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ADVICE LETTER (AL) EXTENSION NOTICE
ENERGY DIVISION
Utility Name: Southern California Edison
Utility Number/Type: U 338-E
Advice Letter Number(s): 4060-E
Date AL(s) Filed: August 22, 2019
Utility Contact Person: Gary A. Stern
Utility Phone No.: (626) 302-9645
Date Utility Notified: September 23, 2019
[x] E-Mailed to: [email protected]
ED Staff Contact: David Duperrault
ED Staff Email: [email protected]
ED Staff Phone No.: (415) 723-5484
[X] INITIAL EXTENSION (up to 120 DAYS from the expiration of the initial review period)
This is to notify that review of the above-indicated AL is extended for up to 120 days beginning
September 23, 2019 for the following reason(s) below. If the AL requires a Commission resolution and
the Commission’s deliberation on the resolution prepared by Energy Division extends beyond the
expiration of the initial extension period, the advice letter will be automatically extended for up to 180
days beyond the initial period.
[ X] A Commission Resolution is Required to Dispose of the Advice Letter
[ ] Advice Letter Requests a Commission Order
[X] Advice Letter Requires Staff Review
The expected duration of initial extension period is 120 days
[ ] FURTHER EXTENSION (up to 180 DAYS beyond initial extension period)
The AL requires a Commission resolution and the Commission’s deliberation on the resolution
prepared by Energy Division has extended beyond the expiration of the initial extension period. The
advice letter is extended for up to 180 days beyond the initial extension period.
_____________________________________________
If you have any questions regarding this matter, please contact David Duperrault at
cc:
EDTariffUnit
Ted Bardacke, Executive Director
Clean Power Alliance
P.O. Box 800 8631 Rush Street Rosemead, California 91770 (626) 302-9645 Fax (626) 302-6396
Gary A. Stern, Ph.D. Managing Director, State Regulatory Operations
August 22, 2019
ADVICE 4060-E (U 338-E)
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION
SUBJECT: Agreement Between Southern California Edison Company and Clean Power Alliance Regarding CPA Implementation and Resource Adequacy Compliance for the 2020 Westlake Village Phase
PURPOSE
Pursuant to General Order (G.O.) 96-B, Rule 9.2.3, Southern California Edison Company (SCE) and Clean Power Alliance (CPA) hereby jointly submit this Tier 3 advice letter requesting approval of the Agreement Between Southern California Edison Company and Clean Power Alliance Regarding CPA Implementation and Resource Adequacy Compliance for the 2020 Westlake Village Phase, dated August 16, 2019 (the “CPA – SCE 2020 RA Agreement”), a copy of which is attached hereto as Exhibit A. For reasons discussed below, the Agreement is reasonable and should be approved.
This advice letter also requests an exemption from the 2019 Final Resource Adequacy (RA) Guide rules that require SCE and CPA to each submit annual and monthly forecasts and month-ahead compliance filings that account for the load migrating to CPA in 2020, so that SCE can be responsible for meeting and reporting on RA compliance on behalf of CPA for its 2020 Westlake Village Phase (also referred to as CPA Phase 5), per the Agreement.
Consistent with G.O. 96-B, General Rule 9.2.3, this advice letter, and the CPA – SCE 2020 RA Agreement, shall be effective upon the submittal of this advice letter, and subject to final disposition by the Commission.1
1 General Rule 9.2.3 (Service to Government Agency) provides, “At all times, a utility other
than a telephone corporation may provide service (other than resale service) to a government agency . . . under terms and conditions otherwise deviating from its tariffs then in effect. The utility may begin such service without prior Commission approval, but the
ADVICE 4060-E (U 338-E) - 2 - August 22, 2019
BACKGROUND
Assembly Bill 117 (2002) authorized the creation of Community Choice Aggregators (CCAs) (codified in Public Utilities Code Section 366.2). In addition to providing broad requirements for the implementation of a CCA program, Section 366.2(c)(8) established the authority of the Commission to designate when a CCA may begin providing service.
