CPX Regulatory Update for October 17, 2019

Regulatory updates for October 17, 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 on the proceeding number below or visit http://www.cpuc.ca.gov/documents/

Brief Notes:

  • The next CPUC voting meeting is on schedule for October 10 at CPUC headquarters. See AGENDA. For the livestream, click HERE.
  • We are continuing to monitor PG&E bankruptcy and wildfire related proceedings but will no longer be reporting on a regular basis. We will report occasionally on any significant developments.
  • We will be filing comments on and monitoring the OIR for SB 1339 relating to microgrids, item 11 below. Opening Comments are due on Oct 21.

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. Integrated Resource Plans (IRP) 16-02-007
  6. Distribution Resource Plans (DRP) 14-08-013 
  7. Renewables Portfolio Standard (RPS) 18-07-003
  8. Integrated Distributed Energy Resources 4-10-003
  9. Direct Access 19-03-009
  10. NEM Successor Tariff 14-07-002
  11. SB 1339 Microgrid Rulemaking 19-09-009

Closed proceedings that matter:

Other CPUC activities with no docket number:

~ ~ ~

  1. PG&E Safety Culture Investigation 15-08-019

New and recent developments:

  • On July 19, the Center, along with adviser Lorenzo Kristov, PhD, filed Commentspursuant to the June 18 Order seeking proposals to improve PG&E safety culture
  • Interim Decisionordering reporting of PG&E Directors’ safety qualifications by August 1 and establishing CPUC advisory panel on corporate governance.

Major Issues:

  • PG&E’s ability to maintain a safe transmission and distribution system
  • Fundamental restructuring of the electricity system

Key Documents:

  • Orderextending statutory deadline to May 8, 2020

Background: In this case, The Climate Center 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.

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

New and recent developments:

  • Oct 11 – Notice of Reassignment of Commissioner. R.17-06-026 has been reassigned to Commissioner Martha Guzman Aceves
  • Oct 1 – CalCCA Reply Comments on Proposed Decision
  • Sept 6 – Proposed Decision– Decision refining the method to develop and true up market price benchmarks; may be heard Oct. 10
  • Sept 3 – Administrative Law Judge’s Ruling denying in part the Motion of the Protect Our Communities Foundation for Evidentiary Hearings and modifying the proceeding schedule

Key Documents:

Next Steps: TBD

Background: The PCIA is a fee charged to CCAs to pay for a utility’s stranded cost of procuring electricity on behalf of customers departing in CCAs.

  1. Resource Adequacy (17-09-020)

New and recent developments:

  • 26 – Decision D1909054 – Order Extending Statutory Deadline. This decision extends the statutory deadline in this proceeding to March 28, 2020.
  • 6 – Proposed Decision– This decision clarifies the requirements governing the use of energy imported into California to meet Resource Adequacy requirements, as set forth in Decision (D.) 04-10-035 and D.05-10-042.
  • On August 30, CalCCA announced a joint settlement agreementamong multiple stakeholders.
  • CalCCA 8/8/19 Notice of Settlement Conference

Key Documents:

  • Track 1 Decision D.18-06-030 Adopting Local Capacity Obligations and Refinements to the RA program
  • 18-06-031 adopting flexible capacity obligations for 2019
  • Email ruling on Energy Division Effective Load Carrying Capacity Proposal
  • Proposed Decision endorsing IOUs as Central Buyer for local RA
  • Ruling on Effective Load Carrying Capacity Proposal
  • Comments on the Proposed Decision

Major Issues: CCA participation in the year-ahead RA showing, cost allocation due to load migration, reducing backstop procurement, consolidating procurement using a central buyer, updates to Effective Load Carrying Capacity modeling methods, aligning the CPUC’s RA measurement hours with CAISO’s.

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 (12-02-009) – 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. Integrated Resource Planning (16-02-007)

New and recent developments:

  • Oct 8 – Amended reply comments of the California Community Choice Association on Proposed Decision requiring electric system reliability procurement for 2021-2023
  • 12 – Proposed Decision– In this Decision, the Commission takes a number of steps to address the potential for electricity system resource adequacy shortages beginning in 2021. The Decision includes CCAs in SCE service territory.
  • Comments on procurement track and reliability issues by CalCCA, TURN, PG&E

Key Documents:

Major Issues:

  • Near, medium, and long-term local reliability needs
  • Approval of a Preferred System Plan
  • How to coordinate LSE procurement to meet CA GHG goals

Next Steps:

  • Late 2019 – Proposed Decision on Procurement Track

Background: On April 25 the CPUC unanimously approved a Proposed Decision that approves or certifies 20 individual LSE IRPs. 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 (14-08-013 )– No new updates for Oct 17, 2019.

August 9 – Ruling postponing capacity analysis workshop.

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 (18-07-003)

No new developments for Oct 17, 2019.

  • August 23 – Decisionre IOU Effective Load Carrying Capability. Behind-the-meter Photovoltaic (PV) must be treated as a supply-side resource; annual loss of load expectation study must be conducted.
  • August 8 – Proposed Decisionrelaxing 2018 RPS Plan reporting for 6 new CCAs. Comment by CalCCA.
  • August 1 – Decisionenforcing RPS program rules, fining Liberty Power $431,014 and Gexa $1,725,461.
  • Joint Utility commentsand Joint CCA reply comments on combining IRP and RPS programs.

Major Issues:

  • Revising RPS renewable market adjusting tariff (ReMAT) and bioenergy market adjusting tariff (BioMAT).
  • Least-cost/best-fit methodology for RPS procurement
  • Cost containment for IOU RPS procurement and coordination with the IRP proceeding
  • Monitoring and review of LSE compliance.

Key Documents:

  • 12-06-038 setting RPS compliance rules.
  • OIR to further develop the RPS program.
  • 2018 RPS Annual Report to Legislature.
  • Amended Scoping Memo.
  • Proposed Decision adopting 2018 RPS procurement plans.
  • Comments on Proposed Decision by CCA Parties.

Next Steps:

  • Fourth Quarter 2019 – Decision on RPS plans
  • May 1, 2020 – Tentative consolidation of IRP/RPS filings.

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.

Most recent development: 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 (19-03-009) – 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.

  1. NEM Successor Tariff Rulemaking R.14-07-002

Pursuant to direction in the NEM Successor Tariff Decision, the Commission will review the NEM successor tariff some time in 2019, when the proceedings related to distributed energy resources are completed and after default TOU rates are implemented. Energy Division staff will explore compensation structures for customer-sited distributed generation other than NEM, as well as consider an export compensation rate that takes into account locational and time-differentiated values. On April 26, 2019, the Energy Division distributed a Revised Solar Information Packet to service list R.14-07-002 and R.12-11-005.  The Energy Division asked for written comments about the content of the Revised Solar Information Packet and implementation approach.  The deadlines for submitting written comments has passed. If you have questions contact Kerry Fleisher at the CPUC Energy Division: Kerry.Fleisher@cpuc.ca.gov

 

  1. Microgrids – R.19-09-009

New or recent developments:

Major Issues:

  • Role of CCAs in microgrid development
  • Microgrid operation, value, and technical challenges.
  • Microgrid regulation and service standards.
  • How microgrids can improve the grid and further policy goals.

Key Documents:

Next Steps:

  • October 19, 2019 – Comments on the OIR are due.
  • November 3, 2019 – Reply comments on the OIR 

Closed proceedings that matter: 

  • CCA Rulemaking03-10-003This was the original rulemaking that occurred between 2003 and 2005 to cross the Ts and dot the Is on CCA law. 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.

Other CCA-relevant CPUC activities with no docket number:

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. 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.

PG&E Bankruptcy (no docket #) (PG&E Fires 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).

