Advocacy at the California Public Utilities Commission (CPUC)

CEERT’s Regulatory Counsel Sara Steck Myers and Associate Regulatory Attorney Megan Myers act as advocates and intervenors before the CPUC and other regulatory agencies to ensure fairly pricing for clean power, improve renewable energy procurement planning, and strengthen implementation of the state’s mandated climate and clean-energy goals. CEERT is helping lead the fight for innovative policies that reflect the true value, costs, and benefits of clean, renewable energy.

Recent Developments:

Summary of CEERT’s Advocacy at the CPUC
CEERT has been active in the following proceedings: Integrated Resource Planning (IRP) (R.20-05-003), Resource Adequacy (R.21-10-002), and Demand Flexibility (R.22-07-005). In addition, we submitted Opening Comments on the new Customer Distributed Energy Resource (DER) Order Instituting Rulemaking (OIR) and intend to participate in that rulemaking. We also plan to participate in the upcoming Phase II of the Demand Response (DR) Applications (A.22-05-002, et al.)

New Events at the CPUC

New Customer Distributed Energy Resource (DER) Order Instituting Rulemaking

On November 23, the CPUC issued R.22-11-013, an OIR to Develop Policy and Create a Consistent Regulatory Framework for Distributed Energy Resource Customer Programs.  The CPUC opens this rulemaking as a successor proceeding to R.14-10-003 to develop and ensure consistent policy direction and review of behind-the-meter distributed energy resource (DER) programs, which the CPUC refers to as “customer programs.”  This rulemaking will be the procedural framework for pursuing the vision and carrying out the actions articulated in the customer programs track of the DER Action Plan recently adopted by the CPUC, which states:

The DER Action Plan’s Customer Programs Track focuses on improving coordination, planning and developing consistent metrics across DER proceedings related to customer programs to maximize their contributions to [greenhouse gas] (GHG) reductions and other state energy goals. The goal is to enable all customers to effectively manage their energy usage in a manner that ensures equitable participation and distribution of benefits, alignment with evolving rate design and load flexibility, alignment with distribution planning objectives, and alignment with integrated resource planning objectives.

On January 9, CEERT submitted Opening Comments agreeing with the proceeding’s focus on advancing the customer programs track of the DER Action Plan to maximize their contributions to GHG reductions and other state energy goals.  A Prehearing Conference will be held in the first quarter of 2023.

Diablo Canyon

On September 9, Chief ALJ Simon issued a Ruling Reopening A.16-08-006, the Application of Pacific Gas and Electric Company for Approval of the Retirement of Diablo Canyon Power Plant.  This pro­ceed­ing is reopened in accordance with P.U. Code Section 712.8(b)(2), which states the CPUC “shall reopen commission Application 16-08-006 and take other actions as are necessary to implement this section.”

On September 23, Assigned Commissioner Reynolds and Assigned ALJ Seybert issued an Amended Scoping Memo and Ruling that directs PG&E to address how it plans to track and record, in a trans­parent manner that prevents double-counting, all costs incurred under the loan provided for by Chapter 6.3 of Div­i­sion 15 of the Public Resources Code:  all costs to be borne by PG&E’s ratepayers; all costs to be borne by ratepayers of all load-serving entities; all costs tracked in the Diablo Canyon Ex­tended Op­era­­tions Liquidated Damages Balancing Account; and any other costs that may be incurred due to continued and extended operations of Diablo Canyon Units 1 and 2.  On October 7, PG&E submitted Comments on the Amended Scoping Memo and Ruling, and on October 14, parties sub­mitted Reply Comments.

On December 6, the CPUC issued D.22-21-005.  In compliance with Senate Bill 846, the Decision imple­ments Sections 712.8(c)(1)(A) and 712.8(e) of the P.U. Code requiring the CPUC to direct and authorize PG&E to take “all actions that would be necessary” to preserve the option of extended operations at Diablo Canyon beyond the current expiration dates, and to track all costs associated with continued and extended operations.  The Decision also closed Application 16-08-006.

On the Agenda for the January 12 CPUC Business Meeting is a new Draft OIR to Consider Potential Exten­sion of Diablo Canyon Power Plant Operations in Accordance with SB 846.   SB 846 requires the CPUC to execute several tasks and consider specific criteria to render a decision by the end of 2023 estab­lishing new retirement dates for Diablo Canyon Units 1 and 2.  This new rulemaking is the forum to seek party input on those tasks and criteria.  A subsequent phase of the proceeding is expected to consider whether additional processes and mechanisms are needed to review, recover, and approve poten­tial extended operations costs at Diablo Canyon.

CPUC Energy Planning and Procurement and Resource Adequacy

Integrated Resource Planning (IRP) (R.20-05-003) and Procurement-Related Activities

Procurement Ruling

On September 8, ALJ Fitch issued a Ruling that invited comments on near-term actions the CPUC could take to encourage immediate additional electricity procurement between now and 2026 or beyond, and to ensure that the requirements of D.19-11-016 and D.21-06-035 are met.  Parties submitted Opening Com­ments on this portion of the Ruling on September 26 and Reply Comments on October 6.

The Ruling also invited comments on a staff paper titled “Reliable and Clean Power Procurement Pro­gram: Staff Options Paper,” included in the Ruling as Attachment A.  Parties are invited to comment on Attachment A and the procurement questions in the Ruling.  A workshop on this portion of the Ruling was held on September 20.  Presentation slides and the workshop recording can be found here.