On February 8, 2018, the Commission adopted Resolution E-4907, Registration Process for Community Choice Aggregators, which further implements AB 117 by establishing a process to ensure that newly launched and expanding CCAs comply with the California Public Utilities Commission’s (Commission’s) statutory year ahead RA requirements before serving customers. To comply with the year-ahead RA process, Resolution E-4907 requires new and expanding CCAs seeking to serve load to submit their implementation plans on or before January 1 of the year prior to their planned start or expansion date and to participate in the Commission’s year-ahead RA process to demonstrate they have the RA resources to serve that load.2
The Resolution establishes a CCA implementation process and timeline, which requires (1) the CCA and Utility to “meet and confer” to resolve disputes over operational issues, (2) the CCA to complete and submit a registration packet including the CCA’s signed service agreement and bond, and (3) the Commission to authorize the date that the CCA may begin service.3 The requirements set forth in Resolution E-4907 apply to all new and expanding CCAs who submit implementation plans after December 8, 2017.
Clean Power Alliance CPA was established in 2017 to provide cost competitive electric services, reduce electric sector greenhouse gas emissions, stimulate renewable energy development, implement distributed energy resources, promote energy efficiency and demand reduction programs, and sustain long-term rate stability for residents and businesses through local control. Originally established as a joint powers authority with unincorporated Los Angeles County, Rolling Hills Estates, and South Pasadena as founding members, CPA has grown to a coalition of 32 agencies across Los Angeles and Ventura Counties.
utility shall promptly submit an advice letter to the appropriate Industry Division to notify the Commission of the utility’s provision of such service and of the rates, charges, terms and conditions under which the service is provided. Although the advice letter may be effective pending disposition under General Rule 7.5.3, the Commission may determine, in an appropriate proceeding, the reasonableness of such service. For purposes of this General Rule 9.2.3, ‘government agency’ means . . . the State of California and its political subdivisions and municipal corporations, including the departments thereof . . . .”
2 Resolution E-4907, p. 10; see also SCE’s Rule 23, Section F.1.a., describing a meet and confer process for SCE and a CCA to reach consensus on implementation issues, and Section F.4.g., describing a CCA’s general RA obligations.
3 Resolution E-4907, p. 1-2.
ADVICE 4060-E (U 338-E) - 3 - August 22, 2019
On August 4, 2017, the LACCE Authority, at a duly noticed public hearing, considered and adopted its Implementation Plan, through Resolution 17-002. Each of the LACCE Authority’s Members has adopted an ordinance to implement a CCA Program through its participation in the LACCE Authority, and each of the Members has adopted a resolution permitting the LACCE Authority to provide service within its jurisdiction. On August 14, 2017 CPA submitted its Implementation Plan and Statement of Intent to the Commission. The Commission had 90 days to review the plan.4 The Commission reviewed CPA’s implementation plan and Statement of Intent and issued a letter certifying CPA’s plan on November 13, 2017. CPA filed Addendum No. 1 to its Implementation Plan and Statement of Intent on December 29, 2017 (adding 21 new Members), and Addendum No. 2 on March 1, 2018 (adding 7 new Members), which were certified by the Commission on March 9 and March 28, 2018, respectively. On December 18, 2018, CPA submitted Addendum No. 3 to its Implementation Plan and Statement of Intent to expand service to the City of Westlake Village effective May 2020. The Commission certified Addendum No. 3 on March 18, 2019. In preparation to serve customers in Westlake Village in 2020, and in anticipation of the CPA -- SCE 2020 RA Agreement, in or around April 2019 CPA provided its 2020 load forecast for its Phase 5 to SCE, and SCE included the Westlake Village 2020 load forecast as part of SCE’s bundled service load forecasts to the Commission and the California Energy Commission (CEC) on April 19, 2019. SCE’s Customer Service Re-Platform (CSRP) Project and 2020 CCA Implementation
SCE’s Customer Service Re-Platform (CSRP) will replace SCE’s 30-year old mainframe custom developed billing system.5 The project encompasses over 200 discrete application systems. CSRP will address SCE business needs for billing increasingly complex rates, customer programs and market participants with frequent changes in requirements, increasing data privacy and security needs and customer expectations for self-service and digital engagement.
CSRP is expected to benefit all customers that use SCE’s billing system, including CCAs. These benefits include a more reliable system with lower operating costs; more streamlined processes and standard data interfaces for all third parties, including CCAs; the ability to make faster billing modifications and expedite testing and enrollment of CCAs and other program providers and their customers.
