Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, September 25, 2024
10:00am
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:
City of West Hollywood
3rd Floor City Manager’s Conference Room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
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
LA 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
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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 August 28, 2024, Legislative & Regulatory Committee Meeting
REGULAR AGENDA
2. Receive 2024 Legislative and Regulatory Update
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON OCTOBER 30, 2024
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
Staff Report – Agenda Item 1
To: Legislative & Regulatory Committee
Subject: Approve Minutes from the August 28, 2024 Legislative & Regulatory Committee Meeting
Date: September 25, 2024
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3
Legislative & Regulatory Committee Item 1
MINUTES
Legislative & Regulatory Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, August 28, 2024, 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
Clean Power Alliance
Executive Conference Room
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
City of West Hollywood
3rd Floor City Manager’s Conference Room
8300 Santa Monica Blvd.
West Hollywood, CA 90069
CALL TO ORDER & ROLL CALL
Chair Deborah Klein Lopez called the meeting to order at 10:00 a.m. and Gabby Monzon, Clerk of the Board, conducted roll call.
Roll Call
Agoura Hills Deborah Klein Lopez Committee Member Absent Carson Cedric Hicks Committee Chair Remote
Los Angeles
County Rita Kampalath Alternate Committee
Member Remote
Manhattan Beach Amy Howorth Committee Member Remote
West Hollywood Chelsea Byers
Alternate Committee
Member Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
Agenda Page 4
Legislative & Regulatory Committee Item 1
CONSENT AGENDA
1. Approve Minutes from the March 27, 2024, Legislative & Regulatory Committee Meeting
Motion: Committee Member Byers, West Hollywood
Second: Committee Member Howorth, Manhattan Beach
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
2. Oral Report on the End of the 2024 California Legislative Session Gina Goodhill, Sr. Director, Government Affairs reported on the end of the 2024 California Legislative session, noted that a significant energy affordability package did not materialize yet. In response to Committee Member Howorth’s question, staff clarified that although there were challenges in passing this type of policy in the legislative amendment process, going through the regular policy process can be beneficial for this type of complex legislative bill.
3. Receive Presentation on Proposition 4 – the Safe Drinking Water, Wildlife Prevention, Drought Preparedness, and Clean Air Bond Act of 2024 and Provide Direction
Ms. Goodhill explained that the proposition would authorize $10 billion for a variety of environmental measures, many of which align with CPA’s policy platform.
Because the proposition has long-term impacts on the state’s general fund and establishes legal requirements for public agencies, staff decided to provide the Committee with an opportunity to discuss the proposition in advance of bringing it to the full Board for a vote. Ms. Goodhill noted that a position would put CPA on the record supporting a proposition that allocates funds towards environmental and energy issues but would not allow CPA to advocate for its passage. The proposition addresses affordability, as some of the electricity infrastructure costs could be paid for with the bond rather than placing costs on customer bills. The Committee directed staff to recommend a Support position to the Board of Directors on Proposition 4.
4. Receive Presentation on the South Coast Air Quality Management District Proposed Amended Rules and Provide Direction
Ms. Goodhill, Sr. Director, Government Affairs, presented a new regulation being proposed by the South Coast Air Quality Management District that would ban on sales of new gas furnaces and gas water heaters upon replacement. Joanne O’Neill, Director of Customer Programs, added that if the regulation is adopted, CPA should prepare to learn how to better assist customers in the implementation phase. AQMD plans to offer a rebate program to support customers with electric appliances. By 2027 and 2028, all residential water and space heating replacements, respectively, must be electric. CPA may engage in a number of ways regarding this proposed regulation and staff seek feedback on from the committee on the type of engagement CPA staff should engage in in.
Regarding Chair Hicks’ questions about the impact on the low to moderate income communities, Ms. O’Neill explained that there are ways to structure AQMD’s suggested rebate program and a focus would be on coordinating with community Agenda Page 5
Legislative & Regulatory Committee Item 1
organizations that work with those populations. Regarding infrastructure, Ms.
Goodhill noted that CPA is supporting legislation that is focused on reliability, in addition to taking advantage of upgrading current infrastructure, while also building new infrastructure, and regionalization as a long-term option to increase reliability.
Ted Bardacke, Chief Executive Officer, replied to Chair Hicks’ comments about community outreach and engagement, noting that CPA can provide input on the implementation timeline to emphasize outreach strategies for target populations.