On December 12, CEERT submitted Opening Comments that supported the 14 objectives of the new procurement program and argued that the program’s top priority must be to meet planned greenhouse gas (GHG) reduction goals through 2035 and beyond, consistent with the requirements of SB 100.  We agreed that the new procurement program will need to include mechanisms for determining resource needs, allocating those needs to specific load-serving entities (LSEs), assuring program compliance, and penaliz­ing LSEs that fail to comply.  Both energy and capacity dimensions of reliability need to be taken into account in the program’s design.  We supported Option 3, which uses the slice-of-day approach for reli­ability and the mass-based hourly metric for GHG emissions to account for GHG reductions.

On January 9, CEERT submitted Reply Comments, arguing that several key objectives must be evaluated.  Procurement program design should allow for flexibility for LSEs and alignment with RA.  The Procure­ment Plan must take into consideration steps being taken in the RA proceeding, and must be designed to prioritize GHG reduction.  We continued to support Option 3, and held that Local Capacity Requirements should be addressed on an order-by-order basis, that interconnection timelines can be reduced through coordi­nation of the IRP and TPP to better use resources, and that an interim approach may be necessary.

Transmission Planning Portfolio (TPP) Ruling

On October 7, ALJ Fitch issued a Ruling that invited comments on proposed electricity resource portfo­lios for use in the California Independent System Operator’s (CAISO’s) 2023-2024 Transmission Plan­ning Portfolio (TPP).  The Ruling included information about mapping of the resources in the base case portfolio to specific busbars on the transmission system, which was included as Attachment A.

On October 31, CEERT submitted Opening Comments supporting the CPUC Staff recommendation that the CAISO 2023-2024 TPP analyze an electric resource portfolio that meets a 30 million metric ton (MMT) GHG target in 2030.  We also supported the recommendations in a July 1 Letter from the CPUC and the CEC to the CAISO in which they recommended changes for the 2022-2023 TPP cycle.

On November 10, CEERT submitted Reply Comments agreeing with the numerous parties that supported the CPUC Staff’s recommendation on the 2023-2024 TPP.  We urged the CPUC to conduct a loss of load expectation (LOLE) analysis, and supported Environmental Defense Fund (EDF) and EDF Renewables (EDFR) in recommending that the CPUC take advantage of the incentives in the Inflation Reduction Act.

Resource Adequacy (RA) (R.19-11-009/R.21-10-002)

On August 29, the CPUC issued D.22-08-039, adopting regional wind Effective Load Carrying Ca­pa­bility values for the 2023 RA year and addressing the demand response (DR) qualifying capa­city (QC) method­ol­ogy for the 2023 and 2024 RA years.  As to DR, the Decision orders parties to de­velop refine­ments to the Load Impact Protocol methodology for use with the 24-hour slice frame­work for the 2024 test year in Workstream 2 of this proceeding, and to submit a proposal according to the schedule adopted in D.22-06-050, which ordered Final Proposals from Workstreams 1-3 to be filed on November 15.

On September 2, Assigned Commissioner Alice Reynolds issued an Amended Scoping Memo and Ruling on Implementation Track Phase 3 and Reform Track Phase 2.  Implementation Track Phase 3 will ad­dress: (1) consideration of 2024-2026 local capacity requirements (LCR), (2) consideration of 2024 flex­ible capacity requirements (FCR), (3) consideration of modifications to the planning reserve margin (PRM) for the 2024 RA year and beyond, and (4) consideration of modifications to the QR methodology for DR in the 2025 RA year.  Reform Track Phase 2 will cover: (1) Workstream 1 to develop 24-hour framework compliance tools, (2) Workstream 2 to determine PRM and counting rules, (3) Workstream 3 to cover CAISO and CPUC validation and compliance, and (4) the allocation of funding to help imple­ment the 24-hour slice framework.

On September 30, California Community Choice Association (CalCCA) submitted a Petition for Modifi­cation (PFM) of D.22-03-034 (Decision on Phase 1 of the Implementation Track: Modifications to the Central Procurement Entity Structure).  CalCCA asks to modify D.22-03-034’s RA procurement timeline and adopt an interim system RA waiver process.  Responses to the PFM were submitted on October 31.  On December 19, the CPUC issued D.22-12-028, which denied CalCCA’s PFM because it failed to meet the requirements of Rule 16.4(b) and provided insufficient basis to warrant modifications to D.22-03-034.

Following the Working Groups held pursuant to D.22-06-050, on November 15, PG&E submitted a Work­shop Report on Final Proposals from Reform Track Phase 2 Workstreams 1-3.  On December 1, CEERT and California Environmental Justice Alliance (CEJA) submitted Opening Comments on the Workshop Report, arguing that the P.U. Code and CPUC precedent require RA reform to advance Cali­fornia’s environmental goals, and that recent legislation highlights the need to focus on reducing hourly and annual GHG emissions.  CEERT and CEJA made the following arguments:

  • The RA resource database should include GHG heat rate and whether a resource is in or adjacent to a disadvantaged community or local capacity requirement area.
  • LSE reporting should include an aggregated hourly breakdown of resources by type.
  • The CPUC should require reporting of how the Loading Order was considered in contracting.
  • The LSE portfolio test should ensure sufficient solar/wind capacity to charge storage.
  • The test year should be used to evaluate resource sufficiency, GHG emissions, and administrative process and implementation.
  • The Maximum Cumulative Capacity Buckets showing should be eliminated from the RA program.
  • The RA program’s Planning Reserve Margin should be calibrated with the counting metrics used for accrediting specific resources.

