Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, May 24, 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 90 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 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
City of West Hollywood
3rd Floor City Manager’s Conference room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
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 Agenda Page 1
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.
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, while not required, 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 March 22, 2023, Legislative & Regulatory Committee Meeting
REGULAR AGENDA
2. Discuss Electricity Grid Regionalization and AB 538 and Provide Direction
3. Review Senate Bill 420 and Assembly Bill 914 Related to Transmission Projects, CEQA Streamlining and Permit Streamlining for Existing Distribution Power Lines and Provide Direction on Policy Positions if Necessary
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON JUNE 28, 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, 801 S. Grand Ave, Suite 400, Los Angeles, CA 90017 or online at www.cleanpoweralliance.org/agendas.
Agenda Page 2
Legislative & Regulatory Committee Item 1
MINUTES
Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, March 22, 2023, 10:00 a.m.
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 Remote
West Hollywood John Erickson Committee Member Absent
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from January 25, 2023, Legislative & Regulatory Committee Meeting
Agenda Page 3
Clean Power Alliance Legislative & Regulatory Committee Page 2 of 3 Marcy 22, 2023 Minutes
Motion: Alternate Committee Member Kulcsar, Carson
Second: Chair Klein Lopez, Agoura Hills
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
2. Receive Oral Overview of AB 1538
Gina Goodhill, Senior Director, Government Affairs, provided an overview of AB 1538. The bill would create an incentive program to encourage Load Serving Entities (LSEs) to add more clean capacity on the grid in order to increase reliability and affordability. Ms. Goodhill indicated that reliability continues to be a challenge due to factors such as extreme weather, state climate goals, and numerous regulatory changes. The California Public Utilities Commission (CPUC) has explored two approaches to meet reliability needs, one being an emergency procurement order requiring all LSEs to take on new contracts, and the other requiring all LSEs to procure a specified capacity amount with an imposed penalty if an LSE falls short. Ms. Goodhill noted that without sufficient capacity, the penalties will be imposed and will increase ratepayer costs. AB 1538 would accomplish two goals, including creating a monetary incentive for LSEs that acquire additional clean capacity above their targets, and working in conjunction with the CPUC to set long-term 2035 targets to ensure clean resources are added to the grid. Ms. Goodhill added that this bill is the first proposal to use incentives to address liquidity in the RA market, and the bill requires project labor agreements or prevailing wage requirements. Assemblymember Muratsuchi has agreed to author the bill, and it has been assigned to its first committee on April 12. Ms.
Goodhill requested that committee members submit letters of support for the bill by the first week of April. AB 1538 does not currently have a funding source, but various state agencies may provide funding that would not impact the ratepayer.
Responding to Chair Klein Lopez’s question about the bill becoming a budget item, Ms. Goodhill indicated that is one possibility, or the California Energy Commission (CEC) may align the bill with funding reserved during the creation of the Strategic Reliability Reserve. Chair Klein Lopez commented that there were many positive discussions and feedback about the bill during Lobby Day. Ms. Goodhill shared that the bill is meant to be a regional statewide solution that can benefit all energy providers that participate in the California Independent System Operator (CAISO).
Committee Member Horvath noted that she authored an item to support AB 1538, which the Los Angeles County Board of Supervisors recently approved.
3. Receive Legislative Update - Initial Outlook on Energy Related Bills Ms. Goodhill provided a presentation on 2023 legislative updates. 2023 will be the busiest legislative year to date for CPA, with legislative topics including reliability, budget change proposals, regionalization, vehicle and building decarbonization, interconnection and transmission, and additional issues. Ms. Goodhill indicated that the highest profile legislative proposal is a budget change proposal; its three main components include central procurement, RA deficiency penalty, and Integrated Resource Plan (IRP) jurisdiction. AB 538 is the re-introduction of the 2018 regionalization bill and would enable the transition of the CAISO into a regional transmission operator with various western states and, if passed, would Agenda Page 4
Clean Power Alliance Legislative & Regulatory Committee Page 3 of 3 Marcy 22, 2023 Minutes
mean a radical change to the current structure. Responding to Chair Klein Lopez’s question, Ms. Goodhill clarified that CPA did not take a position on the original 2018 regionalization bill. Ms. Goodhill indicated that over 20 bills are being tracked so far that are related to vehicle decarbonization. Interconnection, permitting, and transmission capacity planning continue to pose challenges, and various related bills aim to address these challenges. Ms. Goodhill identified additional legislative topics including equity, affordability, jobs, Brown Act flexibility, and the procurement of specific resource types.
