Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, June 28, 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
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
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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 May 24, 2023, Legislative & Regulatory Committee Meeting
REGULAR AGENDA
2. Recommend that the Board of Directors Approve Positions on Two Bills in the 2023/2024 Legislative Session Related to Changes to the California Environmental Quality Act (CEQA)
a. SB 420 - Recommended Position: Support
b. AB 914 - Recommended Position: Support
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON JULY 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, 801 S. Grand Ave, Suite 400, Los Angeles, CA 90017 or online at www.cleanpoweralliance.org/agendas.
3. Receive Presentation on Resource Adequacy Rulemaking Staff Report – Agenda Item 1
To: Legislative & Regulatory Committee
Subject: Approve Minutes from the May 24, 2023 Legislative & Regulatory Committee
Date: June 28, 2023
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Legislative & Regulatory Committee Item 1
MINUTES
Legislative & Regulatory Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, May 24, 2023, 10:00 a.m.
Meeting videos are available on CPA's YouTube Channel.
http://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
L.A. County Hall of Administration
Sybil Brand Conference Room 372
500 West Temple Street
Los Angeles, CA 90012
City of West Hollywood
City Manager’s Conference Room, 3rd Fl
8300 Santa Monica Blvd.
West Hollywood, CA 90069
CALL TO ORDER & ROLL CALL
Committee Chair Deborah Klein Lopez called the meeting to order at 10:15 a.m. and Gabriela Monzon, Board Clerk, conducted roll call.
Roll Call
Agoura Hills Deborah Klein Lopez Committee Chair Remote Carson Cedric Hicks Committee Member Remote
Los Angeles County Rita Kampalath Alternate Committee
Member Remote
Manhattan Beach Amy Howorth Committee Member Absent
West Hollywood John Erickson Committee Member Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
Legislative & Regulatory Committee Item 1
CONSENT AGENDA
1. Approve Minutes from March 22, 2023, Legislative & Regulatory Committee Meeting
Motion: Committee Member Hicks, Carson
Second: Chair Klein Lopez, Agoura Hills
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
2. Discuss Electricity Grid Regionalization and AB 538 and Provide Direction Gina Goodhill, Sr. Director, Government Affairs, and CC Song, Sr. Director, Regulatory Affairs, provided a presentation on electricity grid regionalization and Assembly Bill 538. California is currently a net energy importer and to achieve California’s climate goals, an additional 86 gigawatts of energy is required for the grid. Many states now are participating or considering participation in a Regional Transmission Operator (RTO). The Southwest Power Pool (SPP), an existing RTO, is establishing a new market called Markets+, which will have governance not specific to any state. If states other than California were to join SPP the reliability and cost benefits electricity customers currently enjoy from having access to imports could significantly diminish. There is a growing concern that if California continues with its current operational approach without adapting, it risks isolating itself, while other states may choose alternative options, resulting in fewer available resources for the state. Ms. Goodhill identified key supporters and opponents of regionalization across different communities. Opposing arguments against regionalization include concerns over less state control, increased federal oversight, job creation, and state-level decarbonization efforts. Ms. Goodhill reviewed the regionalization process and governance requirements outlined in AB 538.
Chair Klein Lopez asked about the distinctions between AB 538 and a similar bill that was introduced in 2018. Ted Bardacke, CEO, highlighted three changes in market dynamics that prompted the reintroduction of the regionalization bill. These included the shift of other states towards alternative options, increased reliability issues, and the necessity for a more regional approach to fulfill climate goals. Chair Klein Lopez inquired about CPA’s control over imported energy content. Ms. Song explained that while CPA currently imports energy from other states, the Federal Energy Regulation Commission (FERC) may have more influence over California’s decarbonization efforts. Matthew Langer, Chief Operating Officer, added that regionalization would introduce more out-of-state resources, but it would not impede CPA’s ability to meet customer demands for clean energy or to unclean resources. Committee Member Kampalath asked about CAISO’s authority over energy imported into California. Mr. Bardacke noted that the competition between SPP and CAISO to achieve regionalization is political and added that if state control becomes excessively stringent, it will become increasingly challenging to attract other states to join.
Committee Member Erickson expressed support for a regional approach and emphasized the importance of being aware of potential litigation risks associated with regionalization. Committee Member Hicks asked about increased
Legislative & Regulatory Committee Item 1
transmission costs. Mr. Bardacke indicated that predicting costs is challenging when market participants remain unknown, but economic studies on regionalization indicate greater interregional trading and therefore an overall cost reduction. Committee Member Kampalath asked about specific opposition to regionalization stemming from environmental and labor groups. Ms. Goodhill indicated there are concerns regarding the prioritization of out-of-state resources and jobs. However, an amendment has recently been accepted that prioritizes in-state versus out-of-state development and the environmental justice community has not focused very much on the regionalization issue.
