Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, October 25, 2023
4:00pm
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.
Clean Power Alliance
Executive Conference Room
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
South Bay Cities Council of Governments
Conference Room
2355 Crenshaw Blvd., Suite 125
Torrance, CA 90501
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 of 21
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 the June 28, 2023, Legislative & Regulatory Committee Meeting
REGULAR AGENDA
2. Receive Legislative and Regulatory Update
3. Provide Input on CPA’s Draft 2024 Legislative & Regulatory Policy Platform
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON NOVEMBER 29, 2023*
*Date changed to accommodate for the Thanksgiving holiday.
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 of 21
Staff Report – Agenda Item 1
To: Legislative & Regulatory Committee
Subject: Approve Minutes from the June 28, 2023 Legislative & Regulatory Committee Meeting
Date: October 25, 2023
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3 of 21
Legislative & Regulatory Committee Item 1
MINUTES
Legislative & Regulatory Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, June 28, 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, 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
CALL TO ORDER & ROLL CALL
Committee Member Hicks, acting as Committee Chair, 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 Committee Chair Absent* Carson Cedric Hicks Committee Member Remote
Los Angeles
County Lindsey Horvath Committee Member Remote
Manhattan Beach Amy Howorth Committee Member Remote
West Hollywood Chelsea Byers
Alternate Committee
Member Remote
*Committee Chair Klein Lopez joined as a meeting participant but did not count for quorum.
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
CONSENT AGENDA
1. Approve Minutes from May 24, 2023, Legislative & Regulatory Committee Meeting Agenda Page 4 of 21
Legislative & Regulatory Committee Item 1
Motion: Committee Member Howorth, Manhattan Beach
Second: Committee Member Horvath, Los Angeles County
Vote: The consent agenda was approved by a roll call vote.
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)
Ms. Goodhill briefly discussed a budget deal that excluded legislation potentially harmful to local energy providers; thanked the Committee for their engagement in the matter. Ms. Goodhill noted that the proposed central procurement entity is likely to move forward in the legislative process; noted that it is important to ensure there are sufficient guardrails to avoid market disruption and that CCAs can still procure resources for their customers. Bills presented by staff for committee consideration aim to get transmission built faster.
a. SB 420 - Recommended Position: Support
SB 420 extends the permit exemptions by the California Public Utilities Commission (CPUC) for subtransmission projects. SB 420 allows all projects under 138 kilovolts to go through the typical CEQA application process without a CPUC permit. The bill has wide support and no opposition.
Committee Members asked about the difference between distribution and subtransmission, placement of subtransmission, and the impact of SB 420 on existing local municipal policies for utility undergrounding. Staff indicated that the differences are mainly in kilovolts, speed, and frequency of energy.
Subtransmission and distribution are often placed together in areas already developed. With regard to the impact on local policies, the bill makes no mention of undergrounding and staff will conduct further research. Committee Member Horvath emphasized that the bill should not impact local municipal decisions regarding undergrounding. Committee Member Hicks expressed concern with the placement of subtransmission in densely populated areas that may cause harm to residents. Ted Bardacke, CEO, explained that the negative impacts of installation would emerge during the CEQA process and the bill specifies that subtransmission projects still need to complete the CEQA process.
Motion: Committee Member Howorth, Manhattan Beach
Second: Committee Member Horvath, Los Angeles County
Vote: Item 2a was approved by a roll call vote.
b. AB 914 - Recommended Position: Support
AB 914 aims to establish a 2-year time limit for state agencies to complete the CEQA review and either approve or deny applications for electrical infrastructure projects. 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.
Committee Member Howorth inquired about language in the bill that prevents purposeful delays. Ms. Goodhill clarified that the 2-year timeline starts when the state agency receives a completed application.
Agenda Page 5 of 21
Legislative & Regulatory Committee Item 1
Motion: Committee Member Horvath, Los Angeles County
Second: Committee Member Howorth, Manhattan Beach
Vote: Item 2b was approved by a roll call vote.
Committee Member Horvath asked several questions about Investor Owned Utilities (IOUs) and their involvement in the centralized procurement entity. Ms.
