Item 7 – Receive June 2026 regulatory update dated July 1, 2026 provided by Keyes & Fox. — Valley Clean Energy Board of Directors, July 9, 2026

Item 7
1 VALLEY CLEAN ENERGY ALLIANCE
Staff Report – Item 7
To: Board of Directors
From: Keyes & Fox, Regulatory Consultant
Subject: Regulatory Monitoring Report – Keyes & Fox
Date: July 9, 2026
______________________________________________________________________________ Please find attached Keyes & Fox’s June 2026 Regulatory Memorandum dated July 1, 2026 an informational summary of the key California regulatory and compliance-related updates from the California Public Utilities Commission (CPUC).

Attachment: Keyes & Fox Regulatory Memorandum dated July 1, 2026

1 Valley Clean Energy Alliance
Regulatory Monitoring Report
To: Valley Clean Energy Alliance (VCE) Board of Directors From: Sheridan Pauker, Partner, Keyes & Fox LLP
Jason Hoyle, Director of Research, EQ Research LLC
Subject: Monthly Regulatory Update
Date: July 1, 2026
Keyes & Fox LLP and EQ Research LLC are pleased to provide VCE’s Board of Directors with this informational memo describing key California regulatory and compliance-related updates from the California Public Utilities Commission (CPUC) over the past month.

RPS Rulemaking
Background: This proceeding addresses ongoing Renewables Portfolio Standard (RPS) requirements, including legislative mandates, and other matters related to the purchase of renewable energy. This proceeding is the forum for review of VCE’s RPS Procurement Plan and RPS Compliance reports.

Recent Developments: On June 12, VCE filed its Draft 2026 RPS Procurement Plan. On June 12, the CPUC issued Final Resolution E-5457 updating the fixed avoided-cost rates for the Renewable Market Adjusting Tariff (ReMAT) program.

Analysis: All LSEs filed their Draft 2026 RPS Plans on June 12. The Commission’s guidance for these plans was largely the same as in past years, and VCE provided updates on its procurement and contracted project status updates.

Resolution E-5457 reflected increases to the ReMAT pricing for baseload and as-available non-peaking resources.

Next Steps: Comments on Draft RPS Plans are due July 13, and reply comments and motions to update RPS Plans are due July 27. The next annual RPS compliance report is due August 3. Final Reports for RPS Compliance Period 4 (2021-2024) will be due 30 days after the CEC verification report is provided to the CPUC.

Additional Information: Final Resolution E-5457 (Jun. 12, 2026); VCE Draft 2026 RPS Procurement Plan (Jun. 12, 2026); Scoping Memo and Ruling (May 9, 2024); OIR (Feb. 1, 2024); Docket No. R.24-01-017.

RA Rulemaking
Background: This proceeding is the successor to R.23-10-011, and it will address the 2027 and 2028 RA compliance years, local RA obligations for the 2027-2029 and 2028-2030 compliance years, further refinements to the 24-hour Slice-of-Day (SOD) framework. Track 1 will consider accreditation for long-duration energy storage, unforced capacity outage rates for thermal resources, accreditation for solar and wind resources, and transactability within the SOD framework during the first half of 2026. Track 2 will address the planning reserve margin and coordination with the integrated resource plan proceeding.

Recent Developments: In response to comments filed on June 22 by over 30 parties the CPUC issued a Revised Proposed Decision that would adopt local capacity obligations for 2027-2029, flexible capacity obligations for 2027 and make other program refinements. The Proposed Decision makes adjustments to bidding rules and treatment of revenue for certain RA-related product transactions in the CAISO’s new extended day-ahead market. The modified rules will only apply to new resource contracts. CalCCA’s Comments, among other recommendations, emphasized the importance of its hourly load obligation trading proposal to support affordability and efficiency in the RA market, and requested clarification on long-duration energy storage and energy-only resource charging sufficiency resource showings with an emphasis on the likely need for future improvements.

Analysis: The CAISO’s extended day-ahead market began operating on May 1 to serve the western U.S., including Portland General Electric in October 2026, Public Service Company of New Mexico, and several of California’s public utility agencies by the end of 2027. The bid-related aspects of the Proposed Decision were a concern to many parties because of the potentially harmful impacts on CPUC-jurisdictional market participants if they are subject to rules that do not apply to market participants outside the CPUC’s jurisdiction.

