SUBJECT: Establishment of the Distribution Resources Plan Demonstration Balancing Account (DRPDBA) Pursuant to Decision

Transcription

1 STATE OF CALIFORNIA Edmund G. Brown Jr., Governor PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE SAN FRANCISCO, CA June 2, 2017 Advice Letter 3579-E Russell G. Worden Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, CA SUBJECT: Establishment of the Distribution Resources Plan Demonstration Balancing Account (DRPDBA) Pursuant to Decision Dear Mr. Worden: Southern California Edison Company s (SCE) Advice Letter 3579-E is approved as of June 2, 2017 and is effective April 24, The DRPDBA is approved. However, expenses authorized per Decision (D.) may only be recorded and tracked for those Distribution Resources Plan Track 2 Demonstration Projects approved through the Distribution Resources Plans Rulemaking (R ). On February 16, 2017, the California Public Utilities Commission issued D which approved SCE s Demonstration Project C and D, but not Demonstration Project E. D instructed SCE to utilize EPIC funding to meet the non-der-procurement expenses for Demonstration Project D and stated that this Demonstration Project should have zero procurement costs. Demonstration Project E is pending Commission approval. If the Commission authorizes SCE s Demonstration Project E, SCE may also record any incremental O&M and capital-related revenue requirements per D in the DRPDBA related to this project. Sincerely, Edward Randolph Director, Energy Division Cc: Jose Aliaga-Caro (jose.aliaga-caro@cpuc.ca.gov) Service List of R

2 Russell G. Worden Managing Director, State Regulatory Operations March 24, 2017 ADVICE 3579-E (U 338-E) PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION SUBJECT: Establishment of the Distribution Resources Plan Demonstration Balancing Account Pursuant to Decision Southern California Edison Company (SCE) hereby submits for approval by the California Public Utilities Commission (Commission) the following changes to its tariffs. The revised tariffs are listed on Attachment A and are attached hereto. PURPOSE In accordance with Ordering Paragraph (OP) 30 of Decision (D.) , SCE submits this advice letter to establish Preliminary Statement Part MMM, Distribution Resources Plan (DRP) Demonstration Balancing Account (DRPDBA), to record revenue requirements associated with up to $3 million in Operation and Maintenance (O&M) expenses and capital expenditures for SCE s Demonstration Project C. BACKGROUND The Assigned Commissioner s Ruling on Guidance for Public Utilities Code Section 769 Distribution Resource Planning, dated February 6, 2015, directed the utilities to propose Distributed Energy Resource (DER)-focused demonstration projects and provided guidance on what should be included in those demonstration projects. The utilities submitted their proposed demonstration projects in applications filed on July 1, 2015 and in supplemental filings on June 17, The Commission s Scoping Memo and Ruling of Assigned Commissioner and Administrative Law Judge, Including Deconsolidation of Certain Proceedings and a Different Consolidation of Other Proceedings, issued on January 27, 2016, identified the primary focus of Track 2 as being the design and authorization for Demonstration Projects C, D, and E. P.O. Box Rush Street Rosemead, California (626) Fax (626)

3 ADVICE 3579-E (U 338-E) March 24, 2017 Demonstration Project C is intended to demonstrate Distributed Energy Resources (DER) Locational Benefits. This project will validate the ability of DER to achieve net benefits consistent with the Locational Net Benefits Analysis (LNBA). Demonstration Project D is intended to demonstrate distribution operations and high penetrations of DERs. Demonstration Project E is intended to demonstrate a Microgrid where DERs serve a significant portion of customer load and reliability services. On February 9, 2017, the Commission issued D , Decision on Track 2 Demonstration Projects, addressing Track 2 Demonstration Projects C, D and E as proposed by the utilities. This decision approves SCE s Demonstration Project C with a total non-procurement budget of $3 million. SCE s Demonstration Project D is also approved and SCE is instructed to utilize EPIC funding to meet the non-derprocurement expenses. 1 D did not approve SCE s Demonstration Project E. 2 The utilities are authorized to establish a one-way DRP Demonstration Balancing Account (DRPDBA) to record and track the authorized revenue requirements compared to the revenue requirements associated with actual costs, including both expense and capital. 3 In comments to the Proposed Decision, SCE requested clarification on the operation of the balancing account and related ratemaking. D found SCE s clarification to be reasonable. 4 In alignment with the ratemaking clarification found to be reasonable by the Commission, SCE is establishing a one-way DRPDBA to record incremental demonstration project related O&M expenses, as well as any capital related revenue requirement (e.g., depreciation, return on rate base, property taxes, and income taxes) associated with Demonstration Project C. 5 SCE will only collect in rates the revenue requirements for costs up to the $3 million non-derprocurement cost cap pursuant D At the end of the demonstration period, SCE will transfer the revenue requirements recorded in the DRPDBA associated with up to $3 million in costs to the distribution subaccount of the Base Revenue Requirement Balancing Account (BRRBA) for recovery in distribution rates. Any on-going revenue requirement associated with any capital 1 This project should have zero procurement costs. 2 D does state that SCE may file and serve comments within 45 days from the date of this decision requesting approval for a new Demonstration Project E using an existing Microgrid project. 3 OP 30 in D In the Comments on the Proposed Decision section of D at page 33, the Commission states We agree with this clarification. 5 If the Commission ultimately authorizes a SCE Demonstration Project E, SCE will also separately record any incremental O&M and capital-related revenue requirements in the DRPDBA (not subject to the $3 million non-procurement cost cap).

