CPX Regulatory Update for Thursday, May 16, 2019

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

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

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

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

 

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

New Developments as of early May:

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

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

 

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

New Developments:

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

Next Steps:

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

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

 

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

Also see:

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

 

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

 

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

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

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

 

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

New Developments as of early May:

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

 

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

 

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

 

 

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

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

 

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

 

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

 

Closed proceedings that matter:

 

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

 

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

 

Other regulatory matters:

 

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

 

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

 

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