Goodhill clarified that the Department of Water Resources is an ideal neutral candidate for the central procurement entity. Staff will recommend adequate guardrails regarding energy resources and time constraints. Staff explained that the decision makers over the matter are fluid, but the matter is currently with the Senate Energy Committee. Committee Member Horvath asked various questions about existing transmission infrastructure and ways to expedite development. Matt Langer, Chief Operating Officer, explained that the Federal Energy Regulatory Commission (FERC) governs all transmission infrastructure and requires equal access to existing infrastructure. The FERC established an order that introduced competition for certain transmission projects, but those projects are usually aimed at expanding access to transmission. The CAISO is also investing in transmission infrastructure. Committee Member Horvath noted that the Committee should act promptly on policies prioritizing the growth of transmission infrastructure.
3. Receive Presentation on Resource Adequacy Rulemaking CC Song, Senior Director, Regulatory Affairs, provided a presentation on the Resource Adequacy (RA) rulemaking. In May, the CPUC issued a proposed decision that requires CCAs to comply with both Year-Ahead and Month-Ahead RA requirements for two consecutive years to be eligible for expansion. The revised timeline states that CPA must be compliant with the 2024 Year-Ahead and all 2024 Month-Ahead RA requirements in order to submit an implementation plan in 2025. The CPUC’s rationale for limiting expansion is that it can result in a cost shift, and non-compliance with RA demonstrates a cost shift. CPA and Peninsula Clean Energy jointly submitted comments urging the CPUC to adopt the original proposal of disallowing expansion based on Month Ahead non-compliance. Ms.
Song discussed additional RA requirements proposed by the CPUC and outlined next steps. Mr. Bardacke added that once all 2024 Month Ahead and Year Ahead RA requirements are met, CPA can proceed with expansion.
Chair Klein Lopez inquired about the Committee’s leverage to achieve favorable results for CPA. Staff will continue to monitor the decision and the positions of other CCAs to determine how to move forward.
COMMITTEE MEMBER COMMENTS
Committee Member Howorth thanked staff for explaining the legislative issues thoroughly.
ADJOURN
Acting Chair Hicks adjourned the meeting at 11:02 a.m.
Agenda Page 6 of 21
Staff Report – Agenda Item 2
To: Legislative & Regulatory Committee
From: Gina Goodhill, Senior Director, Government Affairs Approved By: Ted Bardacke, Chief Executive Officer
Subject: 2023 Legislative and Regulatory Update
Date: October 25, 2023
BACKGROUND
On September 14, 2023, the California Legislature finished the 2023 Legislative year, sending thousands of bills to the Governor for his signature or veto. While a record number of energy-related bills were introduced this year, five themes emerged in the energy space. These were:
1) A shift towards more centralized oversight and top-down energy decision making, especially as it relates to reliability
2) Renewed discussions about regionalizing energy markets and stitching together a western-wide regional electricity grid
3) A groundswell of support for and coalition behind offshore wind development 4) A focus on developing the transmission and distribution system needed to deliver clean energy resources
5) A continued commitment to statewide leadership on energy and the environment Many of these themes could be seen in the regulatory arena as well. CPA expects these themes to continue into the 2024 legislative year. The Draft 2024 Policy Platform has additions that directly respond to these themes.
Agenda Page 7 of 21
Legislative & Regulatory Committee Item 2
DISCUSSION
Centralized Oversight
The shift towards a more centralized electricity framework has been an area of interest for this Administration, especially as it relates to ensuring energy reliability. At the end of the 2022 Legislative session, the Governor worked closely with legislators to establish the Strategic Reliability Reserve under the Department of Water Resources (DWR), authorizing DWR to contract for new and existing electricity reliability resources during times of grid emergencies.
AB 1373: In the 2023 legislative year, the Administration took a similar approach through AB 1373 (Garcia), which focused on creating a new Central Procurement Entity (CPE), again led by DWR. If requested by the CPUC, the CPE will procure clean energy resources that meet specific criteria on behalf of all electricity customers in IOU territories, rather than having individual load serving entities (LSEs) procure these resources.
Historically, CCAs have been opposed to any sort of CPE and have viewed it as undermining CCAs intrinsic authority and purpose. However, due to the wide-ranging support for this concept from the Governor’s office, key stakeholders, and state agencies, and due to the complexity of procuring some long-lead time resources like offshore wind – and after securing key amendments to proposals that would have put CCAs at a disadvantage – CPA and CalCCA ultimately adopted a neutral position.
