Legislative & Regulatory Committee of the
Clean Power Alliance of Southern California
Regular Meeting
Wednesday, March 26, 2025
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
Carson City Hall
City Manager’s 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 of 19
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 the October 30, 2024, Legislative & Regulatory Committee Meeting
REGULAR AGENDA
2. Provide Feedback on the Greenhouse Gas Reduction Fund and Affordability Options
3. Receive a Presentation on the Power Charge Indifference Adjustment Reform Proceeding Update
COMMITTEE MEMBER COMMENTS
ADJOURN – NEXT MEETING ON APRIL 23, 2025
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.
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Staff Report – Agenda Item 1
To: Legislative & Regulatory Committee
Subject: Approve Minutes from the October 30, 2024, Legislative & Regulatory Committee Meeting
Date: March 26, 2025
RECOMMENDATION
Approve.
ATTACHMENT
1. Minutes
Agenda Page 3 of 19
Legislative & Regulatory Committee Item 1
MINUTES
Legislative & Regulatory Committee
of the Clean Power Alliance of Southern California
Regular Meeting
Wednesday, October 30, 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 Cedric Hicks called the meeting to order at 10:00 a.m. and Annie Mendoza, Deputy 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 Committee Member Remote
Manhattan Beach Amy Howorth Committee Member Absent
West Hollywood Chelsea Byers
Alternate Committee
Member Remote
All votes are unanimous unless otherwise stated.
GENERAL PUBLIC COMMENT
There was no public comment.
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Legislative & Regulatory Committee Item 1
CONSENT AGENDA
1. Approve Minutes from the August 28, 2024, Legislative & Regulatory Committee Meeting
Motion: Committee Member Byers, West Hollywood
Second: Committee Member Hicks, Carson
Vote: The consent agenda was approved by a roll call vote.
REGULAR AGENDA
2. Provide Input on CPA’s Draft 2025 Legislative & Regulatory Policy Platform (“Platform”) and Recommend Approval of the Platform to the CPA Board of Directors
Gina Goodhill, Senior Director of Government Affairs, provided an update on California’s legislative cycle changes and how they apply to the recommended policy platform draft. Ms. Goodhill explained that an affordability package was introduced, which includes three different themes of bills. One of these bills focuses on cutting program funding to increase affordability. A program transparency bill was also passed, which will require the CPUC to report to the legislature every three years on various aspects of energy efficiency and demand response programs. CPA is already collaborating with other CCAs to refine this reporting process and ensure it is both fair and not overly burdensome.
CC Song, Senior Director of Regulatory Affairs, presented the regulatory updates, expressing that when developing regulatory priorities, affordability, decarbonization, and reliability are the three key policy areas that are the main focus; updates provided were on key proceedings that have impact on CPA’s ability to serve customers effectively, provide affordable rates and innovative products, and CPA’s ability to manage their portfolio to meet state and local policy goals. Ms. Song explained that CPA has been involved in SCE’s 2025 General Rate Case (GRC) application proceedings. They aim to ensure that SCE offers fair and equitable services to bundled and unbundled customers. CPA also monitors and participates in proceedings at other regulatory agencies, such as implementing the revised low management standards at the California Energy Commission.
Chair Hicks requested that if the legislative updates need to be presented to the Board, it should be converted into charts to convey the information effectively. Ms.
Goodhill responded that they could discuss internally how to create a more easily digestible format for the presentation.
Chair Hicks expressed concern regarding service fees and how they can be dealt with legislatively, making it known that these issues are of top priority, in addition to some relief being needed based upon Edison’s control of transmission lines.
Ms. Goodhill responded that another lobby day is being planned in conjunction with CalCCA for January 29, 2025, to familiarize members with CPA before getting into deep policy issues.
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Legislative & Regulatory Committee Item 1
Chair Hicks raised questions about solar panels, specifically regarding their introduction in certain neighborhoods and whether any rebates are being offered.
He also asked how a standard could be established for government buildings to achieve off-grid status, especially now that public access to energy has increased.
