HomeMy WebLinkAbout2020-10-01; Clean Energy Alliance Operational, Administrative and Regulatory Affairs Update; Haber, JasonTo the members of the:
,o)IT'f COUNCIL
Date ~ CA ~ CC --1:_
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October 1, 2020
Council Memorandum
To: Honorable Mayor Hall an
From:
Via:
Jason Haber, lntergovernm,...1.1,; __ ,airs Director
Scott Chadwick, City Mana e
{city of
Carlsbad
Memo.ID# 2020208
Re: Clean Energy Alliance Oper onal, Administrative and Regulatory Affairs Update
This memorandum provides an update on the Clean Energy Alliance's operational, administrative
and regulatory affairs activities, as presented in the attached Sept. 17, 2020, Clean Energy
Alliance Staff Report. Among other things, the report provides an update on the Clean Energy
Alliance launch schedule, which anticipates beginning service to customers in a two-phased
approach; transitioning accounts from SDG&E to the Clean Energy Alliance in May and June 2021.
The report also addresses two ongoing proceedings at the California Public Utilities Commission
(CPUC) that have been discussed previously by the City Council, and which continue to present
elements of uncertainty as they relate to the Clean Energy Alliance's financial proforma. These
include the SDG&E PCIA (Power Charge Indifference Adjustment) Trigger Application
(establishing a schedule and methodology for SDG&E to recover $8.92 million in under-collected
2020 exit fees) and the SDG&E ERRA (Energy Resources Recovery Account) Forecast Proceeding
(setting SDG&E energy generatior:i rates and the PCIA for 2021). The CPUC is expected to issue
rulings on these proceedings in mid-December, at which time the Clean Energy Alliance will be
able to fully evaluate their impacts on the Alliance's community choice aggregation program.
The report also includes information regarding SDG&E's Arrearage Management Plan advice
letter, which presents for CPUC approval, SDG&E's debt forgiveness plan to protect SDG&E and
Clean Energy Alliance customers at risk of disconnection for failure to make payments during and
after the COVID-19 emergency.
Next Steps
The Clean Energy Alliance continuously monitors and reports monthly on operational,
administrative and regulatory affairs activities. City staff will update the City Council once the
anticipated CPUC rulings are incorporated into the Clean Energy Alliance's financial proforma.
Attachment
Clean Energy Alliance Operational, Administrative and Regulatory Affairs Update (Sept. 17, 2020)
cc: Geoff Patnoe, Assistant City Manager
Celia Brewer, City Attorney
City Manager's Office
Intergovernmental Affairs
1200 Carlsbad Village Dr. I Carlsbad, CA 92008 I 760-434-2820 t
Clean Energy Alliance
JOINT POWERS AUTHORITY
DATE:
TO:
FROM:
Staff Report
September 17, 2020
Clean Energy Alliance Board of Direc_tors
Barbara Boswell, Interim Chief Executive Officer
ITEM 2: Clean Energy Alliance Operational, Administrative and Regulatory Affairs Update
RECOMMENDATION:
1) Receive and File Community Choice Aggregation Update Report from Interim CEO.
2) Receive Community Choice Aggregation Regulatory Affairs Report from Special Counsel.
BACKGROUND AND DISCUSSION:
This report provides an update to the Clean Energy Alliance (CEA) Board regarding the status of the
operational, administrative and regulatory affairs activities.
OPERATIONAL UPDATE
CEA is meeting its milestones for the implementation of its community choice aggregation (CCA)
program and is on track to begin serving customers in May 2021/June 2021. (Attachment A -Clean
Energy Alliance Timeline of Implementation Action Items).
Interim Board Clerk Recruitment
CEA Launch Schedule
San Diego Gas & Electric (SDG&E) has been working over the past several years on their Customer
Information System replacement program, known as Envision. They had committed to, and were on
track, for a January 4, 2021 go live, despite the challenges of working remote in the COVID-19 ·
environment. With a January 2021 go live, SDG&E committed to supporting the CEA launch of May
2021. On Friday July 10, CEA staff, its regulatory attorney Ty Tosdal and data manager Calpine Energy
Solutions participated in a call with San Diego Community Power and SDG&E regarding the recently
approved California Public Utilities Commission (CPUC) Decision D. 20-06-003, which requires the
Investor Owned Utilities (IOU) to adopt rules and policy changes designed to reduce the number of
residential disconnections, provide assistance with debt forgiveness and offer extended payment plans.
The decision is required to be implemented by the IOUs April 2021. This timing has presented a
challenge to SDG&E to keep its go live date of January 4, 2021 while also meeting the requirements of
the decision. SDG&E submitted a letter to the CPUC requesting an extension to September 30, 2021 for
implementing the new procedures and policies required by the decision. This request was denied by the
CPUC, resulting in SDG&E postponing implementation of its Envision project to April 2021.