Recent Developments

  • Judge lifts the stay and RULES that litigation revolving around the 2017 Tubbs Wildfire can proceed
  • Fast-tracked legislation (AB 1054) enacted on July 11, 2019 creates $21M fund for future fires, partly at ratepayer expense
  • Settlement agreement with 18 public agencies
  • Bondholder’s $30 billion plan, $16 – $18 million for victims
  • Newsom’s $21 billion plan, renews $2.50 monthly DWR charge for 15 years
  • Ruling denying FERC jurisdiction over PPA agreements

Major Issues:

  • Chapter 11 removes restructuring authority to the Federal Bankruptcy Court.
  • PG&E’s ability to recover wildfire litigation and liability costs via rate increases.
  • The scope and role of PG&E when it emerges from bankruptcy restructuring.
  • Future role of CCAs, distributed energy resources, and distribution utility.

Key Documents:

  • Cal Fire report finding PG&E equipment involved in 12 fires during October, 2017.
  • Ruling and Scoping Memo regarding phase 2 15-08-019 Investigation Into PG&E’s Safety Culture
  • Fire Safety and Utility Infrastructure En Banc

Next Steps:

  • Deadline for PG&E to propose reorganization plan

Our next CPX Regulatory Update will be published on Thursday, October 31. Boo!

 

 

 

CPX Legislative Update – 2019 Wrap-up

For this final update for the 2019 legislative session, we will do things a little differently. Below is a table of all the bills we kept an eye on during the 2019 session. On the left is the bill number and bill author, middle column is the brief description from leginfo, and on the right, the status of the bill.

We’ll be back in January, 2020. Till then, enjoy the break!

Bill Number/Bill Author
Brief Description
Status
AB-235

(Mayes)

Electrical corporations: wildfire victim recovery bonds Two-year bill
AB-296

(Cooley)

Climate change: Climate Innovation Grant Program: voluntary tax contributions Vetoed
AB-684

(Levine)

Building standards: electric vehicle charging infrastructure Vetoed
AB-857

(Chiu)

Public banks Enacted
AB-915

(Mayes)

California Renewables Portfolio Standards Program Two-year bill
AB-961

(Reyes)

Energy programs and projects: nonenergy benefits Two-year bill
AB-1144

(Friedman)

Self-generation incentive program: community energy storage systems: high fire threat districts Enacted
AB-1347

(Horvath)

Electricity: renewable energy and zero-carbon resources: state and local government buildings. Two-year bill
AB-1371

(Cunningham)

California Renewables Portfolio Standard Program: offshore wind generation. Two-year bill
AB-1584

(Quirk)

Electricity: cost allocation. Enacted
SB-45

(Allen, et al)

Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020. Two-year bill
SB-155

(Bradford)

California Renewables Portfolio Standard Program: integrated resource plans. Enacted
SB-168

(Wieckowski)

Climate change: Chief Climate Resilience Officer. Two-year bill
SB-212

(Allen)

Elections: local voting methods. Vetoed
SB-246 Oil and gas severance tax. Two-year bill
SB-255

(Bradford)

Women, minority, disabled veteran, and LGBT business enterprise procurement: electric service providers: energy storage system companies: community choice aggregators. Enacted
SB-350

(Hertzberg)

Electricity: resource adequacy: multiyear centralized resource adequacy mechanism. Two-year bill
SB-386

(Caballero)

California Renewables Portfolio Standard Program: irrigation districts. Two-year bill
SB-520

(Hertzberg)

Electrical service: provider of last resort. Enacted
SB-548

(Hill)

Electricity: transmission facilities: inspection. Two-year bill
SB-549

(Hill)

Public Utilities Commission: rates: capital structure changes. Two-year bill
SB-550

(Hill)

Public utilities: merger, acquisition, or control of electrical or gas corporations. Enacted
SB-662

(Archuleta)

Green electrolytic hydrogen. Two-year bill
SB-676

(Bradford)

Transportation electrification: electric vehicles: grid integration. Enacted
SB-766

(Stern)

Public utilities: weatherization. Two-year bill
SB-772

(Bradford)

Long duration bulk energy storage: procurement. Two-year bill
SB-774

(Stern)

Electricity: microgrids.    Two-year bill

 

CPX Legislative Update for October 3, 2019

Updated 10/3/19

Legislative Calendar Check: The legislature adjourned on September 13. The governor has until October 13 to sign bills. We will issue one more legislative update on October 17, and then will be on break until the legislature resumes business in January 2020. In the meantime, visit the CPX legislative page for occasional updates.

In this 2019 session we are monitored about 29 energy and/or climate-related bills, not all of which would directly impact Community Choice Energy. Below is a selection of highlighted bills with a brief summary, the Center’s position, if any, and the status of the bill.

Two-year bills that will come back in 2020:

AB 56 (Garcia) OPPOSE – This bill will empower the CPUC to order energy procurement based on real or perceived shortcomings in the Integrated Resource Plan submitted by Investor Owned Utilities, Direct Access providers, and CCAs. The bill will allow the CPUC to require procurement on any perceived deficiency that may be 10 to 12 years out in the future. This makes no sense, given that so much lead time would allow a CCA to address any potential problem. Read the Center’s updated July Letter of OppositionStatus: Two-year bill.

AB 235 (Mayes) – Now dubbed the “Catastrophic Wildfire Liability Recovery Act,” this bill will allow PG&E to issue bonds to cover 2017, 2018 wildfire liabilities that ratepayers could ultimately have to pay for, and allows the CPUC to arbitrarily set a limit on the amount a transmission & distribution utility must pay as a result of catastrophic wildfire that may have been the result of their infrastructure. It is essentially a defense of status quo corporate utility dominance.  Status: AB 235 is a two-year bill.

SB 246 (Wieckowski) – Read our Support Letter. – This bill, if enacted as written, will impose an oil and gas severance tax on the privilege of extracting oil or fossil gas from the earth or water in California upon any operator engaged in such extraction. Status: Two-year bill. It will be brought back in January 2020.

SB 350 (Hertzberg) OPPOSE – 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. This bill was a tandem bill with AB 56 that is also a tw0-year bill. Status: Two-year bill.

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 new 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 from any cost burdens. Status: Two-year bill.

SB-772 (Bradford) – This bill relates to procurement of long duration bulk energy storage. Concerns center on forcing the hand of CCA procurement. Status: Two-year bill.

SB 774 (Stern) – SB 774 would require IOUs to collaborate with the State’s Office of Emergency of Services 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. Concerns focus on too much control being placed in the hands of the IOUs over microgrid development when other LSEs and stakeholders can and should play a role. Status: Two-year bill.

Bills we opposed that were enacted:

AB 1054 (Holden, Mayes, Burke) – Enacted: This 200-page bill was fast-tracked through the legislature. In addition to encumbering ratepayers with nonbypassable charges for more than a decade just as they were set to expire, and no safeguard against rate increases, the bill includes a clause that is completely outside of any wildfire concern, and it impacts Community Choice agencies. The clause empowers the CPUC to obstruct sales of IOU assets to other load serving entities and public entities. This could hobble local governments wanting to launch their own municipal service, and/or emerging CCAs that may benefit by acquiring assets that the IOUs no longer want or need. Status: AB 1054 passed out of the legislature on July 11 and was signed by the governor. It is now being challenged in federal court by two PG&E customers on grounds that it may allow for ratepayer funds to be used to pay for cost increases due to PG&E negligence.

AB 1584 (Quirk) – In its final form this bill requires the CPUC to develop and use methodologies for allocating electrical system integration resource procurement needs to each load-serving entity based on the contribution of that LSE’ load and resource portfolio to the electrical system conditions that created the need for the procurement. It also requires the CPUC to develop and use methodologies for determining any costs resulting from a failure of a LSE to satisfy its allocation of those procurement needs. Originally this bill would have impinged on Community Choice agency statutory procurement authority. Due to amendments in August, CalCCA shifted to a neutral position. Status: On the governor’s desk.

SB 155 (Bradford) – This bill expands CPUC’s authority over CCA procurement and Integrated Resource Plans. Read the Center’s July Letter of Opposition. Due to amendments made in early July, CalCCA shifted to a neutral position. Status: On the governor’s desk.

