Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, March 22, 2023
10:00 a.m.
Visit CPA’s YouTube Channel to view a Live Stream of the Meeting www.youtube.com/@CPApublicmeetings
*There may be a streaming delay of up to 60 seconds. This is a view-only live stream.
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Members of the public may also participate in this meeting remotely at the following locations:
Agoura Hills City Hall
Planning Conference Room
30001 Ladyface Court
Agoura Hills, CA 91301
Manhattan Beach City Hall
City Manager Conference Room
1400 Highland Avenue
Manhattan Beach, CA 90266
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Los Angeles County
Hall of Administration
Sybil Brand Conference Room, Room 372
500 West Temple Street
Los Angeles, CA 90012
PUBLIC COMMENT: Members of the public may submit their comments by one of the following options:
• Email Public Comment: Members of the public are encouraged to submit written comments on any agenda item to [email protected] up to four hours before the meeting. Written public comments will be announced at the meeting and become part of the meeting record. Public comments received in writing will not be read aloud at the meeting. • Provide Public Comment During the Meeting: The General Public Comment item is reserved for persons wishing to address the Committee on any Clean Power Alliance-related matters not on today’s agenda. Public comments on matters on today’s Consent Agenda and Regular Agenda shall be heard at the time the matter is called. Comments on items on the Consent Agenda are consolidated into one public comment period. Members of the public who wish to address the Committee at CPA’s Office are requested to complete a comment card and provide it to staff. If you are attending from a remote location, please identify yourself to a CPA representative when your item is called. Each speaker is limited to two (2) minutes (in whole-minute increments) per agenda item with a cumulative total of five 5 minutes to be allocated between the General Public Comment, the entire Consent Agenda, or individual items in the Regular Agenda. Please refer to Policy No. 8 – Public Comment for additional information.
Agenda Page 1
NAVIGATING OUR AGENDA PACKETS
The meeting agenda packets are bookmarked PDFs, which display a list of agenda items to the left of the page and allow you to click to view specific items within the packet. If viewing in your browser, click the "document outline" button in the upper left corner of the screen. If the PDF is downloaded, the bookmark panel (ribbon icon) appears on the left side of the screen.
ACCESSIBILITY: Meetings are accessible to people with disabilities. Individuals who need special assistance or a disability-related modification or accommodation to participate in this meeting, or who have a disability and wish to request an alternative format for the meeting materials, should contact the Clerk of the Board at least two (2) working days before the meeting at [email protected] or (213) 713- 5995. Notification in advance of the meeting will enable us to make reasonable arrangements to ensure accessibility to this meeting and the materials related to it.
CALL TO ORDER AND ROLL CALL
GENERAL PUBLIC COMMENT
CONSENT AGENDA
1. Approve Minutes from January 25, 2023, Legislative & Regulatory Committee Meeting
REGULAR AGENDA
2. Receive Oral Overview of AB 1538
3. Receive Legislative Update – Initial Outlook on Energy Related Bills
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON APRIL 26, 2023
Public Records: Public records that relate to any item on the open session agenda for a regular Board Meeting are available for public inspection. Those records that are distributed less than 72 hours prior to the meeting are available for public inspection at the same time they are distributed to all, or a majority of, the members of the Board. Those documents are available for inspection at CPA Offices or online at www.cleanpoweralliance.org/agendas Agenda Page 2
Legislative & Regulatory Committee Item 1
MINUTES
MEETING of the Legislative & Regulatory Committee of the Clean Power Alliance of Southern California
Wednesday, January 25, 2023, 10:00 a.m.
Meeting videos are available on CPA’s YouTube Channel.
www.youtube.com/@CPApublicmeetings
Committee Members participated in this meeting from the following locations:
Agoura Hills City Hall
Planning Conference Room
30001 Ladyface Court
Agoura Hills, CA 91301
CPA Office
801 S. Grand Ave., Suite 400
Los Angeles, CA 90017
Carson City Hall
Executive Conference Room
701 East Carson Street
Carson, CA 90745
Manhattan Beach City Hall
City Manager Conference Room
1400 Highland Avenue
Manhattan Beach, CA 90266
Los Angeles County
Hall of Administration
Sybil Brand Conference Room, Room 372
500 West Temple Street
Los Angeles, CA 90012
CALL TO ORDER & ROLL CALL
Committee Chair Deborah Klein Lopez called the meeting to order at 10:00 a.m. and Gabriela Monzon, Board Clerk, conducted roll call.
