Regulatory Packet — MCE Board of Directors, March 21, 2024 (part 2 of 2)

SDG&E RESPONSE TO
SDCP AND CEA DR001
RESPONDED: SEPTEMBER 29, 2023
2 SDCP/CEA to SDG&E 1.10:

Referring to the Prepared Testimony of Michelle Menvielle and the table at MM-18; for each RA solicitation conducted in 2021 where SDG&E sought to sell excess RA with delivery in 2022, please provide the following:
a. All solicitation materials
b. SDG&E’s detailed 2021 RA position, by month, at the time of the solicitation, detailed by Local, Flex and System RA.
c. Details of all bids received in the solicitation.
d. Details of all bids awarded.
e. Details of all bids rejected and why they were rejected.

Response to SDCP/CEA to SDG&E 1.10:

SDG&E objects to this request pursuant to Rule 10.1 on the Commission’s Rules of Practice and Procedure on the grounds that it seeks production of information that is neither relevant to the subject matter involved in the pending proceeding nor is reasonably calculated to lead to the discovery of admissible evidence. Specifically, the details of the solicitation materials, RA position, bids received, bids awarded and the reasons bids were rejected are irrelevant to any issue presented in this ERRA Compliance proceeding. Furthermore, SDG&E notes that SDCP and CEA regularly participate in solicitations, and therefore, it would be improper for SDG&E to disclose confidential and commercially sensitive information regarding SDG&E’s sales strategy and other solicitors’ bidding strategies. Specific quantitative analysis involved in scoring and evaluation of participating bids is confidential pursuant to D.06-06-066. Finally, this information is confidential, commercially sensitive and could provide an undue competitive advantage, and therefore, is not subject to disclosure.

EXHIBIT B

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SDG&E Response to
SDCP and CEA DR 002
RESPONDED: 11/16/2023
SDCP/CEA to SDG&E 2.02
For each month during the 2022 compliance period,
a. Please quantify SDG&E’s monthly RA requirement as determined by the CPUC for System, Local, and Flexible RA.
b. Please provide workpapers with details demonstrating whether SDG&E met the monthly RA requirements in subpart (a), specifying capacity provided by resource.

SDG&E Response to SDCP/CEA to SDG&E 2.02
a. SDG&E objects to this request pursuant to Rule 10.1 on the Commission’s Rules of Practice and Procedure on the grounds that it seeks production of information that is neither relevant to the subject matter involved in the pending proceeding nor is
reasonably calculated to lead to the discovery of admissible evidence. Specifically, SDG&E’s monthly RA requirements for System, Local, and Flexible RA are irrelevant to any issue presented in this ERRA Compliance proceeding, and therefore out of scope. b. SDG&E objects to this request pursuant to Rule 10.1 on the Commission’s Rules of Practice and Procedure on the grounds that it seeks production of information that is neither relevant to the subject matter involved in the pending proceeding nor is
reasonably calculated to lead to the discovery of admissible evidence. Specifically, SDG&E’s monthly RA requirements for System, Local, and Flexible RA are irrelevant to any issue presented in this ERRA Compliance proceeding, and therefore out of scope.

EXHIBIT B

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SDG&E Response to
SDCP and CEA DR 002
RESPONDED: 11/16/2023
SDCP/CEA to SDG&E 2.03
Referring to SDG&E’s response to Cal Advocates MDR 3.20: Please provide SDG&E’s final net RA position for each month of the 2022 compliance period. The net RA position should include details demonstrating:
a. Total RA capacity owned or purchased
b. Adjustments for resource outages
c. Other adjustments for operating constraints
d. RA sales to third parties
e. SDG&E’s RA requirements
f. Excess RA
SDG&E Response to SDCP/CEA to SDG&E 2.03
SDG&E objects to this request pursuant to Rule 10.1 on the Commission’s Rules of Practice and Procedure on the grounds that it seeks production of information that is neither relevant to the subject matter involved in the pending proceeding nor is reasonably calculated to lead to the discovery of admissible evidence. Specifically, information regarding SDG&E’s final net RA position for each month is irrelevant to any issue presented in this ERRA Compliance proceeding, and therefore out of scope.

EXHIBIT B

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SDG&E Response to
SDCP and CEA DR 002
RESPONDED: 11/16/2023
SDCP/CEA to SDG&E 2.05
Referring to SDG&E’s response to Cal Advocates MDR 4.1 wherein it provided Advice Letters related to its 2022 Quarterly Compliance Report: For each QCR filed in 2022, please provide all confidential attachments that address, at least in part, any of the following:
a. SDG&E activity in RA solicitations (for RA purchases or sales). b. RA volumes made available for sale by SDG&E.
c. SDG&E RA transactions executed or amended.
d. SDG&E RA-related CPUC filings.

Calculation and reporting of SDG&E’s net RA position.

SDG&E Response to SDCP/CEA to SDG&E 2.05
SDG&E objects to this request pursuant to Rule 10.1 on the Commission’s Rules of Practice and Procedure on the grounds that it seeks production of information that is neither relevant to the subject matter involved in the pending proceeding nor is reasonably calculated to lead to the discovery of admissible evidence. Specifically, SDG&E’s RA transactions and net RA position are irrelevant to any issue presented in this ERRA Compliance proceeding, and therefore out of scope.

EXHIBIT B

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EXHIBIT C

CONFERRAL CORRESPONDENCE RELATED
TO THE JOINT CCAS’ DATA REQUESTS
From: "Cerda, Roger A" <[email protected]>

EXHIBIT C

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Subject: RE: SDG&E ERRA Compliance: SDCP/CEA DRs 1.09, 1.10, 2.02,

2.03, 2.05, 2.08, and 2.09
Date: November 21 , 2023 at 1 :50:27 PM CST
To: agreenwald <[email protected]>
Cc: Tim Lindi <[email protected]>, Jacob Schlesinger
<[email protected]>
Hi Alissa - Thank you for the courtesy notice. Given that DRs

2.02, 2.03 and 2.05 deal with the same subject matter, we don't believe it is necessary to have an additional meet and confer. We look forward to reviewing your motion.

With respect to DR 2.08 and 2.09, we intend to serve the supplemental responses next week (following the Thanksgiving Holiday).

Regards,
Roger
From: Alissa Greenwald <[email protected]>
Sent: Tuesday, November 21, 2023 11 :23 AM
To: Cerda, Roger A <[email protected]>
Cc: Tim Lindi <[email protected]>; Jacob Schlesinger
<[email protected]>
Subject: [EXTERNAL] SDG&E ERRA Compliance: SDCP/CEA
DRS 1.09, 1.10, 2.02, 2.03, 2.05, 2.08, and 2.09
CAUTION! EXTERNAL SENDER STOP, ASSESS, AND
VERIFY
Do you know this person? Were you expecting this email, any links or attachments? Does the content make sense? If suspicious, do not click links, open attachments, or provide credentials. Don't delete it. Report it by using the REPORT SPAM option! Roger,
I am emailing to let you know in advance that we plan to file a motion to compel tomorrow for SDCP and CEA's DRs 1.09 and

1.10. Given SDG&E's objections to SDCP/CEA DRs 2.02, 2.03, and 2.05 which are similar in nature, we plan to include those in our motion. If you think that a meet and confer could potentially change SDG&E's position on DRs 2.02, 2.03, and 2.05, please let me know today so that we can get this scheduled ASAP.

In light of the tight turnaround for intervenor testimony, we will also be asking for a shortened timeframe for responses, with December 1st being the deadline for SDG&E to respond.

Finally, SDG&E indicated that it will supplement DRs 2.08 and

2.09 as soon as possible, but provided no expectation as to when those answers will be served. Will you please let me know SDG&E's timeline for supplementing these answers? If we do not have them by next week, we may need to request an extension to the intervenor testimony deadline.

Best,
--
Alissa Greenwald
Associate, Keyes & Fox LLP
(913) 302-5567 (mobile)
[email protected] | www.keyesfox.com
[keyesfox.com]
Pronouns: (She/Her)
This electronic message transmission contains information from this law firm that may be confidential or privileged. The information is intended to be for the use of the individual or entity named above. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this electronic transmission in error, please notify us by telephone (913-302-5567) or by electronic mail ([email protected]) immediately.

This email originated outside of Sempra. Be cautious of attachments, web links, or requests for information.

EXHIBIT C

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From: "Cerda, Roger A" <[email protected]>
Subject: SDG&E 2022 ERRA Compliance - Meet and Confer re Data Request

1.09 and 1.10
Date: November 10, 2023 at 7:38:15 PM CST
To: Jacob Schlesinger <[email protected]>, agreenwald <[email protected]>
Cc: "Hughes, Zackary J" <[email protected]>, Carlo Bencomo-Jasso <[email protected]>, Brian Dickman
<[email protected]>
Hi Jake – SDG&E has considered your client’s position and stated need for the Resource Adequacy (RA) solicitation information requested in Data Request 1.09 and 1.10. However, after careful review, SDG&E stands by its objections that the solicitation information requested is out of scope of SDG&E’s ERRA
Compliance proceeding.

During our meet and confer, you indicated that you believed this information was relevant to Scoping Issue No. 1 (“Whether SDG&E administered and managed its own generation resources prudently, to include the management of outages and associated fuel costs, according to SOC 4.”) However, Scoping Issue No. 1 pertains to SDG&E’s compliance with the CPUC’s Good Utility Practice and reasonable manager standards with respect to Utility Owned Generation (UOG) resources planned and unplanned
outages during the record period. This Scoping Issue is covered by the testimony of Kevin Counts. Scoping Issue 1 does not involve contract administration or solicitation practices.

Rather, it is SDG&E’s position that Scoping Issue No. 2 governs and that it limits the ERRA compliance review to the
administration and management of executed contracts and power purchased agreements. Scoping Issue No. 2 says nothing about the RA solicitation process.

SDG&E also notes that solicitations are fundamentally different than how it administers contracts. Contractual administration is reviewed “after the fact” in the ERRA compliance proceeding because there is no real-time review or approval from the Commission or stakeholders. This is fundamentally different than

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the solicitation process. When SDG&E launches a RA solicitation, it has an independent evaluator, informs the procurement review group (PRG) before launch, consults with PRG during evaluation, and ultimately outlines any transactions in SDG&E’s quarterly compliance report (QCR). Given that there are already
mechanisms in place to review SDG&E’s solicitation transactions, SDG&E believes they are out of scope of ERRA compliance.

We appreciate the meet and confer discussion on this issue.

Roger A. Cerda
Sr. Counsel - Regulatory Law
San Diego Gas & Electric Company
8330 Century Park Court, CP32D | San Diego, CA 92123
Tel: (858) 654-1781
E-mail: [email protected]

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From: Jacob Schlesinger <[email protected]>
Subject: Re: 1.23-06-002: 2022 ERRA Compliance: Meet and Confer Request Date: November 2, 2023 at 9:21:38 AM CDT
To: "Cerda, Roger A" <[email protected]>, "Hughes, Zackary J" <[email protected]>
Cc: Carlo Bencomo-Jasso <[email protected]>, "[email protected]" <[email protected]>, agreenwald <[email protected]>, Tim Lindl <[email protected]> Thanks, Roger. Let’s do Monday, please.

Jake Schlesinger
Partner at Keyes & Fox LLP
Renewable Energy & Public Utilities Law
1580 Lincoln St., Suite 1105 Denver, CO 80203
Office: (720) 639-2190 Mobile: (970) 531-2525
| [email protected] | www.keyesfox.com |
Confidentiality Note: This transmission may contain information which is privileged, confidential, and protected by the attorney-client or attorney work product privileges. If you are not the addressee, note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please destroy it and notify me immediately at [email protected] From: Cerda, Roger A <[email protected]>
Date: Wednesday, November 1, 2023 at 11:18 AM
To: Jacob Schlesinger <[email protected]>,
Hughes, Zackary J <[email protected]>
Cc: Carlo Bencomo-Jasso
<[email protected]>,
[email protected]
<[email protected]>, agreenwald
<[email protected]>, Tim Lindl
<[email protected]>
Subject: RE: 1.23-06-002: 2022 ERRA Compliance: Meet

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and Confer Request
Hi Jake – Coordinating SME availability on these particular issues has been challenging. Here are the earliest dates we could get:
• Monday Nov. 6 from 2-2:30
• Thursday Nov. 9 from 2:30-3
Hopefully one of those slots works for your team. Let me know and I can circulate a teams invite.

Roger
From: Cerda, Roger A
Sent: Tuesday, October 31, 2023 1:37 PM
To: Jacob Schlesinger <[email protected]>; Hughes, Zackary J <[email protected]>
Cc: Carlo Bencomo-Jasso
<[email protected]>;
[email protected]; agreenwald
<[email protected]>; Tim Lindl <[email protected]> Subject: RE: 1.23-06-002: 2022 ERRA Compliance: Meet and Confer Request
Hi Jake – We’ve had scheduling issues on our end with the SMEs that we want to participate on the call. Zack and I are working on it and will get you some dates/time soon.

Roger
From: Jacob Schlesinger <[email protected]>
Sent: Tuesday, October 31, 2023 12:01 PM
To: Cerda, Roger A <[email protected]>; Hughes, Zackary J <[email protected]>
Cc: Carlo Bencomo-Jasso
<[email protected]>;
[email protected]; agreenwald
<[email protected]>; Tim Lindl <[email protected]> Subject: [EXTERNAL] Re: 1.23-06-002: 2022 ERRA Compliance:

EXHIBIT C

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Meet and Confer Request

EXHIBIT C

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CAUTION! EXTERNAL SENDER - STOP, ASSESS, AND
VERIFY
Do you know this person? Were you expecting this email, any links or attachments? Does the content make sense? If suspicious, do not click links, open attachments, or provide credentials. Don't delete it. Report it by using the REPORT SPAM option! Hey Roger,
We'd very much like to move this along. We were hoping to meet last week; is your team available this week? Please let us know ASAP.

Jake
Jake Schlesinger
Partner at Keyes & Fox LLP
Renewable Energy & Public Uti lities Law
1580 Lincoln St., Suite 11 05 Denver, CO 80203
Office: (720) 639-2190 Mobi le: (970) 531 -2525
I [email protected] I www.keyesfox.com [kfwlaw.com) I Confidentiality Note: This transmission may contain information which is privileged, confidential, and protected by the attorney-client or attorney work product privileges. If you are not the addressee, note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please destroy it and notify me immediately at jschlesinger@key_esfox.com From: Cerda, Roger A <[email protected]>
Date: Tuesday, October 24, 2023 at 1 :26 PM
To: Jacob Schlesinger <[email protected]>,
Hughes, Zackary J <[email protected]>
Cc: Carlo Bencomo-Jasso
<cbencomojasso@newgenstrateg ies. net>,
[email protected]
<bdickman@newgenstrateg ies. net>, ag reenwald
<[email protected]>, Tim Lindi
<[email protected]>

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Subject: RE: 1.23-06-002: 2022 ERRA Compliance: Meet
and Confer Request
Hi Jake - Confirming receipt of this email. Let me confer internally about dates and attendees and I will get back to you shortly with our availability.