The Committee expressed appreciation for the update on the bill positions.
Committee Member Horvath inquired about Assemblymember Holden’s engagement with CPA. Staff indicated that Assemblymember Holden’s office has been proactive in its outreach with CPA staff on this bill in particular. Committee Member Horvath inquired about the general attitude towards Community Choice Aggregations (CCAs), given the challenges customers are facing with regard to increasing energy costs. Ms. Goodhill indicated that in both the Senate and Assembly affordability hearings, CCAs were able to distinguish the local benefits and bill protections they provide their customers. The general feedback towards CCAs from legislators and senators was overall positive, both legislators and CCAs’ concerns about affordability and reliability are more closely aligned. Chair Klein Lopez expressed that the Brown Act will be another important discussion topic in the near future.
COMMITTEE MEMBER COMMENTS
None.
ADJOURN
Chair Klein Lopez adjourned the meeting at 10:42 a.m.
Agenda Page 5
Staff Report – Agenda Item 2
To: Legislative & Regulatory Committee
From: Gina Goodhill, Sr. Director, Government Affairs
Subject: Discuss Regionalization and AB 538 and Provide Direction Date: May 24, 2023
RECOMMENDATION
Discuss electricity grid regionalization and Assembly Bill 538 and provide direction to staff.
ATTACHMENT
1. Presentation
Agenda Page 6
Item 2 - Electricity Grid
Regionalization and AB 538
May 24, 2023
Agenda Page 7
Summary
• The California Legislature is
considering a bill that would
enable the state’s grid operator
(CAISO) to expand to other states
• This is a significant policy
question that the state has
previously considered and may
consider again
• Key stakeholders are split on how
the state should approach this
issue
• Staff is seeking feedback from the
Legislative/Regulatory Committee
on how CPA should approach this
this issue
Agenda Page 8
The U.S. Power Grid and CA
3 The U.S. power grid consists of
the bulk power system, high-voltage transmission equipment, and the lower-voltage distribution
system.
It is broken into 3 independent
grids.
• The Western Interconnect, which
includes 38 separate balancing
authorities, including CAISO.
• The Eastern Interconnect, which
includes 36 balancing authorities
• The Electric Reliability Council of
Texas (ERCOT)
The Western Interconnect is
overseen by the Western Electric
Coordinating Council (WECC)
Agenda Page
1. https://www.tanc.us/understanding
9 -transmission/the-western-us-power-system/
Electric System Operations
Balancing Authorities in the Western United States
4 The actual operations of the electric
system are managed by balancing
authorities (BA), which manage the
supply and demand of energy across
their territory, and transfers of
electricity with other BAs.
There are 38 BAs within the WECC,
representing about 20% of all
generation capacity in the U.S. and
Canada.
BAs are regulated by both the Federal
Energy Regulatory Commission
(FERC) and the North American
Electric Reliability Corporation (NERC).
Agenda Page 10
CAISO Today
5 Overview: The CAISO is both a BA and regional transmission operator that manages the flow of electricity across the high-voltage bulk power system that makes up 80% of CA’s and a small part of Nevada’s electric grid.
Governance: CAISO is regulated by both the Federal Energy Regulatory Commission (FERC) and the North American Electric Reliability Corporation (NERC). • Unlike other RTOs, the CAISO’s 5 –person governing board is appointed by the California Governor and confirmed by the Senate
Interstate Markets: CAISO operates 2 markets that involve multiple states and participants:
• WEIM: The Western Energy Imbalance Market (WEIM), a real-time bulk power trading market that involves 19 voluntary participants (and more coming) across 10 western states
• EDAM: Building on the success of WEIM, the extended day-ahead market (EDAM) is a voluntary day-ahead electricity market that CAISO will launch in early 2024 Both market programs are designed to deliver economic, environmental and reliability benefits to participants by increasing regional coordination Agenda Page 11
The Need to Revisit Regionalization
6 California has set ambitious climate
goals to reach 100% clean energy
by 2045. CPUC’s integrated
resource planning analysis shows
that the grid would need an
additional 86 GWs, more than
double what is currently on the grid.