Ms. Goodhill replied that bills on various elements of decarbonization and distributed energy resources have been observed at legislative sessions and are being tracked. Ted Bardacke, Chief Executive Officer, expressed concern with the new bill that passed, noting that part of establishing the CCA was to offer programs that were different and not within the framework of what the CPUC was authorizing.
Mr. Bardacke explained that CPA examines both regulatory and legislative aspects. He highlighted that the extensive evaluation of customer programs aims to determine where customers feel they are receiving value for their money.
Ms. Goodhill explained the proposed changes to the policy platform. The first change is the addition of bullet 1E, which expands the focus on affordability to include infrastructure financing. The second change is the introduction of a new principle, "4C," which emphasizes bill transparency. Lastly, the platform will be updated to summarize all changes and clarify or combine information for better understanding.
Motion: Committee Member Byers, West Hollywood
Second: Committee Member Hicks, Carson
Vote: Item 2 was approved by a roll call vote.
COMMITTEE MEMBER COMMENTS
Regarding the monthly account charges, Committee Member Hicks asked if there was anything that CPA could provide to the cities that could help with the process or oppose it. Ms. Song replied that the proposed decision is very close, and once the decision has been made, a clearer picture will be available as far as the next steps for advocacy. Mr. Bardacke explained the proceeding process, highlighting that at this point, the legal part of the process must be played out.
ADJOURN
Chair Hicks adjourned the meeting at 10:35 a.m.
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Staff Report – Agenda Item {{item.number}}
To: Legislative & Regulatory Committee
From: Gina Goodhill, Senior Director, Government Affairs Approved By: Ted Bardacke, Chief Executive Officer
Subject: Greenhouse Gas Reduction Fund and Affordability Options Date: March 26, 2025
RECOMMENDATION
Receive and provide feedback.
BACKGROUND1
As California decision makers grapple with rising electricity costs, the cap-and-trade program and the California Climate Credit are both under consideration as potential avenues to lower costs for ratepayers.
Cap-and-Trade: California’s cap-and-trade program is one of several programs designed to reduce greenhouse gas emissions in the state, following the passage of the Global Warming Solutions Act of 2006 (AB 32). It creates incentives for utilities, industries, and other facilities to reduce their greenhouse gas (GHG) emissions and invest in clean energy. The program applies to emissions that cover approximately 75 percent of the state’s GHG emissions, representing about 350 facilities. 1 The background section of this report draws heavily from the following sources:
- Joint Legislative Committee on Climate Change Policies. " California’s Cap-and-Trade Program and Affordability: Emerging Challenges and Potential Solutions." February 26, 2025. - Petek, Gabriel. "California’s Cap-and-Trade Program: Frequently Asked Questions." Legislative Analyst’s Office, October 2023. Available at www.lao.ca.gov.
Agenda Page 7 of 19
Legislative & Regulatory Committee Item 2
The program establishes a limit, or a cap, on major sources of GHG emissions, and issues a number of allowances proportional to the cap. This cap shrinks over time, which corresponds to fewer allowances being available, presumably at a higher price. Some of these allowances are auctioned off, and some are given away for free to utilities, in order to keep costs stable and to prevent companies from fleeing the state. Some revenue raised from the Investor-Owned Utilities selling their free allocations go back to electricity customers through the California Climate Credit, which is discussed in more detail later in this document.
Revenues from cap-and-trade auctions (as opposed to the free allocations) are deposited into the Greenhouse Gas Reduction Fund (GGRF). The amount of revenue varies, but in recent years has been about $3-4 billion per year. About 65% of the revenue is committed via continuous appropriations for high-speed rail; affordable housing and sustainable communities; low-carbon transit; and safe drinking water. This leaves 35% for discretionary expenditures that often include wildfires prevention; zero emission vehicle rebates and infrastructure; extreme heat prevention; livestock methane reduction; oil well abandonment issues; and targeted clean energy programs.
The cap-and-trade program is set to sunset in 2030 unless the Legislature reauthorizes it, which it has done in the past. Between the pending reauthorization and the heightened focus on affordability, now is a good time to revisit if and how the GGRF funds could be used for electricity affordability.