CSRP involves a system freeze that took effect in 2019 and is expected to continue through most of 2020, or longer. The system freeze is necessary to mitigate significant risks associated with critical activities such as data conversion, interfaces and testing,
4 Pub. Util. Code § 366.2(c)(7). 5 CSRP was first proposed in SCE’s General Rate Case Phase 1 (Application16-09-001) to
address technology obsolescence and risk (aging technology, high operating costs and limited agility for future) and improve core Customer Service functions.
ADVICE 4060-E (U 338-E) - 4 - August 22, 2019
and readiness (e.g., training, manual data cleanup, validation and cutover) activities required to support CSRP.6 The objective is to reduce risks of potential billing system issues and to limit changes to SCE’s existing customer systems that are aging and at risk of failure.
During the CSRP system freeze, SCE is limited or unable to transfer customer accounts to CCA Program service. As such, CCAs with plans to implement or expand programs in 2020 are impacted by the CSRP system freeze. However, SCE is able to support the transfer contemplated in the CPA – SCE 2020 RA Agreement consistent with its terms.
In early 2019, SCE began working with impacted CCAs to discuss implementation date changes, with the objective of maintaining CCA momentum and a good customer experience while minimizing risks. SCE proposed to enter into bilateral agreements to address each CCA’s RA obligations for 2020, in recognition that CSRP introduces uncertainties as to timing of 2020 CCA Program implementations, and CCAs may have financial impacts as a result of delayed launches and/or risk procuring unneeded resources.
The CPA – SCE 2020 RA Agreement is the result of approximately five months of arms-length negotiations between SCE and CPA, which were initiated by a meet and confer in or about March 2019. The CPA – SCE 2020 RA Agreement7
CPA and SCE (the Parties) signed the attached CPA-SCE 2020 RA Agreement (the Agreement) on August 16, 2019. Pursuant to the Agreement, CPA agrees to change its implementation start date to June 2020, and SCE agrees to allocate all System, Flexible and Local RA needed to satisfy CPA’s 2020 RA obligations for its Westlake Village Phase, in exchange for payment from CPA at the transparent price based on the CPUC’s 2020 trued-up market price benchmarks for System, Flexible and Local RA, calculated as described in Paragraph J of the Agreement. CPA’s payment to SCE under the Agreement is due on or about February 2021. The Agreement contains no credit or collateral requirements for CPA, in part because the RA resources to be allocated to CPA under the Agreement remain in SCE’s procurement portfolio.
SCE will comply with CPA’s 2020 RA obligations for its Westlake Village Phase on CPA’s behalf, per the terms of the Agreement, including reporting on the 2020 RA compliance at the Commission and California Independent System Operator (CAISO) for both SCE and CPA for its Phase 5, unless the Commission or CAISO requires CPA to file its compliance documentation separately from SCE. Accordingly, this advice letter seeks an exemption from the 2019 Final RA Guide rules that require SCE and CPA to each submit monthly forecasts and month-ahead compliance filings that account for the
6 As with all large-scale software implementations, CSRP involves inherent risks associated
with the implementation that may affect customers, including data migration errors, billing errors, delays in bill issuance, delays in pursuing collections, and increased handle times.
7 This summary shall not modify the CPA – SCE 2020 RA Agreement; in case of any conflict, the Agreement governs.
ADVICE 4060-E (U 338-E) - 5 - August 22, 2019
load migrating to CPA in 2020,8 so that SCE can be responsible for meeting and reporting on the 2020 RA compliance at the Commission and CAISO for both SCE and CPA Phase 5 (for 2020 only), per the Agreement.
SCE and CPA consulted with staff of the CEC and this Commission on operational mechanics of the Agreement and received helpful guidance, which is set forth in Appendix A of the Agreement. Pursuant to this guidance, on August 16, 2019, SCE included CPA’s 2020 load as part of SCE’s bundled service load forecasts submission to the CEC and the Commission.9
The Agreement expressly contemplates a potential to change the new implementation start date because of CSRP, or because CPA may have a change in its plans, and a process for agreeing to a new start date under such circumstances, including at least ninety (90) days advance notice of the need for a change in the start date. However, if CPA’s Phase 5 implementation begins after June 2020, the Parties agree that CPA will only be responsible for 2020 Local RA obligations for those months in 2020 during which CPA actually serves Phase 5 load. If CPA’s Phase 5 implementation is delayed beyond 2020, the Agreement automatically terminates on January 1, 2021. The Agreement contains a mutual release of liability and hold harmless associated with a change in the start date under the Agreement.