We will also follow up on 1.13(d). Thanks for flagging that.

Roger
From: Jacob Schlesinger <[email protected]>
Sent: Monday, October 23, 2023 3:51 PM
To: Cerda, Roger A <[email protected]>; Bucsit, Geneveve
<[email protected]>
Cc: Carlo Bencomo-Jasso
<[email protected]>;
[email protected]; agreenwald
<[email protected]>; Tim Lindi <[email protected]> Subject: [EXTERNAL] 1.23-06-002: 2022 ERRA Compliance:

Meet and Confer Request
CAUTION! EXTERNAL SENDER - STOP, ASSESS, AND
VERIFY
Do you know this person? Were you expecting this email, any links or attachments? Does the content make sense? If suspicious, do not click links, open attachments, or provide credentials. Don't delete it. Report it by using the REPORT SPAM option! Hi Roger,
I'm emailing to schedule meet-and confer on four DRs in our first set, which SDG&E objected to. Those include DRs,

1.09, 1.1 0, 1.11 and 1.12. Can we please meet this week to discuss if we can resolve these disputes and find a way to get us what we need? Please let us know a few times on
Thursday or Friday that might work.

Also, we did not receive any response or objection to DR

1.13(d). Assuming that was simply an oversight and not an objection, we would ask SDG&E to produce a response to
this past due DR as soon as possible.

Best,
Jake
Jake Schlesinger
Partner at Keyes & Fox LLP
Renewable Energy & Public Utilities Law
1580 Lincoln St., Suite 1105 Denver, CO 80203
Office: (720) 639-2190 Mobile: (970) 531-2525
| [email protected] | www.keyesfox.com [kfwlaw.com] | Confidentiality Note: This transmission may contain information which is privileged, confidential, and protected by the attorney-client or attorney work product privileges. If you are not the addressee, note that any disclosure, copying, distribution, or use of the contents of this message is prohibited. If you have received this transmission in error, please destroy it and notify me immediately at [email protected] This email originated outside of Sempra. Be cautious of attachments, web links, or requests for information.

This email originated outside of Sempra. Be cautious of attachments, web links, or requests for information.

EXHIBIT C

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EXHIBIT D

CAL ADVOCATES MASTER DATA REQUEST

3.20 SDG&E RESPONSE TO CAL ADVOCATES
ERRA 2022 MASTER DATA REQUEST
DATE RECEIVED: MARCH 30, 2023
DATE RESPONDED: JULY 5, 2023

Page 75 of 134 ends

3.20. Provide Resource Adequacy (RA) information as follows:

3.20.1. Sold, unsold, and retained resource adequacy by resource and balancing account (RA Tracker)

3.20.2. System, local, and flex positions for each solicitation in which RA for delivery in the record year was offered for sale using:
“2022_SDGE_ERRA_Comp_MDR_3.20.2_RA_Position_Tables_TEMPLATE”

3.20.3. All Tier 1 advice letter filings addressing Operational Constraints, including confidential attachments.

SDG&E Response to 3.20:

Please note that the file “3.20.1 CONFIDENTIAL Resource Adequacy 2022” contains “Protected Materials” (i.e., trade secret, market sensitive, or other confidential and/or proprietary information) as determined by SDG&E in accordance with the provisions of D. 06-06-066 and subsequent decisions. The Protected Materials have been highlighted in yellow and a confidentiality declaration is attached.

Please refer to attached file “3.20.1 CONFIDENTIAL Resource Adequacy 2022.” Note that this resource adequacy report is not adjusted for outages and some substitutions. Also note that because SDG&E offers its excess RA for sale regularly, any RA not used for compliance or sold is considered unsold.

EXHIBIT D

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Exhibit E
SDG&E Response to Motion to Compel

BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA
Application of San Diego Gas & Electric
Company (U 902-E) for Approval of: (i)
Contract Administration, Least-Cost Dispatch
and Power Procurement Activities in 2022, (ii)
Costs Related to those Activities Recorded to the
Energy Resource Recovery Account, Portfolio
Allocation Balancing Account, Power Charge
Indifference Adjustment Undercollection
Balancing Account, Transition Cost Balancing
Account, and Local Generating Balancing
Account in 2022, and (iii) Costs Recorded in
Related Regulatory Accounts in 2022.

Application 23-06-002
(Filed June 1, 2023)
SAN DIEGO GAS & ELECTRIC COMPANY’S (U 902-E) RESPONSE TO SAN DIEGO COMMUNITY POWER AND CLEAN ENERGY ALLIANCE’S MOTION

TO COMPEL DISCOVERY
Roger A. Cerda
Senior Regulatory Counsel
San Diego Gas & Electric Company
8330 Century Park Court, CP32D
San Diego, California 92123
Telephone: (858) 654-1781
Facsimile: (619) 699-5027
Email: [email protected]
Attorney for:

SAN DIEGO GAS & ELECTRIC COMPANY
December 1, 2023
FILED
12/01/23
04:59 PM
A2306002
i

TABLE OF CONTENTS
I. INTRODUCTION ............................................................................................................ 1 II. STANDARDS OF REVIEW APPLICABLE TO THIS MOTION ................................. 2 A. ERRA Compliance Standard of Review .............................................................. 2 B. Rule 10.1 Standard for Discovery ........................................................................ 3 III. THE CCA PARTIES’ MOTION SHOULD BE DENIED IN ITS ENTIRETY ............. 4 A. The CCA Parties’ Effort to Conduct a Detailed Review of SDG&E’s Excess RA Sales is Outside the Scope of the ERRA Compliance Proceeding ............................................................................................................ 4

1. The Language of Scoping Issue No. 1 Does Not Open the Door to Unlimited Inquiry into All Things Related to Generation Resources ...... 5

2. SDG&E’s RA Solicitations are Governed by its Bundled Procurement Plan and are Not Subject to an After-the-Fact Reasonableness Review Pursuant to Pub. Util. Code Section 454.5 ..... 10 B. The Information Requested Implicates Confidentiality Concerns ..................... 14 IV. CONCLUSION .............................................................................................................. 15

BEFORE THE PUBLIC UTILITIES COMMISSION

Application 23-06-002
(Filed June 1, 2023)
SAN DIEGO GAS & ELECTRIC COMPANY’S (U 902-E) RESPONSE TO SAN DIEGO COMMUNITY POWER AND CLEAN ENERGY ALLIANCE’S MOTION TO

COMPEL DISCOVERY
I. INTRODUCTION
Pursuant to Rule 11.3 of the Rules of Practice and Procedure of the California Public Utilities Commission (the “Commission”), San Diego Gas & Electric Company (“SDG&E”) hereby submits this response opposing San Diego Community Power and Clean Energy Alliance’s (the “CCA Parties”) motion to compel discovery (“Motion”). By its Motion, the CCA Parties seek to expand the scope of the ERRA Compliance proceeding to include a detailed examination into the reasonableness of SDG&E’s Resource Adequacy (“RA”) solicitation practices and activities that are not subject to review pursuant to Public Utilities Code Section 454.5(d)(2). Section 454.5(d)(2) makes clear that transactions in compliance with an approved Bundled Procurement Plan are not subject to an after-the-fact reasonableness review. By allowing the CCA Parties to obtain the detailed, underlying information about SDG&E’s excess RA sales, solicitations, and related activities and allowing them to contest whether those activities were appropriate, the Commission would be authorizing an “after-the-fact 2 reasonableness review,” which Section 454.5 expressly prohibits. This type of review has never been part of SDG&E’s ERRA Compliance proceeding and the Commission should reject the CCA Parties’ invitation to expand the scope of this year’s proceeding.

II. STANDARDS OF REVIEW APPLICABLE TO THIS MOTION
The crux of this discovery disputes centers around what activities are within the scope of the ERRA Compliance proceeding. The following standards of review are applicable in deciding the issue.

A. ERRA Compliance Standard of Review
In the ERRA Compliance proceeding, the Commission conducts a compliance review of the utility’s prior period energy resource contract administration, least-cost dispatch, and ERRA balancing account. The Commission is required to perform a compliance review as opposed to a “reasonableness review” of the ERRA compliance application.1 “A compliance review considers
whether a utility has complied with all applicable rules, regulations, opinions, and laws, while a reasonableness review evaluates not only a utility’s compliance, but also whether the data or actions resulting from, for example, the calculation of a forecasted expense, are reasonable, based on the methods and inputs used.”2
In D.02-10-062, the Commission adopted minimum standards of conduct the utilities must follow in performing their procurement responsibilities. Standard of Conduct #4 (“SOC 4”) describes the compliance review criteria for contract administration and economic dispatch of generation resources on which the utilities will be evaluated: “The utilities shall prudently administer all contracts and generation resources and dispatch the energy in a least-cost manner. 1 D.16-05-003, p. 3.
2 Id.
3 Our definitions of prudent contract administration and least cost dispatch are the same as our existing standard.”3
The scope of compliance review described in D.02-10-062 and D.02-12-074 includes Commission review of utility owned generation (“UOG”) management of planned and unplanned outages, fuel expenses, contract administration, California Independent System Operator (“CAISO”)-related costs, existing Qualified Facilities (“QF”) contracts, other power purchase agreements, and economic dispatch of electric generation resources. Accordingly, the Commission’s annual compliance review focuses on UOG management of planned and unplanned outages, prudent contract administration, least-cost dispatch, and UOG fuel procurement activities.

B. Rule 10.1 Standard for Discovery
Rule 10.1 governs discovery from parties in Commission proceedings and states in pertinent part that “any party may obtain discovery from any other party regarding any matter, not privileged, that is relevant to the subject matter involved in the pending proceeding, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence, unless the burden, expense, or intrusiveness of that discovery clearly outweighs the likelihood that the information sought will lead to the discovery of admissible evidence.” (emphasis added)
Per this standard, SDG&E is not required to provide information that is not relevant to issues in scope of the ERRA Compliance proceeding.
3 D.02-10-062 at Conclusion of Law 11.
4 III. THE CCA PARTIES’ MOTION SHOULD BE DENIED IN ITS ENTIRETY A. The CCA Parties’ Effort to Conduct a Detailed Review of SDG&E’s Excess RA Sales is Outside the Scope of the ERRA Compliance Proceeding By its data requests, the CCA Parties seek detailed information regarding SDG&E’s efforts to sell excess RA during the record year, including solicitation materials, monthly RA positions, bid information (i.e., who bid, how much they bid, why bids were rejected or awarded), and much more. For context, some of the questions include the following requests:4 • For each RA solicitation where SDG&E sought to sell excess RA: (a) All solicitation materials regarding excess RA sales, (b) SDG&E’s detailed monthly RA position, detailed by Local, Flex and System RA, (c) Details of all bids received, (d) Details of all bills awarded, and (e) Details of all bids rejected and why they were rejected. (DR 1.09).
• For each month the 2022 compliance period: (a) quantify SDG&E’s monthly RA requirement for System, Local and Flexible RA, and (b) provide workpapers whether SDG&E met the monthly RA requirements, specifying capacity provided by resource (DR 2.02)
• Provide SDG&E’s final net RA position for each month in 2022, including details demonstrating (a) total RA capacity owned or purchased, (b) adjustments for resource outages, (c) adjustments for operating constraints, (d) RA sales to third parties, (e) SDG&E’s RA requirements, and (f) excess RA. (DR 2.03)
• For each Quarterly Compliance Report filed in 2022, provide (a) SDG&E activity in RA solicitations, (b) RA volumes made available for sale by SDG&E, (c) RA transactions executed or amended, and (d) SDG&E RA-related CPUC filings. (DR 2.05) The CCA Parties argue that this information is relevant to Scoping Issue No. 1, which reads: “Whether SDG&E administered and managed its own generation resources prudently, to include the management of outages and associated fuel costs, according to SOC 4.” As noted 4 The full version of the CCA Parties’ data requests and SDG&E’s objections are attached to the CCA Parties’ Motion at Exhibit B.
5 above, SOC 4 provides for the utilities to prudently administer all contract and generation resources and dispatch the energy in a least-cost manner.

The CCA Parties argue that the requirement for a utility to “prudently administer and manage its own generation resources” should be construed very broadly and include any and all issues related to “generation resources,” without any limitation. Under this broad interpretation, the CCA Parties argue that they are entitled to examine every detail related to SDG&E’s efforts to sell excess RA, so that they can in turn, question and contest SDG&E’s conduct in making those sales. The CCA Parties are wrong for several reasons.

1. The Language of Scoping Issue No. 1 Does Not Open the Door to Unlimited Inquiry into All Things Related to Generation Resources First and foremost, SDG&E strongly disagrees with the CCA Parties’ view that Scoping Issue No. 1 allows for inquiry into all areas related to a utility’s generation resources, such as its efforts to sell excess RA. Indeed, the CCA Parties’ interpretation constitutes a massive reinterpretation of what Scoping Issue No. 1 is intended to cover. As has been the case with previous ERRA Compliance proceedings, Scoping Issue No. 1 is intended to cover compliance issues with respect to SDG&E’s Utility Owned Generation (“UOG”) resources planned and unplanned outages during the 2022 record period. In other words, the question of whether SDG&E “prudently administered and managed its own generation resources” in Scoping Issue No. 1 centers on whether SDG&E physically operated and maintained its UOG resources (i.e., Palomar Energy Center, Desert Star Energy Center, Miramar Energy Facility, and Cuyamaca Peak Energy Plant) in a reasonable and prudent manner consistent with “Good Utility Practice” 6 and the “reasonable manager standard” to maximize their availability and minimize the amount of times units are on forced outages.5

The Commission defined “Good Utility Practice” in D.02-12-069 as follows:6 [A]ny of the practices, methods and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice does not require the optimum practice, method, or act to the exclusion of all others, but rather is intended to include acceptable practices, methods, or acts generally accepted in the Western Electric Coordinating Council region.