Amendments to AB 1373 included eliminating three initially proposed provisions: 1) a new penalty charge for LSEs that did not meet their resource adequacy requirements; 2) expanded CPUC authority over CCAs; and 3) oversight of the proposed CPE by the IOUs rather than by a neutral entity like DWR. CalCCA and the CCAs were unfortunately unable to secure an amendment to limit the types of resources that the CPE can procure to only offshore wind and specific geothermal. CPA Board members and local elected officials from around the state were instrumental to achieving the priority amendments from the collective CCAs, and CCAs as a stakeholder were able to show a level of influence not seen in previous years. It will remain to be seen if and how the state will use this new CPE, and CalCCA and CPA will continue to track this issue.
Agenda Page 8 of 21
Legislative & Regulatory Committee Item 2
AB 1538: By contrast, CPA’s sponsored bill, AB 1538 (Muratsuchi), was held in suspense in the Assembly Appropriations Committee after passing out of its first policy committee.
This bill would have created a new incentive mechanism to reward LSEs that procure union built, clean energy resources beyond their minimum requirements, with a goal of increasing the amount of eligible RA available for LSEs to procure. In some ways, this bill is the antithesis of AB 1373 – rather than centralizing and consolidating procurement power, it would have given more purchasing power to LSE’s and would have relied more heavily on them to procure resources.
Because the bill was introduced during the first year of a two-year legislative cycle, CPA could try to advance the bill again during the next legislative year. However, CPA is not inclined to move the bill next year. The CPUC‘s delay in issuing a long-term procurement framework that the bill hinges on, the singular focus on long-lead time resources from California state agencies, and the ongoing budget shortfall would make it difficult for the bill to have any more success in the coming year. In addition, the general concept of a decentralized reliability strategy does not align with the Administration’s current energy or budget priorities.
The CPUC is likely to issue an updated long-term procurement framework proposal later this year and adopt a final proposal in late 2024. CPA will continue to advocate in the integrated resource planning proceeding for a procurement framework that provides certainty for load serving entities and allows CPA to maximize its long-term contracting abilities. The author of AB 1538 continues to express openness to working with CPA on other bill ideas.
Limitations on CCA Expansion: This year brought new efforts from the CPUC to restrict CCAs’ ability to expand their service territories, as part of the continuing concern that decentralization will decrease reliability. CCAs are now required to comply with all Month Ahead compliance for two years before filing an implementation plan and must be compliant with the immediate prior year’s Year Ahead RA compliance requirement to file an implementation plan in the following calendar year. This likely will have an impact on Agenda Page 9 of 21
Legislative & Regulatory Committee Item 2
the ability of some CCAs to expand services to new customers, given constrained RA supply.
CPA will continue to work through CalCCA to advocate for more reasonable regulations that will allow CCAs to expand while contributing to grid reliability.
Offshore Wind and Transmission Planning
Offshore wind emerged as the leading clean energy resource policy priority of the year, with both a high-profile energy bill and a new set of legislators dedicated to advancing the resource.
In May, the California Energy Commission (CEC) established a goal to deploy up to 5,000 megawatts (MW) by 2030 and 25,000 MW of offshore wind by 2045 — enough electricity to power 3.75 million homes initially, with a goal of powering 25 million homes by midcentury. The state currently does not have any offshore wind and offshore wind has suffered a number of recent setbacks – mostly related to cost overruns and resulting contractual disputes between developers and state governments – on the Atlantic Coast.
To meet this monumental goal, legislators introduced a handful of bills focused on laying the groundwork to advance offshore wind in California. AB 1373 (discussed earlier in this report) was largely seen as the resource for which this bill was designed and passing this bill was the priority for the offshore wind industry. CPA expects to see additional offshore wind bills in the coming year.
A key question surrounding offshore wind, and other clean energy resources including some geothermal, is how the state will support the transmission lines and infrastructure needed to connect these resources to the electricity grid. The CAISO has estimated that California will need to build an estimated $30 billion in new transmission capacity by 2040 to achieve the state’s renewable and zero-carbon electricity goals. This need is made even more monumental by the slow timelines of completing new transmission lines, often taking 10 years or more. To address this issue, the Governor signed an Executive Order Agenda Page 10 of 21
Legislative & Regulatory Committee Item 2
in May to create an Infrastructure Strike Team to identify strategies to expedite transmission, among other things. Multiple bills related to reducing transmission and distribution timelines were introduced this year, and CPA expects to see additional bills in the coming year.