Other provisions include:
• CPA will transfer its CAISO Import Allocation Rights for 2020 to SCE at no cost, to enable SCE to satisfy CPA’s 2020 RA obligations.
• SCE will account for CPA customers’ share of Capacity Allocation Mechanism (CAM), Demand Response Allocation Mechanism (DRAM), Local Capacity Reliability (LCR) preferred resources, and Demand Response (DR)-allocated RA, in satisfying CPA’s 2020 RA obligations.
• SCE has an express right to offset CPA’s customer remittances against any SCE invoice under the Agreement that is unpaid 60 days from the date of the invoice.
• SCE will record payments under the Agreement in its Portfolio Allocation Balancing Account (PABA) (see SCE’s Preliminary Statement WW).
• Dispute resolution process (Paragraph N).
• The Agreement expires on April 30, 2022 unless previously terminated.
8 See e.g., 2019 Filing Guide for System, Local and Flexible RA Compliance Filings, issued
October 3, 2018, at Sections 4 (the Filing Process) and 11 (Load Forecast Adjustments). 9 With regard to Section 3 of Appendix A, should the CEC not provide SCE with individual RA
requirements for CPA for 2020, then SCE will calculate the volumes for the System and Flexible RA requirements for CPA using ratio shares based on coincident peak loads outlined by the CEC in or about September 2019, subject to CPA’s review and validation. See Paragraph G of the Agreement.
ADVICE 4060-E (U 338-E) - 6 - August 22, 2019
SCE has no obligations under the Agreement post 2020, and CPA for its Phase 5 must enter the year-ahead RA compliance process in 2020 for the 2021 RA compliance year and beyond.
Per the terms of the Agreement (see Paragraph P), and by operation of G.O. 96-B, General Rule 9.2.3., this advice letter, and the Agreement, are effective upon this Tier 3 advice letter, and subject to final disposition of the Commission.
CPA and SCE submit that the Agreement is reasonable and should be approved because it results from good faith, meet and confer discussions and arms-length negotiations between the Parties, constitutes a reasonable resolution of the Parties’ disputes regarding 2020 CCA implementation and CSRP related concerns, provides valuable consideration to both Parties, and uses transparent pricing at CPUC-adopted market price benchmarks for 2020 RA resources.
CONCLUSION
For reasons discussed above, the CPA -- SCE 2020 RA Agreement is reasonable and should be approved. In order to implement the Agreement, SCE and CPA should be granted an exemption from the 2019 Final RA Guide rules that require SCE and CPA to each submit monthly forecasts and month-ahead compliance filings that account for the load migrating to CPA in 2020, so that SCE can be responsible for meeting and reporting on 2020 RA compliance at the Commission and CAISO for both SCE and CPA, per the Agreement.
TIER DESIGNATION
Pursuant to G.O. 96-B, General Rule 5.3(8), SCE and CPA submit this advice letter with a Tier 3 designation.10
EFFECTIVE DATE – EFFECTIVE PENDING RESOLUTION
Pursuant to G.O. 96-B, General Rule 9.2.3, this advice letter is effective as of August 22, 2019, the same date as submitted, pending final resolution.
10 General Rule 5.3(8) provides that matters related to Service to a Government Agency are
appropriate for a Tier 3 advice letter. Note that General Rule 5.3(8) and certain other cross-references in G.O. 96-B still refer to the previous General Rule for Service to Government Agency (8.2.3) (see e.g., General Rules 3.6 and 5.1).
ADVICE 4060-E (U 338-E) - 7 - August 22, 2019
NOTICE
Anyone wishing to protest this advice letter 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 letter. Protests should be submitted to:
CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102 E-mail: [email protected]
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:
Gary A. Stern, Ph.D. Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770
Telephone: (626) 302-9645 Facsimile: (626) 302-6396 E-mail: [email protected] Laura Genao Managing Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5544 E-mail: [email protected]
Ted Bardacke Executive Director Clean Power Alliance 555 W. 5th Street, 35th Floor Los Angeles, California 90013 Email: [email protected]
There are no restrictions on who may submit 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.