SB-520 (Hertzberg) This bill empowers the CPUC to determine what load serving entity should serve as the provider of last resort (POLR). Currently IOUs serve as the provider of last resort in their service territories. A big problem with the bill is that it gives the IOUs veto control over the POLR application process. If another LSE (e.g., a CCA) wants to become the POLR, the incumbent IOU must agree to the application submitted to the CPUC, which is unacceptable. This bill is a step in the wrong direction. It gives the existing utilities control over whether they continue to have the exclusive right to serve as the utility and gives them control over who if anyone would take over the role of POLR. Why should the State hand over that kind of decision-making authority to the existing utilities? We are concerned that over time, this will make the utilities less accountable. We encourage firm opposition to this bill in its current form. Status: SB 520 is on the governor’s desk awaiting his signature or veto.

SB 676 (Bradford) – This bill requires the CPUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration. Based on amendments made in early July, CalCCA has shifted to a neutral position. Status: On the governor’s desk.

Bills we supported that were enacted:

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. Status: On the governor’s desk.

Bills we supported that died:

AB 1046 (Ting) – Clean Vehicle Rebate Program. This bill would have required the California Air Resources Board to develop a plan to provide for the continuous funding of a program with a goal of supporting deployment of 5 million electric vehicles by December 2030. Status: AB 1046 died in the Senate Appropriations Committee on August 30.

For the complete list of bills we monitored in 2019 click HERE.  The next and final 2019 CPX legislation update will be on Thursday, October 17th.

CPX Regulatory Update for October 3, 2019

Regulatory updates for October 3, 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 on the proceeding number below or visit http://www.cpuc.ca.gov/documents/

Brief Notes:

  • The next CPUC voting meeting is on schedule for October 10 at CPUC headquarters. See AGENDA. For the livestream, click HERE.
  • We are continuing to monitor wildfire related proceedings but will no longer be reporting on a regular basis. We will report occasionally on any significant developments.
  • We will be monitoring the OIR for SB 1339 relating to microgrids, item 11 below.

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. Integrated Resource Plans (IRP) 16-02-007
  6. Distribution Resource Plans (DRP) 14-08-013 
  7. Renewables Portfolio Standard (RPS) 18-07-003
  8. Integrated Distributed Energy Resources 4-10-003
  9. Direct Access 19-03-009
  10. NEM Successor Tariff 14-07-002
  11. SB 1339 Microgrid Rulemaking R.19-09-009

Closed proceedings that matter:

Other CPUC activities with no docket number:

~ ~ ~

 

  1. PG&E Safety Culture Investigation 15-08-019

New and recent developments:

  • On July 19, the Center, along with adviser Lorenzo Kristov, PhD, filed Comments pursuant to the June 18 Order seeking proposals to improve PG&E safety culture
  • Interim Decision ordering reporting of PG&E Directors’ safety qualifications by August 1 and establishing CPUC advisory panel on corporate governance.

Major Issues:

  • PG&E’s ability to maintain a safe transmission and distribution system

Key Documents:

  • Order extending statutory deadline to May 8, 2020

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.

 

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

New and recent developments:

  • Sept 6 – Proposed Decision – Decision refining the method to develop and true up market price benchmarks; may be heard Oct. 10
  • Sept 3 – Administrative Law Judge’s Ruling denying in part the Motion of the Protect Our Communities Foundation for Evidentiary Hearings and modifying the proceeding schedule
  • August 1 – Proposed Decision modifying the PCIA Methodology. The deadline for comments on the APD is September 6, 2018 at 5 p.m. The deadline for consolidated reply comments on the PD and the APD is September 11, 2018 at 5 p.m.

Key Documents:

Next Steps: TBD

Background: The PCIA is a fee charged to CCAs to pay for a utility’s stranded cost of procuring electricity on behalf of customers departing in CCAs.

 

  1. Resource Adequacy (17-09-020)

New and recent developments:

  • 6 – Proposed Decision – This decision clarifies the requirements governing the use of energy imported into California to meet Resource Adequacy requirements, as set forth in Decision (D.) 04-10-035 and D.05-10-042.
  • On August 30, CalCCA announced a joint settlement agreement among multiple stakeholders.
  • CalCCA 8/8/19 Notice of Settlement Conference
  • 8/2/19 Comments of CalCCA on the informal workshop reports
  • Assigned Commissioner’s Ruling on July 3 seeking comment on clarification to resource adequacy import rules. Responses to questions were due by July 19, 2019. Reply comments were due by July 26, 2019.

Key Documents:

  • Track 1 Decision D.18-06-030 Adopting Local Capacity Obligations and Refinements to the RA program
  • 18-06-031 adopting flexible capacity obligations for 2019
  • Email ruling on Energy Division Effective Load Carrying Capacity Proposal
  • Proposed Decision endorsing IOUs as Central Buyer for local RA
  • Ruling on Effective Load Carrying Capacity Proposal
  • Comments on the Proposed Decision

Major Issues: CCA participation in the year-ahead RA showing, Cost allocation due to load migration, Reducing backstop procurement, Consolidating procurement using a central buyer, Updates to Effective Load Carrying Capacity modeling methods, Aligning the Commission’s RA measurement hours with CAISO’s.

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 (12-02-009) – 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. Integrated Resource Planning (16-02-007)

New and recent developments:

  • 12 – Proposed Decision – In this Decision, the Commission takes a number of steps to address the potential for electricity system resource adequacy shortages beginning in 2021. The Decision includes CCAs in SCE service territory.
  • Comments on procurement track and reliability issues by CalCCA, TURN, PG&E
  • CalCCA Motion for amended ruling seeking the staff analysis identifying the “potential for near-term reliability challenges” cited in the Ruling.
  • Final Decision adopting the Reference System Plan as the Preferred System Plan.

Key Documents:

  • Order Instituting Rulemaking
  • Decision D.18-02-018 setting IRP requirements for LSEs
  • Amended Scoping Memo

Major Issues:

  • Near, medium, and long-term local reliability needs
  • Approval of a Preferred System Plan
  • How to coordinate LSE procurement to meet CA GHG goals

Next Steps:

  • Late 2019 – Proposed Decision on Procurement Track

Background: On April 25 the CPUC unanimously approved a Proposed Decision that approves or certifies 20 individual LSE IRPs. 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 (14-08-013 ) – No new updates.

August 9 – Ruling postponing capacity analysis workshop.

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 (18-07-003)

New or Recent Developments:

  • August 23 – Decision re IOU Effective Load Carrying Capability. Behind-the-meter Photovoltaic (PV) must be treated as a supply-side resource; annual loss of load expectation study must be conducted.
  • August 8 – Proposed Decision relaxing 2018 RPS Plan reporting for 6 new CCAs. Comment by CalCCA.
  • August 1 – Decision enforcing RPS program rules, fining Liberty Power $431,014 and Gexa $1,725,461.
  • Joint Utility comments and Joint CCA reply comments on combining IRP and RPS programs.

Major Issues:

  • Revising RPS renewable market adjusting tariff (ReMAT) and bioenergy market adjusting tariff (BioMAT).
  • Least-cost/best-fit methodology for RPS procurement
  • Cost containment for IOU RPS procurement and coordination with the IRP proceeding
  • Monitoring and review of LSE compliance.

Key Documents:

  • 12-06-038 setting RPS compliance rules.
  • OIR to further develop the RPS program.
  • 2018 RPS Annual Report to Legislature.
  • Amended Scoping Memo.
  • Proposed Decision adopting 2018 RPS procurement plans.
  • Comments on Proposed Decision by CCA Parties.

Next Steps:

  • Fourth Quarter 2019 – Decision on RPS plans
  • May 1, 2020 – Tentative consolidation of IRP/RPS filings.

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.

Most recent development: 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 (19-03-009) – 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.