Reply Comments on the Report were submitted on December 12.

Demand Response (DR) Applications (A.22-05-002, et al.)

As previously reported, on July 5 Commissioner John Reynolds issued a Scoping Memo stating that Phase I would address only the utilities’ 2023 bridge funding proposals, and at a later time Phase II issues would be scoped focusing on the 2024-2027 DR program proposals.  DR Auction Mechanism (DRAM) issues covered in the Scoping Memo dealt only with the limited question of whether to approve the DRAM for 2023 solicitations and 2024 deliv­er­ies; the DRAM’s future after 2024 will be addressed later.

Phase I – Non-DRAM Issues

On August 3, parties submitted Reply Testimony on bridge funding.  Evidentiary Hearings were not held on the issues.  Parties submitted Opening Briefs on August 22 and Reply Briefs on September 2.

On November 4, ALJs Jungreis and Toy issued a Proposed Decision Approving IOUs’ DR Programs, Pilots, and Budgets for Bridge Year 2023.  The proceeding remains open to consider utility and intervenor proposals for DR programs, program modifications, pilots, and budgets for 2024-2027.  Opening Com­ments were submitted on November 17 and Reply Comments on November 22.  The Pro­posed Decision was adopted at the December 1 CPUC Business Meeting.

Phase I – DRAM Issues

Parties submitted Opening Testimony on DRAM issues on August 5 and Reply Testimony on September 2.  There was a dispute between the parties on the admissibility of the DRAM Nexant Report.  After ALJ Toy issued a Ruling Canceling Phase I – DRAM Evidentiary Hearings, SCE, for the first time, stated that it would “proffer” the DRAM Nexant Report.  However, no party prior to this had indicated it would move this Report into evidence, and parties were not permitted to perform data requests about the Report.

In response, on September 19, the California Efficiency + Demand Management Council and CPower submitted a Late-Filed Joint Motion for Eviden­tiary Hearings and Discovery in Phase 1 Auction Mechanism and Nexant Report and a Joint Motion for Acceptance of the Late-Filed Joint Motion.  On September 20, the Council and CPower submitted a Joint Motion for Expedited Clarification of ALJ Toy’s Email Ruling of September 16.  On September 21, PG&E submitted a Response that, in part, objected to the Joint Motion’s inference that the process for identifying exhibits had been improper.

On September 22, ALJ Toy issued a Ruling Denying these Motions and Adding Energy Division Re­search Proposal to Record for Party Comment.  The Ruling does not rule on whether the DRAM Nexant Report is evidence.  The Staff Straw Proposal contained in the Ruling proposes a $750,000 DR research budget for the 2023 bridge year.  Opening Comments on the Straw Proposal were submitted on October 7 and Reply Comments on October 14.  Opening Briefs on the Straw Proposal were submitted on October 28 and Reply Briefs on November 10.

On September 26, PG&E, on behalf of the parties to the proceeding, submitted a Joint Motion for Admis­sion of Exhibits Pertaining to Phase 1 Scoped Issue Regarding DRAM.  This Motion moves the uncon­tested exhibits into evidence and then discusses the contested exhibit (Nexant Report), SCE’s position on its admission, and the Council, CPower, Voltus and Leap’s objection to the exhibit.

On September 29, ALJ Toy issued a Ruling on the Joint Motion holding that the Nexant Report will not be admitted into the evidentiary record at this time, and that SCE also did not provide sufficient notice of the Nexant Report’s proposed admission into evidence.  Opening Briefs on Phase I -DRAM Issues were submitted on October 7 and Reply Briefs on October 28.

On December 9, ALJs Jungreis and Toy issued a Proposed Decision (PD) approving the DRAM Pilot for 2024 deliveries.  The PD also approves and provides funding for continued DR research supervised by the Energy Division.  Opening Comments were submitted on December 29 and Reply Comments on January 5.

Phase II

On October 25, ALJs Toy and Jungreis held a Prehearing Conference (PHC) on Phase II issues.  The ALJs identified several tentative issues to be addressed in this proceeding, including whether the appli­ca­tions advance the principles, directives, and guidance adopted in DR decisions and whether the proposed DR programs are reasonable and should be adopted.

CEERT supported those issues but asked that Phase II also explore whether the DR programs and pro­posals account for programs or platforms like the CEC’s load management standards and MIDAS.  Our recommendation was supported by several parties, includ­ing the California Efficiency + Demand Man­agement Council, California Solar & Storage Association, Enel X, CPower, and Marin Clean Energy.  We also urged the CPUC to adopt a less compressed sched­ule, a position supported by CPower, the Council, Google Nest, Leapfrog Power, OhmConnect, and Polaris.

On December 19, Assigned Commissioner John Reynolds issued an Amended Scoping Memo and Ruling and Assigned ALJ Toy issued a Ruling on Two Motions.  The Ruling: supersedes and amends both the scope of issues and the procedural schedule in the Scoping Memo for Phase 1; denies the Public Advo­cates Office’s Motion to dismiss SDG&E’s Application relating to Phase II of this proceeding; and grants Tesla’s Motion for Party Status.  The remaining Phase II sched­ule is identified in the calendar above.