Next Steps: The Proposed Decision may be heard as early as the July 2 Commission meeting. Draft Loss of Load Expectation studies and Planning Reserve Margin proposals are due August 14 and final proposals are due in October.

Additional Information: Revised Proposed Decision (issued Jun. 1 and revised on June 30, 2026); Scoping Memo (Dec. 12, 2025); OIR (Oct. 15, 2025); Docket No. R.25-10-003.

2 PG&E 2027 ERRA Forecast
Background: The annual Energy Resource and Recovery Account (ERRA) forecast proceedings establish the amount of the Power Charge Indifference Adjustment (PCIA) and other non-bypassable charges (NBCs) for the following year, as well as fuel and purchased power costs associated with serving bundled customers that utilities may recover in rates.

Recent Developments: Protests and responses to the Application were filed on June 17. CalCCA’s Protest raised questions about whether PG&E is fully applying SCE’s slice-of-day methodology for calculating retained Resource Adequacy (RA) from storage resources as the Commission previously ordered, and CalCCA highlighted that PG&E intends to use pre-2019 banked RECs the Company currently values at $0 rather than unsold quantities from 2023 and 2024 to cover its forecast shortfall in 2027. On June 18, an ALJ Ruling scheduled the prehearing conference for July 16.

Analysis: The concerns raised by CalCCA relate to ensuring that PCIA rates charged to CCAs are accurate and consistent with prior Commission orders. The Commission intends to address the valuation of pre-2019 banked RECs before PG&E’s Fall Update in October and a value greater than $0 would apply downward pressure on PCIA rates.

Next Steps: The prehearing conference will be held on July 16.

Additional Information: Ruling (Jun. 18, 2026); Application (May 15, 2026); Docket No. A.26-05-007.

PG&E Diablo Canyon 2027 & VPF
Background: During the period of extended operations for the Diablo Canyon Nuclear Plant, PG&E submits an annual application forecasting its costs, market revenues from CAISO, net costs allocated to ratepayers of each large IOU, and its plan for use of volumetric performance fees (VPFs) in the upcoming calendar year.

Recent Developments: On June 16, the CPUC issued a Scoping Memo and Ruling.

Analysis: N/A.

Next Steps: Intervenor testimony is due July 17, evidentiary hearings will be held in mid-September if needed, and a proposed decision is expected in late October.

Additional Information: Scoping Memo and Ruling (Jun. 16, 2026); Application (Mar. 27, 2026); Docket No. A.26-03- 031.

IRP Rulemaking (2025)
Background: This proceeding governs the biennial Integrated Resource Plan (IRP) process, including load serving entity (LSE) procurement requirements, the establishment of a variety of state- and LSE-level load and procurement forecasts, greenhouse gas (GHG) reduction targets, ongoing reliability obligations, and the Commission’s oversight of the IOUs’ bundled procurement plans. This proceeding continues the work of R.20-05-003 and will be the primary forum for most future CPUC work on the Reliable and Clean Power Procurement Program framework (RCPPP).

Recent Developments: On June 17, the ALJ provided additional questions parties may answer in response to the May 20 Mid-Term Reliability Compliance Staff Proposal Workshop.

Analysis: N/A.

Next Steps: Responses to the Workshop questions are due July 14. VCE’s next IRP filing is due August 10, 2026.

Comments on IRP filings are due September 21. Comments on proposed updates are expected to be due in Q3, and a proposed decision adopting updated BPPs is now expected in Q4.

Additional Information: Application for Rehearing (Apr. 6, 2026); Ruling (Mar. 9, 2026); D.26-02-057 and Attachment (Mar. 5, 2026); IRP Ruling (Jan. 16, 2026); Scoping Ruling (Oct. 28, 2025); Ruling (Sep. 30, 2025); OIR (Jul. 2, 2025); Docket No. R.25-06-019.

Demand Response Enhancements
Background: This proceeding seeks to enhance demand response (DR) resources by updating guiding principles, policies, and data system and process requirements. Demand response development is closely connected to the implementation of dynamic rates and real-time pricing (RTP), similar to VCE’s AgFIT Pilot, but across all customer classes.

Recent Developments: On June 11, PG&E submitted the Joint Case Management Statement identifying party positions and disputes on issues.

Analysis: N/A.

Next Steps: A Staff Proposal on data systems and processes to support DR, including dynamic rates, is expected in Q2 2026.