 

  1. NEM Successor Tariff Rulemaking R.14-07-002

Pursuant to direction in the NEM Successor Tariff Decision, the Commission will review the NEM successor tariff some time in 2019, when the proceedings related to distributed energy resources are completed and after default TOU rates are implemented. Energy Division staff will explore compensation structures for customer-sited distributed generation other than NEM, as well as consider an export compensation rate that takes into account locational and time-differentiated values. On April 26, 2019, the Energy Division distributed a Revised Solar Information Packet to service list R.14-07-002 and R.12-11-005.  The Energy Division asked for written comments about the content of the Revised Solar Information Packet and implementation approach.  The deadlines for submitting written comments has passed. If you have questions contact Kerry Fleisher at the CPUC Energy Division: Kerry.Fleisher@cpuc.ca.gov

11. Microgrids – R.19-09-009

New Developments:

Major Issues:

  • Role of CCAs in microgrid development
  • Microgrid operation, value, and technical challenges.
  • Microgrid regulation and service standards.
  • How microgrids can improve the grid and further policy goals.

Key Documents:

Next Steps:

  • October 19, 2019 – Comments on the OIR.
  • November 3, 2019 – Reply comments on the OIR

 

Closed proceedings that matter: 

  • CCA Rulemaking03-10-003 This was the original rulemaking that occurred between 2003 and 2005 to cross the Ts and dot the Is on CCA law. 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.

 

Other CCA-relevant CPUC activities with no docket number:

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. 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.

PG&E Bankruptcy (no docket #) (PG&E Fires 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).

Recent Developments

  • Judge lifts the stay and RULES that litigation revolving around the 2017 Tubbs Wildfire can proceed
  • Fast-tracked legislation (AB 1054) enacted on July 11, 2019 creates $21M fund for future fires, partly at ratepayer expense
  • Settlement agreement with 18 public agencies
  • Bondholder’s $30 billion plan, $16 – $18 million for victims
  • Newsom’s $21 billion plan, renews $2.50 monthly DWR charge for 15 years
  • Ruling denying FERC jurisdiction over PPA agreements

Major Issues:

  • Chapter 11 removes restructuring authority to the Federal Bankruptcy Court.
  • PG&E’s ability to recover wildfire litigation and liability costs via rate increases.
  • The scope and role of PG&E when it emerges from bankruptcy restructuring.
  • Future role of CCAs, distributed energy resources, and distribution utility.

Key Documents:

  • Cal Fire report finding PG&E equipment involved in 12 fires during October, 2017.
  • Ruling and Scoping Memo regarding phase 2 15-08-019 Investigation Into PG&E’s Safety Culture
  • Fire Safety and Utility Infrastructure En Banc

Next Steps:

  • Sept 28 – Deadline for PG&E to propose reorganization plan

 

Our next CPX Regulatory Update will be published on Thursday, October 17.

Advanced Community Energy: Building a Clean and Resilient Electricity Grid

I am pleased to have joined the Center for Climate Protection to work on the new Advanced Community Energy (ACE) initiative.  

Advanced Community Energy (ACE) is an initiative to establish, through legislation, a program to provide funding, technical expertise, best practices and local capacity building for all cities and counties to plan and implement local ACE systems, starting with Community Microgrids. Under the proposed state program, ACE planning will involve collaboration between local government agencies, local residents and stakeholders, especially vulnerable households and disadvantaged neighborhoods, electric distribution utilities, and clean energy developers and technology companies. 

ACE is based on grid architecture developed by Dr. Lorenzo Kristov, taking advantage of dramatic recent developments in Distributed Energy Resources (DER).  

Decarbonization is the overarching policy priority given the climate crisis, although resilience is currently at the forefront of policymaker concerns in the current era of “Public Safety Power Shutoffs.”  Like other PG&E ratepayers, I received a letter advising me to be prepared for the power at my home in fire-prone Marin County to be shutoff for up to 96 hours.  That would be an inconvenience for my family. It could be life-threatening for people who rely on electricity for medical needs. My mother’s skilled nursing facility is required to have on-site back-up generation available for 6 hours. What happens if the power outage is longer than 6 hours?  

In response to power shutoffs, homeowners, businesses and managers of critical facilities are buying back-up power generation.  The town where I live recently decided to purchase a $30K back-up generator. The Association of California Water Agencies recently held a meeting to help water managers plan for how to maintain service during power shutoffs.  The quickest solution? Fossil fuel generators. 

There is a better way: every community should start by identifying its critical facilities and deciding where to install new local renewables and storage. It makes sense to use optimal spaces in a community to generate and store energy, rather than what’s happening now: everyone thinking only about their own facilities.  Some California local governments have already started developing community microgrid projects in order to enhance resiliency, including Oakland, Eureka, and Santa Barbara. These efforts need to expand to other communities.  A statewide program is needed to ensure that all cities and counties in the state have the financial and technical resources and guidance to conduct collaborative, participatory planning processes. In addition to funding support, a statewide ACE program would provide technical expertise and best practices, such as designs for critical-facility microgrids, building efficiency and decarbonization retrofit strategies, carbon-free local mobility services, a clearinghouse for best practices in local government energy planning and a library of case studies.

We also need transformation of our regulatory policies and institutions, revising market rules so that thousands of small-scale distributed energy resources can be compensated for providing local energy services.  We need to direct the CPUC to develop regulatory rules for its jurisdictional electric distribution utilities to collaborate with cities and counties in their service areas. It is essential that local ACE systems address decarbonization, equity and resilience be designed so as to improve the reliable operation of California’s electric grid while minimizing operational impacts and needs for new grid infrastructure investment. IOU distribution utilities must be fully engaged collaborators and provide the information needed for effective ACE planning. This would be a new role for the IOUs, however, so the ACE legislation would direct the CPUC to develop the regulatory framework governing this role and its associated responsibilities and incentives. An eventual transition to a “Distribution System Operator” model would allow local energy resources to reduce costs caused by local peaks and also defer some infrastructure investments.  When the grid experiences outages, local resources could be separated operationally from the central grid at and below the substation. The distribution system operator would implement smart switching and grid segmentation to enable different sub-sections of the distribution grid to maintain operations as needed. This would ensure that during any outage, critical services as established by each community would continue to receive electricity. 

California Fire Threat Map. Source: CPUC

We also need sufficient market signals to enable this transformation.  This would start by increasing state funding to support critical-facility microgrid projects, starting with high fire risk areas and eventually covering all of California. Eventually all California communities may be subject to severe climate-related disruptions, so a statewide “resilient communities” goal would focus on identifying critical facilities in all cities and counties — such as water supply, wastewater treatment, first responders and community care centers for displaced persons — and equipping them with carbon-free energy resources and energy storage to maintain electric service when disruptions occur.   This will build upon existing CPUC proceedings.   Last week the CPUC issued a Decision to use Self Generation Incentive Program funding for additional energy storage project incentives for vulnerable households and critical facilities in high fire threat districts. The CPUC also recently initiated a microgrid rulemaking pursuant to SB1339, which will also be pivotal for development of the future DER-based grid.  

ACE is the logical next step in California’s remarkable history of energy policy innovation.  Back in 2006, I worked at the California Public Utilities Commission on the implementation rulemaking for the $3B California Solar Initiative.  At the very beginning there was a clear vision for the end goal, 3000 MW of new solar in California, and lots of details to be worked out. That’s where we are now with ACE: a compelling vision for how to build a better electricity grid and lots of work ahead to make that vision become reality.   

If’ you would like to learn more about ACE, please sign up to receive our future newsletter or contact me at kurt@climateprotection.org.   I look forward to working together to build a clean and resilient California electricity grid.  

 

 

 

CPX Regulatory Update for September 19, 2019

Regulatory updates for September 19, 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 on the proceeding number below or visit http://www.cpuc.ca.gov/documents/

Brief Notes:

  • The next CPUC voting meeting is on schedule for September 26 at CPUC headquarters. See AGENDA. For the livestream, click HERE.
  • We are continuing to monitor wildfire related proceedings but will no longer be reporting on a regular basis. We will report occasionally on any significant developments.
  • We will be monitoring the OIR for SB 1339 relating to microgrids, coming soon.