CPA took policy positions on nine bills in the 2023 legislative year – of these, five centered on offshore wind and transmission, with the remaining four focused on advancing building and vehicle electrification, increasing reliability, and increasing local resiliency. Of these nine bills, three were signed into law by the Governor, one was vetoed by the Governor, and five failed to advance to the Governor. As noted earlier in this report, the Governor seemed to favor bills that would maintain or expand centralized oversight of energy and transmission, and largely rejected bills that diminished CPUC authority even if they involved process streamlining. Some of the bills that were held in the committee process may be brought back in the 2024 legislative year, and CPA will continue to track those that are.
Regionalization
AB 538: In 2018, California legislators considered and ultimately rejected a bill that would have created a regional electricity grid for the entire West, a key goal of former Governor Jerry Brown. This year, regionalization was resurrected through AB 538 (Holden), which would have worked with states across the west to create a regional transmission system to integrate energy resources across the western electrical grid. While the bill was held in the Assembly Appropriations Committee in May, leaders from the CPUC, CEC and energy agencies in other states have since announced their support for increased integration of regional electricity markets, and potentially further grid integration governed by a new independent entity. Leaders from these agencies have committed to establishing a not-for-profit entity to lay the foundational work towards a regional organization, with the expectation to stand up this not-for-profit entity in mid or late 2024.
While it is possible that a version of this bill will resurface in the 2024 Legislative year, it now seems more likely that staff from these agencies will design a framework and Agenda Page 11 of 21
Legislative & Regulatory Committee Item 2
governance structure before bringing the idea back to the Legislature. CPA will engage and track this issue as it advances through the state and has added new principles to the draft policy platform to address this issue.
Energy and Environmental Leadership
California continued to lead on environmental and energy issues in the 2023 legislative year, with several high-profile bills receiving the Governor’s signature. Several of these could have direct impacts on CPA and its customers.
Oil and Gas: Oil and gas companies were a prominent target of California’s advocacy this year, with a high-profile lawsuit filed by California against some of the biggest oil and gas companies for their role in causing and denying climate change1. While California is not the first state to file such a lawsuit, it is the largest and the first oil-producing state to do so. If California wins the lawsuit, it could mean more money for the state to spend on resiliency and other remediation efforts. Relatedly, the Governor signed SB 704 (Min), which would make it more difficult for new or expanded oil and gas development along the coast and would instead direct state agencies to consider how the coastland could be developed for offshore wind.
Greenhouse Gas Emissions Disclosure: The Governor signed SB 253 (Wiener), which would require public and private companies with more than $1 billion in annual revenues to publicly disclose their greenhouse gas emissions beginning in 2026, including Scope 3 emissions caused by their suppliers, the first such requirement in the country. As the 2026 date nears, CPA is likely to work with businesses in its service territory to help them understand and disclose the greenhouse gas emissions associated with their electricity use.
Climate Bond: SB 867 (Allen) and AB 1567 (Garcia), otherwise known as the Climate Bond, would place a multi-billion climate resilience general obligation bond before the voters. The bond as currently proposed includes funding for several important issues that 1 https://www.gov.ca.gov/wp-content/uploads/2023/09/FINAL-9-15-COMPLAINT.pdf Agenda Page 12 of 21
Legislative & Regulatory Committee Item 2
impact CPA, including resilience centers, transmission lines, and investments in clean energy technologies. While initially proposed for the May 5, 2024 ballot, it has been pushed to the November 2024 ballot and the details will be determined later in the 2024 legislative year. CPA and CalCCA will track this bill and provide feedback as it advances over the coming months.
ATTACHMENT
None.
Agenda Page 13 of 21
Staff Report – Agenda Item 3
To: Legislative & Regulatory Committee
From: Gina Goodhill, Senior Director, Government Affairs Approved By: Ted Bardacke, Chief Executive Officer
Subject: Draft 2024 Policy Platform
Date: October 25, 2023
RECOMMENDATION
Provide input on CPA’s Draft 2024 Legislative & Regulatory Policy Platform. 1 BACKGROUND
In November 2018, CPA’s Board of Directors adopted a Legislative & Regulatory Policy Platform to serve as a framework for CPA’s advocacy and policy efforts. CPA staff have used the platform to pursue actions at the regulatory levels with the understanding that they are taking actions in the best interest of the organization, member agencies, and customers. In February 2023, CPA’s Board of Directors adopted a revised Legislative & Regulatory Policy Platform and protocol, to allow CPA to respond to legislation and policy matters more quickly and effectively. The new protocol allows CPA staff to take bill positions on most bills using the Board approved Policy Platform, rather than seeking Board approval for each bill position.