Consistent with “Good Utility Practice,” SDG&E submitted testimony in this year’s ERRA Compliance proceeding demonstrating that it followed an established maintenance program to maximize the availability of its generation units.7 Specifically, SDG&E’s testimony
shows that its maintenance program factors in a number of considerations, including manufacturer guidelines, appropriate power industry practices, safety considerations, and good engineering and technical judgment to allocate resources most effectively to maximize the availability of its UOG resources.8 Additionally, the testimony demonstrates that SDG&E’s maintenance program incorporates practices that are generally accepted within the electric power generation industry and the Western Electricity Coordinating Council (“WECC”) and the North American Electric Reliability Corporation (“NERC”).9
5 SDG&E makes its showing that it complied with the applicable standards related to planned and unplanned outages in the Prepared Direct Testimony of Keven M. Counts (dated June 1, 2023). 6 D.02-12-069, Attachment A-3 at 5.
7 Direct Testimony of Kevin M. Counts, pp. 4-5.
8 Id.
9 Id.
7 Similarly, the Commission has explained the “reasonable manager” standard in ERRA compliance cases, as follows: Under the “reasonable manager standard, utilities are held to a standard of reasonableness based on the facts that are known or should have been known at the time. The act of the utility should comport with what a reasonable manager of sufficient education, training, experience, and skills using the tools and knowledge at his or her disposal would do when faced with a need to make a decision and act.”10 Again, the testimony of Mr.

Counts demonstrates that SDG&E complied with the reasonable manager standard with respect to UOG resources’ planned and unplanned outages during the record year. Mr. Counts’s testimony includes an Appendix A and B, which identifies all UOG forced outages in 2022 and SDG&E’s efforts to minimize the outages. It is this area of testimony that Scoping Issue No. 1 was intended to cover.

The CCA Parties’ effort to expand these operational and maintenance standards to other areas of UOG activities – in particular the sale of excess RA – is entirely meritless and unsupported by any law or Commissions precedent. Indeed, the CCA Parties acknowledge that the reasonable manager standard is generally applied to evaluate the reasonableness of outages and contract administration.11 However, they argue that nothing constrains the Commission to applying these standards solely within the prism of utility maintenance decisions.12 SDG&E strongly disagrees and urges the Commission to decline the CCA Parties’ invitation to expand the application of these compliance standards to areas that they were never intended to govern.

SDG&E has always understood and interpreted Scoping Issue No. 1 to apply to SDG&E’s 10 D.14-05-023, p. 15.
11 Motion, pp. 10-11.
12 Id.
8 prudent management of its physical operation and maintenance of its UOG assets and that it was not intended to cover other areas such as RA sales or solicitations. There is no compelling reason for the Commission to depart from this well-established precedent in this year’s proceeding.

Indeed, SDG&E notes that Scoping Issue No. 2 covers ERRA Compliance review issues pertaining to the administration and management of executed contracts and power purchase agreements:

2. Whether SDG&E administered and managed its Qualifying Facility (“QF”) and non-QF contracts for generation and power purchase agreements in accordance with the contract provisions and otherwise followed Commission guidelines relating to those contracts and their amendments according to SOC 4.

Notably, Scoping Issue No. 2 says nothing about the review of excess RA sales or the solicitation process. That is because solicitations are fundamentally different than how SDG&E administers contracts. Contractual administration is properly reviewed in the ERRA Compliance proceeding pursuant to Pub. Util. Code Section 454.5(d)(2) because there is no real-time review or approval from the Commission or stakeholders. Therefore, Section 454.5(d)(2) expressly authorizes a regulatory process “to verify and ensure that each contract was administered in accordance with the terms of the contract, and contract disputes that may arise are reasonably resolved.” (see discussion below on application of Section 454.5(d)(2)).

Contractual administration is fundamentally different than the RA solicitation process.

For example, as set forth in SDG&E’s Bundled Procurement Plan (“BPP”), when SDG&E launches a RA solicitation, it has an independent evaluator (“IE”) involved in all aspects of the solicitation formation and review of bids, informs the procurement review group (“PRG”) before launch, consults with PRG during evaluation and prior to short-list notification, and ultimately outlines any transactions, and necessary support in SDG&E’s quarterly compliance report 9 (“QCR”). For bilateral sales of RA, outside of a RA solicitation, D.03-06-067 OP 3(d) requires utilities to provide strong showing justification in Attachment M of the QCR for bilateral transactions with terms longer than one calendar month. Contracts originating through the solicitation process, through brokers or bilaterally are all reported in the QCR. The QCR is filed via Advice Letter (“AL”) and reviewed and audited by the Utility Audits Branch of the CPUC.

During that time SDG&E responds to data requests, outlines any corrective actions and in some cases files a supplemental advice letter before it is ultimately approved. Thus, unlike the contract administration issues covered under Scoping Issue No. 2, there is already a well-established mechanism in place to review SDG&E’s RA transactions. This is why SDG&E’s RA sale transactions have not been (and should not be) within scope of the ERRA Compliance proceeding. The CCA Parties’ proposal to expand the scope of the ERRA Compliance proceeding to conduct a redundant review process for RA transactions would impose a tremendous burden on both the Commission and SDG&E and could result in significant delays in the proceeding.

To be clear, nothing in Scoping Issue No. 2 allows for inquiry into excess RA sales or the solicitation process. As has been the case with previous ERRA Compliance proceedings, Scoping Issue No. 2 covers the administration and management of executed contracts and power purchase agreements, the clear distinction being the review of contract administration after the contract has been executed (as opposed to prior to contract execution). In other words, the question of whether SDG&E “administered and managed its Qualifying Facility (“QF”) and non-QF contracts…” in Scoping Issue No. 2 centers on whether each contract was administered in accordance with the terms of the contract after such contract was executed. The management of excess RA sales or solicitation processes that may result in the execution of these contracts 10 is reviewed and scrutinized through other means discussed above (i.e., the IE, PRG and QCR process).

2. SDG&E’s RA Solicitations are Governed by its Bundled Procurement Plan and are Not Subject to an After-the-Fact Reasonableness Review Pursuant to Pub. Util. Code Section 454.5
As the CCA Parties correctly note, SDG&E’s procurement process (including RA sales and solicitations) are governed by its Bundled Procurement Plan (“BPP”).13 Section II.A of the BPP sets forth SDG&E’s procurement organizational structure and process, describes procurement products and energy market products utilized by SDG&E, and discusses the role of the Procurement Review Group (“PRG”) in SDG&E’s procurement activity. With respect to excess RA sales SDG&E’s BPP states in pertinent part:

SDG&E may make excess local, system, or flexible RA supply (i.e., RA in excess of what SDG&E requires to meet its own RA obligations) available to the market. SDG&E may procure excess capacity from resources to enhance local area reliability in order to reduce the chance of the backstop by the ISO as part of the ISO’s capacity procurement mechanism Tariff authorization. SDG&E may offer such excess RA products to the market through an RFO process, through the CAISO’s Competitive Solicitation Process where the offers are submitted to the CAISO and CAISO optimizes to procure backstop capacity to meet deficiencies or significant events, through a response to a counter-party RFO or through bilateral negotiations with counterparties. Such transactions would be for capacity or rights to capacity, and the related cost would be fully recoverable through SDG&E’s Energy Resource Recovery Account (ERRA). Current Commission rules permit SDG&E to buy and/or sell products bilaterally when (1) SDG&E is approached by an outside non-affiliated third party seeking to sell or purchase short-term RA of one year or less in duration; or (2) SDG&E has a need to purchase or sell short term system, local, or flexible RA capacity. SDG&E will periodically brief its PRG on its RA positions. SDG&E may choose to retain all or some portion of excess RA in order to retain surplus RA for use 13 SDG&E’s Commission approved SDG&E 2014 Bundled Procurement Plan (“BPP”) implemented by Advice Letter 2850-E (including subsequent updates thereto such as AL 3738-E approved by Resolution No. E-5196).
11 in management of scheduled outage replacement or lowering the CAISO’s RA product charges.
14 Pursuant to Pub. Util. Code Section 454.5(d)(2), transactions in compliance with an approved BPP are not subject to an after-the-fact reasonableness review. Specifically, this section states:
(d) A procurement plan approved by the commission shall accomplish each of the following objectives:
(2) Eliminate the need for after-the-fact reasonableness reviews of an electrical corporation’s actions in compliance with an approved procurement plan, including resulting electricity procurement contracts, practices, and related expenses. However, the commission may establish a regulatory process to verify and ensure that each contract was administered in accordance with the terms of the contract, and contract disputes that may arise are reasonably resolved.

By allowing the CCA Parties to obtain the detailed, underlying information about SDG&E’s excess RA sale activities and allowing them to contest whether those activities were appropriate, the Commission would be authorizing an “after-the-fact reasonableness review,” which Section 454.5 expressly prohibits. As section 454.5(d)(2) notes, the extent of the Commission’s compliance review of BPP activities is limited to verification “that each contract was administered in accordance with the terms of the contract, and contract disputes that may arise are reasonably resolved.” SDG&E has already produced the necessary information for the Commission and intervening parties to conduct this compliance review.15 Any additional inquiry regarding the reasonableness of SDG&E’s procurement and sale activities prior to the contracts being executed – i.e., why were certain contracts executed, why were certain bids awarded or rejected – constitutes an after-the-fact reasonableness review 14 BPP, Section II.A.4.g. Resource Adequacy Products, at Original Sheet Nos. 31-32 (emphasis added).

For purposes of this response, SDG&E is citing to the updated version of the BPP set forth in AL 3738-E which was approved by Resolution No. E-5196.
15 See Prepared Direct Testimony of Michelle Menvielle (dated June 1, 2023). 12 that is not only prohibited by statute, but outside the scope of the ERRA Compliance proceeding. Again, as noted above, there already exists a well-established mechanism in place to review SDG&E’s RA transactions.

With respect to the ERRA Compliance proceeding, while intervening parties may make a threshold inquiry as to whether SDG&E sold excess RA in the record year, they are not allowed to review or examine the specifics of those activities for the purpose of contesting their reasonableness. To that end, SDG&E already provides the Commission and parties with a summary of procurement-related resource solicitations in the record year.16 However, additional inquiry into issues such as “Why did SDG&E reject a specific bid and award another?” or “Why did SDG&E sell excess RA at price X instead of price Y” are all outside the scope of the ERRA Compliance proceeding as they would be tantamount to an after-the fact reasonableness inquiry which is not permitted. In fact, there is no existing compliance standard or objective “test” by which the Commission could evaluate whether SDG&E’s RA underlying solicitation activities for a record period should be deemed sufficient. For example, how would the Commission evaluate whether SDG&E’s decision to sell excess RA to Party A instead of Party B was reasonable? Similarly, how would the Commission evaluate whether SDG&E’s decision to sell excess RA at price X instead of price Y was appropriate? Yet, that is exactly what the CCA Parties will be asking the Commission to do if this Motion is granted. Such a determination would need to be done retroactively without a clear and objective standard in place – which again is contrary to the role of the ERRA Compliance proceeding.

In addition, it is important to note that the Commission recently confirmed that SDG&E’s methodology for determining how much of its power charge indifference adjustment (“PCIA”)- 16 Prepared Direct Testimony of Michelle Menvielle, pp. 18-19. 13 eligible RA is reserved in its BPP is reasonable.17 As SDG&E understands it, the amount of PCIA-eligible RA reserved and/or available for sale, is central to the issues the CCA Parties would like to contest in the ERRA Compliance proceeding.18 In Advice Letter 3836-E and 3836-E-A, SDG&E justified its methodology for determining how much of its PCIA-eligible RA is reserved in its BPP, and includes a discussion of its RA Reservation Methodology, Excess RA Determination, Availability of Excess RA, and Sales Volume Reporting.19 With respect to making excess RA available, AL 3836-E states that “SDG&E will issue at least one Request for Offers (“RFO”) prior the deadline for LSEs’ annual RA filing. SDG&E may issue additional RFOs during the compliance year if additional Excess RA becomes available due to changes in RA requirements and/or resource availability. SDG&E may also utilize brokers and bilateral negotiations to sell RA outside of the RFO process.”20 With respect to Sales Voume Reporting, AL 3836-E states that: “SDG&E reports the amount of Excess RA determined to be available for sale through competitive solicitation in Attachment E of its Quarterly Compliance Report (“QCR”). SDG&E also discusses the volume and pricing for its Excess RA solicitations with its Independent Evaluator (“IE”) and its Procurement Review Group (“PRG”).21 Based on this submission, the Commission confirmed that SDG&E’s methodology for reserving PCIA RA in its BPP was appropriate:

The Commission requires the IOUs to manage their portfolios reliably and safely; the Energy Division has not seen evidence that SDG&E’s methodology and 17 SDG&E AL 3836-E and 3836-E-A were approved by disposition letter on May 10, 2022. 18 CCA Parties Motion, p. 4-5.
19 SDG&E AL 3836-E, pp. 2-3.
20 Id. at p. 3.
21 Id.
14 justification, detailed in AL 3836-E and AL 3836-E-A, is unreasonable for doing so or prevents other LSEs from managing their portfolios reliably and safely.

The Energy Division has reviewed AL 3836-E and AL 3836-E-A. The Energy Division finds that AL 3836-E and AL 3836-E-A meet the requirements of D.21- 05-030. Based on what SDG&E has provided, its methodology for reserving PCIA-eligible RA capacity is reasonable to manage its portfolio risks and uncertainties.22
SDG&E provides this information to emphasize that the Commission has already considered the types of issues and concerns raised by the CCA Parties and has already found that the process and methodology set forth in the BPP are reasonable. The Commission should not accept the CCA Parties’ invitation to litigate these types of procurement related issues in the context of the ERRA Compliance proceeding.

B. The Information Requested Implicates Confidentiality Concerns In its objections to the data requests at issue, SDG&E raised confidentially concerns with respect to the disclosure of highly sensitive information to the CCA Parties given their role as market participants. Specifically, SDCP and CEA regularly participate in solicitations, and therefore, it seemed improper for SDG&E to disclose confidential and commercially sensitive information regarding SDG&E’s sales strategy and other solicitors’ bidding strategies.

Providing this commercially sensitive information could provide an undue competitive advantage. Moreover, specific quantitative analysis involved in scoring and evaluation of participating bids is confidential pursuant to D.06-06-066.

SDG&E acknowledges that the CCA Parties should have the ability to meaningfully participate in the ERRA proceeding and SDG&E does not question the CCA Parties’ intent to comply with the confidentiality practices established in D.06-06-066. SDG&E appreciates the 22 May 10, 2022 CPUC disposition letter approving AL 3836-E and AL 3836-E-A, p. 5. 15 CCA Parties’ affirmation that “[n]o CCA market participant will have any access to SDG&E’s market-sensitive information.”23
However, SDG&E raises its confidentially concerns in light of the fact that the commercially sensitive information being requested is not at all relevant to the issues in scope of the ERRA Compliance proceeding. Since the information is not relevant to any issue in dispute, SDG&E has concerns about being compelled to provide this confidential information in the first place. SDG&E appreciates that ruling on these types of discovery motions is challenging, and that sometimes, the simplest solution is to grant discovery and take a “wait and see approach” on relevancy-based objections. But given the highly confidential nature of the information being requested, it is imperative that the Commission take a close look at the arguments being presented to determine whether it is even necessary to disclose this confidential information as a threshold matter.