CEA and its consultants have been working diligently with SDG&E to develop a launch schedule that
minimized impact to CEA while also minimizing the risk of incorrect bills being sent to customers.
SDG&E has proposed a two-phased schedule with accounts transitioning to CEA in May and June 2021.
May 2021 Phase 1 would include the transition of Solana Energy Alliance customers to CEA as well as
customers who do not have complex billing plans in Carlsbad and Del Mar. Those customers who have
been identified with complex billing plans would transition in June 2021. CEA is working with its
Sept. 17, 2020 Item #2 Page 1 of 32
September 17, 2020
Operational & Regulatory
Update
Page 2 of 4
consultants, Pacific Energy Advisors and Calpine Energy Solutions to evaluate the impact of this two-
phased approach from an operational and financial perspective. Preliminary analysis indicates that the
proposed phasing does not have a material impact from a financial perspective. Staff anticipates
providing the Board with an updated proforma reflecting this new phased approach, as well as updated
rates related to the SDG&E ERRA Rate Proceeding at the November Board meeting.
Once the final launch schedule has been agreed to by both CEA and SDG&E several regulatory actions
would need to be taken, including providing proper notification to the CPUC Energy.
Expansion of Clean Energy Alliance
Staff has no update regarding CEA expansion.
Regulatory Compliance Filings
The Integrated Resource Plan (IRP) provides the CPUC with CEA's 10-year projected electricity load as
part of the integrated resource planning process to ensure that California's electric sector meets its GHG
reduction goals while maintaining reliability at the lowest possible costs. Although the IRP was originally
due in April 2020, its due date has been extended to September 2020. The IRP was submitted
September 1, 2020.
Long-Term Renewable Procurement
As a load serving entity, CEA will be required to procure 65% of its minimum state required renewable
portfolio standards in contracts of 10-years or longer. To ensure compliance with this requirement,
CEA's initial renewable energy solicitation is underway. The solicitation process, from beginning through
final execution can be lengthy, particularly in light of the impacts of COVID-19 on the renewable
development industry. The solicitation opened on July 1, 2020 with proposals due July 27, 2020. CEA's
consultant, Pacific Energy Advisors, has been evaluating the responses to identify a short list of projects
to move forward with negotiations. It is anticipated final contracts will be before the Board in late
_2020/early 2021.
Administrative and Operational Policies
During the coming months as CEA prepares for its implementation and operation, policies will be
brought to the Board for consideration in future Board meetings. The policies as proposed will be based
on Government Code or regulatory requirements and best practices of successfully operational CCAs.
/ The policies and timeline as currently anticipated are:
October 15 Board Meeting
• Energy Risk Management Policy Introduction
• Records Retention Policy
November 19 Board Meeting
• Energy Risk Management Policy Approval
January 21 Board Meeting
• Investment Policy
Sept. 17, 2020 Item #2 Page 2 of 32
Contracts $50,000 -$100,000 entered into by Interim Chief Executive Officer
VENDOR DESCRIPTION
Tripepi Smith Communications and Marketing Services
REGULATORY UPDATE
September 17, 2020
Operational & Regulatory
Update
Page 3 of 4
AMOUNT
$92,238.00
Attached is a regulatory report from Ty Tosdal, Special Counsel, providing a summary of key regulatory
proceedings (Attachment B -Tosdal APC Energy Regulatory Update).
FISCAL IMPACT
There is no fiscal impact by this action.
ATTACHMENTS:
Attachment A -Clean Energy Alliance Timeline of Implementation Action Items
Attachment B -Tosdal APC Regulatory Update Report
Sept. 17, 2020 Item #2 Page 3 of 32
Timing
9/1/20
9/17/20
9/17/20
9/17/20
11/1/20
11/1/20
11/19/20
1/1/21
1/21/21
2/1/21
3/1/21
5/1/21
Attachment A
aean Energy Alliance
Tlmellne of Action Items
CCA. Program Related
Description
Marketing/Customer Outreach Plan Development & Kickoff
Records Retention Policy
Bid Evaluation and Criteria Scoring System
Award Scheduling Coordinator Services
Introduce/Adopt Energy Risk Management Policy
System Testing with SDG&E
Set up Call O?nter/Scripting/lVR Recordings
CEA Default Products/programs/renewable energy policies
Create Customer Pre-and Post-Enrollment Notices
Investment Policy
Rate Setting
Customer Noticing
Launch-2 phases May & June 2021
Key:
Board Actions/ Activity
Staff/Consultant Activity
Marketing/Customer Outreach
CCA Launch
/
3rdQtr
'20
10/15 &
11/19
Sept. 17, 2020
4thQtr
'20
lstQtr
'21
September 17, 2020
Operational & Regulatory
Update
Page 4 of 4
Apr-21 May-21 Jun-21 Jul-21
Item #2 Page 4 of 32
Attachment B
ENERGY REGULATORY UPDATE
To: Barbara Boswell, CEO, Clean Energy Alliance
From: Ty Tosdal, Regulatory Counsel, Tosdal APC
Re: Energy Regulatory Update
Date: September 11, 2020
T SDAL
ENERGY & ENVIRONMENTAL LAW
The energy regulatory update summarizes important decisions, orders, notices and
other developments that have occurred at the California Public Utilities Commission
("Commission") and that may affect Clean Energy Alliance ("CEA"). The summary presented
here describes high priority developments and is not an exhaustive list of the regulatory
proceedings that are currently being monitored or the subject of active engagement by CEA. In
addition to the proceedings discussed below, Tosdal APC monitors a number of other regulatory
proceedings as well as related activity by San Diego Gas & Electric ("SDG&E") and other
Investor-Owned Utilities ("IOUs").