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 1 Following input on the Draft Platform, staff will return to the Legislative & Regulatory Committee in November with a request to recommend a Proposed Platform to the Board of Directors at its December meeting.
Agenda Page 14 of 21
Legislative & Regulatory Committee Item 3
CPA at odds with its member agencies, CPA presents a proposed position to the CPA Board of Directors and its Legislative & Regulatory Committee before taking a position.
DISCUSSION
As we move into the second year of a two-year legislative cycle, staff are conscious to suggest minimal changes while simultaneously addressing some of the key energy issues that dominated 2023 and are likely to again be prevalent in 2024. This proposed platform includes new or expanded principles to address the following issues:
1. Transmission and distribution planning
2. Regionalization
3. Building decarbonization
4. Fair rates for CCA customers
Transmission and Distribution Planning: The CAISO has estimated that California will need to build an estimated $30 billion in new transmission capacity by 2040 to achieve the state’s renewable and zero-carbon electricity goals. This need is made even more monumental by the slow timelines of completing new transmission lines, which often take 10 years or more. The proposed principles 2e and 5e would provide clear guidance to CPA staff when it engages in policy discussions geared at expediting transmission and distribution.
Regionalization: A unified electricity market in the Western United States can be a crucial part of ensuring that California can meet its clean energy and affordability goals while also maintaining reliability. The proposed principle 2g would establish some principles for CPA staff to articulate when they engage in policy discussions geared at the creation of a regional energy market and/or grid.
Building Decarbonization: Buildings are California’s second largest source of climate pollution, and CPA’s local reach code program is one effort to address that problem. The Agenda Page 15 of 21
Legislative & Regulatory Committee Item 3
proposed revision to principle 3c would provide clearer guidance to CPA staff when they engage in statewide building decarbonization standards, in addition to local codes.
Fair Rates for CCA Customers: Based on wide-sweeping legislation passed in 2022 (AB 205, which also authorized the operating extension for the Diablo Canyon nuclear power plant), the CPUC is currently studying options for the implementation of a new income-graduated fixed charge, which would replace a portion of electricity bill charges that are currently based solely on the volume of electricity used with a fixed charge that would vary by income levels. This income-based fixed charge would have a direct effect on all customers of Investor-Owned Utilities (IOUs), including CPA customers; in broad terms, low-income customers would see their bills go down while higher income customers would see their bills go up, even if those customers used the same amount of energy.
The income-based fixed charge required by AB 205 came amidst a policy debate that has gained traction as electricity rates have been rising fast in tandem with state decarbonization goals that are pushing for the electrification of transportation and buildings. Within the current delivery rates charged by the IOUs are embedded several costs (including but not limited to wildfire and climate change adaptation, replacement of legacy infrastructure, energy efficiency programs, low-income customer assistance, and rooftop solar subsidies) that have little connection with the amount of energy a customer consumes. 2 Many ratepayer advocates have argued that these costs should not be part of electricity bill but rather should be funded by California’s general fund or other mechanisms, largely because charging low-income customers the same as higher income customers for these basic service needs and public policy goals is a regressive way to pay for them. However, the legislature has been reluctant to shift these costs off of electricity rates and onto the general fund, in part because many of these investments are very long-term and/or require stable and consistent spending levels. 2 See “Paying for Electricity in California: How Residential Rate Design Impacts Equity and Electrification” from Next 10 and The Energy Institute at UC Berkeley’s Haas School of Business. https://www.next10.org/publications/electricity-rates-2 Agenda Page 16 of 21
Legislative & Regulatory Committee Item 3
AB 205 took a different approach by requiring the CPUC to restructure residential electricity rates so that a portion of these non-volumetric items in the delivery charges are paid for based on income in exchange for an equal overall reduction in volumetric rates.