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
Ms. Goodhill provided an overview of Senate Bill (SB) 420 and Assembly Bill (AB) 914, which focus on expediting transmission, interconnection, and permitting timelines by making changes to the California Environmental Quality Act (CEQA) process. SB 420 proposes the designation of a lead agency responsible for nominating priority projects that align with grid reliability or clean energy targets.
SB 420 also involves the CAISO in identifying additional projects eligible for faster processing through the Electrical Transmission Projects Environmental Leadership Development. This would enable projects to complete the CEQA process within 270 days, significantly shorter than the potential 4-year timeline. SB 420 has the support of the California Community Choice Association (CalCCA) and the American Clean Power Association, and there is no known opposition to the bill. AB 914 aims to establish a 2-year time limit for state agencies to complete the CEQA review and either approve or deny an application for an electrical infrastructure project. If the 2-year timeline is exceeded, the bill mandates that a state agency must submit a report to the legislature detailing the reasons for the delay.
Chair Klein Lopez emphasized the importance of active engagement by CPA in CEQA-related bills. Committee Member Erickson expressed support for both SB 420 and AB 914. Staff agreed to bring a recommendation to the Committee for further discussion in the future.
COMMITTEE MEMBER COMMENTS
None.
ADJOURN
Chair Klein Lopez adjourned the meeting at 11:05 a.m.
Staff Report – Agenda Item 2
To: Legislative & Regulatory Committee
From: Gina Goodhill, Senior Director, Government Affairs Approved By: Ted Bardacke, Chief Executive Officer
Subject: Positions on Two Bills in the 2023/2024 Legislative Session Related to Changes to the CEQA process
Date: June 28, 2023
RECOMMENDATION
Recommend that the Board of Directors approve positions on two bills in the 2023/2024 legislative session related to changes to the California Environmental Quality Act (CEQA):
a. SB 420 - Recommended Position: Support
b. AB 914 - Recommended Position: Support
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 brought two bills to the Legislative and Regulatory Committee at the May meeting, but due to time constraints, the Committee asked for further discussion at the June meeting. Based on the initial feedback that staff received and recent amendments to the bills, staff recommends that the Board approve Support positions on two bills that propose
Legislative & Regulatory Committee Item 2
changes to the California Environmental Quality Act (CEQA), with the goal of decreasing electrical transmission and interconnection timelines to help the state meet its clean energy goals and reduce costs.
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, to support an estimated 120 gigawatts of new generation sources1. Construction of new transmission lines can open up additional areas for renewable energy development, which can lower generation costs by increasing supply.
The current process to construct transmission lines is lengthy. The CPUC estimates that major transmission projects require five or six years under ideal conditions, though the sponsors and supporters of the below bills estimate that 10 years is more typical. The CPUC further estimates that 3-4 years of that total is taken up by CEQA review, with lawsuits potentially extending that time. However, it should be noted that while CEQA can add to project timelines, some transmission projects do not require CEQA review at all.
As part of the 2022 approved state budget, AB 205 (Committee on Budget) classified transmission lines carrying power from renewable projects over a certain size as Environmental Leadership Development Projects, thereby requiring any CEQA legal disputes to be resolved within 270 days.
In May of 2023, Governor Newsom announced 10 policy proposals through the budget process meant to streamline energy and other infrastructure projects. Two of these proposals would streamline permitting by making changes to the CEQA process. The Governor also issued an Executive Order calling for the convening of an Infrastructure Strike Team to identify additional permitting streamlining opportunities. Because these 1 CAISO, “20 Year Transmission Outlook” (2022)
Legislative & Regulatory Committee Item 2
proposals were made as part of the budget, they will not go through the policy committee process that legislative bills go through.
SB 420 (Becker): Transmission Projects, CEQA streamlining For projects over 50kv, existing law requires an electric corporation to obtain a CPUC certificate that the present, or future, public convenience and necessity requires construction of the project. Projects under 50kv do not need a CPUC certificate. This public convenience certificate can be part of the larger CEQA process. According to the author’s office and industry stakeholders, the certificate process can take several years.
This bill would expand CPUC permit exemptions from transmission lines under 50 kilovolts to new sub-transmission and distribution lines and to the reconstruction of an existing line that are under 138kv, if they meet specific location requirements.
Approximately half of existing licensing projects at the CPUC would fall into this new 50- 138 kilovolt threshold range, allowing them to move forward without a CPUC public convenience permit.
This bill is sponsored by the American Clean Power Association and supported by CalCCA, Southern California Edison, labor, business associations, as well as by various clean energy associations and several environmental groups.
AB 914 (Friedman): Permit Streamlining for Existing Distribution Power Lines CEQA currently requires state and local lead agencies to establish time limits of one year for completing and certifying EIRs and 180 days for completing and adopting negative declarations. These limits are measured from the date on which an application is received and accepted as complete by the lead agency. However, agencies may provide for a reasonable extension in the event that compelling circumstances justify additional time and the project applicant consents.
