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HomeMy WebLinkAbout2022-01-27; Clean Energy Alliance JPA; ; Clean Energy Alliance Operational, Administrative and Regulatory Affairs Update~ CLEAN ENERGY ALLIANCE Staff Report DATE: January 27, 2022 TO: FROM: Clean Energy Alliance Board of Directors Barbara Boswell, Chief Executive Officer ITEM4: Clean Energy Alliance Operational, Administrative and Regulatory Affairs Update RECOMMENDATION 1) Receive and File Operational and Administrative Update Report from Chief Executive Officer. 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 operational, administrative, and regulatory affairs activities. OPERATIONAL UPDATE Expansion of Clean Energy Alliance The cities of Oceanside, Vista, and San Clemente have expressed interest in joining CEA with a 2024 service launch. The assessment reports related to the service expansion to these cities will be prepared in t he spring of 2022. Assuming the results of the assessment report is favorable, CEA would anticipate the cities considering resolutions to join CEA and ordinances to establish a Community Choice Aggregation in early summer 2022. Call Center Activity The chart below reflects call activity to CEA's call center through December 31, 2021: 1,200 1,000 800 600 •oo 200 Ca lls t o Call Center January 27, 2022 Admin & Regulatory Update Page 2 of5 Calls to the call center have leveled off at an average 200 calls per month with the most common topic being billing inquiries. " 30 " 20 IS 10 Mtr-21 Apr-21 May-21 Call Center Avg Seconds to Answer Avg Call Duration Jun-21 sep-n -AN"& S.cords to ..4nswer -Ava cau 0ur1t1cn January 27, 2022 Admin & Regulatory Update Page 3 of5 Oct-21 Oec.-21 Calls are being answered within 15 seconds on average, with an average duration of approximately 10 minutes. The chart below reflects the monthly arid cumulative opt-outs for CEA. 5,000 4,000 ),000 1.000 UXI0 I Mar•21 t.pr-21 Mtr·:U •1,000 Opt-Out Stats I I Jun-11 Jul•H A1Ji·'1 S,tp,-11 -Monthly Opt-0..t Stats -CUmlJat1'1'~ Opt-oils January 27, 2022 Admin & Regulatory Update Page 4 of5 --Oct.·21 N0Y•71 oc-n CEA realized a net increase in enrollments in December with an increase of 91 service accounts and overall participation rate of 92.01%. Green Impact enrollments continue to increase, with 370 customers enrolled. Customers also have the option to opt down to Clean Impact, of which 110 have selected. Resource Adequacy Compliance As a load serving entity serving customers in 2021, CEA has an obligation to procure Resource Adequacy (RA), based on quantities allocated by CPUC and California Independent System Operator (CAISO). RA procurements do not supply any energy to CEA or its customers, rather it commits the seller to be available to supply energy to the grid if called upon by the CAISO and reduce the possibility of outages. This process is key to ensuring grid reliability. CEA successfully procured all its 2021-2023 RA requirements and is fully compliant with its RA obligation. CEA has met its 2022-2024 RA obligations, which were required to be completed by October 2021. Contracts $50,000 -$100,000 entered into by Chief Executive Officer I VENDOR None I DESCRIPTION I AMOUNT REGULATORY UPDATE January 27, 2022 Admin & Regu latory Update Page 5 of5 CEA's regulatory attorney, Ty Tosdal, will provide an update to the Board on current regulatory activities (Attachment A). FISCAL IMPACT There is no fiscal impact by this action. ATTACHMENTS Attachment A-Tosdal APC Regulatory Update Report Clean Energy Alliance Board Update January 27, 2022 T n SDAL ENERGY & ENVIRONMENTAL LAW Item 4 Attachment Overview • Update on NEM 3.0 Proceeding (R. 20-08-020) • Emergency Load Reduction Program (R. 20-11-003) • SDG&E Rate Applications • TOU-ELEC (A. 21-09-001 ) • Real Time Pricing Pilot (A. 21-12-006) • Update on NEM 3.0 Proceeding • NEM 3.0 Decision will be delayed and does not appear on CPUC agenda for January 27, 2022. Final decision date remains to be determined. • Governor Newsom reported to state that "We still have some work to do" on the proposed decision. • Oral arguments have been canceled and have not been rescheduled. • CEA submitted a letter to CPUC President Reynolds and Commissioners regarding changes. See attached. • Emergency Load Reduction Program • Emergency Load Reduction Program ("ELRP") is designed to provide compensation to customers for reducing energy consumption or increasing electricity supply during critical periods of grid usage. • Compensation for most customers set at $2/KWH and paid for reduction of use during evening hours, 4 to 9 pm. • D. 21-12-015 expanded eligibility requirements to include unbundled and bundled residential customers and other customer groups. • CEA plans to notify SDG&E and participate in the ELRP program. • SDG&E TOU-ELEC • SDG&E filed