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!

 

 

 

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