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Seth Hilton

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Seth Hilton, a partner in Stoel Rives’ Energy Development group, focuses his practice on energy regulation and litigation, representing clients before a variety of energy regulatory agencies in California, including the California Public Utilities Commission and California Energy Commission, as well as in stakeholder proceedings at the California Independent System Operator. His clients include developers of thermal and renewable generation, energy storage developers, transmission developers, energy service providers, and investor-owned and publicly-owned utilities. Seth also represents energy clients in state and federal court and has significant experience in a wide variety of complex commercial litigation.

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On July 29, 2019, the Ninth Circuit Court of Appeals affirmed the lower court’s decision in Winding Creek Solar LLC v. Peterman et al., ruling that California’s feed-in tariff for small qualifying facilities (QFs), the Renewable Market Adjusting Tariff (ReMAT), violates the federal Public Utility Regulatory Policies Act (PURPA) (Ninth Circuit Case No. 17-17531). ReMAT provides small QFs of three megawatts (MW) or less with a standard contract for energy offtake, on a first-come, first-served basis. Under ReMAT, rates available to any given generator fluctuate based on the price the developers ahead in the contract queue will accept. The California investor-owned utilities must offer ReMAT contracts up to a program cap of 750 MW, which is proportionately split among the utilities, and then further divided across different types of generation, including baseload and peak/non-peak resources.

The Ninth Circuit ruled that ReMAT violated two tenets of PURPA. Under PURPA, subject to certain exemptions, utilities are required to buy at the avoided cost rate all the power produced by a QF. First, contrary to PURPA’s requirement that a utility buy all of a QF’s output, the Ninth Circuit found that ReMAT limits the amount of energy that utilities are required to purchase from QFs by placing caps on procurement. Second, ReMAT sets a market-based rate for energy from participating QFs, rather than a price based on the utilities’ avoided cost as required under PURPA.
Continue Reading Ninth Circuit Strikes Down California ReMAT in Winding Creek Solar Case

On April 25, the California Public Utilities Commission (“CPUC”) adopted a decision (“Decision”) in its Integrated Resource Plan (“IRP”) proceeding, R.16-02-007.

The Decision examined the first round of integrated resource plans filed by each of the load-serving entities subject to CPUC jurisdiction. The Decision approved the plans filed by 20 load-serving entities, found that another eight load-serving entities were not required to file integrated resource plans, and found that 19 plans were insufficient as they failed to address criteria pollutant issues. One load-serving entity—Commercial Energy of California, an energy service provider—failed to file an integrated resource plan at all. The Decision also provides specific guidance for plan development for each load-serving entity for the next IRP cycle.

CPUC staff also aggregated all of the resource plans into a single portfolio—after certain adjustments to render it feasible—defined as the Hybrid Conforming Portfolio, or HCP. Adjustments were necessary to ensure that the consolidated new resource procurement proposals did not exceed resource potential in a geographic area or existing transmission availability. Commission staff identified four regions where the proposed new wind resources exceeded assumed resource potential (Northern California, Solano, Southern California Desert, and Riverside East Palm Springs). Where resource potential was exceeded, staff adjusted the resources to come from nearby regions. There were also five regions where the proposed renewable buildout appeared to exceed assumed available transmission capacity (Central Valley North Los Banos, Greater Carrizo, Southern California Desert, Northern California, and Solano). Adjustments were made in these regions by converting the proposed projects to energy-only, or moving resources to nearby locations when transmission assumptions were exceeded. No resource selections for out-of-state resources that required transmission upgrades, however, were adjusted based on transmission limitations. The Decision requires load-serving entities to disclose the contractual and development status of their resource selections in future IRPs, in order to help avoid adjustment issues in the future, and to provide an updated filing with that information to the CPUC by August 16, 2019.
Continue Reading Recent California Public Utilities Commission Decision Charts Path Forward for its IRP Proceeding

At its March 14, 2019 voting meeting, the California Public Utilities Commission (“CPUC”) voted out an Order Instituting Rulemaking (“OIR”) to Implement Senate Bill 237 (“SB 237”) Regarding Direct Access and to Consider Changes to Existing Direct Access Procedures.  The Rulemaking will address the expansion of Direct Access, as required by SB 237.