Roll Call
Agoura Hills Deborah Klein Lopez Chair Remote
Carson Reata Kulcsar Alternate Committee
Member Remote
Los Angeles County Lindsey Horvath Committee Member Remote Manhattan Beach Amy Howorth Committee Member Absent
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from November 16, 2023, Legislative & Regulatory Committee Special Meeting
Agenda Page 3
Clean Power Alliance Legislative & Regulatory Committee Page 2 of 3 January 25, 2023 Minutes
Motion: Committee Member Horvath, Los Angeles County
Second: Alternate Committee Member Kulcsar, Carson
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
2. Review and Recommend Approval of the Proposed 2023 Legislative & Regulatory Policy Platform and Revised Bill Position Protocol to the Board of Directors Gina Goodhill, Director, Government Affairs, and CC Song, Director, Regulatory Affairs, provided a presentation on the proposed updated Legislative & Regulatory Policy Platform. Ms. Goodhill indicated that the previous policy platform has hindered CPA from acting nimbly on bills presented later in the legislative session, amended bills, and bills that do not rise to a high priority level when first presented.
After an analysis of other Community Choice Aggregators (CCAs), staff determined that some CCAs used their respective policy platforms as guidance documents, allowing their staff to use the platform to take positions and subsequently report to their boards. Ms. Goodhill explained that staff proposes revising the platform to make it more prescriptive to provide staff with clear guidance and therefore more comfort with allowing staff to take positions on bills without Board approval. All bill positions would be reported to the Board on a monthly basis. This process will have exceptions, such as for bills that fall outside the scope of the platform, controversial bills with high profile stakeholders, bills that would knowingly put CPA positions out of step with positions CPA cities have taken, or any bill that will raise taxes. Such bills would be presented to the Legislative & Regulatory Committee and then go through the regular Board-approval process before CPA takes a position. Ms. Song reviewed the proposed platform policy principals. The five policy principals include protecting CPA’s local control and competitive position, pursuing power resource planning and procurement, developing and administering customer programs that encourage clean energy adoption, ensuring fair access to data, and supporting CPA’s ability to set its own rates and offer affordable and inclusive services. Ms. Goodhill and Ms. Song reviewed the five principles’ respective categories and reasons for their inclusion in the platform.
Committee Member Horvath asked where the investment of money into development of capacity would be categorized in the policy platform. Ms. Song indicated the second policy platform, power resource planning and procurement.
The category would help guide staff to pursue policies enabling CPA to procure and develop new capacity. Committee Member Horvath commented that the platform should allow staff to swiftly advocate for bills concerning investment in building clean energy infrastructure, even if that investment is not coming directly to CPA but would benefit the region. Staff agreed and suggested including a mention of infrastructure investment under Section 1 Competition and Local Control, Subsection B Finances. In response to Chair Klein Lopez’s question concerning the platform’s coverage at local and regional levels, staff clarified that CPA has taken a more local proactive approach with bills aligning with Board decisions about a direction in CPA policy or programs. For example, when CPA agencies consider building electrification and decarbonization codes, CPA would provide support at the request of Board members. The policy platform would allow for CPA to provide support for such items. Chair Klein Lopez expressed Agenda Page 4
Clean Power Alliance Legislative & Regulatory Committee Page 3 of 3 January 25, 2023 Minutes
apprehension about the policy procedure allowing CPA staff to express support at the local level without a specific request from a Board Member and requested language clarification. Staff suggested the inclusion of a distinction in the proposed platform for differences between the state, federal, and local actions; the platform will help inform the local policy CPA supports but does not allow staff to take proactive action without explicit Board request. Committee Member Kulcsar referenced Committee Member Hicks’ concern for customer affordability and requested that staff ensure the policy acknowledges both competitiveness and an overall focus on customer affordability.
Based on the Committee feedback, staff noted that the changes to the proposed Legislative & Regulatory Policy Platform include clarifications for ‘local’ support, system-wide investments, and enhanced language around affordability in addition to competitiveness.
Motion: Committee Member Horvath, Los Angeles County
Second: Alternate Committee Member Kulcsar, Carson
Vote: Item 2 was approved by a roll call vote with the recommended changes outlined in the discussion.
COMMITTEE MEMBER COMMENTS
Committee Member Horvath announced that the deadline for the submission of bills and spot bills is February 17. Chair Klein Lopez shared that CPA’s virtual lobby day will be held on February 23. Ms. Goodhill shared that lobby day themes include reliability, the state budget, CPA’s Clean Energy Capacity Proposal, and public meeting laws. Mr.
Bardacke added that legislative changes to public meeting laws presented challenges for geographically dispersed public agencies. Mr. Bardacke requested feedback from the Committee on CPA’s engagement in this matter. Committee Member Horvath shared that it is important to maintain and promote accessibility to meetings. Chair Klein Lopez agreed and expressed a preference for potentially agendizing the discussion once staff has had an opportunity to research the matter.