an application for an untiered time-of-use rate designed to promote electrification. • To be eligible, customers must possess (1) an electric vehicle, (2) battery or (3) heat pump for water heating or climate control. • Proposed rate includes a fixed charge. • SDG&E proposes to make rate available to CCA customers. • CEA and SDCP have filed a response and are participating in the proceeding . • SDG&E Real Time Pricing Pilot • SDG&E filed an application for a Real Time Pricing ("RTP") pilot program. • Generation costs set at CAISO day ahead price, plus adders. • SDG&E proposes to make rate available to CCA customers. • Costs to be recovered in distribution rates, raising issues related to cross-subsidization. • CEA and SDCP have filed a response and are participating in the proceeding. • CLEAN ENERGY ALLIANCE January 19, 2022 President Alice Reynolds California Public Utilities Commission 505 Van Ness Avenue San Francisco, CA 94102 RE: PROPOSED DECISION IN NET ENERGY METERING RULEMAKING (R. 20-08-020) Dear President Reynolds, Clean Energy Alliance ("CEA") submits this letter to express serious concerns with the Proposed Decision, issued on December 13, 2021, in the Net Energy Metering ("NEM") proceeding, Rulemaking ("R.") 20-08-020.1 The solar and storage industry has grown tremendously over the years, such that it now plays a critical role in developing and expanding the supply of renewable energy. Unfortunately, the Proposed Decision eliminates long-standing incentives for customer generators, penalizes them for the size of their solar systems and upends the economics of rooftop solar. Adopting the Proposed Decision in its current form would result in widespread negative impacts on the solar industry. CEA recognizes that the Proposed Decision addresses important equity concerns raised by the Investor-Owned Utilities ("IOUs") and other parties, and supports exemptions from certain charges and beneficial rate components designed for low-income customers. However, the Proposed Decision would render the NEM rate design entirely unrecognizable to existing NEM customers and customers who have done their research and are planning to install solar on their homes and businesses in the near future. Meanwhile, new NEM customers would face a dramatically altered economic landscape that fails to recognize the value of their contribution to renewable generation. The Proposed Decision does away with the rate structure that has been in place for rooftop solar owners for years and replaces it with a rate structure that penalizes them for generating energy and reducing their use of energy from the grid. Under the Proposed Decision, compensation for net surplus energy is set by an Avoided Cost Calculator rather than set at the retail rate, resulting in a substantial reduction in the amount that rooftop solar owners will be credited for power they supply to the grid. Furthermore, the Grid Participation Charge of $8/KW per month is excessive and should be reduced, restructured or eliminated for storage owners who provide grid benefits. Grandfathering and restrictions on TOU periods should also be made less restrictive in the interest of fairness and customer choice. In addition, the Market Transition Credit should be increased and extended to prevent rate shocks. CEA respectfully urges the Commission to amend the Proposed Decision to address these specific problems, which are discussed in more detail below. 1 Order Instituting Rulemaking to Revisit Net Energy Metering Tariffs Pursuant to Decision 16-01-044, and to Address Other Issues Related to Net Energy Metering, Rulemaking 20-08-020, filed August 27, 2020. 1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2808 thecleanenergyalliance.org 2 Background CEA is a Joint Powers Authority ("JPA") that was established in 2019 to operate a community choice aggregation program ("CCA") to serve customers in the City of Carlsbad, the City of Solana Beach, and the City of Del Mar, all located in San Diego County. CEA's primary objectives in implementing this program are to procure an electric supply portfolio with higher renewable content than the incumbent utility, San Diego Gas & Electric Company ("SDG&E"), to provide cost competitive electric services when compared to SDG&E, to gain local control in rate setting to provide long-term rate stability for residents and businesses, and to meet climate action plan goals of the member cities. CEA submitted its Implementation Plan in December 2019 and intends began serving customer load earlier this year. Two new cities, San Marcos and Escondido, have recently joined CEA and customers in those jurisdictions will be enrolled in 2023.2 Grid Participation Charge The Proposed Decision adopts a fixed Grid Participation Charge of $8/KW per month for residential customers.3 By most