Direct Access permits customers of a California investor-owned utility (“IOU”) (e.g., Pacific Gas and Electric, San Diego Gas and Electric, Southern California Edison) to obtain their electricity from an electric service provider registered with the CPUC.  The IOU continues to provide transmission and distribution service to the customer.  Direct access was instituted in 1998 as part of California’s efforts to deregulate the electric sector.

As part of California’s efforts to recover from the energy crisis in 2000-2001, the California legislature passed Assembly Bill 1X (“AB1X”), which authorized the Department of Water Resources (“DWR”) to begin procuring electricity on behalf of IOU customers, and required the CPUC to allow DWR to recover the costs of such procurement from IOU ratepayers.  AB1X also authorized the CPUC to suspend Direct Access, motivated by a concern that IOU ratepayers would flee to Direct Access to avoid paying the cost of DWR procurement.Continue Reading California Public Utilities Commission Opens Rulemaking to Consider Expansion of Direct Access

The CAISO recently issued Part 2 of its Resource Adequacy Enhancements Straw Proposal and stakeholders met with the CAISO this week to discuss the paper and get further clarifications on the initial skeletal structure provided.

As part of the process, the CAISO reviewed the counting rules in other ISO/RTOs and found that most ISO/RTOs use…

The 2019-2020 California Legislative Session has reached its first deadline.  February 22, 2019 marked the deadline by which bills could be introduced for the first half of the Legislative Session. Lawmakers will begin Spring Recess April 12 and reconvene April 22.  The last day for bills to be passed out of the house of origin is May 31, 2019.

Below is a list of some of the key bills Stoel Rives’ Energy Team will be monitoring throughout the Legislative Session.  We note that some bills do not contain language beyond the “intent of the Legislature.”  However, we will continue to monitor these bills in case of substantive amendments.  These bills are set forth separately below under the heading “Legislative Intent.”

The majority of the bills introduced this Legislative Session relate in some way to California’s efforts to reduce greenhouse gas emissions and move to cleaner sources of generation, including legislation governing electric vehicles, energy storage, and renewable energy.  A number of bills introduced in February also attempt to address the impacts of wildfires, or to reduce wildfire risk.


ASSEMBLY BILLS

AB 40 (Ting, D)   Zero-emission vehicles: comprehensive strategy.

Status: Introduced December 3, 2018; referred to Committees on Transportation and Natural Resources January 24, 2019.

AB 40 would require by no later than January 1, 2021, the State Air Resources Board to develop a comprehensive strategy to ensure that the sales of new motor vehicles and new light-duty trucks in the state have transitioned fully to zero-emission vehicles, as defined, by 2040, as specified.
Continue Reading Key Energy Related Bills Introduced in the 2019-2020 Legislative Session

FERC approved new changes to the CAISO tariff on February 19, 2019, with a retroactive effective date of November 27, 2018, that will impact projects in the CAISO’s generator interconnection queue. These changes are the result of a several month stakeholder initiative to enhance the interconnection process and follow a history of reforms intended to…

On February 8, 2018, the California Public Utilities Commission (“CPUC”) adopted a new procurement process in a decision which suggested that 2,000 MW of new battery energy storage resources may be needed in California by 2030. This means an additional 2,000 MW of storage on top of the existing 1,325 MW that is already required.…

Massachusetts recently became the latest state to adopt an energy storage target, following California’s lead, and recent storage legislation in Nevada and New York.

The Massachusetts storage mandate originated in the legislature last year, when the state legislature passed H.4568, which was signed by the Governor on August 8, 2016. The legislation required the state’s…

On May 19, 2017, the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) held a joint en banc on customer and retail choice in California. In attendance were CPUC Commissioners Guzman Aceves, Randolph, Peterman, and President Picker.  CEC Commissioners McAllister, Douglas, and Chair Weisenmiller attended.

The en banc was intended to address…

Last Thursday, longtime California Public Utilities Comissioner and President Michael Peevy announced he would not seek reappointment at the end of this year, when his second six-year term with the CPUC expires. In making his announcement, Peevy issued the following statement:

“I originally planned to make the following announcement at the CPUC’s regularly-scheduled…