IV. CONCLUSION
For all the foregoing reasons, SDG&E respectfully submits that the CCA Parties’ Motion to Compel Discovery be denied in its entirety.

Respectfully submitted,
/s/ Roger A. Cerda
Roger A. Cerda
8330 Century Park Court, CP32D
San Diego, CA 92123
Telephone: (858) 654-1781
E-mail: [email protected]
Attorney for:

SAN DIEGO GAS & ELECTRIC COMPANY
December 1, 2023
23 Motion, p. 16.

Exhibit F
SDG&E Ruling
521265451 - 1 -
ALJ/RM3/fzs 12/4/2023

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Application of San Diego Gas &
Electric Company (U 902-E) for
Approval of: (i) Contract
Administration, Least-Cost Dispatch
and Power Procurement Activities in
2022, (ii) Costs Related to those
Activities Recorded to the Energy
Resource Recovery Account, Portfolio
Allocation Balancing Account, Power
Charge Indifference Adjustment
Undercollection Balancing Account,
Transition Cost Balancing Account,
and Local Generating Balancing
Account in 2022, and (iii) Costs
Recorded in Related Regulatory
Accounts in 2022.

Application 23-06-002

EMAIL RULING GRANTING SAN DIEGO COMMUNITY POWER AND CLEAN

ENERGY ALLIANCE MOTION TO COMPEL SAN DIEGO GAS & ELECTRIC

COMPANY TO FULLY RESPOND TO SAN DIEGO COMMUNITY POWER AND

CLEAN ENERGY ALLIANCE DATA REQUESTS
BY 5 P.M. ON DECEMBER 8, 2023
Dated December 4, 2023, at San Francisco, California.
/s/ RAJAN MUTIALU
Rajan Mutialu
Administrative Law Judge
FILED
12/04/23
04:59 PM
A2306002
A.23-06-002 ALJ/RM3/fzs
- 2 -
From: Mutialu, Rajan <[email protected]>
Sent: Monday, December 4, 2023 10:51 AM
To: [email protected]; [email protected]; Huber, Patrick <[email protected]>; [email protected];
[email protected]; [email protected];
[email protected]; [email protected]; [email protected]; [email protected];
[email protected]; Oh, Frances <[email protected]>; Stellrecht, Karl <[email protected]>; Ammermuller, Michael <[email protected]>; Mutialu, Rajan
<[email protected]>; Saraie, Ryan <[email protected]>; Buckley, Theresa <[email protected]>; [email protected]; [email protected]; [email protected]
Cc: ALJ_Support ID <alj [email protected]>; ALJ Docket Office <ALJ Docket [email protected]>
Subject: A.23-06-002 Ruling Granting Joint CCAs' Motion to Compel SDG&E to Fully Respond to Joint CCAs' Data Requests by 5 p.m. on December 8, 2023 To the Service List in Application 23-06-002:

On November 22, 2023, San Diego Community Power and Clean Energy Alliance (Joint CCAs) filed a motion to compel San Diego Gas & Electric Company (SDG&E) to fully respond to Joint CCA Data Requests 1.09, 1.10, 2.02,

2.03, and 2.05 (Data Requests) related to SDG&E’s 2022 Resource Adequacy (RA) solicitations where SDG&E sought to sell excess RA. The motion requested that SDG&E provide a response by 5 p.m. on December 8, 2023.

Pursuant to Rule 11.3, a motion to compel discovery must show that parties previously met and conferred in a good faith effort to informally resolve the dispute, state facts showing a good faith attempt at an informal resolution of the discovery dispute, and include a proposed ruling that clearly indicates the requested relief. Based on documentation provided in the motion, Joint CCAs demonstrated compliance with Rule 11.3 and showed that SDG&E’s responses to A.23-06-002 ALJ/RM3/fzs
- 3 -
Joint CCAs’ Data Requests are relevant to the scope of this proceeding.

Accordingly, this ruling orders SDG&E to fully respond to Joint CCAs’ Data Requests by 5 p.m. on December 8, 2023.

IT IS SO ORDERED.

The Docket Office shall formally file this ruling.

Rajan Mutialu (he/him)
Administrative Law Judge
California Public Utilities Commission
[email protected]
(415) 703-2039

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MARCH FILINGS

BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Continue
Implementation and Administration, and Consider
Further Development, of California Renewables
Portfolio Standard Program.
)
)
)
)
)
)
Rulemaking 24-01-017
(Issued February 1, 2024)

OPENING COMMENTS OF THE

JOINT BIOMAT COMMUNITY CHOICE AGGREGATORS

ON THE ORDER INSTITUTING RULEMAKING
Scott Blaising
BRAUN BLAISING & WYNNE, P.C.
555 Capitol Mall, Suite 570
Sacramento, CA 95814
Telephone: (916) 326-5812
E-mail: [email protected]
March 1, 2024 Attorney for the
Joint BioMAT Community Choice Aggregators

BEFORE THE PUBLIC UTILITIES COMMISSION

OPENING COMMENTS OF THE

JOINT BIOMAT COMMUNITY CHOICE AGGREGATORS

ON THE ORDER INSTITUTING RULEMAKING
Pursuant to Rule 6.2 of the Rules of Practice and Procedure of the California Public Utilities Commission (“Commission”) and in accordance with Ordering Paragraph (“OP”) 6 of the Order Instituting Rulemaking to Continue Implementation and Administration, and Consider Further Development, of California Renewables Portfolio Standard Program, issued on February 1, 2024 (“RPS OIR”), Central Coast Community Energy, Marin Clean Energy, Orange County Power Authority, Pioneer Community Energy, Redwood Coast Energy Authority, and Valley Clean Energy (collectively, the “Joint BioMAT CCAs”) hereby file these opening comments for the principal purpose of requesting that the end date for the Bioenergy Market Adjusting Tariff (“BioMAT”) program be included as a distinct issue to be addressed in this proceeding.
1 The Joint BioMAT CCAs also request that the Commission’s Energy Division initiate another review of the BioMAT program for the purpose of assessing and recommending programmatic changes in light of performance to date and recent participation by Community 1 As it stands now, the RPS OIR includes the following issue in the Preliminary Scoping Memo:
“Ongoing monitoring, reviewing and revising, as needed, all RPS procurement methods and tariffs, such as…the Bioenergy Market Adjusting Tariff (BioMAT).” (RPS OIR at 7; emphasis added.) As further described below, the Joint BioMAT CCAs request that the final Scoping Memo expressly include as a distinct issue the consideration of whether to extend the BioMAT program end date, which is currently set to expire on December 31, 2025.
2 Choice Aggregators (“CCAs”) in the BioMAT program.

The Joint BioMAT CCAs are listed as respondents in this proceeding and look forward to participating in this proceeding.
2 I. INTRODUCTION
Participation by CCAs in the BioMAT program is a relatively recent occurrence.

Following the Commission’s rejection of a staff proposal in 2020 that, if approved by the Commission, would have allowed CCAs to enter into BioMAT contracts and recover costs,3 CCAs sponsored legislation to expressly authorize participation by CCAs in the BioMAT program. In 2021, the Legislature passed Assembly Bill (“AB”) 843 to accomplish this purpose.

Following the passage of AB 843, the Commission instituted Rulemaking (“R.”).22-10-010 to examine CCA participation in the BioMAT program, noting that “AB 843 amended Public Utilities Code Section 399.20 to extend to CCAs within an [investor-owned utility’s (“IOU”)] service territory the existing renewable feed-in tariff for qualifying bioenergy electric generation facilities.”
4 CCA participation in the BioMAT program was extensively reviewed and addressed in R.22-10-010. Following a year-long process, the Commission issued D.23-11-084, which set rules to enable CCAs to participate in the BioMAT program. Consistent with guidance provided in D.23-11-084, on January 29, 2024, the California Community Choice Association (“CalCCA”) submitted a Tier 2 joint advice letter seeking Commission approval of various BioMAT program documents on behalf of four initial CCA participants: Central Coast 2 See RPS OIR at 17; Ordering Paragraph 7 (Appendix B). 3 See D.20-08-043 at 16-18.
4 OIR (R.22-10-010) at 1.
3 Community Energy, Orange County Power Authority, Pioneer Community Energy, and Redwood Coast Energy Authority. Subsequently, on February 1, 2024, each of these participating CCAs submitted a Tier 3 advice letter seeking Commission approval of program year 2024 and 2025 forecast BioMAT revenue requirements. As further described below, initial action taken to date by CCAs to investigate and participate in the BioMAT program has been extensive, and reflects a material changed circumstance in the BioMAT program.

Since its original adoption in 2014,5the BioMAT program has undergone review, revisions, and updates. With limited exception, the Commission has used the Renewables Portfolio Standard (“RPS”) program rulemaking to review the BioMAT program and to address BioMAT-related issues. R.11-05-005 was the original venue for consideration of BioMAT-related issues. 6 Subsequent review of and revisions to the BioMAT program occurred within the context of successor RPS rulemakings (R.15-02-020 and R.18-07-003), including the most recent revision to the end date for the BioMAT program7and adoption of numerous “changes to program rules, contract terms, and processes.”8
The BioMAT program was initially authorized for 60 months from program start date (or, until February 2021).9 Following a staff proposal and stakeholder input, the end date for the program was subsequently extended to December 31, 2025.10 In scoping issues for the Commission’s implementation of AB 843 relating to participation by CCAs, the assigned 5 See Decision (“D.”)14-12-081.
6 See D.14-12-081.
7 See D.20-08-043 at 11.
8 See D.20-08-043 at 3-4 (summarizing an extensive list of program-related changes prompted by the Bioenergy Market Adjusting Tariff (BioMAT) Staff Proposal, dated March 5, 2020 (“BioMAT Staff Proposal”)).
9 See D.14-12-081 at 71; see also D.16-10-025 at 4.
10 D.20-08-043 at 10.
4 Commissioner made clear that the Commission would not be using R.22-10-010 to consider “amendments to the sunset date.”11 This determination was made because of the belief that an RPS rulemaking is “the appropriate place to consider programmatic changes to BioMAT not explicitly required by AB 843” and because consideration in an RPS rulemaking “would enable participation of all BioMAT stakeholders.”12
The Commission recently considered and renewed this determination. In D.24-01-033, the Commission addressed a long-pending petition for modification that sought, among other things, to extend the end date for the BioMAT program. The Commission denied the request but reaffirmed its position that “[t]he BioMAT program will continue to be monitored, reviewed, and revised, as necessary, in R.18-07-003 or its successor [RPS] proceeding.” 13 Purposeful review of the BioMAT program in this proceeding is warranted. Participation by CCAs in the BioMAT program represents a material changed circumstance that merits further review of the program. Moreover, current market and regulatory factors, and their impact on the BioMAT program, should also be reviewed. While the Joint BioMAT CCAs believe that the end date for the BioMAT program should be examined and revised as soon as possible, other changes to the program should also be considered in due order, as briefly described below.

II. OPENING COMMENTS
The RPS OIR expressly invites parties “to comment on the Preliminary Scoping Memo 11 Assigned Commissioner’s Scoping Memo and Ruling, issued on April 6, 2023 in R.22-10-010 (“CCA BioMAT Scoping Memo”), at 2.
12 CCA BioMAT Scoping Memo at 2.
13 D.24-01-033 at 5. A pending proposed decision in R.11-05-005 would also, if approved by the Commission, deny a request for an extension to the end date on procedural grounds. See Proposed Decision of Administrative Law Judge Atamturk, dated January 24, 2024, at 6 (Conclusion of Law 1). 5 and schedule established in th[e] OIR.”14 As noted above, the Preliminary Scoping Memo includes the following as an issue within the preliminary scope of this proceeding:
“Ongoing monitoring, reviewing and revising, as needed, all RPS procurement methods and tariffs, such as…the Bioenergy Market Adjusting Tariff (BioMAT).”15 For comments “directed to the issues identified within the preliminary scope of this proceeding,” the RPS OIR directs parties to “include whether to revise the issues; how to prioritize the issues to be resolved; how procedurally to address these issues; and the proposed timeline for resolving the issues identified.”
16 Set forth below, the Joint BioMAT CCAs address
these matters with an initial focus on revising the BioMAT program by extending the end date from December 31, 2025 to mid-2029.

An extension of the end date should be considered on an expedited basis to provide reasonable assurance to participating CCAs that their timely efforts to launch their respective BioMAT programs will be duly recognized and accommodated, and to incentivize additional CCA participation. As it is now, notwithstanding expending significant cost and time to develop BioMAT program documents and to initiate implementation efforts, the current end date would unnecessarily truncate the contracting period for CCAs, particularly when compared to the contracting period for the IOUs when they launched their respective BioMAT programs.

Other changes to the BioMAT program should also be considered in this proceeding in due course. Consideration of other changes to the BioMAT program is reasonable in light of the recent emergence of CCAs as participants in the program, but also because key market and regulatory issues have arisen in the intervening years since the Commission’s last review of the 14 RPS OIR at 11.
15 OIR at 7; emphasis added.
16 OIR at 7.
6 BioMAT program. While still time sensitive, these other changes to the BioMAT program will likely require more time to consider than a simple extension to the program’s end date.

A. The Preliminary Scoping Memo Should Be Revised to Expressly Include the Issue of Extending the BioMAT Program End Date
As noted above, the Preliminary Scoping Memo provides generically for consideration of revisions to the BioMAT program.17 The Joint BioMAT CCAs request that the final Scoping Memo expressly include, as a distinct issue, the question of whether to extend the BioMAT program’s end date. Consideration of extending the end date is warranted in light of the recent emergence of CCAs as new participants in the program. By expressly identifying this issue, parties and stakeholders will be on notice that the Commission plans to address and consider whether to extend the end date.