Under the IOU proposal, residential customers in SCE with household income less than $75,000 annually would see average electricity bills go down, bills for those with annual incomes of between $75,000 and $195,000 would stay about the same, and bills for those making more than $195,000 would go up. In addition to the IOU proposal, several stakeholders made alternative proposals that are skewed towards higher or lower bill impact differentials based on income.3
CPA has not developed a position on the broad policy question at hand. CPA’s rates and competitiveness levels are unlikely to be impacted as long as the CPUC remains true to the legislative intent (and most of the stakeholder proposals, including those from the IOUs) that the restructuring take place entirely within delivery rates rather than touching on generation rates.
Due to the administrative complexity, privacy concerns, and potential for gaming or errors within the income determination process for the fixed charges, it is possible that implementation of the rate restructuring will be significantly delayed and/or subject to alteration by the legislature. The proposed revision to principle 1a would more clearly allow CPA staff to engage in discussions on this topic to ensure that CCA customers are treated fairly.
ATTACHMENT
1. 2024 Proposed Policy Platform
3 All income levels cited here are rough estimates based on total household income. Exact income thresholds and how they would be calculated is undefined in the various proposals and particularly problematic from an implementation perspective.
Agenda Page 17 of 21
Legislative & Regulatory Committee Item 3
DRAFT
2024 Legislative and Regulatory Policy Platform
Overview and Purpose
The Clean Power Alliance (CPA) Legislative and Regulatory Policy Platform (Platform) serves as a guide to the CPA Board of Directors and CPA staff in their advocacy efforts and engagement on policy matters of interest to CPA. The Platform allows both members of the CPA Board of Directors and CPA staff to pursue actions at the regional, state and federal legislative and regulatory levels in a consistent manner and with the understanding that they are pursuing actions in the best interest of the organization and its mission, its member agencies, and its customers.
The Platform provides direction to CPA staff on positions that should be taken on regulatory matters and legislative bill proposals. The Platform also provides guidance to the Chief Executive Officer on positions that should be taken on legislative and regulatory matters that come before the California Community Choice Association (CalCCA) Board of Directors.
CPA staff report to the Board monthly on all positions taken on legislative bills. For bills that fall outside the scope of this 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 member agencies have taken, CPA staff will seek approval of a proposed position to the Legislative & Regulatory Committee and Board of Directors before taking a position.
Policy Principles
The Legislative and Regulatory Policy Platform is centered around five basic principles:
1. Protecting CPA’s local control and competitive position, especially as it relates to rates, finances, power procurement and expansion of its service territory.
2. Pursing power resource planning and procurement that promotes the growth in renewable energy capacity at the local level and reduce fossil fuel dependency, with the goal of combating climate change.
3. Developing and administering customer programs that encourage clean energy adoption by CPA customers.
4. Ensuring fair access to data, particularly as it relates to energy usage, billing, and information needed to develop and administer customer programs.
5. Supporting CPA’s ability to set electric rates and offer programmatic services that are affordable and inclusive for all.
These principles are incorporated throughout the below platform.
Agenda Page 18 of 21
Legislative & Regulatory Committee Item 3
Policy Platform
1. Affordability and Local Control
a. Fair rates and cost allocation: CPA will pursue administrative and legislative initiatives that will ensure that non-bypassable charges assessed for CPA customers are fair, that CPA’s customers are not unnecessarily burdened by non-bypassable charges, and that any income-graduated fixed charges treat CPA customers fairly.
b. Finances: CPA will pursue administrative and legislative initiatives to ensure that CPA is eligible to apply and receive funding made available to the electricity sector for decarbonization, reliability, and affordability purposes, and that CPA’s financial health are not disparately impacted by new regulations.
c. CCA Expansion: CPA will pursue administrative and legislative initiatives to protect CPA’s ability to expand its service to new member agencies. d. Local Control: CPA will pursue administrative and legislative initiatives to protect CPA Board’s authority over CPA’s procurement, rate-setting, and customer program development activities.