Additional Information: Joint Case Management Statement (Jun. 11, 2026); Ruling (Apr. 8, 2026); D.26-03-016 on Flex Alert Funding (Mar. 26, 2026); Ruling on Staff Proposal on IOUs Bridge Year Funding (Mar. 10, 2026); Scoping Memo and Ruling (Feb. 12, 2026); Ruling and Staff Proposal (Dec. 30, 2025); OIR and Guiding Principles (Sep. 29, 2025); Docket No. R.25-09-004.

3 PCIA/ERRA Reform
Background: This Rulemaking considers updates and reforms to the ERRA and Power Charge Indifference Adjustment (PCIA) rules and processes with the objectives of improving existing rules, mitigating rate volatility, and ensuring indifference among bundled and departing customers. Track 1 concluded in 2025, Track 2’s scope was revised to consider issues related to the valuation of pre-2019 RECs arising from 2026 ERRA forecast proceedings, and an additional Track 3 will be initiated later in 2026 to review broader issues.

Recent Developments: The evidentiary hearing was held on June 2. In the upcoming Track 3, a multi-day workshop was held June 8, 9, and 15, and a June 19 Ruling invited party comments on the workshops.

Analysis: A valuation for pre-2019 banked RECs will reduce PCIA charges and customer bills for CCAs with customers who departed IOU generation service after 2019.

Next Steps: A proposed decision on pre-2019 banked REC valuation is expected by July 31. Comments on the Track 3 scoping workshops are due July 9 and reply comments are due July 16.

Additional Information: Ruling (Jun. 19, 2026); Ruling on hearing (May 28, 2026); Track 3 Workshop Ruling (May 13, 2026); Ruling (Apr. 24, 2026); Ruling and Staff Report (Mar. 27, 2026); Ruling (Feb. 20, 2026); Amended Scoping Memo (Feb. 3, 2026); Ruling (Dec. 26, 2025); CalCCA Petition for Writ of Review (Dec. 1, 2025); D.25-06-049 (Jun. 27, 2025); Scoping Memo (Apr. 8, 2025); ALJ Ruling (Mar. 21, 2025); Ruling & Staff Report on RA MPB (Feb. 26, 2025); OIR (Feb. 26, 2025); Docket No. R.25-02-005.

PG&E 2027 Phase 1 GRC
Background: Phase 1 General Rate Case (GRC) proceedings determine PG&E’s overall revenue requirement and classification of costs by function for a set period (in this case, 2027-2030).

Recent Developments: On June 18, an ALJ Ruling extended the deadline for opening and reply briefs.

Analysis: N/A.

Next Steps: Opening briefs are now due July 2 and reply briefs are due July 23. A proposed decision is expected in March 2027.

Additional Information: Ruling (Jun. 18, 2026); Ruling (Apr. 24, 2026); Ruling on schedule (Feb. 26, 2026); Amended Scoping Memo and Ruling (Jan. 26, 2026); Ruling (Jan. 16, 2026); Resolution SPD-37 (Dec. 10, 2025); Ruling (Nov. 24, 2025); CalAdvocates/SBUA Motion (Nov. 6, 2025); Ruling (Sep. 25, 2025); Scoping Memo and Ruling (Jul. 31, 2025); Application (May 16, 2025); Docket No. A.25-05-009.

PG&E Billing System Modernization
Background: This proceeding addresses PG&E’s plan to upgrade its legacy billing system, some portions of which date back to the mid-1990s. PG&E proposed a three-stage upgrade that would ultimately be complete in Q4 2029 and cost an estimated $761.3 million.

Recent Developments: Evidentiary hearings were held in June. On June 5, PG&E emailed the ALJ to notify the Commission and parties that PG&E and the Joint CCAs have reached a settlement in principle on all the Joint CCAs’ issues.

Next Steps: The Settling Parties will be filing a formal settlement motion in July. Opening briefs for other parties in the case are due July 16, and reply briefs are due August 13.

Additional Information: Joint Case Management Statement (May 7, 2026); (Ruling (Mar. 10, 2026); Ruling (Feb. 5, 2026); Ruling (Feb. 3, 2026); Ruling (Dec. 12, 2025); Ruling (Nov. 18, 2025); Ruling (Sep. 11, 2025); Joint Case Management Statement (Aug. 20, 2025); D.25-08-008 (Aug. 19, 2025); Joint CCA Testimony (Jun. 30, 2025); Scoping Memo (Mar. 27, 2025); Application (Oct. 23, 2024); Docket No. A.24-10-014.