In response to Committee Member comments, Ms. O’Neill announced that there is a new CPA energy team service that will help both residential and small business customers navigate the electrification, incentive, and contractor process, etc.
Committee Member Kampalath noted that focusing on how to assist low-income communities in this transition is best done by figuring out how best to include them, not simply delaying or excluding them from the regulations. The Committee agreed that CPA should engage in the rulemaking process, focusing on how this would impact low-income populations, providing input on incentive design, community engagement, and funding for outreach during and after implementation of the regulation.
COMMITTEE MEMBER COMMENTS
None.
ADJOURN
Chair Hicks adjourned the meeting at 10:46.
Agenda Page 6
Staff Report – Agenda Item 2
To: Legislative & Regulatory Committee
From: Gina Goodhill, Senior Director, Government Affairs CC Song, Senior Director, Regulatory Affairs
Approved By: Ted Bardacke, Chief Executive Officer
Subject: 2024 Legislative and Regulatory Update
Date: September 25, 2024
BACKGROUND
On August 31, 2024, the California Legislature finished the 2024 Legislative year, sending several hundred bills to the Governor for his signature or veto.
While many of these bills had been in discussion for months, the highest profile energy bills were introduced just days before the end of the session, and largely failed to advance to the Governor. These bills made up the “Affordability Package,” and were part of a larger affordability theme that dominated the 2024 year.
In addition to affordability, the legislature also tackled bills that dealt with building and vehicle electrification, reliability, and transmission planning. The California Public Utilities Commission (CPUC) tackled many of these same issues in their regulations.
LEGISLATIVE DISCUSSION
Beginning in April, there were rumors of pending legislation from Assembly leadership to tackle growing electricity affordability concerns. While affordability had been a minor theme in previous legislative sessions, the Income Graduated Fixed Charge that was proposed in the beginning of the session, along with a recent report by the CPUC’s Public Agenda Page 7
Advocates Office that a majority of Californians had seen a 50% increase in their electricity bills since 2021, brought this issue to the forefront.
Much of the early conversations in 2024 focused on changes or cuts to various ratepayer funded energy efficiency programs. Despite this early interest, legislative leadership did not release concrete proposals until the final week of the legislative session, and in some cases, the final 72 hours (thus allowing for no amendments). The final affordability proposals centered on several themes, three of which directly impact CPA customers:
1. Program Funding: One of the biggest themes of the affordability discussion was the various customer programs that are funded through ratepayers, and the subsequent impact that these programs have on rising rates. When proposed cuts to energy efficiency funding were met with resistance, the legislature pivoted to proposed cuts to three other energy rebate programs. Led by the Chair of the Assembly Energy Committee, Cottie Petrie-Norris, AB 3121 targeted cuts to rebates for school HVAC upgrades; programs to help low-income customers access rooftop solar; and a battery storage rebate program.
Taken together, cuts to these programs were expected to provide a one-time $30 bill credit to customers. Stakeholders from environmental, solar, housing, and labor groups mobilized against this proposal, forcing legislators to withdraw it before a vote.
Of greater surprise and impact for CCAs was a customer program transparency bill that went into print mere hours before the 72-hour cutoff for legislative amendments. AB 3264 (Petrie-Norris) requires the CPUC to evaluate and report to the legislature on all energy efficiency and demand response programs, including those paid for by CCA customers and not overseen by the CPUC. These new reporting requirements have the potential to be burdensome for CCA staff, and to evaluate CCA programs using a cost-effectiveness methodology that is inappropriate for CCA programs. This bill is awaiting the Governor’s signature. The bill author acknowledged during debate that the legislation still needs some clarification; clean-up language and changes to reporting methods and methodologies will be an immediate priority for CalCCA in the coming legislative session.
Legislative & Regulatory Committee Item 2
Agenda Page 8
2. California Environmental Quality Act (CEQA) and Permitting Reform: Another part of the affordability discussion focused on reducing ratepayer costs by building clean energy projects more quickly and cheaply. SB 1272 (Laird) would have authorized the CEC to prepare an environmental impact report for clean energy project that developers could use instead of undergoing their own study, but the bill died before reaching the Governor.