2. Power Resources Planning and Procurement
a. Resource Adequacy and Reliability: CPA will pursue administrative and legislative initiatives that will enable CPA to secure capacity resources to meet its reliability obligations, such as initiatives that evaluate the supply of capacity resources available to load serving entities (LSEs), determine the appropriate market mechanisms for LSEs to procure capacity resources, and develop a durable policy framework that encourages all LSEs to construct their fair share of new capacity resources to maintain grid reliability while pursuing decarbonization efforts.
b. Carbon-Free Resources: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to procure carbon-free resources to meet or exceed the needs of CPA’s three product offerings and its long-term carbon-free procurement goal as required by SB 100 and other statutory or regulatory obligations.
c. Renewable Resources: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to procure eligible Renewable Portfolio Standard (RPS) resources to meet the needs of CPA’s three product offerings and its long-term RPS procurement goal as required by SB 100 and other statutory or regulatory obligations.
d. Integrated Resource Plan: CPA will pursue administrative and legislative initiatives that will maximize CPA’s ability to plan and procure resources to meet various environmental and reliability goals set by state laws and by its Board of Directors, while offering affordable products and programs to serve its customers, including disadvantaged communities.
Agenda Page 19 of 21
Legislative & Regulatory Committee Item 3
e. Transmission: CPA will pursue administrative and legislative initiatives that will expedite new transmission infrastructure needed to meet California’s climate goals, as well as initiatives that will provide CPA adequate access to transmission capacity to maximize its procurement of RPS-eligible or carbon-free resources that meet various statutory and regulatory requirements. f. Research & Development: CPA will pursue administrative and legislative initiatives that support the research and development of new energy resources that can be procured to meet the reliability and decarbonization goals set by the State and its Board of Directors.
g. Grid Reliability: CPA will pursue administrative and legislative initiatives that support the expansion of regional energy markets and an electrical grid that improves reliability, accelerates decarbonization, improves transmission planning, and reduces costs for ratepayers, while maintaining California’s ability to set and meet its own climate goals, and protects clean energy jobs within the State.
3. Customer Programs
a. Demand Response, Demand Flexibility and Energy Efficiency: CPA will pursue administrative and legislative initiatives that will enable CPA to pursue demand response programs and opportunities for its customers. b. Zero-emission vehicles: CPA will pursue administrative and legislative initiatives to promote electrification of the transportation sector in response to state and federal goals aimed at increasing the usage of zero emission vehicles.
c. Building decarbonization: CPA will pursue administrative and legislative initiatives that supports the ability of CPA to promote electrification and the reduction of natural gas usage in the building sector, including statewide zero-emission building standards. d. Local Grid Management and Resiliency: CPA will pursue administrative and legislative initiatives that supports the ability of CPA and its member agencies to offer local grid management and resiliency solutions to increase local reliability and adaptability that could protect against power outages and extreme heat.
e. Distributed Energy Resources: CPA will pursue administrative and legislative initiatives that support the ability of CPA to offer and utilize distributed energy resources as part of its reliability, resiliency and community engagement strategies.
f. Research and Development: CPA will pursue administrative and legislative initiatives that support the ability of CPA to explore new opportunities related to behind the meter clean energy resources.
Agenda Page 20 of 21
Legislative & Regulatory Committee Item 3
4. Data Access
a. Timely and Accurate Access to Customer Data: CPA will pursue administrative and legislative initiatives that will enable CPA to obtain timely and accurate access to its customers’ data to improve billing accuracy and inform the development and implementation of customer programs. b. Fair Fees for Data Management Services: CPA will pursue administrative and legislative initiatives to ensure that the fees due to Southern California Edison for data access and management are fairly assessed based on data needs and potential technological improvements.
5. Diversity, Equity, Inclusion
a. Customer Protection: CPA will pursue administrative and legislative initiatives that support the protection of all ratepayers, particularly environmental and social justice communities in CPA’s service territory.
b. Supplier Diversity: CPA will pursue administrative and legislative initiatives that supports supplier diversity in CPA’s contracting activities and through women-owned, minority-owned, disabled-veteran-owned, and lesbian, gay, bisexual, and/or transgender owned business enterprises. c. Workforce Development: CPA will pursue administrative and legislative initiatives that support workforce development with a focus on new stable, well-paying local jobs, and participation in a just transition to a low-carbon economy.
d. Energy Equity: CPA will pursue administrative and legislative initiatives that supports increased access to clean energy technologies, clean energy and contracting jobs, and clean energy opportunities for environmental and social justice communities in CPA’s service territory.
e. Access to the Electrical Grid: CPA will pursue administrative and legislative initiatives that support reducing timelines in interconnection and service extensions for new construction, critical services, renewable energy, building decarbonization, and other projects in CPA’s service territory.
Agenda Page 21 of 21