ADJOURN
Chair Klein Lopez adjourned the meeting at 10:52 a.m.
Agenda Page 5
Staff Report – Agenda Item 2
To: Legislative & Regulatory Committee
From: Gina Goodhill, Sr. Director, Government Affairs
Approved By: Ted Bardacke, Chief Executive Officer
Subject: AB 1538
Date: March 22, 2023
RECOMMENDATION
Receive overview of AB 1538.
SUMMARY
AB 1538 (Muratsuchi) would create a catalyst program to incentivize bringing clean capacity resources online, creatively designed to increase grid reliability and ultimately decrease electricity rates. Staff first presented this idea to the Legislative & Regulatory Committee at its October 2022 meeting.
This is the first bill that CPA has sponsored since 2019. The scarcity and rising prices in the Resource Adequacy (RA) market, and the impact it is having on customers’ bills and electricity reliability, inspired CPAs proactive engagement in this proposal. The bill would provide potential benefits to all California ratepayers and is not a “CCA-only” or “CPA-only” approach.
BACKGROUND
Over the last several years, California has been at increasing and ongoing risk of not having enough capacity on the grid to meet demand. A combination of many natural gas plants going offline, regulatory changes, and other issues have reduced system capacity to critical levels. At the same time, demand continues to increase due to climate change, Agenda Page 6
Legislative & Regulatory Committee Item 2
and will increase even further as the state pushes towards increasing vehicle and building electrification.
Capacity, tracked through the CPUC RA program, is bought and sold through a bi-lateral market structure. For the market structure to work as intended, there needs to be enough supply available to create competition between generators to sell RA at competitive prices. But a tight market over the past few years has meant that this competition has ceased to exist, causing the price of RA to skyrocket. High RA prices are contributing to rapidly rising electricity rates.
Problem
Without a steady influx of new clean resources in the market, prices will continue to go up, electricity bills will continue to rise, and grid emergencies and the threat or reality of rotating outages will become more frequent.
The CPUC has had a track record of issuing short term procurement orders to tackle reliability issues as they surface. However, these orders generally only direct procuring resources to replace existing capacity that is set to retire and fails to account for the new capacity that will be needed due to hotter temperatures and increased electrification. This means that under current policy, grid reliability will, at best, stay the same as it is today, forcing the state to increasingly rely on the newly created “last-resort” taxpayer-funded Strategic Electricity Reliability Reserve and doing little to reduce the rise in electricity rates.
Short-term procurement orders give enormous market power to developers who happen to have projects in development with near-term online dates, which continues to drive up the cost for ratepayers. And because these short-term orders have largely been reactive, rather than the result of proactive, long-term planning, they are easily disrupted by trade and supply chain issues, war, the pandemic, and other global issues.
Agenda Page 7
Legislative & Regulatory Committee Item 2
The state needs a long-term plan to bring new, clean energy resources on the grid quickly and consistently. It needs to move away from relying simply on short-term procurement orders, and from using a “sticks” only approach that punishes LSE’s who don’t meet their targets, but offers no incentive for LSE’s that go above and beyond the requirements.
Proposed Solution
The proposed solution is two-pronged: set a big, bold target for new capacity and incentivize LSE’s to quickly get that capacity online and to exceed the target, providing a cushion for reliability and liquidity to the RA market.
AB 1538 would establish the Clean Energy Reliability Program to be administered by the CPUC. This program would provide incentive payments to LSE's that bring clean energy resources online, above their compliance requirements. The incentive payments will be equal to the current year RA market price benchmark for each eligible megawatt. This will also help bring increased competition to the RA market.
Together, the incentive payments paired with the reduced RA prices will help relieve near-term upward pressure on electricity rates. AB 1538 would work in conjunction with an open proceeding at the CPUC that is creating a long-term framework and target for new clean energy resources by 2035 to ensure there is enough capacity to meet reliability needs. This bill will provide guidance to the CPUC that the target should be a floor not a ceiling, in order to create the necessary competition that will drive down prices in the RA market.
Status And Upcoming Amendments
The bill has been double referred to both the Assembly Utilities and Energy Committee, and the Assembly Natural Resources Committee. It will be heard first in the Assembly Utilities and Energy Committee on April 12th. CPA has requested that all CPA Board members work with their cities or counties to submit an official Letter of Support by March 28th, which will ensure that it is included in the committee analysis.
