BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Transcription

1 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Order Instituting Rulemaking to Review, Revise, and Consider Alternatives to the Power Charge Indifference Adjustment. Rulemaking PACIFIC GAS AND ELECTRIC COMPANY, SOUTHERN CALIFORNIA EDISON COMPANY, AND SAN DIEGO GAS & ELECTRIC COMPANY JOINT NOTICE OF EX PARTE COMMUNICATIONS Pursuant to Rule 8.4 of the California Public Utility Commission s Rules of Practice and Procedure, Pacific Gas and Electric Company (PG&E), Southern California Edison Company (SCE), and San Diego Gas & Electric Company (SDG&E), collectively Joint Utilities, hereby give notice of the following oral ex parte communication. This notice is being served on the service lists for the Power Charge Indifference Adjustment proceeding captioned above and the Integrated Resource Planning proceeding, R , because the communication tangentially addressed procurement planning. On Thursday, July 5, 2018, at approximately 11:00 AM, the Joint Utilities met with John Reynolds, Advisor to Commissioner Peterman, at the offices of the California Public Utilities Commission in San Francisco, California. The communication lasted approximately 30 minutes. A handout was provided and is attached to this notice. Attendees for the Joint Utilities were as follows: PG&E Erik Jacobson, Director, Regulatory Relations; SCE -Laura Genao, Director,

2 Regulatory Affairs, participated by phone; SDG&E, Brian Prusnek, Director, Regulatory Affairs. The Joint Utilities explained why Renewable Energy Credits (RECs) allocated under the Green Allocation Mechanism (GAM) should retain their Product Content Categorization 1 (PCC 1) classification. RECs allocated under GAM meet the PCC 1 definition in Public Utilities Code Section (b). There is no substitution of electricity from another source. A pro rata share of the net costs and benefits from the Renewables Portfolio Standard (RPS)-eligibility procurement simply follow the customers for whom that procurement was conducted. GAM does nothing to alter the contractual arrangements with renewable resource suppliers. It does not involve any new commercial transactions or REC sale agreements. GAM simply allocates the revenues and RECs proportionately to bundled and departing load customers. Allocating RECs under GAM is administratively easier to implement than having an annual true-up of the RECs market value. The Commission has previously allowed RECs to be re-united with energy produced under three Department of Water Resources contracts that were allocated to SCE and SDG&E. This precedent demonstrates that the Commission has authority to ensure RECs allocated to Load Service Entities (LSEs) under GAM retain their PCC 1 classification. The Joint Utilities described the REC creation process. There is no PCC designation in WREGIS (Western Renewable Energy Generation Information System). RPS generators transfer RECs to the IOUs 90 days after the delivery 2

3 month. Similarly, under GAM, the IOUs propose to transfer a pro-rata share of the RECs to CCAs. The CPUC and CEC would review and approve the PCC designations included in the LSEs RPS compliance reports. The Joint Utilities responded to a June 18, 2018 ex parte communication by Marin Clean Energy (MCE) and Sonoma Clean Power Authority (SCP). The graphs used by MCE and SCP combined actual contracted RPS procurement with uncontracted for volumes. The uncontracted for volumes should be excluded when assessing the impacts of GAM on these CCAs RPS open position. The allocation of RECs under GAM would still leave significant headroom below their stated RPS goals and will not impair the rest of the existing and forming CCAs. Respectfully submitted, Dated: July 10, 2018 /s/ Erik B. Jacobson Erik B. Jacobson Director, Regulatory Relations Pacific Gas and Electric Company P.O. Box San Francisco, CA Phone: Fax: EBJ1@pge.com 3

4 Joint Utilities Meeting Power Charge Indifference Adjustment (R ) July 5, 2018

5 Agenda Product Content Categorization Re-Evaluating Claims made by MCE and SCP 2

6 Product Content Categorization The plain language of (b) establishes that the RECs allocated under GAM are PCC 1 RECs CPUC has authority to adopt GAM and allocate the full compliance value of RPS procurement (PCC 1 RECs and long-term attributes) to departing load customers (b) - a PCC 1 REC is produced when delivery is scheduled from the eligible renewable energy resource into a California balancing authority without substituting electricity from another source. Under the CAISO market structure, CAISO dispatches RPS-eligible resource to serve aggregate load and the IOU receives revenues and is allocated PCC 1 RECs; GAM envisions the same process for the allocation of revenues/recs to Departing Load GAM retains the original procurement arrangement; there is no new transaction or re-sale as the IOU continues to be the contract holder A finding that RECs allocated under GAM are PCC 3 RECs is tantamount to finding that no RECs generated through CAISO market transactions are PCC 1 RECs. This is not a common-sense solution. The Commission has previously interpreted the PCC rules to achieve a common-sense solution (D allowing re-unification ), which it should do pursuant to GAM (b) - properly read to require 65% of RPS procurement to be from long-term contracts that an LSE s customers continue to be obligated to pay the cost of. 3