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. Integrated Resource Plans (IRP) 16-02-007
  6. Distribution Resource Plans (DRP) 14-08-013 
  7. Renewables Portfolio Standard (RPS) 18-07-003
  8. Integrated Distributed Energy Resources 4-10-003
  9. Direct Access 19-03-009
  10. NEM Successor Tariff 14-07-002

Closed proceedings that matter:

Other CPUC activities with no docket number:

~ ~ ~

 

  1. PG&E Safety Culture Investigation 15-08-019

New and recent developments:

  • Reply Comments from PG&E, Office of Ratepayer Advocate, others. Not posted to proceeding documents list
  • On July 19, the Center, along with adviser Lorenzo Kristov, PhD, filed Comments pursuant to the June 18 Order seeking proposals to improve PG&E safety culture
  • Interim Decision ordering reporting of PG&E Directors’ safety qualifications by August 1 and establishing CPUC advisory panel on corporate governance.

Major Issues:

  • PG&E’s ability to maintain a safe transmission and distribution system

Key Documents:

  • Orderextending statutory deadline to May 8, 2020

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.

 

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

New and recent developments:

  • 6 – Proposed Decision – Decision refining the method to develop and true up market price benchmarks; may be heard Oct. 10
  • 3 – Administrative Law Judge’s Rulingdenying in part the Motion of the Protect Our Communities Foundation for Evidentiary Hearings and modifying the proceeding schedule
  • August 1 – Proposed Decisionmodifying the PCIA Methodology. The deadline for comments on the APD is September 6, 2018 at 5 p.m. The deadline for consolidated reply comments on the PD and the APD is September 11, 2018 at 5 p.m.

Key Documents:

Next Steps (Tentative):

  • September – Proposed decision on Group 1 issues 1 – 7
  • September 26 – Group 3 second update

Background: The PCIA is a fee charged to CCAs to pay for a utility’s stranded cost of procuring electricity on behalf of customers departing in CCAs.

 

  1. Resource Adequacy (17-09-020)

New and recent developments:

  • 6 – Proposed Decision – This decision clarifies the requirements governing the use of energy imported into California to meet Resource Adequacy requirements, as set forth in Decision (D.) 04-10-035 and D.05-10-042.
  • On August 30, CalCCA announced a joint settlement agreementamong multiple stakeholders.
  • CalCCA 8/8/19 Notice of Settlement Conference
  • 8/2/19 Comments of CalCCA on the informal workshop reports
  • Assigned Commissioner’s Rulingon July 3 seeking comment on clarification to resource adequacy import rules. Responses to questions were due by July 19, 2019. Reply comments were due by July 26, 2019.

Key Documents:

  • Track 1 Decision D.18-06-030 Adopting Local Capacity Obligations and Refinements to the RA program
  • 18-06-031 adopting flexible capacity obligations for 2019
  • Email ruling on Energy Division Effective Load Carrying Capacity Proposal
  • Proposed Decision endorsing IOUs as Central Buyer for local RA
  • Ruling on Effective Load Carrying Capacity Proposal
  • Comments on the Proposed Decision

Major Issues: CCA participation in the year-ahead RA showing, Cost allocation due to load migration, Reducing backstop procurement, Consolidating procurement using a central buyer, Updates to Effective Load Carrying Capacity modeling methods, Aligning the Commission’s RA measurement hours with CAISO’s.

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 (12-02-009) – 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. Integrated Resource Planning (16-02-007)

New and recent developments:

  • 12 – Proposed Decision – In this Decision, the Commission takes a number of steps to address the potential for electricity system resource adequacy shortages beginning in 2021. The Decision includes CCAs in SCE service territory.
  • Comments on procurement track and reliability issues by CalCCA, TURN, PG&E
  • CalCCA Motion for amended ruling seeking the staff analysis identifying the “potential for near-term reliability challenges” cited in the Ruling.
  • Final Decision adopting the Reference System Plan as the Preferred System Plan.

Key Documents:

  • Order Instituting Rulemaking
  • Decision D.18-02-018 setting IRP requirements for LSEs
  • Amended Scoping Memo

Major Issues:

  • Near, medium, and long-term local reliability needs
  • Approval of a Preferred System Plan
  • How to coordinate LSE procurement to meet CA GHG goals

Next Steps:

  • Late 2019 – Proposed Decision on Procurement Track

Background: On April 25 the CPUC unanimously approved a Proposed Decision that approves or certifies 20 individual LSE IRPs. 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 (14-08-013 )– No updates.

August 9 – Ruling postponing capacity analysis workshop.

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 (18-07-003)

New or Recent Developments:

  • August 23 – Decisionre IOU Effective Load Carrying Capability. Behind-the-meter Photovoltaic (PV) must be treated as a supply-side resource; annual loss of load expectation study must be conducted.
  • August 8 – Proposed Decisionrelaxing 2018 RPS Plan reporting for 6 new CCAs. Comment by CalCCA.
  • August 1 – Decisionenforcing RPS program rules, fining Liberty Power $431,014 and Gexa $1,725,461.
  • Joint Utility commentsand Joint CCA reply comments on combining IRP and RPS programs.

Major Issues:

  • Revising RPS renewable market adjusting tariff (ReMAT) and bioenergy market adjusting tariff (BioMAT).
  • Least-cost/best-fit methodology for RPS procurement
  • Cost containment for IOU RPS procurement and coordination with the IRP proceeding
  • Monitoring and review of LSE compliance.

Key Documents:

  • 12-06-038 setting RPS compliance rules.
  • OIR to further develop the RPS program.
  • 2018 RPS Annual Report to Legislature.
  • Amended Scoping Memo.
  • Proposed Decision adopting 2018 RPS procurement plans.
  • Comments on Proposed Decision by CCA Parties.

Next Steps:

  • Fourth Quarter 2019 – Decision on RPS plans
  • May 1, 2020 – Tentative consolidation of IRP/RPS filings.

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.

Most recent development: 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 (19-03-009) – 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.

 

  1. NEM Successor Tariff Rulemaking R.14-07-002

Pursuant to direction in the NEM Successor Tariff Decision, the Commission will review the NEM successor tariff some time in 2019, when the proceedings related to distributed energy resources are completed and after default TOU rates are implemented. Energy Division staff will explore compensation structures for customer-sited distributed generation other than NEM, as well as consider an export compensation rate that takes into account locational and time-differentiated values. On April 26, 2019, the Energy Division distributed a Revised Solar Information Packet to service list R.14-07-002 and R.12-11-005.  The Energy Division asked for written comments about the content of the Revised Solar Information Packet and implementation approach.  The deadlines for submitting written comments has passed. If you have questions contact Kerry Fleisher at the CPUC Energy Division: Kerry.Fleisher@cpuc.ca.gov

 

Closed proceedings that matter: 

  • CCA Rulemaking03-10-003 This was the original rulemaking that occurred between 2003 and 2005 to cross the Ts and dot the Is on CCA law. 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.

 

Other CCA-relevant CPUC activities with no docket number:

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. 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.

PG&E Bankruptcy (no docket #) (PG&E Fires 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).

Recent Developments

  • Judge lifts the stay and RULES that litigation revolving around the 2017 Tubbs Wildfire can proceed
  • Fast-tracked legislation (AB 1054) enacted on July 11, 2019 creates $21M fund for future fires, partly at ratepayer expense
  • Settlement agreementwith 18 public agencies
  • Bondholder’s $30 billion plan, $16 – $18 million for victims
  • Newsom’s $21 billion plan, renews $2.50 monthly DWR charge for 15 years
  • Ruling denying FERC jurisdiction over PPA agreements

Major Issues:

  • Chapter 11 removes restructuring authority to the Federal Bankruptcy Court.
  • PG&E’s ability to recover wildfire litigation and liability costs via rate increases.
  • The scope and role of PG&E when it emerges from bankruptcy restructuring.
  • Future role of CCAs, distributed energy resources, and distribution utility.