Similarly, SB 1420 (Caballero) would add green hydrogen projects to the list of facilities eligible for centralized permitting and expedited CEQA review. This will allow these projects to come to fruition sooner and will maximize the state’s ability to take advantage of $1.2 billion from the U.S. Department of Energy to accelerate the development and deployment of clean renewable hydrogen. The bill was passed by the legislature and is now awaiting the Governor’s signature.
3. Disconnection Protection: Finally, the affordability package included a bill to protect customers who are at risk of electricity service disconnection. SB 1142 (Menjivar) adds ratepayer protections against disconnection due to nonpayment of bills for certain customers and is awaiting the Governor’s signature.
Overall, while some pieces of the affordability package made it to the Governor, the package was largely seen as a failure, especially with the announcement that the affordability discussions would be continued in a special session of the Legislature to discuss rising gasoline prices.
One bright spot in the larger affordability discussion was the August announcement of substantial federal funding for the state. The U.S. Department of Energy awarded a $600 billion grant to improve California’s electric grid that will lead to energy savings and enhanced reliability for consumers. This includes upgrades to 100 miles of electric transmission lines with grid enhancing technologies that will expand transmission capacity and provide interconnection improvements.
Legislative & Regulatory Committee Item 2
Agenda Page 9
In addition to the affordability package, several other significant energy bills moved forward, including four supported by CPA.
• SB 1221 (Min) creates pilots to eliminate gas service in specified neighborhoods.
This approach could be the first step in shifting the building sector towards electrification to meet the state’s greenhouse gas reduction goals. CPA is also tracking a related proposal as part of a proceeding at the CPUC. • AB 2779 (Petrie-Norris) requires CAISO to study grid enhancing technologies (GETs) to help increase the capacity and efficiency of current transmission lines. • SB 1130 (Bradford) expands the undersubscribed low-income Family Electric Rate Assistance (FERA) program to additional households.
• SB 59 (Skinner) directs state agencies to study bidirectional charging (which would allow electric vehicles to send energy back to the grid) and gives them the authority to mandate bidirectional capability in vehicles if it will be beneficial.
One additional theme that emerged as part of the affordability discussions is increasing transparency on electric bills. As electricity costs increase, ensuring that customers understand what they are paying for has become increasingly important, and CPA expects to see proposed legislation on this topic in the coming legislative session. This theme will be reflected in CPA’s proposed 2025 Legislative and Regulatory Policy Platform.
REGULATORY DISCUSSION
While the regulatory process does not follow the same calendar as the legislative process, many of these same themes have emerged in ongoing rulemaking in which CPA is engaged. As in the past, some items at play have, at their core, issues of CCA autonomy in the areas of ratemaking, procurement, and customer program development.
Affordability: CPA, along with other CCAs operating in SCE territory (the “Joint CCAs”), has been engaging in affordability discussions through SCE’s 2025 General Rate Case to ensure rate affordability and fair treatment of CCA customers. The key issues that the Joint CCAs have advocated are:
Legislative & Regulatory Committee Item 2
Agenda Page 10
1) Reducing the proposed CCA service fees: SCE proposed to nearly double its CCA service fees despite no planned mass enrollment, and no proposed increase in the level or quality of service. One of the fees, the Monthly Account Maintenance Fee (MAMF), would increase by a factor of five if SCE’s proposal is adopted. The MAMF would, purportedly, support the work related to mass enrollment, as well as regular calls with CCA staff to correct or mitigate billing system errors. However, mass enrollments in the next four years have already been accounted for in costs and none of them are large enough to necessitate a significant service fee increase. Furthermore, the meetings required to reconcile billing system errors are caused by SCE’s system and process. The Joint CCAs asked the CPUC to direct SCE to maintain the current level of the MAMF.
2) Improving SCE’s handling of back-billing practices caused by its system: Related to the billing system errors raised in the context of CCA service fees, the Joint CCAs have also asked the Commission to direct SCE to apply its back-billing policies fairly across bundled and unbundled customers and reduce its billing error rates by prioritizing issues raised by CCAs. Currently, for bundled residential customers, SCE credits any back-billed charges beyond the last three months; for commercial customers, back-billed charges beyond three years in the past are credited. For unbundled customers, however, SCE only credits back the delivery side of the bill, not the generation side. This practice arguably contradicts SCE’s Rule 17. In contrast, PG&E credits both generation and delivery back-billed charges across bundled and unbundled customers.