California needs to import electricity
to meet its Resource Adequacy
requirements, and to meet the
demand of extreme summer heat
events.
There are doubts as to whether
California can build the new 86 GW
of resources it needs fast enough
inside CA to both meet climate
goals and reliability needs if the
supply of imports begins to decline.
Agenda Page 12
The Need to Revisit Regionalization, continued
7 An existing RTO, the Southwest Power Pool (SPP), is asking Western States to join their new market, called Markets+, similar to CAISO’s WEIM and EDAM. Unlike WEIM and EDAM, Markets+ will be operated by a governance board that is not appointed by a specific state or participant.
Many WEIM participants have already made commitments to leave WEIM for Markets+, jeopardizing resources available to WEIM and CAISO.
Supporters of regionalization have raised concerns that if CA doesn’t expand to an RTO, resources across Western states will become less and less available to CA.
Agenda Page 13
Arguments in Support of Regionalization
Improved reliability: Better coordination on Resource Adequacy by pooling generation resources across a larger region
Accelerated decarbonization: Easier to match variable demand and renewable generation across the region; less curtailment of wind and solar resources
Improved transmission planning: Streamlining the process of long-term resource planning
Cost reduction: Reduce transmission congestion costs, streamlining the cost of RA/operating reserve to maintain reliability, more efficient use of renewables are estimated to save $379 Million to $574 million annually for California electricity customers, approx. 4.5% of total annual costs Agenda Page 14
8 Key Supporters
Environmental
• NRDC
• Environmental Defense
Fund
• California Environmental
Voters (formally CLCV)
• Ceres
Business
• CalChamber
• CA Manufacturing &
Technology Association
• CA Community Economic
Development Association
• Microsoft
• San Jose Chamber of
Commerce
• Silicon Valley Leadership
Group
Energy
• CAISO
• American Clean Power
• Apex Clean Energy
• CA Energy Storage
Association
• EDF Renewable Energy
• Engie North America
• Independent Energy
Producers
• MCE
• Pattern Energy
• Southern California Edison
• Solar Energy Industry
Association
• CA Wind Energy
Association
Agenda Page 15
Arguments against Regionalization
Loss of state control: A regional board of directors will likely be less accountable to California ratepayers and California’s environmental and energy policy goals. California will likely only have one vote whereas California’s load is much larger than other Western states Federal oversight: FERC may have greater oversight over California policies that express preferences for renewable or carbon-free resources and is more subject to national politics and policies
Job Creation: More projects may be built outside of California and California LSEs may purchase more of those resources
State-level decarbonization: While more states have adopted renewable/carbon-free electricity goals fossil fuel resources will still be more abundant across the west and therefore may be imported into California more easily
Agenda Page 16
10 Key Opponents
Environmental
• Sierra Club
• Clean Coalition
• Food and Water
Watch
• The Climate Center
• CA Alliance for
Community Energy
• CA Climate Voters
• CFROG
• Climate Reality
Project Ventura
County
• Various 350 chapters
• All indivisible chapters
Labor
• California Labor
Federation
• Coalition of California
Utility Employees
• CA Sate Association
of Electrical Workers
• CA State Council of
Laborers
• CA State Pipe Trades
Council
Ratepayer/Other
•Consumer Watchdog
•CMUA
•TURN
Agenda Page 17
AB 538: Regionalization Process
12 Enable the transition of the CAISO to a regional transmission operator with independent governance. Process:
Recently amended to a 2-year bill
CAISO develops and submits a governance proposal to the CEC to meet specific governance requirements (next slide)
CEC, in consultation with CPUC and CARB, reviews the governance proposal and holds at least 5 public hearings (plus additional verification between agencies)
Legislature reviews and provides feedback on the structure CAISO implements a governance structure, if there is intention from non-participating transmission owners to join and the FERC has approved any changes to CAISO tariff that are necessary. Open to transmission owners, retails sellers, POUs.