Legislative & Regulatory Committee Item 2
This bill would establish a two-year total 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.
ATTACHMENT
None.
Staff Report – Agenda Item 3
To: Legislative & Regulatory Committee
From: CC Song, Senior Director, Regulatory Affairs
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Update on Resource Adequacy Rulemaking
Date: June 28, 2023
RECOMMENDATION
Staff will provide an information-only update on the Resource Adequacy proceeding at the California Public Utilities Commission. No action is required.
ATTACHMENT
1. Presentation on Resource Adequacy Rulemaking
Update on Resource
Adequacy Rulemaking
Summary
In May, the CPUC issued a
proposed decision (PD) in the RA
proceeding including a provision to
restrict LSEs expansion o CCAs would need to comply with both Year Ahead and Month Ahead RA
requirements two years in a row in to
expand
o CPA staff have submitted
comments and met with
Commissioner offices on the need
to avoid penalizing LSEs who
meet their month ahead
requirements
2
Background
3 Every two years, the CPUC initiates a new Resource Adequacy rulemaking proceeding to examine both large structural issues that may require a longer time horizon to implement, as well as short-term issues and changes needed to be made to the existing RA framework.
The 2023-2024 RA proceeding is a two-track proceeding:
o Reform Track: Focused on developing implementation details for a new RA framework to be tested in 2024, fully implemented in 2025.
o Implementation Track: Focused on refining the existing RA framework to provide clarifications or solve short-term problems.
A proposed decision was issued on May 25, 2023 in the implementation track to address a wide range of issues, including CCAs’ ability to expand, and the amount of RA that LSEs need to procure
CCA Expansion Restrictions
Energy Division (ED) Proposal: A
CCA cannot expand if it had incurred
month ahead deficiencies in the
previous two calendar years
PD Rejects ED Proposal and
Proposes “Zero Tolerance” for RA
deficiency: In contrast to the Energy
Division’s proposal of disallowing CCA
expansion based on month ahead
deficiencies, the proposed decision (PD)
requires CCAs to be compliant with both
month ahead RA (MARA) and year
ahead RA (YARA) requirements to file
an implementation plan to expand
4 2023 YARA
Non-compliance
Compliant with
all 2023 MARA
Compliant with
all 2024 MARA
January 1, 2025
Implementation
Plan Submission
for January 1,
2026 Launch
2023 YARA
Non-compliance
Compliant with
all 2023 MARA
Compliant with
all 2024 MARA
At least 2 more
years for
implementation
submission, plus
1 year until
launch (i.e. no
earlier than 2027)
2024 YARA
Non-compliance
Timing under PD’s “Zero Tolerance”: CCA Launch Timeline based on Month Ahead and Year Ahead RA Compliance
Timing under ED Proposal: CCA Launch Timeline based on
Month Ahead RA Compliance
CCA Expansion Restrictions cont’d
5 The CPUC’s basis for limiting expansion is that CCA’s expansion can lead to cost shift and that non-compliance with RA is a demonstration of cost shift.
The issue with limiting expansion based on year ahead RA compliance is:
o Does not target reliability. Month ahead RA showing directly impacts reliability. This should be the focus of any penalties. The PD upends incentives for CCAs to cure their month ahead deficiencies, leading to more reliability concerns
o Doesn’t take into account operational and market realities. RA resources sometimes don’t materialize until the month ahead time frame due to a variety of reasons, e.g. new construction, transmission availability, unknown water levels for hydro resources, scheduled outages that would impact a resource’s capacity value
CPA and Peninsula Clean Energy submitted joint comments on June 14 to urge the Commission to adopt the original proposal to disallow expansion based on month ahead non-compliance.
Other Additional RA Requirements
6 Planning Reserved Margin (PRM). CPUC requires LSEs to procure a ‘buffer amount’ in addition to the amount required to meet LSEs load. This amount has been increased from 15% to 17%.
IOUs have an “Effective Planning Reserve Margin” of additional 3% - 5.5% for May – September 2024 and 2025. The purpose of the Effective PRM is to provide additional buffer for summer reliability.
o Costs for resources procured by the IOUs for the Effective PRM are collected from all customers.
o While non-IOU LSEs have less to procure due to the lower PRM (17% compared to the IOUs’ 20%-22.5% during the summer months), IOU procurement for Effective PRM decreases the availability of RA capacity.
Next Steps
7 CPUC can adopt the PD as early as June 29, 2023.
CPA staff have met with Commissioners’ offices to discuss CCA expansion eligibility, and RA market dynamics that impact resource availability in the year ahead time frame vs. the month ahead time frame.
Depending on the outcome of the final decision, some CCAs may consider appealing the decision.
Questions?