California Climate Credit: The California Climate Credit comes from cap-and-trade allowances that are given to utilities for free in an effort to stabilize rates and keep companies in California. These allowances are then sold and the revenue is distributed to residential customers twice a year as a flat, on-bill credit in April and October (residential customers receive a similar credit on their gas bill in April). The amount of the climate credit varies by utility, based on each IOU’s allowance allocation. In 2024, SCE customers received $172; in 2025, SCE customers are expected to receive $116.462. 2 https://www.cpuc.ca.gov/climatecredit
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Legislative & Regulatory Committee Item 2
These credits provide immediate ratepayer relief respective of income or energy usage, without customers having to take any action.
DISCUSSION
With concerns about electricity affordability at an all-time high, and the GGRF program up for reauthorization and modification at both CARB and the Legislature, there may be a new opportunity to re-examine how both the California Climate Credit and the GGRF could be modified to decrease electricity costs.
In October 2024, Governor Newsom issued an Executive Order directing the CPUC to review existing ratepayer programs and the California Climate Credit, among other things, and identify opportunities to mitigate the rising costs of electricity3. The CPUC identified several options to reallocate the Climate Credit to increase affordability for specific groups of customers4. These are:
1) allocating the credit only to low-income customers on the CARE rate; 2) allocating the credit only to customers who do not have rooftop solar 3) allocating the credit on the basis of usage, with customers who use more electricity receiving a higher credit.
Separately, CPA has been working with CalCCA to identify additional opportunities to use the GGRF and Climate Credit for affordability. Three opportunities have been identified:
1) Shift the distribution of the credit to summer months when bills are highest, rather than distributing the credit in April and October
2) Use the GGRF discretionary funds, in addition to the revenue from the free allowances, to increase the Climate Credit that residential customers receive 3) Use the GGRF discretionary funds to invest in policy-driven transmission projects as a long-term strategy to bring down the cost of transmission, which is one of the current drivers of rising electricity bills.
3 https://www.gov.ca.gov/wp-content/uploads/2024/10/energy-EO-10-30-24.pdf 4 https://www.cpuc.ca.gov/-/media/cpuc-website/industries-and-topics/reports/cpuc-response-to-executive-order-n-5-24.pdf Agenda Page 9 of 19
Legislative & Regulatory Committee Item 2
Shifting the Climate Credit to summer months without increasing the credit is the easiest of these options, though arguably the least impactful. The summer months are when bills are highest and customers most need bill relief. Assemblymember Rick Zbur is authoring AB 729, which would do just this, shifting the electricity bill Climate Credit from April and October to August and September. CPA is a co-sponsor of this bill, along with SCE.
Decisions about increasing the climate credit (short-term affordability) or investing in transmission to create longer-term electricity affordability via the GGRF are more fraught, as it would require taking this money from some other programs currently being funded by the GGRF. However, if electricity bills continue to rise, customers will be less likely to invest in electrification measures, which may dilute the effectiveness of some of the programs that are currently funded through the GGRF, further exacerbating climate change.
As Cap-and-Trade reauthorization conversations progress, as well as debates about both short and long term spending from the GGRF, staff would appreciate direction on how to approach the issue of cutting program spending in favor of more broadly based affordability measures, and within that, how to balance measures that would result in immediate rate relief (e.g. increase the Climate Credit) with measures that could bring down costs long-term but may not provide any immediate savings (e.g. state investment in transmission).
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Staff Report – Agenda Item 3
To: Legislative & Regulatory Committee
From: CC Song, Senior Director, Regulatory Affairs
Reviewed by: Matthew Langer, Chief Operating Officer
Approved By: Ted Bardacke, Chief Executive Officer
Subject: Power Charge Indifference Adjustment (PCIA) Reform Proceeding Update
Date: March 26, 2025
BACKGROUND
Staff will present an update on the new Power Charge Indifference Adjustment (PCIA) reform proceeding issued by the California Public Utilities Commission in February 2025.