Demand Flexibility (R.22-07-005)

As previously reported, on July 22, CPUC issued R.22-07-005, an OIR that seeks to enable wide­spread demand flexibility through electric rates.  On August 15, CEERT sub­mitted Opening Comments arguing that the OIR fails to fully account for the fact that this proceeding is long overdue and there are now nu­mer­ous rate pilots and rates being developed for distributed energy resources in general rate cases (GRCs) and appli­ca­tions.  We support the proceeding’s goals but want to ensure that efforts in IOU GRC ap­pli­­ca­tions and other rate-related applications based on the CPUC’s direction in D.19-03-002 are not nega­tively im­pacted.   We stressed that time is of the essence and this proceeding must be given the highest priority.

On August 25, CEERT submitted Reply Comments, noting we are among many parties that support the proceeding’s goals.  We agree with multiple parties that this proceeding must be implemented in a timely manner, not negatively impact other proceedings, and ensure coordination between the CPUC and CEC.

On September 16, ALJ Wang held a PHC in the proceeding.  Sara Steck Myers appeared on behalf of CEERT and stated that, as currently proposed, the issues to be addressed will require “many years for the implementation of demand flexibility rates, which for CEERT raises the question of whether that scope and schedule will provide any timely meaningful relief to the electric grid challenges currently faced by this state, and as evidenced by the last several weeks.”  Ms. Myers noted that ongoing dynamic real-time pricing activities, including studies and pilots, “provide the building blocks and foundation for timely achieving this OIR’s goal, and certainly should not be ignored in Phase 1.”  A transcript is here.

On September 27, CEERT submitted a Post-Prehearing Statement agreeing with parties that expressed concerns about the lengthy time proposed by the ALJ and some parties to make progress on key issues.  We also argued that Phase 1, Track B of this proceeding must be modified to account for current and ongoing work that is being undertaken on dynamic real-time pricing options and pilots.

On November 2, Assigned Commissioner Alice Reynolds issued a Phase 1 Scoping Memo and Ruling.  Phase 1 is organized into two concurrent tracks.  Track A will establish an income-graduated fixed charge for residential rates for all IOUs in accordance with Assembly Bill 205, including small and multi-jurisdictional electric utilities.  Track B will streamline and expedite the adoption of demand flexibility rates for large IOUs.  The remaining schedule is identified in the calendar above.  Parties submitted Opening Comments on December 2 and Reply Comments on January 4.

On December 9, ALJ Wang issued a Ruling inviting parties to file Briefs on questions of statutory inter­pretation to inform parties’ Track A Proposals pertaining to AB 205.  Opening Briefs were due on January 23 and Reply Briefs on February 13.

Bloom’s Petition for Rulemaking to Adopt a DER Reliability & Resilience Tariff to Address Urgent and Near-Term Grid Reliability Needs (P.22-06-012)

As previously reported, on June 23, Bloom Energy Corporation submitted a Petition for Rulemaking to Adopt a Distributed Energy Resource Reliability & Resilience Tariff to Address Urgent and Near-Term Grid Reliability Needs.  On July 25, CEERT submitted a Response to the Petition.  On August 4, Bloom submitted a Reply to Responses to the Petition.

On October 28, 2022, ALJ Rizzo issued a Proposed Decision Denying Petition of Bloom Energy Corpo­ra­tion to Adopt, Amend, or Repeal a Regulation Pursuant to Public Utilities (P.U.) Code Section 1708.5.  Opening Comments were submitted on November 17 and Reply Comments on November 22.

On December 5, the CPUC issued D.22-12-003, which denied Bloom’s Petition for Rulemaking.  The decision finds that the issues presented in the Petition were considered in CPUC proceedings within the previous 12 months and that the proposal, as narrowly presented, is not appropriate for a rulemaking and is more appropriately considered in other proceedings.  This decision closes P.22-06-012.

CPUC Gas System and Grid Initiatives

Aliso Canyon (I.17-02-002)

On September 23, Assigned Commissioner Alice Reynolds issued a Ruling Entering into the Record Energy Division Proposal and Ordering Testimony.  This Ruling sets forth the need for the Aliso Canyon Natural Gas Storage Facility, given current conditions, and enters into the record Energy Division’s Staff Proposal for Portfolio and Next Steps (Staff Proposal).

On October 12, a Workshop was held on SoCalGas’s Proposed Natural Gas Demand Response Pilot Program.  The proposed pilot program will test the effectiveness of managing natural gas usage during system peak demand periods.

On October 18, ALJ Zhang issued a Ruling Extending Testimony Due Dates.  Opening Testimony was submitted on December 21.

On October 24, ALJ Zhang issued a Ruling entering into the record a “Southern California Winter Gas Peak Savings Potential Analysis” Guidehouse Consulting memo, affixed to the Ruling as Attach­ment A.

Gas Reliability and System Planning (R.20-01-007)

On August 3, ALJ Bemesderfer issued a Ruling that admits into the administrative record Southwest Gas Corporation’s Report on the March 29 Gas Infrastructure Equity Workshop.

On September 21, ALJ Bemesderfer issued a Ruling Seeking Revised Data from California’s Gas Utili­ties.  PG&E, SoCalGas, and SDG&E needed to supply the information requested in the Appendix to this Rul­ing by October 21.  A subsequent Ruling extended the due date to November 4.

On September 29, ALJ Bemesderfer issued a Ruling Suspending Amended Scoping Memo Section 2B Workshop Schedule.  The workshops were to be held in October and cover equity, rate design, gas rev­enues, safety, and workforce issues.  A future Ruling will set a new 2023 date for the workshop.