Key Documents:

  • Cal Fire report finding PG&E equipment involved in 12 fires during October, 2017.
  • Ruling and Scoping Memo regarding phase 2 15-08-019 Investigation Into PG&E’s Safety Culture
  • Fire Safety and Utility Infrastructure En Banc

Next Steps:

  • Sept 28 – Deadline for PG&E to propose reorganization plan

 

Our next CPX Regulatory Update will be published on Thursday, October 3.

 

CPX Legislative update for September 19, 2019

Check back frequently for updates during legislative sessions (January – October every year).

Updated 9/19/19

Legislative Calendar Check: The legislature adjourned on September 13. The governor has until October 13 to sign bills. We will issue two more legislative updates on October 3 and 17, and then will be on break until the legislature resumes business in January 2020. In the meantime, visit the CPX legislative page for occasional updates.

In this 2019 session we are monitored about 29 energy and/or climate-related bills, not all of which would directly impact Community Choice Energy. Below is a selection of highlighted bills with a brief summary, the Center’s position, if any, and the status of the bill.

Two-year bills that will come back in 2020:

AB 56 (Garcia) OPPOSE – This bill will empower the CPUC to order energy procurement based on real or perceived shortcomings in the Integrated Resource Plan submitted by Investor Owned Utilities, Direct Access providers, and CCAs. The bill will allow the CPUC to require procurement on any perceived deficiency that may be 10 to 12 years out in the future. This makes no sense, given that so much lead time would allow a CCA to address any potential problem. Read the Center’s updated July Letter of OppositionStatus: Two-year bill.

AB 235 (Mayes) – This bill was amended recently to allow PG&E to issue bonds to cover 2017, 2018 wildfire liabilities that ratepayers could ultimately have to pay for, and allows the CPUC to arbitrarily set a limit on the amount a transmission & distribution utility must pay as a result of catastrophic wildfire that may have been the result of their infrastructure. Status: AB 235 is now a two-year bill.

SB 246 (Wieckowski) – Read our Support Letter. – This bill, if enacted as written, will impose an oil and gas severance tax on the privilege of extracting oil or fossil gas from the earth or water in California upon any operator engaged in such extraction. Status: Two-year bill. It will be brought back in January 2020.

SB 350 (Hertzberg) OPPOSE – 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. This bill was a tandem bill with AB 56 that is also a tw0-year bill. Status: Two-year bill.

SB 386 (Caballero) – Two-year bill. 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 new 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 from any cost burdens. Status: On May 30 Senator Caballero announced that SB 386 would be a two-year bill. Expect the fight to continue in early 2020.

SB-772 (Bradford) – Two-year bill. Relates to procurement of long duration bulk energy storage. Concerns center on forcing the hand of CCA procurement. Status: On May 30 the bill was ordered to the inactive file on request of Senator Bradford.

SB 774 (Stern) – Two-year bill. SB 774 would require IOUs to collaborate with the State’s Office of Emergency of Services 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. Concerns focus on too much control being placed in the hands of the IOUs over microgrid development when other LSEs and stakeholders can and should play a role. Status: At the request of the author, SB 774 was placed in the inactive file on July 8.

Bills we opposed that were enacted:

AB 1054 (Holden, Mayes, Burke) – Enacted: This 200-page bill was fast-tracked through the legislature. In addition to encumbering ratepayers with nonbypassable charges for more than a decade just as they were set to expire, and no safeguard against rate increases, the bill includes a clause that is completely outside of any wildfire concern, and it impacts Community Choice agencies. The clause empowers the CPUC to obstruct sales of IOU assets to other load serving entities and public entities. This could hobble local governments wanting to launch their own municipal service, and/or emerging CCAs that may benefit by acquiring assets that the IOUs no longer want or need. Status: AB 1054 passed out of the legislature on July 11 and was signed by the governor. It is now being challenged in federal court by two PG&E customers on grounds that it may allow for ratepayer funds to be used to pay for cost increases due to PG&E negligence.

AB 1584 (Quirk) – Until recently this bill would have impinged on Community Choice agency’s statutory procurement authority. Due to recent amendments, CalCCA has shifted to a neutral position. We remain opposed due to the original mal-intent of the bill and our assessment that there is no compelling merit to the current version of the bill. Status: The bill made it through its final vote on Sept 10 and is on the governor’s desk.

SB 155 (Bradford) – This bill expands CPUC’s authority over CCA procurement and Integrated Resource Plans. Read the Center’s July Letter of Opposition. Due to amendments made in early July, CalCCA has shifted to a neutral position. We remain opposed. Status: SB 155 made it through its final votes in both houses on Sept 10 and 11 and is on the governor’s desk.

SB-520 (Hertzberg) This bill empowers the CPUC to determine what load serving entity should serve as the provider of last resort (POLR). Currently IOUs serve as the provider of last resort in their service territories. A big problem with the bill is that it gives the IOUs veto control over the POLR application process. If another LSE (e.g., a CCA) wants to become the POLR, the incumbent IOU must agree to the application submitted to the CPUC, which is unacceptable. This bill is a step in the wrong direction. It gives the existing utilities control over whether they continue to have the exclusive right to serve as the utility and gives them control over who if anyone would take over the role of POLR. Why should the State hand over that kind of decision-making authority to the existing utilities? We are concerned that over time, this will make the utilities less accountable. We encourage firm opposition to this bill in its current form. Status: SB 520 The bill was made it through its final votes in both houses on Sept 10 and 11 and is on the governor’s desk.

SB 676 (Bradford) – This bill would require the CPUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration. Based on amendments made in early July, CalCCA has shifted to a neutral position. Status: SB 676 made it through both houses and is on the governor’s desk.

Bills we supported that were enacted:

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. Status: AB 684 made it through its final votes on Sept 9 and 10 and is on the governor’s desk.

Unclear:

AB 1046 (Ting) – Clean Vehicle Rebate Program. Read our Letter of Support. This bill requires the California Air Resources Board to develop a plan to provide for the continuous funding of a program with a goal of supporting deployment of 5 million electric vehicles by December 2030. Status: AB 1046 was heard in the Senate Appropriations Committee on August 30 and is being held under submission, an action taken by a committee when a bill is heard in committee and there is an indication that the author and the committee members want to work on or discuss the bill further, but there is no motion for the bill to progress out of committee. It is not clear whether this bill is dead or a two-year bill. Update coming soon.

For the complete list of bills we monitored in 2019 click HERE.  Next CPX legislation update will be on Thursday, October 3rd.

Chula Vista, La Mesa and Encinitas commit to San Diego-led community choice energy agreement

La Mesa and Chula Vista have officially jumped aboard the community choice aggregation, or CCA, bandwagon — and both cities have agreed accept an offer from the city of San Diego to join forces in a partnership to govern the nascent program.

The La Mesa city council voted 5-0 Tuesday night to adopt an ordinance authorizing a CCA and passed a resolution to enter a joint powers agreement led by San Diego, which has agreed to oversee all the initial startup costs to get the program up and running by 2021.

About an hour later, the Chula Vista City Council passed a similar measure but the vote was much closer — 3-2, to officially establish a CCA and take part in a city of San Diego-led joint powers agreement, or JPA.

Read more

CPX Regulatory Update – September 6, 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 on the proceeding number below or visit http://www.cpuc.ca.gov/documents/

Brief Notes:
  • The next CPUC voting meeting is on schedule for September 12 in Los Angeles. See AGENDA. For the livestream, click HERE.
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. Utility Wildfire Mitigation Plans (SB 901) 18-10-007
  7. Penalties for 2017 Wildfires 19-06-015
  8. Integrated Resource Plans (IRP) 16-02-007
  9. Distribution Resource Plans (DRP) 14-08-013 
  10. Renewables Portfolio Standard (RPS) 18-07-003
  11. Integrated Distributed Energy Resources 4-10-003
  12. Direct Access 19-03-009
  13. NEM Successor Tariff 14-07-002
Closed proceedings that matter:
Other CPUC activities with no docket number:

 

  1. PG&E Safety Culture Investigation 15-08-019

New and recent developments:

  • Reply Comments from PG&E, Office of Ratepayer Advocate, others. Not posted to proceeding documents list yet.
  • On July 19, the Center, along with adviser Lorenzo Kristov, PhD, filed Comments pursuant to the June 18 Order seeking proposals to improve PG&E safety culture
  • Interim Decision ordering reporting of PG&E Directors’ safety qualifications by August 1 and establishing CPUC advisory panel on corporate governance.