Disconnections and Reconnections
Background: This proceeding addresses approaches to the disconnection and reconnection of electric customers with a focus on improving energy access and cost containment.

Recent Developments: On June 4, the ALJ issued a Ruling scheduling two public participation hearings on August 6.

On May 28, The Utility Reform Network, Utility Consumers’ Action Network, National Consumer Law Center, and Center for Accessible Technology submitted a joint emergency Motion to reduce the statewide temperature threshold for suspending utility disconnections from 100°F to 90°F and requested the time for responses to the Motion be shortened from 15 days to 5 days.

Analysis: The joint emergency Motion was submitted in response to the IOUs missing the May 1 deadline in D.25-06-012 to implement new heat-based disconnection thresholds. The Commission recognized the growing need to reduce disconnections during extreme heat events in D.25-06-012, and Governor Newsom recently announced expanded features in the CalHeatScore System and emphasized the danger of extreme heat over the coming months.

Next Steps: Public Participation Hearings will be held on August 6.

4 Additional Information: Ruling (Jun. 4, 2026); Joint Emergency Motion (May 28, 2026); PG&E Arrearage Management Plan Annual Report (May 1, 2026); CBO Pilot Recommendations (Dec. 11, 2025); Ruling granting extension (Oct. 21, 2025); Ruling (Oct. 13, 2025); D.25-06-012 (Jun. 17, 2025); Phase 2 Scoping Memo (Jul. 15, 2022); OIR (Jul. 20, 2018); Docket No. R.18-07-005.

PG&E 2023 Phase 2 GRC
Background: Phase 2 General Rate Case (GRC) proceedings determine PG&E’s marginal cost of service and revenue requirement allocation among customer classes for a set period (in this case, 2023-2026). This proceeding is also considering extension of existing dynamic rate pilots (including VCE’s AgFIT pilot, now expanded across PG&E territory) and other real-time pricing (RTP) pilots as well as post-pilot dynamic rates required by the CEC’s Load Management Standards.

Recent Developments: On June 8, PG&E served supplemental testimony on its proposed changes to the real-time pricing pilots (including AgFIT). On June 17, the ALJ issued a Ruling modifying the schedule to allow additional time for settlement discussions.

Analysis: PG&E proposes several substantive changes to its dynamic rate pilots, including elimination of customer bill protection, subscriptions, transactive pricing and incentives for CCA participation. PG&E proposes customers on new rates be eligible to participate, a $26.5 million budget, and that such changes go into effect in 2029 or sooner.

Next Steps: Settlement status reports are due July 10, August 7, September 4, and October 2. Rebuttal testimony is due October 9, and a meet and confer will be held October 19. A Ruling on the need for evidentiary hearings is expected November 20. Intervenor testimony on PG&E’s dynamic rate pilot proposals is due October 30, or 60 days after the release of the Mid-Term and M&E RTP pilot results.

Additional Information: Ruling modifying schedule (Jun. 17, 2026); PG&E Supplemental Testimony (Jun. 8, 2026); Motion for bifurcated track (Nov. 6, 2025); PG&E Testimony and Change Tables (Oct. 29, 2025); Scoping Memo (Mar. 21, 2025); Application (Sep. 30, 2024); Docket No. A.24-09-014.

Advanced Electric Rate Design
Background: This proceeding will establish advanced electric rate design policies, including rate structures and components such as time-of-use (TOU), demand charges, and the design of demand flexibility and dynamic rates.

Additionally, rate design options to support electrification for large commercial and industrial (C&I) customers, as well as rate design options for data centers and other large load customers will also be addressed.

Recent Developments: The prehearing conference was held June 18.

Analysis: N/A.

Next Steps: A scoping memo and ruling is expected during July.

Additional Information: Ruling (May 22, 2026); OIR (Apr. 10, 2026); Docket No. R.26-04-009.

PG&E 2024 ERRA Compliance
Background: The annual ERRA Compliance proceeding reviews the utility’s compliance with CPUC-approved standards for generation-procurement and cost recovery activity occurring in the prior year, such as energy resource contract administration, least-cost dispatch, fuel procurement, and balancing account entries.