Proposed Decision on 2015 Energy Efficiency Programs Finally Arrives

On September 16, the CPUC issued the long-awaited Proposed Decision on the 2015 energy efficiency programs, an extension of the 2013-2104 "transition period."  The Proposed Decision:

• Authorizes funding for 2015. Funding is supposedly stable and based on the current annual expenditures.
• Names 2015 as "start" of Rolling Portfolio. This is potentially confusing for Program Administrators who might have an interest in revamping their energy efficiency offerings.
• Complains Program Administrators haven't spent budgets or met goals. This last point is interesting, because the applications for 2015 were submitted six months ago, before very much data about the current transition period was available. The Proposed Decision acknowledges this.

 The LGSEC will be submitting comments on the Proposed Decision on October 6, and possibly reply comments on October 13. If you would like to join the Energy Efficiency Policy Committee, which has the lead on this topic, please notify Jody London and Jenny Woods. The earliest the CPUC would vote on this is October 16.

CPUC Pushing Ahead with Distribution Resource Planning

In August the CPUC opened a new proceeding (R.14-08-013) to establish policies, procedures, and rules to guide the utilities in developing their Distribution Resources Plan proposals, a new requirement put in place with AB 327 (2013). The utilities are required to file these Distribution Resources Plans by July 1, 2015. Under AB 327, the Plans must:

• Examine locational benefits and costs of distribution system
• Identify standard tariffs, contracts, or other ways to deploy distributed resources
• Coordinate existing programs
• Figure out how much more money is needed
• Identify barriers to deployment of distributed resources

 The proceeding will consider providing guidance to the utilities for incorporating any additional spending necessary to integrate cost-effective distributed resources into their subsequent general rate case requests. CPUC Commission Florio said this proceeding is the "most important proceeding at this commission" over coming years.

The CPUC took initial comments on the new rulemaking last month, and held a workshop on September 17 to discuss how these distribution plans can and should be developed. Commissioner Picker, who is the lead Commissioner in this case, noted that this will be a fundamental revisioning of the electricity grid, with new roles. He wants to bring in new players and new thinking. He called for pilots that saturate a particular area, as a precursor to larger scaling of distribution resource planning.

The LGSEC is following this proceeding closely, and will be submitting Reply Comments on October 6 that call for utilities to be required to collaborate with local governments on any planning issues.

CPUC To Open New Proceeding on Integrated Demand Side Management

On October 2, the CPUC will consider a new rulemaking "to consider the development and adoption of a regulatory framework to provide policy consistency for the direction and review of demand side resource programs." The CPUC envisions this framework to be a unified mechanism to authorize and direct the investor-owned electric and gas utilities to achieve demand reduction and load shaping using integrated demand side management resources.

This proceeding will aim to create an overarching process to plan for and procure all demand-side resources and technologies in an integrated and coordinated manner. The draft Rulemaking posted for review notes the need for better coordination of electric vehicle, demand response, distributed generation, energy efficiency, distributed energy storage, marketing education and outreach, smart grid, rate design, and water-energy issues. The Rulemaking will consider how to best enable the utilities, other administrators, and electric market actors to offer a wide portfolio of demand modifying technologies that may be best tailored to the specific characteristics of individual customers. The proceeding will continue the established efforts to promote policy and program development to procure all available cost-effective demand reductions. It also will explore the current incentive structure for the management and shareholders of the electric and gas utilities to support demand reduction.

The draft Rulemaking notes the CPUC will seek coordination with State agencies including the CEC, the Air Board, the Independent System Operator. The Rulemaking also seeks active participation from local and regional governments.

It appears the proceeding will try to meld together demand side issues such as goals and potential, marketing and education, planning assumptions, EM&V, data collection and availability, shareholder incentives, and implementation plans. It also will coordinate with the Distribution Resources Plan rulemaking described above.

Opening comments will be due 30 days from the date the Rulemaking is issued, likely early November.

PG&E Gets Both Rate Increases and Fines; Heads Roll Over Improper Lobbying

It's been a tumultuous couple of months for PG&E, still trying to recover from the San Bruno gaspipeline blast in 2010. On August 14, the CPUC approved a revenue requirement increase in PG&E's general case of about $2.4 billion over three years (Decision 14-08-032 in A.12-11-009). This was the first general rate case for PG&E since the explosion, and is about $700 million less than PG&E had requested. The approved revenue increase is supposed to ensure maintenance, replacement, and improvements to the utility's infrastructure. In approving the Decision, Commissioners noted that these funds should be used to improve safety.