4 ADVICE 3579-E (U 338-E) March 24, 2017 expenditures will continue to be recorded in the BRRBA until it is included in SCE s General Rate Case revenue requirement. 6 PROPOSED TARIFF CHANGES As discussed above and in accordance with D , in this advice letter, SCE is establishing Preliminary Statement Part MMM, Distribution Resources Plan Demonstration Balancing Account (DRPDBA), a one-way balancing account to record revenue requirements associated with up to $3 million in O&M expenses and capital expenditures for SCE s Demonstration Project C. If the Commission ultimately authorizes a SCE Demonstration Project E, SCE will also record any incremental O&M and capital-related revenue requirements in the DRPDBA related to Demonstration Project E (not subject to the $3 million non-der-procurement cost cap). Similar to many of SCE s other balancing and memorandum accounts, costs recorded in the DRPDBA will be reviewed in SCE s annual Energy Resource Recovery Account (ERRA) Review proceedings. No cost information is required for this advice filing. This advice filing will not cause the withdrawal of service, or conflict with any other schedule or rule. TIER DESIGNATION Pursuant to General Order (GO) 96-B, Energy Industry Rule 5.1, this advice letter is submitted with a Tier 1 designation. EFFECTIVE DATE SCE requests that this advice filing become effective March 24, 2017, the same date as filed. NOTICE Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received no later than 20 days after the date of this advice filing. Protests should be submitted to: 6 Any third-party energy and capacity procurement costs incurred as part of approved demonstration project procurements are to be recovered through normal procurement processes (e.g., advice letters and the ERRA process) as authorized by the Commission, and these procurement costs will not be recorded in the DRPDBA.

5 ADVICE 3579-E (U 338-E) March 24, 2017 CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California EDTariffUnit@cpuc.ca.gov Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above). In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of: Russell G. Worden Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California Telephone: (626) Facsimile: (626) AdviceTariffManager@sce.com Laura Genao Managing Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California Facsimile: (415) Karyn.Gansecki@sce.com There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and must be received by the deadline shown above. In accordance with General Rule 4 of General Order (GO) 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B and R service lists. Address change requests to the GO 96-B service list should be directed by electronic mail to AdviceTariffManager@sce.com or at (626) For changes to all other service lists, please contact the Commission s Process Office at (415) or by electronic mail at Process_Office@cpuc.ca.gov.

6 ADVICE 3579-E (U 338-E) March 24, 2017 Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE s web site at For questions, please contact Sue DiBernardo at (626) or by electronic mail at Susan.DiBernardo@sce.com. Southern California Edison Company RGW:sd/ll:jm Enclosures /s/ Russell G. Worden Russell G. Worden

7 CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/cpuc Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: Darrah Morgan ELC GAS Phone #: (626) PLC HEAT WATER Disposition Notice to: EXPLANATION OF UTILITY TYPE ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water (Date Filed/ Received Stamp by CPUC) Advice Letter (AL) #: 3579-E Tier Designation: 1 Subject of AL: Establishment of the Distribution Resources Plan Demonstration Balancing Account Pursuant to Decision Keywords (choose from CPUC listing): Compliance, Balancing Account AL filing type: Monthly Quarterly Annual One-Time Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: Decision Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL: Confidential treatment requested? Yes No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Resolution Required? Yes No Requested effective date: 4/24/17 No. of tariff sheets: -4- Estimated system annual revenue effect: (%): Estimated system average rate effect (%): When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: Service affected and changes proposed 1 : Pending advice letters that revise the same tariff sheets: Preliminary Statement Part MMM and Table of Contents None 1 Discuss in AL if more space is needed.

8 Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this filing, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California Russell G. Worden Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California Telephone: (626) Facsimile: (626) Laura Genao Managing Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California Facsimile: (415)

9 Public Utilities Commission 3579-E Attachment A Cal. P.U.C. Sheet No. Original E Original E Title of Sheet Preliminary Statement Part MMM Preliminary Statement Part MMM Cancelling Cal. P.U.C. Sheet No. Revised E Table of Contents Revised E Revised E Table of Contents Revised E 1