On October 26, ALJ Fogel issued a Proposed Decision adopting a gas infrastructure General Order (GO) as contained in Appendix A.  Opening Comments were submitted on November 15 and Reply Comments on November 21.  On December 8, the CPUC issued D.22-12-021, a Final Decision that adopts the GO.

On October 28, ALJ Bemesderfer issued a Ruling that addresses the confidentiality claims of SoCalGas and SDG&E (collectively known as Sempra), PG&E, and Southwest Gas on gas consumption data and infrastructure data these companies submitted in response to the ALJ’s April 15 Ruling in this proceed­ing.  A subsequent Ruling on September 21 required similar but more detailed information.  For reasons explained in this Ruling, only customer gas consumption data submitted by these utilities should be granted confidential treatment.  Accordingly, the Sempra companies and Southwest Gas were ordered to submit their information consistent with the orders contained therein.

On December 22, ALJ Fogel issued a Ruling Directing Parties to File Comments on Staff Gas Infra­structure Decommissioning Proposal.  Distribution gas utility respondents to this rulemaking shall and other parties may file comments on the Staff Proposal.

Self-Generation Incentive Program (SGIP) (R.20-05-012)

On July 18, SCE submitted a Petition for Modification of D.22-04-036 (Decision Establishing Heat Pump Water Heater (HPWH) Program Requirements).  While SCE would be concerned with an order to transfer all HPWH program funds to an unregulated third party in any circumstances, its concern is exacerbated by the program administration structure the Decision establishes.  At a minimum, the Decision must adopt more prudent funding requirements.  Center for Sustainable Energy submitted a Response to the Petition for Modification on August 17, and SCE submitted a Reply on August 26.

On October 26, Assigned Commissioner Rechtschaffen issued a Ruling seeking comments from parties on issues related to improving outcomes for low-income customers under the SGIP and a variety of im­ple­­mentation issues related to the funding authorized by AB 209.  Opening Comments were submitted on December 2 and Reply Comments on December 16.

On October 27, the CPUC issued D.22-10-028, which grants SCE’s Petition to Modify D.22-04-036 to allow SCE to transfer Heat Pump Water Heater program funds quarterly to the third-party program adminis­tra­tor/program implementer, based on: (1) quarterly budgets submitted by the third-party and ap­proved by the Energy Division and (2) actual, reasonable expenditures supported by quarterly reporting with documentation to the Energy Division.

Grid for High Distributed Energy Resource (DER) (R.21-06-017)

On August 12, ALJs Lakhanpal and Hymes issued a Ruling Noticing Electric Grid Education and Out­reach Workshop for August 23.  On August 31, several parties submitted Comments on the Workshop.

On August 30, ALJs Lakhanpal and Hymes issued a Ruling Approving PG&E’s Motion for an Extension to File Known Load Project Tracking Data and Partly Approving SCE’s Motion for Extension of Time to File 2022 Grid Needs Assessment (GNA)/Distribution Deferral Opportunities Report (DDOR).  PG&E was given an extension to file a report on the Known Load Project Tracking on October 15.  SCE sub­mitted its partial report on the GNA/DDOR information by September 2, and was directed to submit a complete report by January 13.

On December 1, Assigned Commissioner Houck and Assigned ALJs Hymes and Lakhanpal issued a Ruling Noticing December 13 Workshop, which presented the draft Scope of Work for the Track 1 Distri­bution Planning Community Engagement Needs Assessment Study and discussed the Track 1 and Track 2 community outreach efforts carried out by CPUC Staff from September 2022 through November 2022.

Other CPUC Proceedings CEERT Continues to Track

CEERT is either a party to or on the service list for numerous CPUC proceedings that have required or could require CEERT participation, and we continue to track them in anticipation of participating now or in the future.

Because these proceedings were not the focus of CEERT’s efforts in September – December of 2022, only limited information about them is provided here.

Net Energy Metering (NEM) (R.20-08-020)

On December 19, the CPUC issued D.22-12-056, a Decision Revising Net Energy Metering (NEM) Tariff and Subtariffs.

Below is language from the Decision that provides the CPUC’s justification for adopting this Decision.

This Decision adopts a successor to the NEM tariff that addresses the guiding prin­ciples adopted in D.21-02-011 as well as the requirements of the P.U. Code.  The current NEM tariff and its sub­tariffs are revised to balance the multiple requirements of the P.U. Code and the needs of the elec­tric grid, the environment, participating ratepayers, and other ratepayers.  The Deci­sion revises the NEM tariff, aiming to improve price signals by better aligning them with the electric grid’s condi­tions, both day and night.  The updated billing structure of the tariff is designed to optimize grid use by the tariff’s cus­tom­ers and incentivize adoption of combined solar/storage systems.  These changes aim to help meet California’s climate goals and increase reliability, while promot­ing affordability across all income levels.

A review of the current NEM tariff, referred to as NEM 2.0, found that the tariff negatively im­pacts non-participating ratepayers; disproportionately harms low-income ratepayers; and is not cost-effective.  This decision determines that, to address the requirements of the guiding principles and the findings related to the NEM 2.0 tariff, the successor tariff should promote equity, inclu­sion, electrification, and the adoption of solar paired with storage systems, and provide a glide path so that the industry can sustainably transi­tion from the current tariff to the successor tariff and from a predominantly stand-alone solar system tariff to one that promotes the adoption of solar systems paired with storage.