Additional checks and balances to ensure compliance with FERC requirements, CEC, CAISO, and the Secretary of State
Agenda Page 18
AB 538: Governance
Governance Requirements Include:
Governance by a western states’ committee with an equal number of representatives from each state. CA rep is appointed by Governor and confirmed by Senate Open meeting standards consistent with Bagley-Keene Act + public access to records Maintaining state authority over state matters related to procurement policy, resource planning, and resource or transmission siting within the state, including setting resource adequacy standards, and prohibiting the operation of a centralized capacity market Ensuring that the dispatch of resources appropriately reflects the costs for resources to comply with California’s climate policies
Establishing a clear structure for state regulators to provide guidance to the organization Enabling participation of demand response, storage, and distributed energy resources Maintaining CA’s renewable portfolio standard compliance requirements that favor in-state renewable energy development over out-of-state development Agenda Page 19
Questions and Discussion
Agenda Page 20
Staff Report – Agenda Item 3
To: Legislative & Regulatory Committee
From: Gina Goodhill, Sr. Director, Government Affairs
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Review Two Bills in the 2023/2024 Legislative Session Related to Changes to the CEQA process
Date: May 24, 2023
RECOMMENDATION
Review two bills in the 2023/2024 California Legislative Session and provide direction on policy positions if necessary.
BACKGROUND
At the February 2023 Board Meeting, the Board approved a new policy protocol that allows staff to take policy position on bills that fall within the Board-approved 2023 Policy Platform. For bills that fall outside the scope of the platform; bills that are likely to attract high-profile supporters and detractors; bills that would raise taxes; or bills that would knowingly put CPA at odds with positions that its members agencies have taken, CPA staff must seek direction from the Legislative & Regulatory Committee and Board of Directors before taking a position.
Staff is seeking direction on two bills that propose changes to the California Environmental Quality Act (CEQA), with the goal of decreasing electrical transmission and interconnection timelines in order to help the state meet its clean energy goals.
DISCUSSION
SB 420 (Becker): Transmission Projects, CEQA streamlining Agenda Page 21
Legislative & Regulatory Committee Item 3
Electric transmission lines are high voltage power lines that move electricity from generation resources to distribution lines in neighborhoods. To achieve the state’s 2045 renewable and zero-carbon electricity goals, California needs to build an estimated $30 billion in new transmission capacity by 2040.1
Despite this need, the process to get new transmission online is lengthy. According to the bill author, the CAISO has determined that new transmission lines can take 10 or more years to complete. This long timeline is primarily attributed to two issues:
1. Transmission projects must undergo duplicative economic review at both the CPUC and CAISO. This review process alone takes 3-4 years.
2. Projects can be stalled by lawsuits. While the Governor can deem certain projects as “environmental leadership development projects”, which requires any lawsuit to be ruled on within 270 days, most transmission projects do not fall within this designation.
This bill would simplify the approval process for “priority” transmission projects that meet grid reliability and clean energy targets in two ways: 1) by designating a to-be-determined state agency to designate certain key transmission projects as “priority,” thereby requiring CEQA legal challenges to be resolved within 270 days, and; 2) by eliminating duplicative economic analysis by the CPUC.
This bill is sponsored by the American Clean Power Association and supported by CalCCA as well as by various clean energy associations and several environmental groups. San Diego Gas and Electric has opposed the bill unless it is amended to address concerns that this proposed process would conflict with parts of the current process.
AB 914 (Friedman): Permit Streamlining for Existing Distribution Power Lines 1 CAISO, “20 Year Transmission Outlook” (2022)
Agenda Page 22
Legislative & Regulatory Committee Item 3
To meet the state’s goal of 100% zero-emission vehicle goals and the state’s building decarbonization aspirations, utilities will need to quickly bring new electrical grid infrastructure online.
This bill would establish a two-year time limit for the relevant state agency to complete CEQA review and approve or deny an application for an electrical infrastructure project.
If the state agency fails to meet this deadline, the bill would require the state agency to submit a report to the Legislature detailing the reasons.
Originally, the bill also established new CEQA exemptions for the two types of electrical substations and transmission line facility projects:
1. The expansion of utility infrastructure in an existing utility right-of-way
2. New utility infrastructure within two miles of a current site that is expected to have increased demand due to transportation or building electrification or due to a new renewable energy source.
While these CEQA exemptions were struck in the Assembly Natural Resources Committee, the Chair of the Committee ordered the bill author and relevant stakeholders to work together to propose a more acceptable CEQA exemption. We expect the details of that exemption to emerge in the coming days.
Agenda Page 23