10 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 1 MMM. Distribution Resources Plan Demonstration Balancing Account (DRPDBA) 1. Purpose The purpose of the one-way Distribution Resources Plan Demonstration Balancing Account (DRPDBA) is to record revenue requirements associated with up to $3 million in Operations & Maintenance (O&M) expenses and capital expenditures for SCE s Demonstration Project C as authorized in D If the Commission ultimately authorizes a Demonstration Project E, SCE will also record any incremental O&M and capital-related revenue requirements in the DRPDBA for Demonstration Project E (not subject to the $3 million non-der-procurement cost cap). 2. Operation of the DRPDBA Monthly entries to the DRPDBA shall be determined as follows: a. A debit entry equal to SCE s recorded incremental O&M expenses associated with actual expenses for each DRP Demonstration Project; b. A debit entry equal to SCE s recorded capital-related revenue requirement (including book depreciation, applicable taxes, and an authorized rate of return on recorded rate base) associated with each DRP Demonstration Project; and c. A credit entry to transfer the balance to the distribution sub-account of the Base Revenue Requirement Balancing Account (BRRBA) at the end of the Demonstration Period. Interest shall accrue monthly to the DRPDBA by applying the Interest Rate to the average of the beginning of month and end of month balance in the DRPDBA. The $3 million spending cap for Demonstration Project C is based on direct capital expenditures and O&M expenses and refers to project-related spend, controllable by program managers. Pursuant to D , SCE will not record overheads or administrative and general expenses in the DRPDBA that would otherwise be approved in a general rate case. (Continued) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 3579-E Caroline Choi Date Filed Mar 24, 2017 Decision Senior Vice President Effective Apr 24, H13 Resolution

11 Southern California Edison Original Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No. PRELIMINARY STATEMENT Sheet 2 MMM. (Continued) Distribution Resources Plan Demonstration Balancing Account (DRPDBA) (Continued) 3. Disposition For Demonstration Project C, SCE will only collect in rates the revenue requirements associated with costs up to the $3 million non-procurement cost cap pursuant to D At the end of the demonstration period, SCE will transfer the revenue requirements recorded in the DRPDBA associated with up to $3 million in costs to the distribution subaccount of the Base Revenue Requirement Balancing Account (BRRBA) for recovery in distribution rates. Any on-going revenue requirement associated with any capital expenditures will continue to be recorded in the BRRBA until the capital-related revenue requirement is included in SCE s General Rate Case revenue requirement. 4. Review Procedures The operation of the DRPDBA will be reviewed in SCE s annual April 1 Energy Resource Recovery Account (ERRA) Review proceeding to ensure the entries are stated correctly and are consistent with D (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 3579-E Caroline Choi Date Filed Mar 24, 2017 Decision Senior Vice President Effective Apr 24, H12 Resolution

12 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 1 Cal. P.U.C. Sheet No. TITLE PAGE E TABLE OF CONTENTS - RATE SCHEDULES E E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS E TABLE OF CONTENTS - RULES E TABLE OF CONTENTS-INDEX OF COMMUNITIES, MAPS, BOUNDARY DESCRIPTIONS E TABLE OF CONTENTS - SAMPLE FORMS E E (T) PRELIMINARY STATEMENT: A. Territory Served E B. Description of Service E C. Procedure to Obtain Service E D. Establishment of Credit and Deposits E E. General E F. Symbols E G. Gross Revenue Sharing Mechanism E E H. Baseline Service E I. Not In Use... -E J. Not In Use... -E K. Nuclear Decommissioning Adjustment Mechanism E L. Purchase Agreement Administrative Costs Balancing Account E M. Income Tax Component of Contributions E N. Memorandum Accounts E E E E E E E E O. California Alternate Rates for Energy (CARE) Adjustment Clause E E P. Optional Pricing Adjustment Clause (OPAC) E (Continued) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 3579-E Caroline Choi Date Filed Mar 24, 2017 Decision Senior Vice President Effective Apr 24, H6 Resolution

13 Southern California Edison Revised Cal. PUC Sheet No E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No E TABLE OF CONTENTS Sheet 3 (Continued) PRELIMINARY STATEMENT: (Continued) Cal. P.U.C. Sheet No. RR. New System Generation Balancing Account E SS. Songs 2&3 Steam Generator Removal And Disposal Balancing Account E E TT. SONGS Cost of Financing Balancing Account E UU. Not In Use... -E VV. Medical Programs Balancing Account E WW. Community Choice Aggregation Cost Responsibility... Surcharge Tracking Account E XX. Low Carbon Fuel Standard Revenue Balancing Account E YY. Base Revenue Requirement Balancing Account E E ZZ. Energy Resource Recovery Account E E AAA. Post Test Year Ratemaking Mechanism E BBB. Not In Use... -E CCC. Cost of Capital Mechanism E DDD On Bill Financing Balancing Account E EEE Not in Use... -E FFF Electric Program Investment Charge Balancing Account-California Energy Commission E GGG Electric Program Investment Charge Balancing Account-Southern California Edison E HHH Electric Program Investment Charge Balancing Account-California Public Utilities Commission III JJJ E New Solar Homes Partnership (NSHP) Program Balancing Account (NSHPPBA) E Aliso Canyon Demand Response Program Balancing Account (ACDRPBA) E E RRR Integrated Distributed Energy Resources Shareholder Incentive Award Balancing Account (idersiaba) e MMM Distribution Resources Plan Demonstration Balancing Account (DRPDBA) E (N) (Continued) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 3579-E Caroline Choi Date Filed Mar 24, 2017 Decision Senior Vice President Effective Apr 24, H8 Resolution