B. The Schedule for this Proceeding Should Prioritize Consideration of the BioMAT Program’s End Date
Expedited consideration of whether to extend the BioMAT program’s end date is needed to address the uncertainty and unfair treatment currently facing CCAs. As evidenced by the extensive work put forth in recently submitted BioMAT-related documents, materials and tariffs, the participating CCAs are committed to successfully implementing the BioMAT program. The joint advice letter submitted on January 29, 2024 is over 300 pages, and contains a variety of detailed implementation-related documents and material. The participating CCAs made this commitment in the face of uncertainty associated with the program’s end date. The Joint BioMAT CCAs request that the Commission work diligently to acknowledge the participating CCAs’ commitment to date and to address the disadvantage embedded in the currently restricted participation window.
17 See note 15, above.
7 As it stands now, the Joint BioMAT CCAs face a program duration that differs markedly from what the IOUs experienced when they first launched their respective BioMAT programs.

For the IOUs, the Commission determined in D.14-12-081 that it is “reasonable to set the ending date for the bioenergy [feed-in tariff] as being 60 months from the program starting date.”18 As the original end date (February 2021) was approaching, the Commission considered and extended the end date by another five years for the IOUs. 19 The staff proposal supporting this
extension stated that “[e]xtending the end date by five years will provide more time to fulfill the SB 1122 requirement of 250 MW of procurement from small bioenergy projects.”20 The staff proposal also stated that “[a] five-year program extension should provide more long-term programmatic certainty and allow more time for additional project development, while maintaining the Commission’s direction to establish a clear program end date.”21 As such, the IOUs have received the benefit of successive five-year terms to contract for BioMAT projects. In contrast, as it stands now, the Joint BioMAT CCAs will have less than two years to contract for BioMAT projects. To be consistent with Commission goals, more “long-term programmatic certainty” is needed for participating CCAs.

C. The Commission Should Address the Issue of Extending the BioMAT Program’s End Date Through Written Comments
The issue of the BioMAT program end date was addressed in the original BioMAT program decision (D.14-12-081) and again in D.20-08-043 (after being vetted in the BioMAT Staff Proposal). Moreover, this issue was also addressed in the context of a petition for 18 D.14-08-021 at 71.
19 D.20-08-043 at 10.
20 BioMAT Staff Proposal at 2.
21 BioMAT Staff Proposal at 2.
8 modification.22 As such, while certain aspects of the issue are unique (namely, recent participation by CCAs), the general issue has been examined previously. This should allow for expedited consideration without having to produce an extensive procedural record.

While the Joint BioMAT CCAs are not necessarily opposed to having a workshop at which CCAs and other parties could discuss the issue of extending the program end date, the Joint BioMAT CCAs do not believe that a workshop is necessary. In light of time constraints and the approaching end date, the Joint BioMAT CCAs believe that it would be best to address this issue through an administrative law judge ruling describing the issue (possibly coupled with a staff proposal) and requesting opening and reply comments on the issue.

D. The Commission Should Issue a Final Decision By September 2024 to Extend the BioMAT Program’s End Date
As noted above, participating CCAs are currently facing unfair treatment vis-à-vis the IOUs with respect to program duration. Instead of having five years to implement the BioMAT program, participating CCAs have less than two years. In recognition of the significant commitment made by participating CCAs, the Joint BioMAT CCAs request that the Commission issue a final decision on an extended program end date by September 2024. If the scoping memo is issued in the first quarter, as contemplated in the OIR,23 the proposed schedule in the OIR should allow for the orderly consideration of this issue in the second quarter, and issuance of a final decision in the third quarter.

For comparability, the Joint BioMAT CCAs recommend that CCAs be given five years to implement the BioMAT program. Given a program start date in mid-2024, this would mean that 22 See D.24-01-033 (addressing a petition for modification filed by the Bioenergy Association of California).
23 See RPS OIR at 8.
9 the BioMAT program end date should be extended through mid-2029.

E. Other Changes to the BioMAT Program Should be Considered in the Context of the RPS Proceeding, and Addressed in the Early Stages of the Proceeding
In D.14-12-081, the Commission expressly set forth its expectation that various factors could and eventually would justify a review process for the BioMAT program – both with respect to pricing factors24 and to the other factors influencing the BioMAT program.25 In furtherance of this expectation, the Commission launched a major review process in 2017 that lasted roughly three years, culminating in the issuance of D.20-08-043.26 While D.20-08-043 addressed many changes, the Commission declined to make a determination on “additional actions that the Commission should take to address program cost, program barriers, expanding program participation, safety, and/or equity.”27 Instead, the Commission stated that it would continue to monitor and revise the BioMAT program, as necessary.28 The Joint BioMAT CCAs believe that it is now appropriate for the Commission to initiate a second review of the BioMAT program. Two principal factors warrant this review. First, the emergence of CCAs as participants in the BioMAT program creates a material change to the program. As noted in the legislative analysis supporting final adoption of AB 843:

When the BioMAT program was first established in 2012, there was only one CCA serving customers. There are now 23 CCAs that serve more than 11 million customers in the state. If enacted, this bill will allow a growing portion of the state's energy sector to participate in BioMAT.29
24 See D.14-12-081 at 62.
25 See D.14-12-081 at 73-74.
26 See D.20-08-043 at 6 (providing a description of the review process). 27 D.20-08-043 at 53.
28 See D.20-08-043 at 53.
29 Assembly Concurrence in Senate Amendments, dated July 5, 2021, at 2. 10 The significant expansion of CCA programs over the last seven years and the commitment made recently by CCAs to the BioMAT program underscore the changing dynamic and the need to consider the BioMAT program in light of these changed circumstances.

Second, pricing trends suggest that a review is appropriate. In D.14-12-081, the Commission generally described the tension surrounding prices under the BioMAT program.30 On the one hand, the Commission recognized concerns about “the costs to ratepayers of implementing [the BioMAT program].”31 On the other hand, the Commission adopted the view expressed by a party that “in order to successfully implement [the legislatively mandated BioMAT program], the utilities will almost surely have to procure some very expensive power…”32 To hold this tension in balance, the Commission established points and parameters “at which a review of the program pricing is appropriate.”33 Given current pricing and cost-related factors, the Joint BioMAT CCAs believe that a review of program pricing is necessary and appropriate.

III. CONCLUSION
The Joint BioMAT CCAs respectfully request that the issue of extending the BioMAT program’s end date be set forth as a distinct issue in the final scoping memo, and that the schedule for this proceeding be established to provide for accelerated consideration of this issue based on written comments. The Joint BioMAT CCAs also request that other changes to the BioMAT program be included as a separate issue to be considered in this proceeding, ideally in the early stages of the proceeding.
30 See generally D.14-12-081 at 60-63
31 D.14-12-081 at 61.
32 D.14-12-081 at 61 (citing Green Power Institute).
33 D.14-12-081 at 62.
11 The Joint BioMAT CCAs thank the Commission for its consideration of these requests.

Dated: March 1, 2024 Respectfully submitted,
/s/ Scott Blaising
Scott Blaising
BRAUN BLAISING & WYNNE, P.C.
555 Capitol Mall, Suite 570
Sacramento, CA 95814
Telephone: (916) 326-5812
E-mail: [email protected]
Attorney for the
Joint BioMAT Community Choice Aggregators

BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Continue
Implementation and Administration, and
Consider Further Development, of
California Renewables Portfolio Standard
Program.

Rulemaking 24-01-017

COMMENTS OF THE JOINT PARTIES ON

ORDER INSTITUTING RULEMAKING TO CONTINUE IMPLEMENTATION AND

ADMINISTRATION, AND CONSIDER FURTHER DEVELOPMENT, OF

CALIFORNIA RENEWABLES PORTFOLIO STANDARD PROGRAM
Justin Wynne
BRAUN BLAISING & WYNNE, P.C.
555 Capitol Mall, Suite 570
Sacramento, CA 95814
(916) 326-5812
[email protected]
Counsel for the Cities of Lancaster, Pico
Rivera, San Jacinto, and Rancho Mirage
Dated: March 4, 2024
1 BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Continue
Implementation and Administration, and
Consider Further Development, of
California Renewables Portfolio Standard
Program.

Rulemaking 24-01-017

COMMENTS OF THE JOINT PARTIES ON

ORDER INSTITUTING RULEMAKING TO CONTINUE IMPLEMENTATION AND

ADMINISTRATION, AND CONSIDER FURTHER DEVELOPMENT, OF

CALIFORNIA RENEWABLES PORTFOLIO STANDARD PROGRAM
In accordance with the Rules of Practice and Procedure of the California Public Utilities Commission (“Commission”) and the Order Instituting Rulemaking to Continue Implementation and Administration, and Consider Further Development, of California Renewables Portfolio Standard Program (“OIR”), issued on February 1, 2024, Apple Valley Choice Energy, City of Lancaster, City of Pico Rivera, City of Rancho Mirage, City of Pomona, City of San Jacinto, City of San José, Administrator of San José Clean Energy, City of Santa Barbara, Marin Clean Energy, Peninsula Clean Energy Authority, Silicon Valley Clean Energy Authority, Sonoma Clean Power, and the Regents of the University of California (“Joint Parties”) respectfully submit these comments.
1 The Joint Parties generally support the preliminary scoping memo as set forth in the OIR, but provide two recommended additions:
• The Scoping Memo should expressly include consideration of fully or partially combining the renewables portfolio standard (“RPS”) Procurement Plan filing with the 1 Pursuant to Rule 1.8(d), Apple Valley Choice Energy, City of Pomona, City of San José, Administrator of San José Clean Energy, City of Santa Barbara, Marin Clean Energy, Peninsula Clean Energy Authority, Silicon Valley Clean Energy Authority, Sonoma Clean Power, and the Regents of the University of California have authorized the undersigned counsel to sign and file these comments on their behalf.
2 integrated resource planning (“IRP”) filings, consistent with the direction of Decision (“D.”) 19-12-042; and
• The Scoping Memo should include consideration of a modification to the confidentiality rules for Final RPS Procurement Plans to ensure that the confidential information of retail suppliers is provided with three years of protection, consistent with D.21-11-029.

I. COMMENTS ON THE OIR
A. The Scoping Memo Should Include Consideration of Fully or Partially Combining the RPS Procurement Plan Filing with the IRP Filings.

The preliminary scoping memo in the OIR appropriately includes “[c]oordinating with the integrated resource planning proceeding,” as a remaining issue from Rulemaking (“R.”) 18- 07-003.2 One of the key unresolved issues regarding this coordination is the proposal to consider the full or partial combination of the RPS Procurement Plan filing with the IRP filings. The Assigned Commissioner and Assigned Administrative Law Judge’s Ruling Identifying Issues and Schedule of Review for 2019 Renewables Portfolio Standard Procurement Plans (“2019 ACR”), issued on April 19, 2019, included a Commission staff proposal to combine the RPS Procurement Plan filings with the IRP filings in years where IRP Plans are required.3 In response, the large investor owned utilities (“IOUs”) filed comments providing a detailed framework to accomplish combining these RPS and IRP filings.4 Informed by the IOU proposal and other party comments, the Commission included the following direction in the decision adopting 2019 RPS Procurement Plans (D.19-12-042):

It is always our goal to avoid duplicative filings and reduce the burden on small parties or new market entrants. We therefore direct Energy Division to develop a comprehensive and practicable plan to combine IRP and RPS filings without jeopardizing the current timelines, allocation of Commission resources, or procedural efficiencies currently in place for IRP and RPS. The plan must include 2 OIR at 7.
3 2019 ACR at 23-27.
4 Joint Opening Comments of Southern California Edison Company (U 338-E), San Diego Gas & Electric Company (U 902-E), and Pacific Gas and Electric Company (U-39 E) on Coordination of RPS Procurement Plan With Integrated Resource Plan Proceeding, July 19, 2019. 3 implementation details and identify the ways in which the combined IRP and RPS filing will meet the objectives identified in party comments (as listed above). To this end, Energy Division is authorized to hold workshops, establish working groups, prepare a white paper or staff proposal, and take such other actions as the Director of Energy Division may deem necessary. The Director of Energy Division shall issue progress reports on a quarterly basis and shall complete a staff proposal based on the foregoing process no later than August 2020.5 The Joint Parties agree with D.19-12-042 that the potential to avoid duplicative filings and reduce administrative burdens merits the consideration of a full or partial combination of the RPS and IRP filings. Therefore, the Joint Parties recommend that the Commission include in the Scoping Memo a process consistent with the direction of D.19-12-042. At a minimum, this should include an Energy Division-led process involving significant opportunities for input from parties to this proceeding. Given the complexity of this task and the importance of these filings, the proposed schedule for this process should provide adequate time for a thorough vetting of the ultimate proposal in order to ensure that the goals of reduced administrative burdens are actually achieved.

B. The Scoping Memo Should Include Consideration of a Modification of the Confidentiality Rules to Ensure Retail Sellers Receive Three Full Years of Confidentiality Protection.

D.21-11-029 revised the Commission’s rules regarding confidentiality for certain RPS information. Specifically, D.21-11-029 shortened the confidentiality protection period for energy and capacity forecast data from a total of four years to three years, specifically limiting confidentiality to two future years and the “current year or year of filing.”6 Throughout D.21-11- 029, the Commission reiterated its intent to provide retail sellers with a total of three years of confidentiality protection.7 The Administrative Law Judge’s Ruling Regarding the Motions for 5 Decision on 2019 Renewables Portfolio Standard Procurement Plans, December 30, 2019, at 74. 6 D.21-11-029 at 2; see also D.21-11-029, Attachment 2, Appendix 2 at I(A) and I(B). 7 See id. at 2, 34, 38, and 67.
4 Leave to File Confidential Material Under Seal (“2023 ALJ Confidentiality Ruling”), issued on June 12, 2023, provided further guidance on this direction from D.21-11-029 for Final RPS Procurement Plans as follows:
the “current year (year of filing)” should be the year the document is filed. As a result, retail sellers’ 2022 data in their final RPS procurement plans, filed in 2023, should not be redacted.8
In practice, the interpretation provided in the 2023 ALJ Confidentiality Ruling results in less than the full three years of confidentiality protection for retail seller energy and capacity data. This is due to the normal filing schedule where Draft RPS Procurement Plans are filed between May and August of the initial year and Final RPS Procurement Plans are typically due in January or February of the following year. For example, in the 2023 Draft RPS Procurement Plans (due July 17, 2023), retail sellers were entitled to confidentiality protection for data covering the years of 2023, 2024, and 2025. Final 2023 RPS Procurement Plans were due on January 22, 2024, and retail sellers filing on that date would lose the ability to redact 2023 data because the “year of filing” is now 2024. However, those retail sellers are presumably unable to redact 2026 data because this data was already made public in the Draft 2023 RPS Procurement Plans. As a result, these retail sellers are only able to redact 2024 and 2025 data in their Final 2023 RPS Procurement Plans. As 2023 data was only protected for approximately six months, the result is that retail sellers are only entitled to 2.5 years of confidentiality protection, rather than the full three years specified by D.21-11-029.