3) Providing more transparent and detailed testimony to justify upgrades to its utility owned generation assets: The Joint CCAs argued that the CPUC should direct SCE to provide more information in its GRC testimony going forward to ensure the CPUC has sufficient details to determine cost responsibility of the new assets, and appropriately vintage the resources so the Power Charge Indifference Adjustment (PCIA) is assessed properly.
A proposed decision should be issued by the end of October, and a decision may be adopted at the end of 2024 or early 2025. CPA will continue to work with the Joint CCAs Legislative & Regulatory Committee Item 2
Agenda Page 11
to ensure the CPUC staff understand the fairness principles driving these requested actions.
Decarbonization: The California Energy Commission (CEC) established load management standards (LMS) in 1982 to increase electricity demand flexibility and encourage decarbonization through demand side management. Shifting electricity consumption to different times of the day can help reduce carbon emissions and increase grid reliability.
CPA submitted its Board-approved LMS compliance plan to the CEC in March and recommended utilizing existing and planned customer programs to meet the LMS requirements, based on analysis conducted using available data. Since then, CPA has met with CEC staff to discuss CPA’s LMS compliance plan.1 The CEC staff informed CPA that CPA will likely need to make revisions to its plan in order to 1) reflect CPA’s ongoing communications with SCE regarding CPA’s participation in SCE’s real time pricing (RTP) pilot, and 2) reflect CPA’s intention to evaluate incorporating more dynamic price signals in its customer programs.
CPA staff anticipates receiving a letter from the CEC staff containing the requested revisions in the next two months. Once the letter has been received, CPA will have 90 days to revise its compliance plan and submit the revised version to the CEC. In the meanwhile, CPA staff have continued to engage with SCE regarding participating in SCE’s RTP pilot and is actively discuss the possibility of revising our programs to meet the CEC’s requirements or establishing our own RTP rates. CalCCA is also engaged at the statewide level on broader themes of implementation feasibility and regulatory overreach in the CEC’s implementation of LMS.
Reliability:
Implementation of Central Procurement Entity for Long Lead Time Resources 1 Staff understands that the CEC has met with other large CCAs regarding their LMS compliance plans.
Legislative & Regulatory Committee Item 2
Agenda Page 12
At the end of the 2023 Legislative session, AB 1373 was signed into law, requiring the CPUC to determine by September 1, 2024, whether there is a procurement need for long-lead time (LLT) resources. The CPUC then can request the Department of Water Resources (DWR) to procure those resources within 6 months of the determination.
On August 22, 2024, the CPUC issued a decision determining the need of up to 10.6 gigawatts (GW) of LLT resources, made up of 7.6 GW of offshore wind, 1 GW of geothermal, 1 GW of multi-day long duration energy storage (LDES), and 1 GW of LDES with a discharge period longer than 12 hours. A subsequent informal request may be sent to DWR within 6 months of the issuance of this decision to ask DWR to initiate procurement activities. The total procurement may be less than the determined need of
10.6 GW.
The decision also determines that all CPUC-jurisdictional load serving entities (LSEs), including investor-owned utilities, CCAs, and direct access energy service providers must share the costs of procurement based on each LSE’s share of load forecast. As the need for any additional LLT resource procurement will be determined in future integrated resources planning cycles, CPA staff, along with other CCAs, will continue to work with CPUC staff to determine specific types of LLT resource needs, and how the DWR procured resource capacity should be factored into California’s resource planning process.
Resource Adequacy Program Refinements
The CPUC adopted a 24/7 capacity framework in 2022 (also referred to as ’Slice of Day’ framework), with the goal to ensure that California has sufficient capacity on the grid at all hours, especially during the evening peak hours in the summer. Each LSE needs to demonstrate that it has enough capacity monthly to serve each hour of the day. CPA staff have worked closely with CPUC staff to implement the new 24/7 capacity framework for the upcoming 2025 Resource Adequacy (RA) year. CPA staff have anticipated this fundamental program shift for several years and have been actively planning and procuring resources to meet the Year Ahead RA obligations. CPA staff have also actively Legislative & Regulatory Committee Item 2
Agenda Page 13
provided feedback to CPUC staff on the compliance requirements in order to minimize confusion and ensure that CPA’s portfolio’s contribution to reliability is accurately reflected.
ATTACHMENT
None.
Legislative & Regulatory Committee Item 2
Agenda Page 14