ATTACHMENTS
1. Presentation on PCIA Reform Proceeding Update
Agenda Page 11 of 19
Power Charge Indifference
Adjustment (PCIA) Reform
Proceeding Update
March 26, 2025
Agenda Page 12 of 19
Presentation Overview
• PCIA and Energy Resource
Recovery Account (ERRA)
Background
• PCIA and ERRA Reform
Proceeding Updates
• CPA staff engagement and next
steps
Agenda Page 13 of 19
Background: PCIA and ERRA
Purpose of the PCIA: Recover “stranded costs” from departing customers by charging them the net costs of generation contracts procured on their behalf by the IOU while they were bundled customers, leaving bundled customers “indifferent.”
Current PCIA framework was determined by a 2018 CPUC decision, which adopted a Market Price Benchmarks (MPB) methodology to determine IOU PCIA portfolio value.
MPBs are updated every year based on market data to be utilized in the Energy Resource Recovery Account (ERRA) proceeding, which sets the PCIA each year.
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3 New PCIA and ERRA Reform Proceeding
The 2025 PG&E and SCE ERRA Forecast applications (filed in May 2024) led to the issuance of the new proceeding
• IOUs and CCAs have identified issues related to setting MPBs in the last few years • Most recently, a dispute over the categorization of Local RA in PG&E’s and SCE's ERRA forecast, resulted in higher PCIA rates for CPA customers. The Commission adopted the IOUs’ recategorization proposal without providing stakeholders sufficient opportunity to examine and debate the merits of the proposal
• Subsequently, the Commission stated in the PG&E’s and SCE’s ERRA decisions that it would consider broader PCIA issues in a separate rulemaking
The PCIA and ERRA Reform proceeding was formally issued on February 20, 2025 • The Commission’s near-term objective is to “fix” RA MPB which they believe overstates RA value • Longer-term they seek to broadly re-evaluate the PCIA in light of changing market conditions Track 1: Considers and adopts changes to RA MPBs on an expedited basis, to be implemented by October 2025 for the release of MPBs
• Proposed decision to be issued in May 2025
Track 2: Further changes to MPBs, on a longer timeline
• Proposed to be complete by 2028
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4 PCIA and ERRA Reform: CPUC Track 1
Staff Proposals and CalCCA Positions
Incorporate long-term transactions in MPBs
• CalCCA position: Oppose incorporation of long-term transactions in MPBs. MPBs should be reflective of recent market prices, not transactions entered into years ago under different market conditions
Utilize one single RA MPB instead of 3
• CalCCA position: Support utilization of a single RA MPB Exclude affiliate transactions from MPB calculation
• CalCCA position: Support exclusion of affiliate transactions to reduce the risk of market manipulation
Exclude swap and sleeve transactions
• CalCCA position: Conditionally support exclusion of swap and sleeve transactions to the extent such transactions can be objectively and transparently identified Utilize monthly values for the overall RA MPBs
• CalCCA position: Support utilization of monthly values for overall RA MPB to reflect seasonality changes of RA prices
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5 Potential Track 2 Issues
Consideration of structural changes to the PCIA including:
• Sunsetting the PCIA to allow IOUs access to the PCIA portfolios in an environment of growing load • Allocating PCIA resources from the IOUs’ portfolios to CCAs to account for more accurate value of resources and reduce rate volatility for customers
Revisiting the PCIA GHG-free methodology to accurately value non-RPS carbon-free resources, e.g. hydro and nuclear Consideration of RA Slice-of-Day framework’s impact on RA MPB Development of a framework for re-vintaging utility-owned resources Agenda Page 17 of 19
6 CPA Staff Engagement and Next Steps
CPA's goal is to ensure an equitable outcome and make sure the Commission sees its role as balancing the needs of all customers – bundled and unbundled - rather than favoring bundled customers
Staff is actively engaging to seek a favorable outcome from the proceeding through • Advocacy through CalCCA and participation in CalCCA working groups • Ex-parte meetings with commissioners
• Conversations with IOUs
Track 1 comments due on March 18, expecting PD in May
• Coordinate with external counsel and technical consultant on implementation in SCE’s ERRA forecast application proceeding
Track 2 will be initiated after Track 1 decision adoption • Ongoing conversations with CalCCA members about priorities • This track has the potential to alter the current PCIA framework with unpredictable results Agenda Page 18 of 19
7 Questions
Agenda Page 19 of 19