Major Issues:

  • PG&E’s ability to maintain a safe transmission and distribution system

Key Documents:

  • Order extending statutory deadline to May 8, 2020

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.

 

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

New and recent developments:

  • Sept. 3 – Administrative Law Judge’s Ruling denying in part the Motion of the Protect Our Communities Foundation for Evidentiary Hearings and modifying the proceeding schedule
  • August 1 – Proposed Decision modifying the PCIA Methodology. The deadline for comments on the APD is September 6, 2018 at 5 p.m. The deadline for consolidated reply comments on the PD and the APD is September 11, 2018 at 5 p.m.
  • July 9, 2019 the ALJ issued a Ruling modifying the schedule

Key Documents:

Next Steps (Tentative):

  • September – Proposed decision on Group 1 issues 1 – 7
  • September 26 – Group 3 second update

Background: The PCIA is a fee charged to CCAs to pay for a utility’s stranded cost of procuring electricity on behalf of customers departing in CCAs.

 

  1. Resource Adequacy (17-09-020)

New and recent developments:

  • On August 30, CalCCA announced a joint settlement agreement among multiple stakeholders.
  • CalCCA 8/8/19 Notice of Settlement Conference
  • 8/2/19 Comments of CalCCA on the informal workshop reports
  • Assigned Commissioner’s Ruling on July 3 seeking comment on clarification to resource adequacy import rules. Responses to questions were due by July 19, 2019. Reply comments were due by July 26, 2019.

Key Documents:

  • Track 1 Decision D.18-06-030 Adopting Local Capacity Obligations and Refinements to the RA program
  • 18-06-031 adopting flexible capacity obligations for 2019
  • Email ruling on Energy Division Effective Load Carrying Capacity Proposal
  • Proposed Decision endorsing IOUs as Central Buyer for local RA
  • Ruling on Effective Load Carrying Capacity Proposal
  • Comments on the Proposed Decision

Major Issues: CCA participation in the year-ahead RA showing, Cost allocation due to load migration, Reducing backstop procurement, Consolidating procurement using a central buyer, Updates to Effective Load Carrying Capacity modeling methods, Aligning the Commission’s RA measurement hours with CAISO’s.

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 (12-02-009) – 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 (19-01-006)

New and recent developments:

Key Documents:

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).

 

  1. Utility Wildfire Mitigation Plans (SB 901) 18-10-007

No new updates

  • IOU wildfire mitigation plans were approved at the May 30, 2019 CPUC voting meeting.
  • Assigned Commissioner and Administrative Law Judge’s June 14 Ruling launching Phase 2 of the Wildfire Mitigation Plan proceeding.
  • Order Instituting Rulemaking

Background: Senate Bill 901 requires electric utilities to prepare and submit wildfire mitigation plans that describe the utilities’ plans to prevent, combat, and respond to wildfires affecting their service territories. Through a proceeding it opened on Oct. 25, 2018 (R.18-10-007), the CPUC will review the initial plans, and develop and refine the content of and process for review and implementation of wildfire mitigation plans to be filed in future years.

 

  1. Penalties for 2017 Wildfires (19-06-015)This is a newly opened Investigation that we will monitor

Issue: Possible PG&E violation of Public Utilities Code.

Key Documents:

Next Steps: August 5 – PG&E report in response to questions in OII

 

    8. Integrated Resource Planning (16-02-007)

New and recent developments:

 

  • Comments on procurement track and reliability issues by CalCCA, TURN, PG&E
  • CalCCA Motion for amended ruling seeking the staff analysis identifying the “potential for near-term reliability challenges” cited in the Ruling.
  • Final Decision adopting the Reference System Plan as the Preferred System Plan.
  • SEA Analysis of the Final Decision, SEA Analysis of the Proposed Decision.
  • Comments on the PD by SDG&E, CalCCA, CAISO, Calpine, SEA
  • Reply comments by SDG&E, CalCCA, CAISO, Calpine.

Key Documents:

  • Order Instituting Rulemaking
  • Decision D.18-02-018 setting IRP requirements for LSEs
  • Amended Scoping Memo
  • Ruling on production cost modeling approach and schedule for preferred system plan development
  • Ruling seeking comment on policy issues and options related to reliability
  • Ruling seeking comments on inputs and assumptions for development of the 2019-2020 Reference System Plan

Major Issues:

  • Near, medium, and long-term local reliability needs
  • Approval of a Preferred System Plan
  • How to coordinate LSE procurement to meet CA GHG goals

Next Steps:

  • Late 2019 – Proposed Decision on Procurement Track

Background: On April 25 the CPUC unanimously approved a Proposed Decision that approves or certifies 20 individual LSE IRPs. 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.

 

9. Distribution Resource Plans (14-08-013 )No updates.

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.

 

10. Renewable Portfolio Standard (18-07-003)

Recent Developments:

  • August 23 – Decision re IOU Effective Load Carrying Capability. Behind-the-meter Photovoltaic (PV) must be treated as a supply-side resource; annual loss of load expectation study must be conducted.
  • August 8 – Proposed Decision relaxing 2018 RPS Plan reporting for 6 new CCAs. Comment by CalCCA.
  • August 1 – Decision enforcing RPS program rules, fining Liberty Power $431,014 and Gexa $1,725,461.
  • Joint Utility comments and Joint CCA reply comments on combining IRP and RPS programs.

Major Issues:

  • Revising RPS renewable market adjusting tariff (ReMAT) and bioenergy market adjusting tariff (BioMAT).
  • Least-cost/best-fit methodology for RPS procurement
  • Cost containment for IOU RPS procurement and coordination with the IRP proceeding
  • Monitoring and review of LSE compliance.

Key Documents:

  • 12-06-038 setting RPS compliance rules.
  • OIR to further develop the RPS program.
  • 2018 RPS Annual Report to Legislature.
  • Amended Scoping Memo.
  • Proposed Decision adopting 2018 RPS procurement plans.
  • Comments on Proposed Decision by CCA Parties.
  • 19-02-007 accepting draft 2018 RPS plans filed by LSEs.
  • Comments on SB 100 implementation from CCAs and PG&E.
  • Reply comments from Joint CCAs and Joint Utilities.

Next Steps:

  • Fourth Quarter 2019 – Decision on RPS plans
  • May 1, 2020 – Tentative consolidation of IRP/RPS filings.

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.

 

11. Integrated DER – No new developments.

Most recent development: 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.

 

12. Direct Access Rulemaking (19-03-009) – 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.

 

13. NEM Successor Tariff Rulemaking R.14-07-002

Pursuant to direction in the NEM Successor Tariff Decision, the Commission will review the NEM successor tariff some time in 2019, when the proceedings related to distributed energy resources are completed and after default TOU rates are implemented. Energy Division staff will explore compensation structures for customer-sited distributed generation other than NEM, as well as consider an export compensation rate that takes into account locational and time-differentiated values. On April 26, 2019, the Energy Division distributed a Revised Solar Information Packet to service list R.14-07-002 and R.12-11-005.  The Energy Division asked for written comments about the content of the Revised Solar Information Packet and implementation approach.  The deadlines for submitting written comments has passed. If you have questions contact Kerry Fleisher at the CPUC Energy Division: Kerry.Fleisher@cpuc.ca.gov

 

Closed proceedings that matter: 
  • CCA Rulemaking 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. 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.

 

Other CPUC activities with no docket number:

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.

PG&E Bankruptcy (no docket #) (PG&E Fires 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).