In a separate case, PG&E is requesting an increase in the revenue requirement for its gas transmission and storage system (A.13-12-012). The three-year cumulative request is for $2 billion. PG&E would use the increased revenue to replace old transmission pipelines, test pipelines for safety, and related work. This gas system increase is contested. The Utility Reform Network believes the general rate case increase and this gas system increase, if approved, would lead to a combined increase in residential bills of 30 percent in 2015. TURN wants PG&E shareholders to pay for the remedial pipeline work. Similarly, the Office of Ratepayer Advocates recommends about half of what PG&E requests. The CPUC is expected to issue a decision in March 2015.

On September 2, two Administrative Law Judges at the CPUC released a decision that fines PG&E $1.4 billion for the San Bruno explosion, the largest safety fine in CPUC history. All fines are paid by utility shareholders. Any party has 30 days to appeal the decision. PG&E also faces criminal indictments from the federal government over San Bruno.

On September 15, the headline about PG&E was that the utility had fired three executives from its regulatory group over improper lobbying at the CPUC. At the same time, the long-time chief of staff to CPUC President Michael Peevey resigned. The improper lobbying occurred in January, when PG&E contacted Peevey's office as well as Commissioner Florio to try to influence the assignment of an ALJ to the utility's gas transmission and storage rate proceeding (A.13-12-012). The Public Utilities Code, and CPUC rules, dictate that any concerns over assignment of ALJs must be made through formal pleadings, and no ex parte communication is allowed. In addition to the resignation of his chief of staff, Peevey has recused himself from the penalty phase of the San Bruno investigation.

The San Francisco Chronicle reported on September 20 that morale at the CPUC is very low. It reported on a staff meeting last week at which Commission employees called for Peevey's resignation. Peevey's term expires at the end of this year.

Parties Still Trying to Settle on San Onofre Costs

Earlier this year, utilities, ratepayer (TURN, Office of Ratepayer Advocates), union (Coalition of California Utility Employees), and environmental groups (Friends of the Earth) presented the CPUC with a settlement on the issue of who should pay for costs related to the shutdown of the San Onofre Nuclear Generating Station (I.12-10-013). Under the proposed settlement, ratepayers would cover about $3.3 billion, including various operations and replacement power expenses. Plant owners Southern California Edison and San Diego Gas & Electric would pay for a recent steam-generator project and other expenses.

Other groups not part of the settlement - the Alliance for Nuclear Responsibility, the Coalition to Decommission San Onofre, and Womens Energy Matters - have challenged it, saying it is too expensive and the CPUC should complete its ongoing investigation into the SONGS failure, and Edison's role.

On September 5, Commissioner Florio issued a ruling calling on the parties to modify the settlement and bring it back to the CPUC. Florio's Ruling says the proposed settlement disfavors consumers. The proposed settlement currently sets formulas for how recoveries from Mitsubishi and Nuclear Energy Insurance Limited would be shared between the utilities and consumers. The proposed formula favors utilities until they are made whole for the refunds to consumers of steam generator replacement-related costs. The newer ruling noted that the initial formula unfairly favored shareholders over consumers; the requested a modification that would direct all recoveries from Mitsubishi, a parts supplier to SONGS, be shared equally between consumers and the utilities. The settling parties were directed to come back to the CPUC with a revised settlement no later than September 19.

Utilities Ask Stakeholders Whether ReMAT Tariff Is Working As Expected

On August 29, the utilities announced the convening of a stakeholder meeting for interested parties of the Renewable Market Adjusting Feed-in Tariff ("ReMAT"). The ReMAT is a tariff for renewable projects up to 3 MW. It uses a series of "market based" prices to solicit resources, up to a legislatively mandated cap. The tariff went into effect last year. The CPUC, in Decision 12-05-035, required the utilities to convene stakeholders within the first year of the program to solicit market experience with the price adjustment mechanism.  The utilities jointly hosted a webinar on September 24. Each utility will post survey and webinar registration materials on their respective ReMAT webpages as they become available:

PG&E: www.pge.com/rfo/remat

SCE: www.sce.com/remat

SDG&E: www.sdge.com/regulatory-filing/654/feed-tariffs-small-renewable-generation

CalEPA and Air Board Take Cap and Trade Show on the Road

The California Air Resources Board on September 18 adopted guidelines to maximize the benefits to disadvantaged communities of investments from cap and trade revenues. Senate Bill 535 (De Leon, 2012) directs state and local agencies to make significant investments that improve California's most vulnerable communities. Those investment come from the proceeds of quarterly auctions held by the Air Resources Board under its Cap-and-Trade program. The State's portion of the proceeds are appropriated by the Legislature as part of the State's annual budget and are required to be used to further the regulatory purposes of Assembly Bill 32.