The Joint Parties request that the Commission include in the Scoping Memo the consideration of a modification to the confidentiality rules to address this misalignment. 8 2023 ALJ Confidentiality Ruling at 3.
5 II. CONCLUSION
The Joint Parties appreciate the opportunity to provide these comments on the OIR.

March 4, 2024, Respectfully submitted,
/s/ Justin Wynne
Justin Wynne
BRAUN BLAISING & WYNNE, P.C.
555 Capitol Mall, Suite 570
Sacramento, California 95814
(916) 326-5812
[email protected]

BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking to Oversee the
Resource Adequacy Program, Consider
Program Reforms and Refinements, and
Establish Forward Resource Adequacy
Procurement Obligations.

R.23-10-011
CALIFORNIA COMMUNITY CHOICE ASSOCIATION’S OPENING COMMENTS ON ASSIGNED COMMISSIONER’S SCOPING MEMO AND RULING
Evelyn Kahl,
General Counsel and Director of Policy
Lauren Carr,
Senior Market Policy Analyst
Eric Little,
Director of Regulatory Affairs

CALIFORNIA COMMUNITY CHOICE

ASSOCIATION
One Concord Center
2300 Clayton Road, Suite 1150
Concord, CA 94520
Telephone: (510) 980-9459
E-mail: [email protected]
March 8, 2024
i

TABLE OF CONTENTS
I. INTRODUCTION ...............................................................................................................1 II. COMMENTS ON CALCCA’S PROPOSALS ....................................................................3 A. CalCCA’s Hourly Load Transaction Proposal can be Implemented with No CAISO Impacts in the Near-Term, and Improved with Minor CAISO Impacts in the Long-Term ..........................................................................3 B. CalCCA’s Hourly Load Transaction Proposal Addresses Concerns Around the Need for Hourly Transactability to Meet the RA Requirement and the Storage Charging Requirement .............................................5 C. CalCCA’s Cure Period Extension Proposal Can be Implemented with No CAISO Impacts ..................................................................................................6 D. The Commission Should Adopt CalCCA’s Temporary System and Flexible RA Waiver Proposal with the Following Clarifications ............................7

2. CalCCA’s Proposed Waiver Mechanism Prevents Leaning to the Greatest Possible Extent Under Current Compliance
Framework ...................................................................................................9

3. The Commission Should Have Discretion to Grant or Deny Waivers Based Upon Each LSE’s Unique Circumstances ........................10

4. The Commission Should Consider Offers Above $40 Per Kw-Month as One Justification for Granting Waivers .....................................11

5. The Commission Should Implement a System and Flexible RA Waiver as Soon as Possible........................................................................13

6. The Number of Buyers in the RA Market is not a Reason to Intervene in the Market ..............................................................................13 E. The Commission Should Adopt CalCCA’s Proposal on Maximum Energy Bid Prices for Unspecified Import RA Resources with the Following Additional Details .................................................................................15 Table of Contents continued
ii
III. COMMENTS ON OTHER PARTIES’ PROPOSALS .....................................................16 A. The Commission Should Fully Delay SOD Until 2026, Forego AReM’s Other Options for SOD Delay, and Refrain from Making Changes to the Framework Too Close to the First Binding Compliance Showing .................................................................................................................16 B. The Commission Should Retain the 17 Percent PRM for 2025, Calibrated to 15.43 percent if the Commission Implements SOD in 2025........................................................................................................................18 C. The Commission Should Coordinate with the CAISO to Adopt a Resource-Specific UCAP Methodology Consistent with Many of the Principles Outlined in PG&E and SCE’s Proposals ..............................................19 D. The Commission Should Adopt AReM’s Proposal to Allow Effective PRM Resources to Count on LSEs’ Plans to Prevent Backstop Cost Exposure Resulting from Accrediting Discrepancies Between the CAISO and the Commission ..................................................................................21 E. Cal Advocates Should Clarify Several Elements of Its Residual Capacity Auction Proposal to Allow Parties to Better Explore its Merits .....................................................................................................................22 IV. CONCLUSION ..................................................................................................................23 iii

SUMMARY OF RECOMMENDATIONS
• California Community Choice Association’s (CalCCA) hourly load transaction proposal can be implemented with no California Independent System Operator (CAISO) impacts in the near term, and improved with minor CAISO impacts in the long-term; • CalCCA’s hourly load transaction proposal addresses concerns around hourly transactability of resources for the resource adequacy (RA) requirement and storage charging requirement;
• CalCCA’s cure period extension proposal can be implemented with no CAISO impacts; • The Commission should adopt CalCCA’s temporary system and flexible RA waiver proposal with the clarifications described in section II.D.; • The Commission should adopt CalCCA’s proposal on maximum energy bid prices for unspecified import RA resources with the additional details described in section II.E.; • The Commission should delay slice-of-day (SOD) until 2026, forego the Alliance for Retail Energy Market’s (AReM) other options for SOD delay, and refrain from making changes to the framework too close to the first binding compliance showing; • The Commission should retain the 17 percent planning reserve margin (PRM) for 2025, calibrated to 15.43 percent if the Commission implements SOD in 2025; • The Commission should coordinate with the CAISO to adopt a resource-specific unforced capacity methodology consistent with many of the principles outlined in Pacific Gas and Electric Company and Southern California Edison Company’s proposals; • The Commission should adopt AReM’s proposal to allow effective PRM resources to count on load-serving entities’ plans to prevent backstop cost exposure resulting from accrediting discrepancies between the CAISO and the Commission; and • The Public Advocates Office at the California Public Utilities Commission should clarify several elements of its Residual Capacity Auction proposal to allow parties to better explore its merits.

BEFORE THE PUBLIC UTILITIES COMMISSION

R.23-10-011
CALIFORNIA COMMUNITY CHOICE ASSOCIATION’S OPENING COMMENTS ON ASSIGNED COMMISSIONER’S SCOPING MEMO AND RULING
California Community Choice Association1 (CalCCA) submits these opening comments pursuant to the Assigned Commissioner’s Scoping Memo and Ruling 2 (Ruling), dated December 18, 2023. The Ruling seeks opening comments on all proposals filed in Track 1 (excluding FCR and LCR issues).

I. INTRODUCTION
The California Public Utilities Commission’s (Commission) resource adequacy (RA) program is in the midst of a significant transition to ensure it remains capable of securing a fleet of resources that can reliably serve load in all hours. The Commission must prioritize customer affordability as this transition occurs, especially in light of the current RA market scarcity that 1 California Community Choice Association represents the interests of 24 community choice electricity providers in California: Apple Valley Choice Energy, Ava Community Energy, Central Coast Community Energy, Clean Energy Alliance, Clean Power Alliance, CleanPowerSF, Desert Community Energy, Energy For Palmdale’s Independent Choice, Lancaster Energy, Marin Clean Energy, Orange County Power Authority, Peninsula Clean Energy, Pico Rivera Innovative Municipal Energy, Pioneer Community Energy, Pomona Choice Energy, Rancho Mirage Energy Authority, Redwood Coast Energy Authority, San Diego Community Power, San Jacinto Power, San José Clean Energy, Santa Barbara Clean Energy, Silicon Valley Clean Energy, Sonoma Clean Power, and Valley Clean Energy. 2 Assigned Commissioner’s Scoping Memo and Ruling, Rulemaking (R.) 23-10-011 (Dec. 18, 2023): https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M521/K589/521589385.PDF. 2 has driven prices to all-time highs and hindered the ability of load serving entities (LSE) to procure enough capacity to meet their compliance obligations despite their best efforts.

CalCCA continues to advocate for Commission adoption of its Track 1 proposals submitted on January 19, 2024,3
and February 23, 2024.4 In these comments, CalCCA offers clarifications to its Track 1 proposals in response to the helpful comments and questions it received from parties at the February 14, 2024, and February 28, 2024, workshops. CalCCA also offers comments on other parties’ Track 1 proposals with a focus on ensuring the RA program preserves customer affordability during this period of transition and market scarcity. These comments can be summarized as follows:
• CalCCA’s hourly load transaction proposal can be implemented with no California Independent System Operator (CAISO) impacts in the near term, and improved with minor CAISO impacts in the long-term;
• CalCCA’s hourly load transaction proposal addresses concerns around hourly transactability of resources for the RA requirement and storage charging requirement; • CalCCA’s cure period extension proposal can be implemented with no CAISO impacts; • The Commission should adopt CalCCA’s temporary system and flexible RA waiver proposal with the clarifications described in section II.D.; • The Commission should adopt CalCCA’s proposal on maximum energy bid prices for unspecified import RA resources with the additional details described in section II.E.; • The Commission should delay slice-of-day (SOD) until 2026, forego the Alliance for Retail Energy Market’s (AReM) other options for SOD delay, and refrain from making changes to the framework too close to the first binding compliance showing; • The Commission should retain the 17 percent planning reserve margin (PRM) for 2025, calibrated to 15.43 percent if the Commission implements SOD in 2025; 3 Public Version California Community Choice Association’s Comments on Assigned Commissioner’s Scoping Memo and Ruling, R.23-10-011 (Jan. 19, 2024) (CalCCA Track 1 Proposals) at 25-26: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K571/524571013.PDF. 4 California Community Choice Association’s Track 1 Revised Slice-Of-Day (SOD) Proposals, R.23-10-011 (Feb. 23, 2024) (CalCCA Track 1 Revised SOD Proposals) at 5:
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K147/526147188.PDF. 3 • The Commission should coordinate with the CAISO to adopt a resource-specific unforced capacity (UCAP) counting methodology consistent with many of the principles outlined in Pacific Gas and Electric Company (PG&E) and Southern California Edison Company’s (SCE) proposals;
• The Commission should adopt AReM’s proposal to allow effective PRM resources to count on LSE plans to prevent backstop cost exposure resulting from accrediting discrepancies between the CAISO and the Commission; and • The Public Advocates Office at the California Public Utilities Commission (Cal Advocates) should clarify several elements of its Residual Capacity Auction proposal to allow parties to better explore its merits.

These recommendations seek to ensure that the RA program results in reliable electric service without excessive cost to customers.

II. COMMENTS ON CALCCA’S PROPOSALS
A. CalCCA’s Hourly Load Transaction Proposal can be Implemented with No CAISO Impacts in the Near-Term, and Improved with Minor CAISO Impacts in the Long-Term
CalCCA’s hourly load obligation trading proposal would allow one LSE to pay another LSE to take on portions of its RA obligations on an hourly basis. This proposal garnered significant discussion in the February 14, 2024, workshop around how it would impact the CAISO’s RA showing and validation process. Following the workshop, CalCCA consulted with the CAISO and determined that the Commission can implement hourly load obligation trading with no CAISO impacts.

To do so, the Commission would accept and validate hourly load transactions consistent with the process documented in CalCCA’s January 19, 2024, proposal5 and February 23, 2024
proposal update.6
The LSEs would submit their contracted resources in their RA plans to the 5 CalCCA Track 1 Proposals at 25-26.
6 CalCCA Track 1 Revised SOD Proposals at 5.
4 CAISO, including all resources shown to the Commission in its SOD showing tool, consistent with the CAISO’s showing process under SOD and the CAISO’s February 23, 2024 proposal.7

Because the CAISO will validate Commission-jurisdictional LSE plans by validating the gross peak hour under SOD, only hourly load transactions that occur during the gross peak hour would have impacts under CAISO RA processes. These impacts can be isolated to the LSEs conducting load transactions and avoid the CAISO entirely. The CAISO validates LSE RA plans against the LSE’s load, as communicated through the CEC’s load forecast process, plus a PRM.

As such, there is no way for the LSE to communicate an hourly load obligation trade directly to the CAISO. This would result in a Capacity Procurement Mechanism (CPM) cost allocation risk for the LSE paying another to take on its obligation in the gross peak hour in the narrow instances when a deficiency not related to hourly load transactions occurs.8 To improve the hourly load obligation trading proposal in the long term, the Commission and the CAISO could update their processes such that the CAISO allocates CPM costs to the Commission and have the Commission allocate those costs to LSEs after taking into account hourly trades. Such an update should not be seen as a requirement to implement hourly load obligation trading. Instead, it should be viewed as a potential improvement that could be explored at the CAISO in a future stakeholder initiative. 7 Revised Slice of Day Proposal of the California Independent System Operator Corporation, R.23-10-011 (Feb. 23, 2024):
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K147/526147302.PDF. 8 An LSE appearing deficient from a CAISO perspective due to an hourly load obligation trade that the CAISO cannot see should not trigger backstop because the LSE on the other side of the hourly load obligation trade would be required to show to CAISO the resources it is using to cover the additional load that it was paid to take on. In other words, the hourly load obligation trade would keep the system “whole” and should not trigger the need for backstop all else equal. Other deficiencies unrelated to the hourly load trade (e.g., another LSE having an individual deficiency) could trigger backstop, in which case the LSE paying another to take on its obligation would be exposed to backstop cost allocation. 5 B. CalCCA’s Hourly Load Transaction Proposal Addresses Concerns Around the Need for Hourly Transactability to Meet the RA Requirement and the Storage Charging Requirement
In its revised Track 1 proposals, California Energy Storage Alliance (CESA) notes that the existing SOD framework has “serious transactability and inefficiency issues.”9 CalCCA strongly agrees with this statement and presented data from LSEs’ Year Ahead RA (YARA) test year filings in its January 19, 2024,10 and February 23, 2024,11 proposals demonstrating such.

Individual LSEs did not meet SOD test year requirements in many hours of their YARA test year showing even though long positions show that trading between LSEs could eliminate nearly all deficiencies, and potentially all deficiencies if storage was reoptimized to reflect hourly trading.

The existing SOD framework, which does not allow transactions in the same granularity as the requirement, creates artificial barriers to meeting obligations when obligations could in fact be met with the capacity on the system.

