HomeMy WebLinkAbout2020-12-17; Clean Energy Alliance JPA; ; Clean Energy Alliance Operational, Administrative and Regulatory Affairs UpdateClean Energy Alliance
JOINT POWERS AUTHORITY
Staff Report
DATE: December 17, 2020
TO: Clean Energy Alliance Board of Directors
FROM: Barbara Boswell, Interim Chief Executive Officer
ITEM 5: 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).
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. The
postponement of the Envision go live date impacts CEA's implementation.
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 and CEA have agreed to a two-phased schedule with accounts transitioning to CEA in May and
June 2021, and the Board authorized the Interim Chief Executive Officer to enter into a letter agreement
with SDG&E memorializing the phased approach. The May 2021 Phase 1 would include the transition of
Solana Energy Alliance customers to CEA as well as customers in Carlsbad and Del Mar who do not have
complex billing plans. Those customers who have been identified with complex billing plans would
December 17, 2020
Operational & Regulatory
Update
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transition in June 2021. Staff continues to work with Ca[pine and SDG&E to fine tune the customer list
for each phase.
CEA Communications and Marketing Update
Work continues on CEA's communications and marketing initiatives. The updated website went live on
December 1, 2020. Next deliverables include Brand Standards (letterhead, email signatures, etc.);
establishing social media presence; creation of communications tools (FAC1s, information sheets); and
development of customer notices.
Community Advisory Committee
The first meeting of the CEA Community Advisory Committee took place on December 3. Alternate
Board Member Dwight Worden was ratified as CAC Chair, pursuant to Board identification that the
Board Alternate appointment would serve as CAC Chair, and Dr. Don Mosier was elected Vice Chair. The
CAC is very enthused and look forward to working on programs to support CEA's success.
Expansion of Clean Energy Alliance
CEA staff was contacted by City of Oceanside staff for an update on how CEA is doing with its
implementation efforts. An updated was provided as well as an offer to set up a call to further discuss
Oceanside's interest in CEA.
Discussions with Key Potential CEA Customers
Staff has continued its discussions with San Diego County Water Agency (SDCWA) regarding Clean
Energy Alliance and implications to SDCWA of its electric accounts within CEA territory becoming
customers. SDCWA staff anticipates a SDCWA Board discussion regarding CCA at an upcoming Board
meeting. CEA staff has also had discussions with Walmart regarding CEA and its products and services as
compared to SDG&E.
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 RA requirements and is
fully compliant with its RA obligation.
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 identified a short list of projects and negotiations are
proceeding. It is anticipated final contracts will be before the Board in first quarter 2021.
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Operational & Regulatory
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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:
January 21 Board Meeting
•Investment Policy
•Social Media Policy
Contracts $50,000 - $100,000 entered into by Interim Chief Executive Officer
VENDOR
DESCRIPTION AMOUNT
None
REGULATORY UPDATE
See the attached regulatory report (Attachment B) from Tosdal APC for updates on the following:
SDG&E ERRA Forecast Proceeding (A.20-04-014)
Annual proceeding in which SDG&E sets its energy generation and Power Charge Indifference
Adjustment rates for the coming year.
San Diego Gas & Electric Advice Letter 3257-E, Regarding CCA Financial Security Requirement (R.03-10-
003)
CEA has executed a letter of credit and has filed the required advice letter in compliance with the new
Financial Security Requirement. Included in the advice letter is the request for CPUC to refund the
originally posted $100,000. CEA has protested the updated FSR calculation filed by SDG&E that resulted
in an incorrect increased FSR for CEA.
San Diego Gas & Electric PCIA Trigger Application (A.20-07-009)
SDG&E's application in which it proposed to recover $8.92M Power Charge Indifference Adjustment
(PCIA) undercollection through PCIA rates to CCA and Direct Access customers and simultaneously
refund that amount to bundled customers over a 6-month amortization period beginning January 1,
2021.
FISCAL IMPACT
There is no fiscal impact by this action.
ATTACHMENTS
Attachment A - Clean Energy Alliance Timeline of Implementation Action Item
Attachment B —Tosdal APC Regulatory Update Report
December 17, 2020
Operational 84. Regulatory
Update
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Attachment A
Clean Energy Alliance
Timeline a action Items
CM Program Related
Timing Destripdon Status
3rd Cbr
70
4th Ce.:r
20
1st MT
71 Apr-21 May-21 Jun-21 Jul-21
9/1/20 Marketing/Customer Outreach Plan Development & Kickoff
Complete
9/17/20 Bid Evaluation and Criteria Scoring System
9/17/20 Award Scheduling Coordinator Services Complete
11/19/20 Introduce/Adopt Energy Risk Management Policy Complete
10/15
&
11/19
10/15/20 Records Retention Policy Complete
System Testing with SDe&E
Set up Call Center/Scripting/IVR Recordings
12/17/20 Credit Solution
12/17/20 (IA Default Products/programs/renewable energy policies
1/1/21 Create Customer Pre- and Post-Enrollment Notices
1/21/21 Policies - Investment &Social Media
2/1/21 Rate Setting
3/1/21 Customer Noticing
5/1/21 Launch - 2 phases May &June 2021
Key:
Board Actions/Activity
Staff/Consultant Activity
Marketing/Customer Outreach
CCA Launch
Attachment B T SDAL
ENERGY & ENVIRONMENTAL LAW
ENERGY REGULATORY UPDATE
To: Barbara Boswell, Interim CEO, Clean Energy Alliance
From: Ty Tosdal, Regulatory Counsel, Tosdal APC
Re: Energy Regulatory Update
Date: December 11, 2020
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 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"). Relevant documents discussed below may be accessed via this Dropbox link.