ADVICE 4060-E (U 338-E) - 8 - August 22, 2019
In accordance with General Rule 4 of GO 96-B, SCE is serving copies of this advice letter to the interested parties shown on the attached GO 96-B, R.17-09-020 and R.03-10-003 service lists. Address change requests to the GO 96-B service list should be directed by electronic mail to [email protected] or at (626) 302-3719. For changes to all other service lists, please contact the Commission’s Process Office at (415) 703-2021 or by electronic mail at [email protected].
Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by submitting and keeping the advice letter at SCE’s corporate headquarters. To view other SCE advice letters submitted with the Commission, log on to SCE’s web site at https://www.sce.com/wps/portal/home/regulatory/advice-letters.
For questions, please contact Janet Combs at (626) 302-1524 or by electronic mail at [email protected].
Southern California Edison Company
/s/ Gary A. Stern Gary A. Stern, Ph.D.
GAS:jc:cm Enclosures
ADVICE LETTER S U M M A R YENERGY UTILITY
Company name/CPUC Utility No.:
Utility type:Phone #:
EXPLANATION OF UTILITY TYPE
ELC GAS
PLC HEAT
MUST BE COMPLETED BY UTILITY (Attach additional pages as needed)
Advice Letter (AL) #:
WATERE-mail: E-mail Disposition Notice to:
Contact Person:
ELC = ElectricPLC = Pipeline
GAS = GasHEAT = Heat WATER = Water
(Date Submitted / Received Stamp by CPUC)
Subject of AL:
Tier Designation:
Keywords (choose from CPUC listing):AL Type: Monthly Quarterly Annual One-Time Other:If AL submitted in compliance with a Commission order, indicate relevant Decision/Resolution #:
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 NoIf 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: No. of tariff sheets:
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 proposed1:
Pending advice letters that revise the same tariff sheets:
1Discuss in AL if more space is needed.
CPUC, Energy DivisionAttention: Tariff Unit505 Van Ness AvenueSan Francisco, CA 94102 Email: [email protected]
Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this submittal, unless otherwise authorized by the Commission, and shall be sent to:
Name:Title:Utility Name:Address:City:State:Telephone (xxx) xxx-xxxx:Facsimile (xxx) xxx-xxxx:Email:
Name:Title:Utility Name:Address:City:State:Telephone (xxx) xxx-xxxx: Facsimile (xxx) xxx-xxxx:Email:
Zip:
Zip:
ENERGY Advice Letter Keywords
Affiliate Direct Access Preliminary StatementAgreements Disconnect Service ProcurementAgriculture ECAC / Energy Cost Adjustment Qualifying FacilityAvoided Cost EOR / Enhanced Oil Recovery RebatesBalancing Account Energy Charge RefundsBaseline Energy Efficiency ReliabilityBilingual Establish Service Re-MAT/Bio-MATBillings Expand Service Area Revenue AllocationBioenergy Forms Rule 21Brokerage Fees Franchise Fee / User Tax RulesCARE G.O. 131-D Section 851CPUC Reimbursement Fee GRC / General Rate Case Self GenerationCapacity Hazardous Waste Service Area MapCogeneration Increase Rates Service OutageCompliance Interruptible Service SolarConditions of Service Interutility Transportation Standby ServiceConnection LIEE / Low-Income Energy Efficiency StorageConservation LIRA / Low-Income Ratepayer Assistance Street LightsConsolidate Tariffs Late Payment Charge SurchargesContracts Line Extensions TariffsCore Memorandum Account TaxesCredit Metered Energy Efficiency Text ChangesCurtailable Service Metering TransformerCustomer Charge Mobile Home Parks Transition CostCustomer Owned Generation Name Change Transmission LinesDecrease Rates Non-Core Transportation ElectrificationDemand Charge Non-firm Service Contracts Transportation RatesDemand Side Fund Nuclear UndergroundingDemand Side Management Oil Pipelines Voltage DiscountDemand Side Response PBR / Performance Based Ratemaking Wind PowerDeposits Portfolio Withdrawal of ServiceDepreciation Power Lines
EXHIBIT A
CPA – SCE 2020 RA Agreement