1. SDG&E Advice Letter 3602-E_2902-G (Arrearage Management Plan)
SDG&E issued Advice Letter ("AL") 3602-E_2902-G on September 9, 2020, and it
provides a detailed description of an Arrearage Management Plan ("AMP") that is designed to
protect customers at risk of disconnection for failure to make payments. IOUs are required to
adopt an AMP plan as a result of the disconnections decision that the Commission adopted
earlier this year, D. 20-06-003. CalCCA and several individual CCA programs were involved in a
workshop and negotiations with the IOUs regarding implementation prior to the issuance of the
advice letter.
SDG&E plans to track and recover all customer debt forgiven through the AMP
program-including CCA customer debt related to commodity costs-and recover that debt on
behalf of both the IOUs and the CCAs through the utilities' Public Purpose Program ("PPP")
charge. This will include all debt forgiven through the AMP Plan for both bundled and unbundled
customers, including CCA commodity-related debt forgiven. Notably, the collection and
allocation payment method will apply only to CARE/FERA customers through the AMP program.
As a result, SDG&E's Rule 27 will remain unchanged and at the conclusion of the COVID-19
measures in April 2021, SDG&E will continue to follow the payment allocation method outlined
in Rule 27.-
Please note that forgiveness of debt or arrearages for CCA customers will require
that a CCA program notify the utility and participate in the AMP program. For unbundled
customers to have CCA charges forgiven in the AMP Plan, the CCA must elect to participate in
the AMP Plan. If the CCA does not elect to participate, SDG&E may only forgive the utility
1
Sept. 17, 2020 Item #2 Page 5 of 32
T SDAL
ENERGY & ENVIRONMENTAL LAW
charges through its AMP. Therefore, SDG&E requests that participating CCAs provide SDG&E
reasonable notice that the CCA is electing to participate in the AMP.
Pursuant to direction from the Energy Division that the AMP program be implemented
before April 2021, SDG&E is proposing to implement its AMP program within 90 days of the
Energy Division's letter, dated August 13, 2020, or no later than November 11, 2020, or within
45 days after approval of the advice letter, which could be November 12, 2020 at the earliest.
Protests are due within 20 days of the advice letter being issued or no later than
September 29, 2020. ·
2. SDG&E PCIA Trigger Application (A.20-07-009)
The Commission held a Prehearing Conference ("PHC") on August 27, 2020, where the
relevant issues and schedule for the proceeding were discussed, as well as a motion to compel
production of confidential documents. Given the current status of the proceeding, it is possible
but unlikely that the $8.92 million balance in the PCIA trigger account will be collected this year,
and more likely that it will be amortized over a longer period of time. A longer amortization
schedule will reduce monthly rate shock by spreading recovery of the balance over a longer
period of time. The next steps in the proceeding are the issuance of a scoping memo and a
ruling on the motion.
Related, at a recent Public Utilities Commission meeting, Commissioner Guzman
Aceves mentioned that the PCIA cap and trigger mechanism that is currently in place
may need to be revisited. No decision initiating a new proceeding or other action has been
taken. IOU representatives have also made suggestions at various times to eliminate the cap
and trigger mechanism. The proposed change would have major implications for CEA and
other CCA programs. Further analysis and review are necessary to determine the impacts.
3. SDG&E ERRA Forecast Proceeding (A.20-04-014)
CEA's counsel on the SDG&E ERRA Forecast have been working diligently to enter
documents into the record regarding SDG&E's accounting, rate methodologies and related
matters. The consultant, NewGen Strategies, has been contributing significantly to the effort.
The next major step in the proceeding is briefing, and briefs are due on September 25, 2020.
2
Sept. 17, 2020 Item #2 Page 6 of 32