7 PCC-0/PCC-1 RECs: Creation Process Renewable Resource Meter + Generator 4 After Delivery, Meter Data Sent to WREGIS 1 PPA Settlement Process IOU Bids Generator Into CAISO Markets 3 Long-Term PPA CAISO Market - Matches Supply and Demand of All LSE s IOUs CAISO Market Revenues Or Charges 2 Physical Energy Delivered in Real-Time to all LSE s Bid-in Load - Energy may be used by any market participant - Not linked to IOU holding PPA with the Generator Generator s WREGIS Account - RECs created 90 days after delivery month - No PCC Designation 5 Generator Transfers RECs to IOU IOU s WREGIS Account - IOU Retires RECs RPS Compliance Filing Submitted to CPUC. Recommends Designation of Retired RECs as PCC-0 or PCC-1 CPUC - Approves recommendation of PCC & long term designation 4

8 PCC-0/PCC-1 RECs: GAM Allocation GAM Does Not Alter: Long-Term Contract Energy Scheduling/Delivery WREGIS REC Creation PCC Category Renewable Resource Meter + Generator 4 After Delivery, Meter Data Sent to WREGIS 1 PPA Settlement Process IOU Bids Generator Into CAISO Markets 3 Long-Term PPA CAISO Market - Matches Supply and Demand of All LSE s IOUs CAISO Market Revenues Or Charges 2 Physical Energy Delivered in Real-Time to all LSE s GAM REC Allocation GAM Revenue Allocation Pro-Rata Share of CAISO Market Revenues/Charges Allocated to CCA customers Bid-in Load - Energy may be used by any market participant - Not linked to IOU holding PPA with the Generator Generator s WREGIS Account - RECs created 90 days after delivery month - No PCC Designation 5 Generator Transfers RECs to IOU IOU s WREGIS Account Pro-Rata Share of RECs Transferred from IOU to CCA CCA s WREGIS Account - CCA Retires RECs CPUC - Approves recommendation of PCC & long term designation 5

9 Re-Evaluating Claims by MCE and SCP in Ex Parte Meeting On June 18, 2018 Marin Clean Energy (MCE) and Sonoma Clean Power Authority (SCP) conducted an Ex Parte meeting with Commissioner Peterman s Office Graphics were presented that implied a GAM Allocation would push the CCA s far above their RPS needs MCE s and SCP s graphics combined actual contracted RPS procurement with uncontracted for volumes Excluding the uncontracted for volumes and using the same information included in the CCA presentation, the Joint Utilities observe that: Neither MCE nor SCP have procured sufficient RPS to meet the 50% by 2030 statutory mandate GAM may result in two CCAs being slightly above the statutory minimum over certain early periods, but it would still leave significant headroom below these CCAs' stated RPS goals and will not impair the rest of the existing and forming CCAs 6

10 SCP Ex Parte with Peterman s Office on 6/18/18 Statutory minimum RPS requirements used to demonstrate a long position. Meanwhile, marketing materials and implementation plan both have RPS goals above 50% in RPS % accounts for uncontracted procurement, including: RPS Under Negotiation/Planned Existing Contract Re-Up Short Term RPS True-Up 7

11 Joint Utilities Analysis of SCP s Claims 1 Yellow bars break out the hypothetical future procurement identified in the Ex Parte materials. Blue bar is SCP s RPS Target of 56% by 2023, as published in SCP s 2016 Implementation Plan 2. The real picture SCP s future RPS position is a stark contrast to the previous slide, showing less than 15% procured in the late 2020 s. Even after including GAM allocation, SCP is still significantly short on RPS compared to the 56% target. 1. Analysis was conducted using data in Appendix A and B from MCE/SCP Ex Parte meeting with Commissioner Peterman s Office on June 18, Page 26: Because SCP s post-2023 RPS goals are unclear, they are reflected as a dotted line. 8

12 MCE Ex Parte with Peterman s Office on 6/18/18 Similar to SCP, MCE includes large amounts of RPS Under Negotiation/Planned procurement in the Ex Parte presentation 9

13 Joint Utilities Analysis of MCE s Claims RPS Target of 80% by 2027, as published in MCE s 2018 IRP 3. Meeting its 2027 goal of 80% RPS would still allow for significant future contracting. Even after GAM, MCE is short on RPS starting in 2020 compared to stated IRP target of 63%. 3. Page 8: Because MCE s post-2027 target is unknown, it is presented as a dotted line. 10