The State is using CalEnviroScreen, a tool that assesses all census tracts in the State to identify areas disproportionately affected by multiple types of pollution, and areas with vulnerable populations. This will help identify a specific list of disadvantaged communities for investment.  The CalEPA Secretary will adopt the final list of qualifying disadvantaged communities this month.

CalEPA and the Air Resources Board held public workshops in Oakland, Fresno, and Los Angeles at the end of August and early September to discuss investment of Cap-and-Trade auction proceeds.   Follow this proceeding here.

On September 5, 2014, San Diego Gas & Electric Company (SDG&E) issued its 2014  Request for Offers ("RFO") seeking eligible resources to meet its Local Capacity Requirements  ("LCR") established in Decision 14-03-004. SDG&E will solicit a total of up to 800 MW, including a minimum of 200 MW of preferred resources (energy efficiency, demand response, renewables, combined heat and power, distributed generation or energy storage), of which 25 MW must come from energy storage systems. 

SDG&E has separately filed an application for California Public Utilities Commission approval of a 600 MW bilateral contract with a conventional resource, the Carlsbad Energy Center (A.14-07-009).  If approved, 600 MW of SDG&E's need will be filled by this contract and SDG&E will be authorized to procure only 200 MW of preferred resources, including at least 25 MW of energy storage.  In this event, bidders shall be notified that 600 MW of the need for this solicitation has been filled.

Offers in response to the RFO are due on January 5, 2014, via the PowerAdvocate� online platform.  In order to submit a bid, applicants must register at www.poweradvocate.com.

Hawaii Initiates Energy Efficiency Auction

Hawaii Energy, the ratepayer-funded energy conservation and efficiency program for Hawaii, Honolulu, and Maui counties, is launching their state's first "Hawaii Energy Efficiency Auction." The auction is open to contractors, developers, energy efficiency solution providers, energy service companies, energy vendors, and property managers to submit qualified energy efficiency projects to compete for up to $2.1 million in incentive funds to offset project costs.

The Hawaii Energy Efficiency Auction is just one of many upcoming energy efficiency initiatives being developed under the Hawaii Public Utilities Commission's direction to help electric ratepayers maximize their energy savings. The goal of the auction is to identify and enable turnkey energy efficiency projects that provide the best value.

There are two project categories. Targeted projects will focus on specific target markets or specific technologies, such as residential solar thermal water heaters for multi-family homes, LED lighting, smart thermostats, occupancy sensors, and whole-home monitors and energy management systems. Innovative projects will represent new energy efficiency technologies not currently offered by Hawaii Energy.

The California Energy Efficiency Industry Council  will meet November 13, 2014 from 8:30 a.m. to 5:30 p.m. for its sixth annual conference, which will be held at the Hotel Shattuck in Berkeley, CA. This event marks the first year that the Council has invited colleagues from outside its council membership to participate in the full day event with insights into emerging trends in energy efficiency and demand response. Come take advantage of this exciting opportunity to network and engage with your peers and representatives from the clean energy industry, state regulatory agencies, utilities, and more.  Check www.efficiencycouncil.org for more information.

Take the California Water Challenge!

Next 10 recently released the California Water Challenge! With California in the midst of an exceptional drought, Next 10 felt that it was a critical time for engaged citizens to weigh in on the tough choices we will all face to meet our state's growing water demand. The California Water Challenge is meant to be a place to start engaging people interested in water policy.

Climate Registry Developing National Energy Efficiency Protocol

On September 22, the Climate Registry released its newest white paper, An Energy Efficiency Registry; a Flexible and Transparent way to Track and Report Energy Efficiency under the Clean Power Plan. The paper proposes a framework for tracking, managing and reporting the impacts of energy efficiency, which U.S. EPA identified as one of the building blocks that states can utilize to achieve their GHG reduction targets under the Clean Power Plan.

While many states are already implementing innovative energy efficiency strategies and programs, energy savings resulting from these measures are projected, estimated, reported, and audited using a wide range of approaches. This presents a challenge for federal regulatory compliance. The Climate Registry believes a flexible, nation-wide energy efficiency registry would:

• enable and expand programs that could be used for compliance with the CPP by increasing transparency and using a consistent framework to track and report projected and realized energy savings,
• enable broad analysis of the impacts of existing energy efficiency programs,
• identify new opportunities for energy savings,
• reduce risks that limit available project financing of energy efficiency projects,
• potentially serve as the foundation for an energy efficiency crediting platform.

Read the complete white paper here.