In the successor tariff, the structure of the NEM 2.0 tariff is revised to be an improved version of net billing, with a retail export compensation rate aligned with the value that behind-the-meter energy generation systems provide to the grid and retail import rates that encourage electrification and adoption of solar systems paired with storage.  The successor tariff applies electrification retail import rates, with high differentials between winter off-peak and summer on-peak rates, to new residential solar and storage customers instead of the time-of-use rates in the current tariff. The successor tariff also replaces retail rate compensation for exported energy with Avoided Cost Calculator (ACC) values that vary according to grid needs.  The high differential electrification retail import rates in combination with the variable retail export compensation rates provided by the ACC send strong price signals to customers to shift their use of energy from the grid to mid-day and export electricity during the evening hours, which promotes the installation of storage with the solar systems. These price signals also benefit customers who electrify their vehicles, home devices, and appliances. The changes will improve the reliability of electricity in California and reduce GHG emissions.

To ensure the sustainable growth of customer-sited renewable distributed generation, the successor tariff provides a glide path in the form of an adder based on the values in the ACC.  The glide path allows for a transition period for the solar industry to adapt to a solar paired with storage market­place.  This Decision also adopts revisions that offer customers in low-income households more access to distributed generation systems, including solar systems paired with storage.  To improve such opportunities, this decision provides a glide path with a higher adder to ensure eligible cus­tom­ers achieve the same nine-year payback target for stand-alone solar systems that all other resi­dential customers receive.  To ensure affordability of the successor tariff and equity among all cus­tomers, this decision directs an evaluation of these elements preceded by a three-year data collec­tion period.

Affordability is front and center in this proceeding, given the finding that a significant and grow­ing cost shift exists in the previous tariff and, to a lesser extent, remains in the adopted successor tariff.  This cost shift is created by the ability of distributed generation customers to avoid fixed costs, including grid costs and public purpose program costs, which then become the responsibility of non-participating ratepayers, including low-income customers. The successor tariff adopted in this decision is designed to compensate customers for the value of their exports to the grid based on the ACC.  This improved valuation will significantly reduce the cost shift and improve afford­ability for nonparticipating ratepayers, particularly low-income ratepayers. Additionally, the CPUC has initiated a rulemaking (R.22-07-005) to broadly restructure the way fixed costs are collected, moving from volumetric charges to an income-graduated fixed charge on all residential customers.  This fixed charge will further reduce cost shifts through an equitable approach to the distribution of electric costs.

Finally, eligible customers of the successor tariff will have the opportunity to take advantage of new funding for up-front incentive payments for solar paired with storage systems and stand-alone storage.  This funding allows the CPUC to offer a total of $900 million, with $630 million set aside for low-income customers, to reduce the cost of these systems. This funding will provide the financial means for eligible customers to access these systems while further supporting the sus­tain­able growth of customer-sited renewable generation.

Renewables Portfolio Standard (RPS) (R.18-07-003)

On November 18, the CPUC issued D.22-11-021, which reviews and approves Voluntary Allocations and modifies the Market Offer process proposals of the LSEs to sell excess renewable resources pursuant to D.21-05-030.  The CPUC approves all Voluntary Allocation offers made by IOUs and accepted by the LSEs (except 3 Phases Renewables, Inc.) in this Voluntary Allocation and Market Offer (VAMO) cycle, as reported in the LSEs’ draft 2022 RPS Plans filed on July 1, or updates filed on August 15.

3 Phases Re­newables must file an updated draft 2022 RPS Plan, incorporating information on the status of their Voluntary Allocations, within seven days of the issuance date of this decision.  PG&E, SCE, and SDG&E must each file a Tier 1 Advice Letter within 15 days of the issuance date of this decision to in­clude the changes to the Market Offer process ordered here, along with updated Market Offer pro formas.

On December 19, the CPUC issued D.22-12-030 which adopts, with modifications, the Draft 2022 RPS Procurement Plans of the large IOUs that the CPUC regulates, the small and multijurisdic­tional utilities under the CPUC’s jurisdiction, community choice aggregators, and electric service pro­viders.

Energy Efficiency (EE) (R.13-11-005)

On November 18, the CPUC issued D.22-11-031, which finds that SCE mismanaged its 2017 – 2019 energy efficiency upstream lighting program and failed to ensure that efficient light bulbs were tracked and sold as intended. This decision requires the following financial compensation from SCE:

  • $76.1 million in program funding shall be credited to ratepayers for the administrative costs and the incentives costs of the light bulbs that could not be accounted for.
  • $6.8 million in shareholder incentives through the Efficiency Savings and Performance Incentive (ESPI) mechanism shall be refunded.
  • $19.06 million in fines shall be paid to the State’s General Fund for violations of Rule 1.1 of the Commission’s Rules of Practice and Procedure.

This decision concludes the adjudicatory phase of this proceeding related to SCE’s upstream lighting program, but the rest of the proceeding remains open.

On November 29, Southern California Regional Energy Network (SoCalREN) submitted a Motion Seek­ing Authorization for the Compensation Pilot Presented in the California Energy Efficiency Coordinating Committee Compensation Task Force Final Report.  Attached to the Motion is the CAEECC Compen­sa­tion Task Force Final Report.  Responses to the Motion were submitted on December 14.