To remedy the transactability and inefficiency issues inherent in the existing SOD framework, CESA proposes to institute an initial system-wide storage charging sufficiency test prior to requiring sufficiency to be determined at the LSE level.12 CESA’s proposal focuses on one of the requirements LSEs must meet under SOD, the storage charging sufficiency requirement. LSEs will be required to meet other requirements, however, that are also hampered by the inability to transact efficiently. That is, LSEs will be required to show enough capacity in each hour to cover their own load plus a PRM to meet its hourly RA requirements without being able to transact for resources or load obligations in an hourly fashion. 9 Revised Track 1 Proposals of the California Energy Storage Alliance, R.23-10-011 (Feb. 23, 2024) (CESA Track 1 Revised Proposals) at 11-12:
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K147/526147527.PDF. 10 CalCCA Track 1 Proposals at 22-24. 11 CalCCA Track 1 Revised SOD Proposals at 3. 12 CESA Track 1 Revised Proposals at 13-15. 6 While the CESA proposal could offer some relief for LSEs, it would by no means take care of all transactability concerns. Of the examples where LSEs were deficient in the SOD filings, but not deficient in the conventional YARA filing, only about half appeared to have insufficient charging energy. The remainder were deficient in the SOD filing yet had excess charging energy available for storage. Even with CESA’s storage charging sufficiency proposal in place, some LSEs may still be short of meeting their requirement while another LSE finds themselves long in exactly those hours. While the CESA proposal may help with hourly transactability, it by no means is sufficient to allow LSEs to transact in a cost-effective manner for their customers in meeting reliability needs.

CalCCA’s hourly load transaction proposal addresses transactability issues that exist in both the RA requirement and the storage charging sufficiency requirement by allowing LSEs to pay other LSEs to take on portions of their obligation that long LSEs can meet with their existing portfolios. In doing so, it ensures that the LSE trading away its obligation pays for the RA it is effectively receiving from other LSEs. The Commission should adopt CalCCA’s hourly load transaction proposal for the initial SOD compliance year to address the transactability and inefficiency issues flagged in CESA and CalCCA’s proposals.

C. CalCCA’s Cure Period Extension Proposal Can be Implemented with No CAISO Impacts
In its January 19, 2024, proposals, CalCCA submitted a proposal that would extend the cure period through the RA month so that the Commission allows more time for LSEs to cure RA deficiencies before assessing penalties.13 This proposal would allow LSEs to access new and 13 Such penalties include non-financial penalties, such as points accumulation and expansion limitations, and the financial penalties LSEs pay for deficiencies cured after five business days of notification by Energy Division. This proposal does not propose any changes to the $5,000 or $10,000 penalty for deficiencies cured within five business days of notification by Energy Division. 7 existing capacity that becomes available between the showing deadlines and the end of the RA month. As demonstrated in CESA’s February 23, 2024, revised proposal, allowing LSEs to cure with capacity that becomes available after the showing deadline could increase the available supply by hundreds of megawatts (MW).
14 CalCCA’s proposal is intended to modify the timing of the Commission’s assessment of penalties. It is not intended to modify the timing of the CAISO RA processes. This means that if an LSE cures after the RA showings deadline and after the time the CAISO performs its assessment of the need for backstop procurement, it may result in the LSE receiving a CAISO backstop cost allocation. Although this outcome is possible, there is no downside to system reliability if it occurs.

CalCCA recognizes that by missing the standard showing and cure period, the resource will not have a supply plan and subsequent must offer obligation with the CAISO. If the Commission feels that it is necessary, it could require any purchasing LSE that cures an RA deficiency after the current cure period to demonstrate a must offer obligation in its contract with the resource. Relying on contractual obligations is similar to the non-specified RA import obligation to bid no higher than $0 in the CAISO market which can only be effectuated by contract.

D. The Commission Should Adopt CalCCA’s Temporary System and Flexible RA Waiver Proposal with the Following Clarifications
CalCCA proposed a temporary system and flexible RA waiver process that would allow the Commission to grant partial or full waivers to LSEs that demonstrate efforts to procure consistent with a high standard. This proposal would provide relief to LSEs in recognition of current RA market supply constraints, as well as the regulatory uncertainty associated with transitioning to a 14 CESA Track 1 Revised Proposals at 6.
8 new RA framework. The sections that follow address comments and questions received in the February 28, 2024, workshop to enhance and clarify elements of CalCCA’s proposal.

1. Community Choice Aggregator (CCA), Investor-Owned Utility (IOU), Ratepayer Advocates, and Generator Representatives Agree Current System Conditions Warrant a System and Flexible RA Waiver Process CalCCA has proposed on multiple occasions that the Commission should adopt a system and flexible RA waiver to address RA market tightness and high prices and has been met with Commission rejection on each occasion. Since then, RA market conditions have worsened, highlighting the continued need for an RA waiver. In fact, conditions have become so dire that CCA,
15 IOU,16 customer advocates,17 and generator representatives18 have all recognized the need to revisit an RA waiver.

As SCE stated in its proposal, “circumstances have changed since 2019 and 2020 to such a degree that the penalty waiver issue warrants Commission reconsideration…Customers should not be subject to a comply at all cost framework, and LSEs should not be subject to penalties when compliance is impossible.”19
ACP-C concurs with the need for a waiver, stating:
“Strict enforcement of RA program rules without any consideration of mitigating factors risks unnecessarily increasing ratepayer costs.

This is particularly true in instances where LSEs face shortfalls in capacity despite exercising best efforts to procure capacity or bring new capacity online. Penalizing LSEs in these instances does not further incentivize compliance and instead increases costs of 15 CalCCA Track 1 Proposals at 9-11.
16 Track 1 Proposals of Southern California Edison Company (U 338-E), R.23-10-011 (Jan. 19, 2024) (SCE Track 1 Proposals) at 2-5:
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K484/524484642.PDF. 17 Residual Capacity Auction Proposal of the Public Advocates Office (Public Version), R.23-10- 011 (Jan.19, 2024) (Cal Advocates Track 1 Proposal):
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M525/K128/525128819.PDF. 18 American Clean Power – California Track 1 Proposals, R.23-10-011 (Jan 19, 2024) at 9-12:
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K571/524571042.PDF. 19 SCE Track 1 Proposals at 4. 9 capacity procurement and creates risk for new project development at a time when the State is not on track to meet longer term capacity goals.”20
A waiver is also a “key element” of Cal Advocates’ residual capacity auction proposal, “because it will enable LSEs to decline RA bids at elevated prices that have no connection to real costs.”21
The broad range of entities supporting a waiver point to the need for the Commission to reassess its merits. While the Commission’s RA penalty and compliance program plays a key role in ensuring LSEs bring enough RA capacity to support system reliability, it does nothing to strengthen compliance when there is market scarcity. Instead, it increases costs of procurement by putting upward pressure on capacity prices and by adding costs to LSEs who cannot comply despite their best efforts.

2. CalCCA’s Proposed Waiver Mechanism Prevents Leaning to the Greatest Possible Extent Under Current Compliance Framework During the February 28, 2024, workshop, Energy Division expressed concerns that LSEs who receive a waiver would effectively avoid paying for RA and therefore avoid providing reliability, while LSEs that did procure enough RA to meet their obligations would have done so at high market prices. CalCCA understands this concern, and intentionally structured its proposal in a way that would prevent such leaning concerns to the greatest extent possible under the existing RA compliance framework. That is, to obtain a waiver, LSEs would have to meet procurement efforts consistent with high standards or demonstrate contributing factors outside of their control, such as Power Purchase Agreement (PPA) delays or SOD implementation issues.

After demonstrating such efforts and contributing factors, Energy Division would need to 20 American Clean Power – California Track 1 Revised Proposals, R.23-10-011 (Feb. 23, 2024) at 9: https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K148/526148079.PDF. 21 Cal Advocates Track 1 Proposal at 13. 10 evaluate the LSE’s waiver request, with some discretion left to Energy Division as to whether they would approve the request. This leaves LSEs unable to know for certain whether they would receive a waiver in advance of Energy Division’s assessment. This uncertainty maintains the incentive for LSEs to do their best to comply and only apply for a waiver when it is not possible for them to meet their requirements after exhausting all reasonable procurement efforts.

In addition, LSEs that receive a waiver would still be subject to payments for actions taken to resolve their deficiencies. First, should the CAISO engage in backstop procurement, backstop costs would be allocated to LSEs that were deficient in their RA showings even if those LSEs received waivers. Second, LSEs that receive waivers would also be subject to capacity payments associated with the Electric Supply Strategic Reliability Reserve procurement as adopted in Assembly Bill 1373 (Stats. 2023, ch. 367).22 Both of these mechanisms will ensure that if RA deficiencies trigger additional procurement to meet reliability needs, those LSEs that are deficient receive allocation of the costs of that procurement regardless of whether or not they receive a waiver.

3. The Commission Should Have Discretion to Grant or Deny Waivers Based Upon Each LSE’s Unique Circumstances
At the February 28, 2024, workshop, Energy Division expressed concern with the amount of discretion left to Energy Division under CalCCA’s waiver proposal. Under the proposal, Energy Division would have discretion to grant waivers based on a number of factors, including the LSE’s participation in the RA market, price, PPA delays, and SOD implementation issues. These factors would not have strict standards (e.g., an LSE must participate in X number of requests for offer (RFO) Energy Division would use to determine whether it would grant a waiver. 22 Assembly Bill 1373, Stats. 2023, Ch. 367 (Oct. 7, 2023):
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1373. 11 Allowing Energy Division some discretion over when to grant waivers is preferred to a “check-the-box” type of exercise where Energy Division must grant a waiver if an LSE meets certain defined standards. First, uncertainty around whether a waiver will be granted creates an incentive for LSEs to do all they can to procure to meet their obligations because Energy Division granting a waiver is not guaranteed. Strictly defined standards could result in LSEs stopping their procurement efforts once they meet the defined standards because they would know that they would receive a waiver. The uncertainty also incents generators to negotiate on price because they also do not know whether an LSE will receive a waiver. Second, it would be difficult for the Commission and parties to define and agree upon strict standards for this purpose. Such standards would need to include number of RFOs held and participated in, number and timing of bi-lateral outreach, offer prices accepted and declined, diligent practices in broker markets including the timing of reviewing and accepting prices offered, acceptability of other terms and conditions including credit terms, duration of contract, outage substitution provisions, etc., reasonableness of identifying short positions in a timely manner given resource uncertainty (e.g. hydro output), among potentially numerous other conditions that could rise unexpectedly.

There are likely too many variables involved to practically develop strict criteria. For these reasons, the Commission should adopt a temporary RA waiver process that provides a minimal amount of discretion to Energy Division as provided in CalCCA’s proposal.

4. The Commission Should Consider Offers Above $40 Per Kw-Month as One Justification for Granting Waivers
CalCCA’s January 19, 2024, proposal indicates that LSEs who take all commercially reasonable efforts to procure but were unable to meet their obligations would be eligible to request a waiver if they:
• Received no bids aligned with reasonable prices, or
12 • Received bids that included unreasonable terms and/or conditions.

At the February 28, 2024, workshop, CalCCA defined reasonable prices as the CPM soft offer cap plus the 3rd tier penalty price rounded up to the nearest ten, resulting in a price of $40 per kilowatt (kW) -month. CalCCA proposed this number less because of how it was calculated and more because of just how high RA prices have gotten in recent years.

The price at which an LSE can use price to justify its requests for a waiver should be one factor the Commission uses to assess whether granting a waiver is warranted. This price should not set precedent as to reasonable capacity prices. Instead, it should only be used for the temporary waiver to ensure prices do not rise any higher than they already have in recent years.

Economic theory would suggest a reasonable capacity price is something more like the net cost of new entry (CONE), which CalCCA has calculated as roughly $15 per kW-month.

Given how far prices have gotten away from net CONE, it is prudent for the Commission to adopt a price at which LSEs can request a waiver. This would enable LSEs to only use price to justify their requested waivers when they cannot find capacity at prices aligned with current market levels which are already exceedingly high.

The Commission should ensure that any price criteria it adopts is coupled with an unreasonable term and condition criterion so that the price criteria is not used by generators to charge an unreasonable amount. To accomplish this, the Commission should clarify that an unreasonable term and condition would include offers at high prices for an unacceptable amount of time. For example, under CalCCA’s proposal, offers at the $40 per kW-month price that exceed at term of a quarter strip (e.g., $40 per kW-month for a year-long RA strip) should be eligible justification an LSE could provide as justification for a waiver. --
13 5. The Commission Should Implement a System and Flexible RA Waiver as Soon as Possible
CalCCA’s January 19, 2024, proposal included a temporary system and flexible RA waiver to be in place from 2025 through 2027. This timeframe was intended to cover both the immediate periods of RA market scarcity and the first three SOD compliance years. SCE also proposed a temporary waiver process. Its proposal would have waivers in place beginning in summer 2024 through summer 2025 with the option to revisit its extension for 2026.23 CalCCA supports the Commission adopting a system and flexible RA waiver for summer 2024.

CalCCA’s analysis of the RA supply and demand balance shows that RA market scarcity concerns are immediate and present under the existing framework and under a SOD framework.24 Adopting a system and flexible RA waiver as soon as possible is in the best interest of customers who are faced with significant RA cost increases and, without a waiver, “an automatic penalty structure that may be impossible for an LSE to comply with.”25 For these reasons, the Commission should adopt a temporary waiver in place from summer 2024 through 2027.

6. The Number of Buyers in the RA Market is not a Reason to Intervene in the Market
Twice during the workshops, parties raised questions regarding the buying side of the RA market. The first instance was in the presentation from Cal Advocates where Cal Advocates suggested that the increase in the number of buyers has increased competition on the buyer side and has played a role in RA price increases. This statement was made as an introduction to a single purchaser backstop role for system RA. The second instance was a statement by an Energy Division representative that some sellers may not want to sell to some LSEs, noting instances of 23 SCE Track 1 Proposals at 3. 24 CalCCA Track 1 Proposals at 3-6. 25 SCE Track 1 Proposals at 3.
14 bankruptcy as a cause for sellers not offering supply. The Energy Division representative made this statement in response to CalCCA’s presentation on its system and flexible RA waiver proposal in which a part of the justification for the waiver would be a lack of supply offers to meet the LSE’s obligation. These statements incorrectly imply an issue with the demand side of the RA market (i.e., number of buyers) when it is really an issue with the supply side (i.e., not enough supply) that is creating RA price increases and lack of supply offers.

Despite high loads, high energy prices, and capacity prices at their highest historical levels, not a single CCA or electric service provider has declared bankruptcy since Western Community Energy (WCE), which occurred in 2021. In 2021, the Commission’s RA report showed the weighted average price of RA at $6.50.26 The current Commission market price benchmark is 134 percent higher than that level at $15.23.27 Even under these challenging circumstances in February 2023, an eighth CCA announced it had received an investment grade credit rating of A- by S&P Global.