1. SDG&E ERRA Forecast Application (A. 20-04-014)
Following briefing and ex parte meetings requested by CEA and other local CCA
programs, the Commission issued a Proposed Decision that directs SDG&E to update its billing
determinants using the methodology put forward by CEA and SDCP and agrees with the CCAs
that SDG&E failed to support its position that it is required to rely on an outdated sales forecast
that will result in inaccurate rates. The Proposed Decision states that adoption of an updated
sales forecast would lead to a 2.06 percent reduction in class average rates, rather than a 12.35
percent reduction in rates under SDG&E's original proposal. The Proposed Decision also
agrees with CEA and SDCP that SDG&E should routinely provide greater data transparency
and directs SDG&E to provide more detailed information in monthly ERRA reports and in
testimony supporting future ERRA Applications. The Commission declined to address issues
surrounding the CAPBA balance refund and how the CAPBA adder will be apportioned to
certain vintages. The Proposed Decision states these issues are more suitably addressed in
other proceedings.
Special counsel for CEA and SDCP submitted comments supporting the Proposed
Decision's position on the billing determinants and data transparency issues and requesting the
Commission to reconsider the CAPBA refund in this proceeding. SDG&E also submitted
comments on the PD in which it largely reiterated its position on the billing determinants issue
without providing any additional legal justification or proposed alternatives. SDG&E also states
that updating its billing determinants would be difficult and time-consuming to develop and
adoption of the PD would lead to rate volatility. Additionally, Cal Advocates submitted
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comments in support of SDG&E's position that billing determinants cannot be updated with a
more accurate sales forecast. Counsel for SDCP and CEA is currently preparing Reply
Comments on the PD due to be filed December 11. SDG&E's Application scheduled to be heard
and decided at the Commission's meeting on December 17, 2020.
2.Financial Security Requirements (FSR) for CCAs (R. 03-10-003)
Clean Energy Alliance submitted a protest to CPUC Energy Division Director Edward
Randolph on November 30, 2020, pointing out that SDG&E's FSR calculation applied costs but
not revenue for certain procurement costs during months that CEA was operational and failed to
reflect mutually agreed upon adjustments meant to accommodate SDG&E. These errors result
in an FSR amount that significantly exceeds potential reentry fees in violation of D. 18-05-022.
SDG&E's response acknowledged some of the issues raised, but stated that it had followed the
prescribed methodology for calculating the FSR amount.
CEA also sent a letter to CPUC Acting Executive Director Rachel Peterson requesting
an extension of time to comply with Resolution E-5059 to allow for settlement of disputes
surrounding SDG&E's calculation of CEA's FSR amount and requesting clarification regarding
conflicting FSR due date language between Resolution 5059-E and SDG&E AL 3646. Director
Peterson has granted CEA an extension of time to comply Resolution E-5059 until 30 days after
the Commission approves a FSR calculation submitted by SDG&E. The issues around the
advice letter may be able to be resolved following additional discussions with the Energy
Division.
Finally, CEA submitted Advice Letter 20-1 CCA Financial Security Requirement
Instrument, in compliance with Resolution 5059-E, on December 8, 2020 which includes CEA's
Pro Forma Letter of Credit. As directed in D. 18-05-022, CEA's Advice Letter 20-1 also requests
the return of CEA's initial bond of $100,000 from SDG&E.
3.SDG&E PCIA Trigger Application (A. 20-07-009)
Following the issuance of the Proposed Decision, The San Diego CCAs, CalCCA, and
SDG&E entered a Joint Stipulation by which SDG&E agrees to propose to recover the CAPBA
undercollection over a 36-month amortization period beginning January 1, 2021 and ending
December 31, 2023. This extended amortization period will reduce the PCIA rate increase from
roughly $7.50 per month to $2.54 per month. SDG&E also agreed as part of the stipulation to
clarify that it will not recover the CAPBA balance from customers in PCIA vintage 2020 who will
be departing for CCA service in 2021. Finally, if the PCIA Trigger is reached in 2021, SDG&E
agrees to propose a 12-month amortization period in its recovery application. In exchange, the
San Diego CCAs and CalCCA agreed to affirmatively support the termination of the PCIA cap-
and-trigger in a joint petition for modification of D. 18-10-019 in early 2021.
Counsel for CEA, SDCP, and SEA filed Joint Opening Comments on the Proposed
Decision in which the CCAs support a 36-month amortization period and request the PD be
modified to clarify that the CAPBA balance cannot not be recovered from customers in PCIA
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vintage 2020. The Joint Opening Comments also urge the Commission to consider addressing
the CAPBA refund in this proceeding to ensure that bundled customers who depart for CCA
service in 2021 will receive their full refund.
Counsel for CEA, SDCP, and SEA also filed Joint Reply Comments on the Proposed
Decision reiterating its support for a 36-month amortization period and supporting SDG&E's
request for PD clarification that SDG&E may recover the balance by an amount less than
1.90/kWh. This revision would provide SDG&E with the ability to implement a reduced rate
increase over a longer amortization period. SDG&E's Application is scheduled to be heard and
decided at the Commission's meeting on December 17, 2020.
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