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.

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