition, or amendments.

Bills we are supporting:

SB 288 (Wiener) “Solar Bill of Rights” – Read our Support Letter. SB 288 passed its first hearing on April 10 in the Senate Energy Committee, with a vote of 11-0. At the hearing over fifty organizations and individuals called for the protection of the right to self-generate without undue barriers, red-tape, or discriminatory charges by the big utilities. On the opposing side were the big utilities with a single stale and dubious talking point: cost-shift. The bill still has at least five more steps before it makes it to the Governor’s desk. Next up is Senate Appropriations Committee in May, followed by a Senate floor vote in June. Each step is difficult for a bill like this so stay tuned and stay involved. For the latest visit the bill sponsor Solar Rights Alliance’s Solar Bill of Rights page.

SB 246 (Wieckowski) – Read our Support Letter. – This bill would impose a severance tax on oil and gas extracted from California.

AB 684 (Levine) – Read our Support Letter. – Rules proposed in this bill would ensure that the infrastructure necessary for EV charging in multi-family dwellings is codified through multi-family building standards.

SB 255 – A Bradford bill to support? Senator Steven Bradford is well-known in CCA circles as one of the most ant-CCA legislators. However, AB 255 is a good bill. This bill would require CCAs (and other LSEs) with gross annual revenues exceeding $1,000,000 to annually submit a detailed and verifiable plan to the CPUC for increasing procurement from small, local, and diverse business enterprises in all categories, including, but not limited to, renewable energy, energy storage system, and smart grid projects. The bill would also require each CCA with gross annual revenues exceeding $1,000,000 to annually submit a report to the CPUC regarding its procurement from women, minority, disabled veteran, and LGBT business enterprises in all those same categories. The bill is scheduled to be heard in Senate Appropriations Committee April 22.

Bills we are opposing:

AB 56 (Garcia) – Read our Letter of Opposition AB 56 was amended in the April 10 Assembly Utilities Committee and passed out of that committee. The bill would now authorize the CPUC to require an existing agency, the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA), to undertake procurement of electricity to meet the State’s climate, clean energy, and reliability goals that are not satisfied by load-serving entities (LSEs). The bill would authorize CAEATFA to undertake procurement consistent with specified objectives and to manage the resale of electricity for its contracted resources and would provide for the reduction in procurement compliance obligations for LSEs for the electricity procured by CAEATFA. The bill would impose a nonbypassable charge for recovering revenue from retail end-use customers of LSEs  collected on the basis of usage. Although the bill was amended on April 10, we remain in opposition pending further review. Our key concern is the degree to which the bill ensures procurement autonomy and that CAEATFA is only authorized to procure “residual” assets when LSEs are not able to meet their obligations. This bill will next be heard in the Assembly Appropriations Committee on April 22.

AB 1362 (O’Donnell) – In 2011 SB 790 was enacted as the result of egregious obstruction from PG&E against cities and counties in PG&E service territory that were attempting to form Community Choice agencies. SB 790 (Leno, 2011) established a Code of Conduct that prohibits IOUs from using ratepayer funds to market against CCA formation. AB 1362 would render the Code of Conduct meaningless by applying the requirements equally to all load serving entities. We are in the process of crafting an opposition position/letter. The bill is in the Assembly Utilities and Energy Committee and will be heard on April 24.

Bills we are watching:

SB 350 (Hertzberg) – This bill authorizes the CPUC to consider changes within the resource adequacy (RA) program, including the use of a multiyear centralized resource adequacy mechanism. Our key concern The bill will next be heard in Senate Appropriations on April 22.

SB 520 (Hertzberg) – This bill aims to make certain changes regarding electricity service Provider of Last Resort (POLR). All three IOUs currently serve as POLR and all three have stated that they no longer want to, asserting that they do not believe they are fairly compensated for serving as POLR. Some CCAs have expressed interest in serving as POLR, however, there is no current undertaking to assess what terms and conditions under which a CCA or another entity could serve as POLR. As of April 17, no committee bill analysis has been published. It was amended on April 11 in the Senate Energy Committee and will be heard again in that same committee on April 24.

For the complete list of bills we are tracking, updated for April 18, click HERE.

Our next legislative update will be published on May 2.

 

Board Holds Workshop on Community Choice Energy

Energy experts from across the state spoke before the County Board of Supervisors during a workshop Tuesday that may help determine whether the County buys and sells electricity.

The Supervisors heard from utility experts, consumer groups and representatives from cities and counties that offer community choice energy.

The Board voted in February to study whether community choice energy, also known as community choice aggregation, should be offered to residents of the County’s unincorporated areas. These programs allow cities and counties to buy, and/or generate, and sell electricity to residents and businesses as alternatives to public utilities like San Diego Gas & Electric.

The County buys electricity and natural gas for its own facilities on the open market instead of directly from SDG&E. During the last three years, the direct access program has saved the County an average of about $3 million a year.

The Board asked staff to look into the pros and cons of community choice energy for County residents and businesses with progress reports every two months. Tuesday’s workshop was the first progress report. County staff members will present the results of a County CCE feasibility study/business plan to the Board in October.

Video of the workshop can be seen here. The next progress report is expected in June.

 

Board Holds Workshop on Community Choice Energy, By Tracy DeFore, San Diego County News Center, April 9, 2019.