Agenda Page 8
Legislative & Regulatory Committee Item 2
While not yet in print, the bill is expected to be amended to clarify that in addition to being zero-carbon, new build resources can only qualify for the incentive if they use a project labor agreement for projects that are 5 megawatts or larger or meet prevailing wage requirements for projects under 5 megawatts. There is also a pending clean-up amendment that allows for geothermal resources to be included even though those resources can emit small amounts of carbon in some technology configurations.
ATTACHMENT
None.
Agenda Page 9
Staff Report – Agenda Item 3
To: Legislative & Regulatory Committee
From: Gina Goodhill, Sr. Director, Government Affairs
Subject: Legislative Updates
Date: March 22, 2023
Staff will provide a presentation on the item.
ATTACHMENT
1. Legislative Updates Presentation
Agenda Page 10
Item 3
2023 Legislative Updates
Agenda Page 11
Overview
2023 will be the busiest
legislative year to date for CPA o More bills than any year in the past decade
– 2,638 bills
introduced by Feb 17
o 92 bills flagged so far that will
directly impact CCAs, with
potentially more to come
o Record number of new legislators and legislators running for new office
o CPA running its own bill, AB 1538
Agenda Page 12
2 Reliability
3 Context: Climate change and the absence of long-term resource planning have caused a tight capacity market, driving “short-termism” procurement orders to build more resources to meet increased electricity demand and increased focus on penalizing LSEs that miss targets.
Budget Change Proposal and Reliability: The highest profile legislative proposal is a budget change proposal from the Governor’s office. There are 3 main components to this proposal:
o Central procurement: Authorizes CPUC to facilitate procurement through the Department of Water Resources (DWR) or IOUs and pass on costs to all LSEs. o Resource Adequacy (RA) Deficiency Penalty: Requires RA-deficient LSEs to pay additional penalties to DWR’s strategic reserve, in addition to CPUC RA penalties o IRP Jurisdiction: Extends CPUC’s IRP jurisdiction to all LSEs. Language could be used to include procurement jurisdiction.
Agenda Page 13
Regionalization
4 Context: CAISO’s first attempt to form a broader western regional grid operator failed in 2018, largely due to concerns related to FERC engagement, loss of local control, and potential import of coal or other GHG-intensive energy into California. As other western states adopt higher renewable/carbon-free policy goals and reliability concerns increase, conversations about forming a regional grid operator have restarted.
Regionalization can have policy impacts on transmission planning and reliability – and could increase reliability and reduce costs.
AB 538 (Holden) is the re-introduction of the 2018 bill. It would enable the transition of the California Independent System Operator (CAISO) into a regional transmission operator with various western states.
o If passed, it would be a radical change to the current structure and CCAs are assessing the impacts
o Stakeholders are split, with labor and CPUC-funded ratepayer advocates opposing, and environmental groups divided
Agenda Page 14
Vehicle and building decarbonization
5 Context: The state has set ambitious vehicle electrification goals yet is not on track to meet them. Funding for various EV programs was one of the biggest proposed cuts in response to the budget deficit.
Over 20 bills being tracked so far related to vehicle decarbonization o These include new EV charging requirements at homes and rest stops; equitable EV deployments and discounts for disadvantaged communities; gas station conversions for EV charging; heavy duty EV requirements such as school buses and other sectors; and more Fewer bills related to building decarbonization
o These include energy efficiency studies and equitable decarbonization programs Agenda Page 15
Interconnection and Transmission
6 Context: While challenges in interconnection, permitting, and transmission capacity planning are not new to California, they have exacerbated since LSEs have been directed to aggressively bring online new resources to meet grid reliability needs and renewable/carbon-free energy goals. Severely delayed and abandoned electrical projects are being seen in communities throughout CA, including at critical facilities and affordable housing, as well as large scale renewable energy generation facilities. o Several CCAs are developing a coalition to push the Governor, Legislature and CPUC to address these widespread issues and require that projects are completed in a timely manner o Various bills related to interconnection acceleration; accelerating response time to customers, setting clear timeline requirements for interconnection, and more Agenda Page 16
Additional Issues
7 Equity, Affordability and Jobs: Electricity rates have gone up in the last few years due to market volatility and upgrades to distribution/transmission infrastructure due to wildfires and extreme weather events. The legislature has held several hearings to examine electricity/gas affordability o Bills include utility career development; price spike protections; and changes to CARE/FERA funding Governance: With remote work options a legacy of the pandemic, some legislators are exploring whether to amend the Brown Act to more easily allow virtual attendance options for elected and appointed officials.
o Several bills that speak to increasing Brown Act flexibility Resource Specific: State is focused on diversifying the clean energy mix and bringing long-lead time resources online. Bills related to procurement of specific resource types are numerous, with offshore wind and bioenergy the most popular
Agenda Page 17
Questions?
Agenda Page 18