On December 20, ALJs Fitch and Kao issued a Proposed Decision Addressing Energy Efficiency Third-Party Processes and Other Issues.  The Proposed Decision addresses several topics important to the on­going success of the CPUC’s EE portfolio and the third-party solicitation process, including:

  • Removing requirements for performance assurances as a starting point for contract negotiation;
  • Requiring cybersecurity insurance only when deemed necessary;
  • Removing the requirement for a two-stage solicitation process;
  • Updating the definition of diverse business enterprise to include businesses owned by persons with disabilities;
  • Updating terms and conditions to reflect the Total System Benefit metric;
  • Adopting a confidentiality matrix;
  • Clarifying financial conflict of interest rules for procurement review group members;
  • Requiring a consistent methodology to account for administrative costs associated with third-party contracts;
  • Requiring annual instead of semi-annual workshops for third-party solicitation stakeholders;
  • Allowing the use of strategic energy management approaches beyond the industrial sector;
  • Improving and clarifying governance and oversight of the Commission’s database tools;
  • Addressing ongoing use of the California Analysis Tool for Locational Energy Assessment project; and
  • Adopting data sharing requirements for CPUC-authorized energy efficiency programs.

Opening Comments were due on January 13 and Reply Comments on January 18.

2024-2031 Energy Efficiency Business Plans and 2024-2027 Portfolio Plans (A.22-02-005, et al.)

On August 2, ALJ Kao issued a Ruling Inviting Comments on Staff Proposal for Gas Energy Efficiency Incentives and Codes and Standards Sub-Programs and Budgets.  The Staff Proposal, in part, responds to the January 13 Motion of Sierra Club, in R.13-11-005, requesting that the CPUC prohibit energy effi­ciency funding for non-cost-effective gas appliance incentive measures.  On August 18, ALJ Kao issued a Ruling which extended the due dates for comments on the Ruling.  Opening Comments were submitted on September 23 and Reply Comments on October 3.

On August 26, ALJ Kao issued a Ruling Seeking Responses to Specific Questions in Intervenor Testi­mony.  This Ruling poses questions to be addressed in Intervenor Testimony.  The questions pertain to the following issues: Equity and Advancement of the Environmental and Social Justice Action Plan, Flexibil­ity and Opportunity for Innovation, Aligning with External Funding, and Energy Efficiency Integrated Pro­grams.  Intervenor Testimony was submitted on October 21 and Rebuttal Testimony on November 21.

On December 8, SDG&E submitted a Joint Meet and Confer Statement that reflects parties’ positions on issues in dispute and uncontested issues.

Transportation Electrification Framework (R.18-12-006)

On August 5, the CPUC issued D.22-08-024, a Decision Adopting Plug-In Electric Vehicle Submetering Protocol and Electric Vehicle Supply Equipment Communication Protocols.

The Decision adopts a plug-in electric vehicle submetering protocol for PG&E, SCE, San Diego Gas & Electric Company (SDG&E), Liberty Utilities (CalPeco Electric) LLC, Bear Valley Electric Service Inc., and PacifiCorp d/b/a Pacific Power, and requires the utilities to implement the submetering protocol for all customers with plug-in electric vehicles (EVs) and customer-owned submeters. The protocol reduces the cost of EV charging; consumers can avoid having to install a separate utility meter, and can instead use the technology to have their EV charging measured and billed separately from their primary meter. Sub­metering thus promotes the adoption of EVs, the deployment of vehicle-grid integration, and the real­i­zation of the corresponding electric grid benefits.

This decision also adopts electric vehicle supply equipment communication protocols for PG&E, SCE, SDG&E, Liberty Utilities (CalPeco Electric) LLC, Bear Valley Electric Service Inc., and PacifiCorp d/b/a Pacific Power, and requires the utilities to qualify EV supply equipment that meets the minimum perfor­mance standards for all future transportation electrification efforts. The Plug-In EV Submetering Protocol is Attachment A.

On November 21, the CPUC issued D.22-11-040, which adopts a long-term transportation electrification policy framework (TEF) that includes a third-party administered statewide transportation electrification infrastructure rebate program, and directs PG&E, SCE, SDG&E, Liberty Utilities (CalPeco Electric) LLC, Bear Valley Electric Service Inc., and PacifiCorp d/b/a Pacific Power to jointly fund the program and associated activities.

The adopted program prioritizes investment in low-income, underserved, and tribal communities to en­sure participation from customers that lack access to the benefits of transportation electrification.  The decision resolves the TEF policy and program design topics that have been under consideration since 2020, and adopts the most important elements of the statewide infrastructure rebate program.  Additional program guidelines will be established in a subsequent decision and advice letters.

PG&E Clean Energy Optimization Pilot (CEOP) (A.22-03-006)

On October 17, PG&E, the Public Advocates Office, the Regents of the University of California, and SCE submitted a Joint Case Management Statement.  The parties held a meet-and-confer conference on October 10, and determined that hearings are not necessary and that parties are in the process of schedul­ing discussions about a potential settlement.  On October 24, ALJ Wang issued a Ruling Cancelling Evi­dentiary Hearing and Directing Parties to Answer Questions.  Opening Briefs were submitted on Decem­ber 5 and Reply Briefs on December 19.