At the same time that concern is being expressed that decentralization of load service is causing high RA prices or concerns that sellers will not sell to non-IOU LSEs, the Commission published information regarding progress on meeting Mid-Term Reliability (MTR) procurement mandates. A February 2023 progress report from the Commission shows that CCA procurement does not appear to be lagging that of the IOUs and in some cases is superior to the IOUs. Take 26 https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/resource-adequacy-homepage/2021_ra_report.pdf at Table 6. 27 https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/community-choice-aggregation-and-direct-access/calculation-of-mpb-2023-2024-final.pdf at Table 2. 15 aways in the report include noting that CCAs are collectively over-procured by 220 MW for MTR while the IOUs are under-procured by 2,600 MW.28
Given that the same CCAs have been successful in obtaining investment grade credit ratings and that they have been successful at procuring new generation, the real question is not the number of buyers. CalCCA has demonstrated that tight capacity conditions will make it difficult for all LSEs to meet compliance obligations. It seems logical then that it is not the growth in the number of LSEs but rather a lack of capacity that is the cause of high prices.

The Commission should consider the mechanisms it puts in place that may exacerbate the imbalance in the market. For example, an excess PRM target by the IOUs procuring at the same time as all other LSEs places increased competition in the market due to the volume of capacity needed and not the number of buyers. At the same time, if sellers prefer IOUs as counterparties, this action by the Commission will play into that bias. Acting on these issues now will enable a competitive market to occur regardless of the number of buyers and allow reliability needs to be met cost-effectively.

E. The Commission Should Adopt CalCCA’s Proposal on Maximum Energy Bid Prices for Unspecified Import RA Resources with the Following Additional Details
In CalCCA’s January 19, 2024, proposal to establish a maximum energy bid price for non-specified import RA resources,29 the description of how the Commission should calculate a maximum bid price provided specificity of how to value green-house gas (GHG) and Variable Operation and Maintenance (O&M) in the calculation. While CalCCA provided general information about what resources the Commission could use to calculate the cost of natural gas, 28 https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/integrated-resource-plan-and-long-term-procurement-plan-irp-ltpp/public-report-d19mtr-compliance-summaries-feb-2023-vintage1.pdf at 46. 29 CalCCA Track 1 Proposals at 17-20.
16 it did not provide a specific methodology. To provide more specificity of the natural gas price component of the calculation, CalCCA recommends that the Commission calculate an average monthly gas index as follows:
• 15 days prior to the operating month, the Commission should use the average of the prior 30 days’ gas prices;
• Values for natural gas prices should include:
o Inter-Continental Exchange (ICE) Physical Fixed Price Monthly values for Cheyenne, Malin, Waha, and Opal (contract symbol on ICE are XNT, XGT, XT7, and XXQ respectively);
o Natural Gas Intelligence Daily Natural Gas Price for Sumas (Pointcode RMTSUMAS); and
o ICE Fixed Price Future for El Paso Permian (contract symbol FQP).

The average of the 30 days for all six points would establish the gas price used to calculate the maximum non-resource specific RA import energy bid as Average Gas Price * 12 Heat Rate to arrive at the cost of energy due to gas cost in dollars per megawatt-hour (MWh).

This would then be added to the GHG costs and Variable O&M cost per MWh as described in CalCCA’s January 19, 2024, proposal to arrive at the maximum energy bid from a non-specified RA import resource.

III. COMMENTS ON OTHER PARTIES’ PROPOSALS
A. The Commission Should Fully Delay SOD Until 2026, Forego AReM’s Other Options for SOD Delay, and Refrain from Making Changes to the Framework Too Close to the First Binding Compliance Showing Several parties put forth revised SOD proposals submitted on February 23, 2024, addressing paths forward for implementing SOD. AReM put forth three options: (1) delay SOD until 2026, (2) delay SOD until some point in 2025, or (3) allow LSEs to choose which RA 17 framework they would be compliant with in 2025.30 The Commission should adopt AReM’s first option, to delay SOD implementation until 2026, consistent with CalCCA’s revised SOD proposal that includes exit criteria that should be used to determine if the SOD framework is ready to transition to its first binding compliance year.31 AReM’s second option risks LSEs having to comply with two different sets of requirements, one for year-ahead and a different one for month-ahead, using resources with two different sets of counting rules. This puts uncertainty and potential excess costs on LSEs who would be required to comply with two different sets of RA programs. Its third option would place different standards on LSEs, complicating compliance and raising concerns around how to equitably allocate costs of backstop procurement, should backstop procurement be required. For these reasons, the Commission should delay SOD until 2026. This will ensure the 2025 RA program is consistent between the year-ahead and month-ahead and consistent across LSEs, while providing additional time for the Commission and stakeholders to continue their hard work on getting SOD implementation right.

The Commission should ensure that, regardless of the ultimate implementation date of SOD, it resolves all outstanding SOD issues as early as possible prior to the first binding SOD showing. It is important to provide enough time for LSEs to conduct procurement and make showings through the templates without experiencing errors. If the Commission adopts Middle River Power LLC’s (MRP) proposal, for example, the Commission would need to accompany the proposal with a delay in SOD implementation. MRP proposes that the Commission (1) conduct analysis referred to in the SOD Report by August 1, 2024, and (2) hold a public workshop for 30 Revised Slice-Of-Day Track 1 Proposals of the Alliance for Retail Energy Markets, R.23-10-011 (Feb. 23, 2024): https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K147/526147303.PDF. 31 CalCCA Track 1 Revised SOD Proposals. 18 parties to consider and address necessary implementation changes to improve LSE compliance by October 1, 2024.32 October 1, 2024, is far too late for any SOD changes to be finalized if the Commission were to maintain a 2025 SOD implementation date considering year-ahead showings would need to be submitted by the end of October. The Commission should ensure it makes any changes to the SOD framework with enough time for Energy Division and LSEs to adjust and follow the exit criteria outlined in CalCCA’s February 23, 2024, revised SOD proposals.33 B. The Commission Should Retain the 17 Percent PRM for 2025, Calibrated to

15.43 percent if the Commission Implements SOD in 2025
During the February 14, 2024, and February 28, 2024, workshops, parties discussed various potential paths the Commission could take for updating the PRM for 2025. These included retaining the 17 percent PRM adopted in Decision (D.) 23-06-029,34 adopting a 15.43 percent PRM, or performing an additional loss-of-load expectation study to inform the 2025 PRM. The Commission should make it a standard practice to base its PRM on loss of load expectation (LOLE) analysis. A PRM based on an LOLE study will ensure a reliable RA portfolio consistent with a 1-in-10 planning standard. The Commission should not, however, conduct another LOLE study for the 2025 PRM due to the timing constraints expressed by Energy Division in the February 28, 2024, workshop.

It is too late for the Commission to run a new LOLE study for the 2025 PRM. The Commission must make a decision on the PRM in June to allow LSEs enough time to conduct procurement prior to their year-ahead showings submitted at the end of October. LSEs need 32 Middle River Power LLC Track 1 Slice-Of-Day Proposal, R.23-10-001 (Feb. 23, 2024):
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M526/K147/526147950.PDF. 33 CalCCA Track 1 Revised SOD Proposals at 6. 34 D.23-06-029, Decision Adopting Local Capacity Obligations For 2024 - 2026, Flexible Capacity Obligations for 2024, and Program Refinements, R.21-10-002 (July 5, 2023):
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M513/K132/513132432.PDF. 19 certainty as soon as possible about their requirements, and the existing timeline LSEs are under is already extremely tight. Pushing a Commission decision on the PRM any further than June would be untenable.

The Commission has provided enough direction in D.23-06-029 to adopt a PRM without performing a new LOLE study at such late stage.35 Given this direction, the Commission should adopt a 17 percent PRM for 2025. This PRM should be calibrated to the SOD framework (i.e., the Commission should adopt a 15.43 percent PRM per Energy Division’s SOD calibration) if SOD is implemented in 2025. The Commission should focus on conducting a LOLE study to set the PRM for 2026 and establish a cadence that allows for the adoption of PRMs in future years that are based on LOLE studies.

C. The Commission Should Coordinate with the CAISO to Adopt a Resource-Specific UCAP Methodology Consistent with Many of the Principles Outlined in PG&E and SCE’s Proposals
In its January 19, 2024, proposals, Energy Division puts forth a proposal for incorporating class-average forced outage rates into resources’ monthly SOD counting values.

CalCCA has long supported the Commission and the CAISO transitioning to a UCAP counting methodology. However, Energy Division’s proposal should be modified to produce unit-specific UCAP values. Unit-specific UCAP values are necessary because they provide incentives for units to be available to the CAISO market and take actions to minimize forced outages.

Technology-specific values diminish these incentives by not directly rewarding resources that are reliable with higher UCAP values and failing to directly penalize resources that are not reliable with lower UCAP values.
35 D.23-06-029 at Ordering Paragraph 7.
20 To produce unit-specific UCAP values, the CAISO and the Commission should leverage Outage Management System (OMS) to develop publicly available UCAP values and give generators an opportunity to validate the values, as they do with net qualifying capacity today.

OMS appears to be a superior data source given it tracks outages for all CAISO resources, while Generating Availability Data System (GADS) only tracks outages for a subset of resources.

In addition, the Commission’s proposed methodology and the CAISO’s previous UCAP proposal differ in a number of ways (technology-specific versus unit-specific UCAP values, monthly versus seasonal UCAP values, Effective Forced Outage Rate of Demand (EFORd) versus tightest supply cushion, etc.). As part of the CAISO’s RA Modeling and Program Design stakeholder initiative and this RA proceeding, the CAISO and the Commission should seek to urgently resolve these differences and adopt a uniform UCAP counting framework.

A UCAP counting framework adopted by the Commission and CAISO should follow the following principles, many of which are consistent with the principles put forth in the proposals submitted by PG&E36 and SCE37:
• Calculate resource specific UCAP values that incorporate existing resources’ historical forced outage performance to maintain incentives for resources to be available and minimize forced outages;
• Calculate class average UCAP values for new resources only and blend with resource specific performance as data becomes available; • Adopt and implement simultaneously and in conjunction with changes to the CAISO program necessary to support UCAP (e.g., modifications to must-offer obligations, substitution rules, Resource Adequacy Availability Incentive Mechanism, etc.);
36 Pacific Gas and Electric Company (U 39 E) Track 1 Proposals to the Resource Adequacy Program, R.23-10-011 (Jan. 19, 2024) at 5:
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K511/524511423.PDF. 37 SCE Track 1 Proposals at 6. 21 • Adopt in tandem with an adjustment to the PRM to reflect the shift of forced outage impacts from the PRM to the qualifying capacity (QC) value while maintaining a 1-in-10 LOLE;
• Use public data so that resource owners can reasonably calculate their own QC values and so that LSEs can assess the reliability of resources when making contracting decisions;
• Differentiate UCAP values by season to capture any potential patterns in forced outages due to temperature or other seasonal factors;
• Assess forced outages during the tightest supply cushion hours or when generation is in demand; and
• Apply counting rules in a manner that puts all technology types on a level playing field and accurately reflects their capabilities in both the year-ahead and month-ahead timeframe – this should include a review of the counting methodologies for all resources (including those that would use UCAP, like thermal and storage, and those that would not, like hydro).

D. The Commission Should Adopt AReM’s Proposal to Allow Effective PRM Resources to Count on LSEs’ Plans to Prevent Backstop Cost Exposure Resulting from Accrediting Discrepancies Between the CAISO and the Commission
In its January 19, 2024 proposals, AReM describes an impact of the CAISO’s August 2023 CPM in which LSEs that were compliant with the Commission’s RA program were allocated backstop costs due to inconsistent resource accreditation for RA credits between the Commission and CAISO.38 As AReM points out, the IOUs procure effective PRM capacity that they include on their RA plans that LSEs do not. The effective PRM can mitigate the risk of CPM cost responsibility associated with the RA credit accrediting inconsistency between the Commission and the CAISO. Because the IOUs are the only ones that put effective procurement resources on their RA plans, only the IOUs receive the benefit of protection against CPM cost allocation, even though all LSEs pay for effective PRM procurement. 38 Track 1 Proposals of The Alliance For Retail Energy Markets, R.23-10-011 (Jan. 19, 2024) at 3-4:
https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M524/K038/524038601.PDF. 22 AReM proposes to resolve this inconsistency by allowing LSEs to report effective PRM supply in their CAISO RA showings consistent with the existing Cost Allocation Mechanism (CAM) in place today until the inconsistency is fully addressed within the CAISO’s RA Modeling and Program Design Working Group.39 The Commission should adopt AReM’s proposal. Allowing only the IOUs to mitigate the risk of CPM costs associated with accrediting inconsistencies even though all LSEs pay for effective PRM resources results in a cost shift to unbundled customers. The Commission should remedy this cost shift should by allowing all LSEs to report effective PRM procurement to the CAISO.

E. Cal Advocates Should Clarify Several Elements of Its Residual Capacity Auction Proposal to Allow Parties to Better Explore its Merits During the February 28, 2024, workshop, Cal Advocates presented its proposal that would couple a residual capacity auction with an RA waiver to promote RA program affordability. At many points in the presentation, Cal Advocates referenced workshops that would need to take place in order to resolve key open issues related to its proposal. In order for parties to take a position on the proposal, more information is needed on important questions, including but not limited to:
• Would the Residual Capacity Auction (RCA) be a temporary mechanism, and under what conditions would the RCA be deployed?
• How are good faith efforts defined? For example, how would the proposal treat circumstances outside the LSEs’ control, like PPA delays? • How would the proposal ensure the Operator of the Residual Capacity Auction (ORCA) does not have information about competitors that gives them an advantage over other LSEs?
• Is a debt equivalence adder necessary? Cal Advocates’ January 19, 2024, proposal suggests yes, but debt equivalence adders address long-term debt on the IOU’s 39 As AReM notes in its proposal, this would only impact the reporting of the supply to the CAISO.

This would not result in an allocation of CAM credits for use in Commission RA compliance under this proposal.
23 balance sheet, and the ORCA’s contracts for four months or less would not rise to this level of obligation.
• What is the process for determining if the ORCA needs to continue? Should ORCA be retired once tight market conditions are resolved? • Could the RCA be used to limit interference by the IOUs’ excess PRM procurement with other LSEs’ efforts to meet compliance obligations? • Would costs be allocated through a modified CAM, or would the LSE be billed directly?
• What administrative costs would arise, and how could these costs be controlled? Cal Advocates should provide a workshop schedule that enables parties to develop answers to these questions before the Commission and parties formulate their positions on the proposal.

IV. CONCLUSION
For all the foregoing reasons, CalCCA respectfully requests consideration of the opening comments herein and looks forward to an ongoing dialogue with the Commission and stakeholders.

Respectfully submitted,
Evelyn Kahl,
General Counsel and Director of Policy

CALIFORNIA COMMUNITY CHOICE

ASSOCIATION
March 8, 2024
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MCE Board of DirectorsMarch 21, 2024

MCE Board of Directors
March 21, 2024