accounts, the average residential solar system in California is approximately 6 KW, so rooftop solar customers would pay an additional $48 per month on average to access the grid. This is a substantial new charge that rooftop solar owners will be required to pay each month going forward. It is noteworthy that the Grid Participation Charge is not based on the amount of energy produced or used, unlike many other charges that make up a customer's bill, but is instead a flat fee that is determined based on the size of the solar system. The larger the system, the higher the fee. While the Proposed Decision exempts low-income customers from the fee, the fact that the fee remains fixed and cannot be mitigated will provide a strong disincentive to prospective NEM customers. While low-income customers have been exempted from the Grid Participation Charge, other customers will now face a monthly penalty for installing solar and storage, and the result is likely to be a steep reduction in rooftop solar and storage installations. CEA cannot support the Grid Participation Charge in its current form. The charge should be reduced, restructured or eliminated for customers installing storage in order to avoid adverse effects. Market Transition Credit The Proposed Decision adopts a Market Transition Credit ("MTC") between $0 and $5.25/KW depending on IOU territory and customer group. When eligible customers begin receiving the MTC, the amount steps down 25% each year, ultimately reaching zero after year four. While the MTC does provide a transition of sorts, given the deep cuts to net surplus compensation, it is not set at an amount that is high enough and does not last long enough to prevent severe rate shocks or maintain strong incentives for adoption of rooftop solar and 2 Clean Energy Alliance, Addendum No.1 to the Community Choice Aggregation Implementation Plan and Statement of Intent to Address Expansion to the Cities of Escondido and San Marcos, December 30, 2021 . 3 Proposed Decision at 127. 3 storage. The MTC should be set at a higher rate and be extended for a longer duration in order to prevent solar and storage customers from experiencing major fluctuations in their rates. Grandfathering The previous NEM decision, D. 16-01-044, issued in 2016 and commonly referred to as NEM 2.0, permitted then existing NEM 1.0 customers to maintain service for 20 years after interconnection. By contrast, the Proposed Decision requires existing NEM 1.0 and 2.0 customers to transition to NEM 3.0 no more than 15 years after interconnection. All other customers must begin service on NEM 3.0 effective 120 days after a final decision. For NEM 1.0 and 2.0 customers who installed solar and storage systems 10 to 15 years ago, transitioning to NEM 3.0 will come as a great shock. Radically changing the costs of customers who invested in rooftop solar and storage with the expectation that rate structures would remain in place is simply unfair. NEM 1.0 and 2.0 customers should be permitted to maintain a 20-year period of rate stability instead of being forced into NEM 3.0. TOU Rate Schedules The previous NEM decision, D. 16-01-044 referred to as NEM 2.0, required that NEM customers be on a Time-of-Use ("TOU") rate schedule but permitted customers to elect the specific TOU schedule. The Proposed Decision, however, restricts NEM customers to a single TOU period per IOU, restricting customer choice. While there is five-year legacy period for TOU rates, that legacy period would only be available to NEM 1.0 and 2.0 customers, while new NEM 3.0 customers will have no choice in the matter. Related, the NEM 3.0 decision authorizes IOUs to propose other eligible rate schedules and make changes to the TOU rate schedules through Tier 3 Advice Letter. The rate schedule may not be properly noticed to all affected parties or fully vetted through that process, so a formal application or other process may be required. At a minimum, the TOU rate schedule restriction should be relaxed for reasons of customer choice and to avoid uncertainty regarding later changes. NEM 3.0 customers should be able to elect their preferred TOU rate schedule. Concluslon CEA understands that the Commission has many viewpoints to consider and competing interests to balance. The organization has reviewed the Proposed Decision, given it careful thought, and directed these comments toward issues that could be addressed with the remaining time available before a final decision is reached. CEA respectfully asks that its concerns on the Proposed Decision be heard and taken into consideration. Barbara Boswell, CEO Clean Energy Alliance 1200 Carlsbad Village Drive Carlsbad, CA 92008 Copy: Commissioner Clifford Rechtschaffen Commissioner Darcie Houck Commissioner Genevieve Shiroma Commissioner John Reynolds Service List R. 20-08-020 4