Recent Developments

  • Judge lifts the stay and RULES  that litigation revolving around the 2017 Tubbs Wildfire can proceed
  • Fast-tracked legislation (AB 1054) enacted on July 11, 2019 creates $21M fund for future fires, partly at ratepayer expense
  • Settlement agreement with 18 public agencies
  • Bondholder’s $30 billion plan, $16 – $18 million for victims
  • Newsom’s $21 billion plan, renews $2.50 monthly DWR charge for 15 years
  • Ruling denying FERC jurisdiction over PPA agreements

Major Issues:

  • Chapter 11 removes restructuring authority to the Federal Bankruptcy Court.
  • PG&E’s ability to recover wildfire litigation and liability costs via rate increases.
  • The scope and role of PG&E when it emerges from bankruptcy restructuring.
  • Future role of CCAs, distributed energy resources, and distribution utility.

Key Documents:

  • Cal Fire report finding PG&E equipment involved in 12 fires during October, 2017.
  • Ruling and Scoping Memo regarding phase 2 15-08-019 Investigation Into PG&E’s Safety Culture
  • Fire Safety and Utility Infrastructure En Banc

Next Steps:

  • Sept 28 – Deadline for PG&E to propose reorganization plan

 

Our next CPX Regulatory Update will be published on Thursday, September 19.

CPX Legislative Update – September 6, 2019

Updated 9/6/19

Legislative Calendar Check: The legislature is now in its final two weeks and will adjourn on September 13.

We are monitoring about 20 energy and/or climate-related bills, not all of which directly impact Community Choice Energy. Below is a selection of highlighted bills with a brief summary, the Center’s position, if any, and the status of the bill.

Bills we oppose:

AB 1584 (Quirk) – Until recently this bill would have impinged on Community Choice agency’s statutory procurement authority. Due to recent amendments, CalCCA has shifted to a neutral position. We remain opposed due to the original mal-intent of the bill and our assessment that there is no compelling merit to the current version of the bill. Status: The bill is in its Third Reading in the Senate today, September 6. Visit the CPX legislative page for updates as they become available.

SB 155 (Bradford) – This bill expands CPUC’s authority over CCA procurement and Integrated Resource Plans. Read the Center’s July Letter of Opposition. Due to amendments made in early July, CalCCA has shifted to a neutral position. We remain opposed. Status: SB 155 was heard in conference committee on September 5, Assembly amendments concurred in (Ayes 38. Noes 0.). Ordered to engrossing and enrolling and on to the governor’s desk.

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. Currently IOUs serve as the provider of last resort in their service territories. A big problem with the bill is that it gives the IOUs veto control over the POLR application process. If another LSE (e.g., a CCA) wants to become the POLR, the incumbent IOU must agree to the application submitted to the CPUC, which is unacceptable. This bill is a step in the wrong direction. It gives the existing utilities control over whether they continue to have the exclusive right to serve as the utility and gives them control over who if anyone would take over the role of POLR. Why should the State hand over that kind of decision-making authority to the existing utilities? We are concerned that over time, this will make the utilities less accountable. We encourage firm opposition to this bill in its current form. Status: SB 520 The bill was amended last Friday, 8/30, in an effort to address the above issues. Unfortunately, we do not believe the issues have been adequately resolved. Visit the CPX legislative page for updates as they become available.

Bills we support:

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. Status: AB 684 was heard in the Senate Appropriations Committee on August 30, ordered to the Senate Special Consent Calendar, and was heard there on September 5th. Check the CPX legislative page for results of the 9/5 action.

AB 1046 (Ting) – Clean Vehicle Rebate Program. Read our Letter of Support. This bill requires the California Air Resources Board to develop a plan to provide for the continuous funding of a program with a goal of supporting deployment of 5 million electric vehicles by December 2030. Status: AB 1046 was heard in the Senate Appropriations Committee on August 30 and is being held under submission, an action taken by a committee when a bill is heard in committee and there is an indication that the author and the committee members want to work on or discuss the bill further, but there is no motion for the bill to progress out of committee. This does not preclude the bill from being set for another hearing, but there is not much time.

Bills that were enacted, became two-year bills, were gutted and amended, or died:

AB 1054 (Holden, Mayes, Burke) – Enacted: This 200-page bill was fast-tracked through the legislature. In addition to encumbering ratepayers with nonbypassable charges for more than a decade just as they were set to expire, and no safeguard against rate increases, the bill includes a clause that is completely outside of any wildfire concern, and it impacts Community Choice agencies. The clause empowers the CPUC to obstruct sales of IOU assets to other load serving entities and public entities. This could hobble local governments wanting to launch their own municipal service, and/or emerging CCAs that may benefit by acquiring assets that the IOUs no longer want or need. Status: AB 1054 passed out of the legislature on July 11 and was signed by the governor. It is now being challenged in federal court by two PG&E customers on grounds that it may allow for ratepayer funds to be used to pay for cost increases due to PG&E negligence.

AB 56 (Garcia) IS NOW A TWO-YEAR BILL. This bill died in committee on July 10 but was brought back in a motion for reconsideration in August and is now back as a two-year bill. Expect the battle to continue in 2020. – This bill will empower the CPUC to order energy procurement based on shortcomings in the Integrated Resource Plan submitted by Investor Owned Utilities, Direct Access providers, and CCAs.  The bill will allow the CPUC to require procurement on any perceived deficiency that may be 10 to 12 years out in the future. This makes no sense, given that so much lead time would allow a CCA to address any potential problem. Read the Center’s updated July Letter of Opposition. Status: Two-year bill.

AB 1362 (O’Donnell) – This bill as originally written would have destroyed the utility “Code of Conduct” but was amended in May to a point of harmlessness.

AB 235 (Mayes) – This bill was amended recently to allow PG&E to issue bonds to cover 2017, 2018 wildfire liabilities that ratepayers could ultimately have to pay for, and allows the CPUC to arbitrarily set a limit on the amount a transmission & distribution utility must pay as a result of catastrophic wildfire that may have been the result of their infrastructure. Status: AB 235 is now a two-year bill.

SB 246 (Wieckowski) – Read our Support Letter. – This bill, if enacted as written, will impose an oil and gas severance tax on the privilege of extracting oil or fossil gas from the earth or water in California upon any operator engaged in such extraction. Status: Two-year bill. It will be brought back in January 2020.

SB 288 (Wiener) Gut/amend – The former “Solar Bill of Rights” is no more. The “SB 288” bill number is now a different subject altogether. Urge your representative to work with Senator Wiener to initiate a similar bill.

SB 350 (Hertzberg) Two-year bill – 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. This bill was a tandem bill with AB 56 that failed to pass the Senate Energy Committee. Status: Senator Hertzberg pulled the bill from the file at the July 10 Assembly Energy Committee. It is now a two-year bill.

SB 386 (Caballero) – Two-year bill. 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 new 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 from any cost burdens. Status: On May 30 Senator Caballero announced that SB 386 would be a two-year bill. Expect the fight to continue in early 2020.

SB 676 (Bradford) – This bill would require the CPUC, by December 31, 2020, in an existing proceeding, to establish strategies and quantifiable metrics to maximize the use of feasible and cost-effective electric vehicle grid integration. Based on amendments made in early July, CalCCA has shifted to a neutral position. Status: SB 676 passed unanimously out of the Asm Appropriations Committee on August 21 and is now on to the full Assembly.

SB-772 (Bradford) – Two-year bill. Relates to procurement of long duration bulk energy storage. Concerns center on forcing the hand of CCA procurement. Status: On May 30 the bill was ordered to the inactive file on request of Senator Bradford.

SB 774 (Stern) – Two-year bill. SB 774 would require IOUs to collaborate with the State’s Office of Emergency of Services 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. Concerns focus on too much control being placed in the hands of the IOUs over microgrid development when other LSEs and stakeholders can and should play a role. Status: At the request of the author, SB 774 was placed in the inactive file on July 8.

For the complete list of bills we are monitoring click HERE.  Next CPX legislation update will be on Thursday, September 19th.