Building Decarbonization (R,19-01-011)

On September 20, the CPUC issued D.22-09-026, which adopts Energy Division’s staff proposal to eli­minate gas line extension allowances, the 10-year refundable payment option, and the 50 percent dis­count payment option under the current gas line extension rules.  The elimination is for customers in all cus­tomer classes effective July 1. The Decision applies to new applications for gas line extensions sub­mitted on or after July 1. Applications submitted before July 1 will not be affected by this decision.

On September 26, Assigned Commissioner Rechtschaffen issued a Ruling Regarding Permissible Refrig­er­ants for the Building Initiative for Low-Emissions Development (BUILD) Program and the Technology and Equipment for Clean Heating (TECH) Initiative and New Funding from Assembly Bill 179.  This Ruling modifies the deadline adopted in D. 20-03-027 in Phase I of this proceeding for permissible refrig­erants used in appliances of building projects incentivized by the BUILD Program and the TECH Initia­tive from January 1, 2023 to January 1, 2025.  In addition, this Ruling seeks parties’ comments by no later than October 17 on how the CPUC should use the additional funding allocated from California’s Fiscal Year 2022-2023 General Fund revenues for the TECH Initiative, and whether any changes should be made to its implementation or design.  Comments were submitted on October 17.

On December 23, Commissioner Rechtschaffen issued a Proposed Decision that, per AB 179, authorizes the transfer of $50 million to the Building Decarbonization Pilot Program Balancing Account (BDPPBA) to fund continued statewide implementation of the TECH Initiative.  As the TECH Initiative contracting agent, SCE is directed to work with the TECH implementer to identify and track within the BDPPBA the source of funds used for program expenses (i.e., which costs were paid using the original $120 million from Cap-and-Trade allowance proceeds versus the new $50 million from General Fund tax revenue).  This PD allocates, at a minimum, 40 percent of the program costs to fund activities that serve equity customers.  Opening Comments were submitted on January 12 and Reply Comments on January 17.

Improvements to Rule 21 (R.17-07-007)

On August 17, ALJ Hymes issued a Ruling Suspending Proceeding Schedule.  The CPUC anticipated that disposition of all outstanding advice letters would be completed in time for parties to develop opening testimony for service on September 30.   However, the advice letters have not been disposed and it is unknown at this time when that will occur.  A subsequent Ruling will establish a new schedule.

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

On August 4, ALJ Wang issued a Ruling that requests comments on the Staff Analysis and Proposal for Incorporating Long-Term RPS Transactions into the RPS Market Price Benchmark (MPB).  Opening Comments were submitted on August 26 and Reply Comments on September 9.

On September 12, 2022, ALJ Wang issued a Ruling Requesting Comments on GHG-Free Resources Staff Proposal and Other Issues.  Opening Comments were submitted on November 7 and Reply Comments on November 30.

Disconnections (R.18-07-005)

On August 29, the CPUC issued D.22-08-037, which orders Southwest Gas Company, Liberty Utilities LLC, Bear Valley Electric Service, a division of Golden State Water Company, PacifiCorp, Alpine Natural Gas Operating Company, and West Coast Gas Company, Inc. to implement residential customer protections and reporting requirements to reduce disconnections and ease reconnections of residential service.  The Decision also allows the small and multijurisdictional utilities to establish a two-way bal­ancing account for recovery of uncollectible charges and a memorandum account to track the administra­tive costs of this decision.  The memorandum account will be subject to review for reasonableness of the administrative costs in the SMJUs’ next General Rate Case cycle or other appropriate ratesetting venue. This Decision concludes Phase 1-A of this proceeding; the rulemaking remains open for Phase 2, which will consider additional residential disconnection reforms and preventative approaches.

On November 10, ALJ Wang issued a Ruling Relating to the Phase 2 Workshop in October.  This Ruling directs PG&E, SCE, SoCalGas, and SDG&E to file responses to the questions in this Ruling by Decem­ber 9, and to file a joint Meet and Confer Report on February 3.  Parties may file Opening Comments on the Report by February 25 and Reply Comments on March 13.  Attached to the Ruling are the utilities’ Presentation slides from the Phase 2 Workshop.

Affordability (R.18-07-006)

On August 4, the CPUC issued D.22-08-023 which is the Decision Implementing the Affordability Metrics.  D.20-07-032 adopted three metrics, the Affordability Ratio, Hours-at-Minimum-Wage, and SocioEconomic Vulnerability Index, by which the CPUC would assess the relative affordability of essen­tial utility service across industries and proceedings, including examination of how different geographic areas of California are impacted.  This Decision directs when and how the affordability framework will be applied in CPUC energy, water and communications proceedings, and further develops the tools and meth­­o­dologies used to calculate the three affordability metrics.  The general implementation directives in this decision allow the CPUC to use these tools and methodologies to measure affordability metrics over time across proceedings and industries.  The specific application of the affordability frame­work will be determined in individual proceedings.

On October 13, Assigned Commissioner Houck issued a Ruling that provides an opportunity for parties to (1) respond to the questions in Section 5.3 of D.22-08-023 (Decision Implementing the Affordability Metrics), (2) comment generally on the use and interpretation of the affordability framework in individual CPUC proceedings; and (3) comment generally on the use and interpretation of the affordability frame­work in the annual Affordability Report (Attachment 1 to this Ruling).

Additional proceedings tracked, but where there has been little or no activity since our last Quarterly Report, or the proceeding has been closed:

  • 13-09-011: Demand Response
  • 18-04-019: Climate Change Adaptation
  • R.18-07-017: Public Utility Regulatory Policies Act (PURPA)