The California Public Utilities Commission (CPUC or Commission) is weighing party comments on implementation of Assembly Bill (AB) 2143. Enacted last year, AB 2143 will take effect on January 1, 2024. This bill extends existing prevailing wage requirements for public works to the construction of any renewable electrical generation facility, and any associated battery storage
Commission Issues Long-Awaited Proposed Decision in Transportation Electrification (TE) Proceeding, Setting a Framework for California TE Policy and Investment
On October 14, 2022, the assigned Commissioner (Rechtschaffen) issued a proposed decision (PD) on Transportation Electrification Policy and Investment in the pending rulemaking (R.) 18-12-006 before the California Public Utilities Commission (Commission). Commission approval of the PD would adopt a new Transportation Electrification Framework (TEF) to guide utility investments in electric vehicle (EV) charging infrastructure and would authorize $1 billion in ratepayer funding for the first five years of the TE program, known as Funding Cycle 1 (FC1). In recognition of the rapidly evolving EV landscape, the PD proposes to cap spending during first three years of FC1, which is a five-year funding cycle, at $600 million, and access to the remaining $400 million budget is held until the Commission issues a “Mid-Cycle Assessment” decision to determine whether modifications to or termination of the program budget is warranted. Notably, the Commission would prohibit Fortune 1000 companies from receiving any FC1 rebates, regardless of whether they propose to operate in a disadvantaged community.
Commission Ruling Reopens the NEM 3.0 Record to Invite Comment on and Consider Limited Issues
In its first move since hitting “pause” on the California Public Utilities Commission’s (Commission) consideration of a controversial December 2021 proposed decision (Proposed Decision or PD) that would have overhauled the existing net energy metering (NEM) tariff for California’s solar customers, the presiding administrative law judge (ALJ) issued a ruling on May 9 to reopen the record and invite party comments on a limited scope of issues.
Background
The Commission adopted California’s existing solar tariff, known as NEM 2.0, on January 28, 2016 in Decision (D.) 16-01-044. Customers opting into this tariff pay a one-time interconnection fee (less than $150 for systems under 1 MW and $800 for systems over 1 MW). Customers taking service on the NEM tariff are automatically opted into a time-of-use rate plan and are subject to select non-bypassable charges (NBCs) that are used to fund general customer programs such as contributions to the wildfire fund, nuclear decommissioning, and the public purpose program, among others. NEM customers receive a bill credit for any excess generation produced by their system and exported to the electric grid, which credits may be used to offset customer energy costs. Under NEM 2.0, any excess generation credits are applied to the customer’s bill at the same retail rate (including generation, distribution and transmission charges) the customer would have paid for the energy consumption.
Continue Reading Commission Ruling Reopens the NEM 3.0 Record to Invite Comment on and Consider Limited Issues
California Makes Progress Towards Ensuring Electric Reliability for Summer 2022
On January 11, 2022, the California Energy Commission (CEC) issued an update to its Summer 2022 Stack Analysis. Previously, on September 8, 2021, the CEC issued a revised Summer 2022 Stack Analysis that showed potential energy shortfalls ranging from 200 MW to 4,350 MW during the months of July through September 2022, in the evening
California Public Utilities Commission Takes Action to Prevent Outages During Summer 2022 and 2023
On October 29, 2021, the California Public Utilities Commission (CPUC) issued three proposed decisions intended to address potential electric capacity shortfalls in 2022 and 2023. The proposed decisions, if approved, would implement a variety of demand-side and supply-side policies designed to ensure that in the event of extreme weather during the summer of 2022 and/or 2023, California has sufficient electric capacity to avoid outages.
Background
In August 2020, the California ISO experienced outages during the evenings of August 14 and 15, and only extraordinary efforts, including voluntary conservation efforts by California energy users, allowed the California ISO to avoid outages the following week.
After those outages, the CPUC and the California Energy Commission (CEC) have been working towards addressing potential capacity shortfalls during extreme weather events during the summer. In November 2020, the CPUC opened a rulemaking (R.20-11-003) to ensure reliability in the event of extreme weather during the summer of 2021. In February 2021, the CPUC adopted a decision directing procurement of additional capacity (D.21-02-028), and in March, adopted a decision directing additional demand-side and supply-side actions to increase supply and decrease load during extreme weather events (D.21-03-056).
California managed to avoid outages during the summer of 2021, although it was helped by relatively mild weather in August and September. A stack analysis performed by the CEC this summer, however, showed the potential for capacity shortfalls of up to 4,350 megawatts (MW) for summer 2022. In August, the CPUC implemented a second phase to R.21-11-003, to ensure reliability during the summers of 2022 and 2023.
Continue Reading California Public Utilities Commission Takes Action to Prevent Outages During Summer 2022 and 2023
CPUC Issues Net-Qualifying Capacity Values to Be Used for Mid-Term Reliability Procurement
In June 2021, the California Public Utilities Commission (Commission) issued its Mid-Term Reliability Procurement Decision, Decision (D.) 21-06-035, which directed load-serving entities subject to its jurisdiction (investor-owned utilities, community choice aggregators, and energy service providers) to procure at least 11,500 megawatts (MW) of net-qualifying capacity (NQC) for reliability for the period 2023 through 2026. The decision established cumulative annual procurement requirements: 2,000 MW in 2023, 6,000 MW in 2024, 1,500 MW in 2025, and 2,000 in 2026. The decision also states that the Commission expects all of the resources procured pursuant to that decision to be zero-emitting, unless they otherwise qualify under renewables portfolio standard eligibility requirements (biomass, for example).
Continue Reading CPUC Issues Net-Qualifying Capacity Values to Be Used for Mid-Term Reliability Procurement
CAISO Clarifies Generator Deliverability Assessment Proposal
In a stakeholder call yesterday, the CAISO discussed the Revised Draft Final Proposal in the Generator Deliverability Assessment stakeholder initiative. During the call, the CAISO addressed outstanding stakeholder questions, including confirming key upcoming dates for project developers.
Background on the Proposal
The CAISO is proposing revisions to its deliverability assessment methodology in response to the rapid increase in the amount of solar resources and the California Public Utilities Commission’s (CPUC) resulting transition to an Effective Load Carrying Capability (ELCC) approach to calculating qualifying capacity (QC). The CAISO’s revisions are intended to more closely align the capacity studied in the deliverability assessment with the generator’s anticipated QC under the CPUC’s new ELCC methodology. Under the current deliverability assessment methodology, generators are studied at a higher capacity than the projects can qualify for under the ELCC methodology. Under the revised deliverability methodology, projects are expected to retain their full capacity deliverability status (FCDS) and their NQC value will not be reduced, but the proposed change should be beneficial to future interconnection customers because it will free up some unused deliverability and likely result in fewer required network upgrades to receive FCDS.
As part of the proposal the CAISO is also creating a new sub-status for solar and wind projects: Off-Peak Deliverability Status (OPDS). New solar and wind OPDS resources will receive market scheduling priority by continuing to be allowed to self-schedule as an incentive for resources to develop in locations that do not trigger upgrades or trigger only low-cost localized transmission upgrades.
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Ninth Circuit Strikes Down California ReMAT in Winding Creek Solar Case
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
California Public Utilities Commission Opens Rulemaking to Consider Expansion of Direct Access
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.
Reminder of January 1, 2019 Mandatory New Notice Requirement by CA Residential Solar Contractors
In 2017, the California Legislature passed a bill that resulted in Business and Professions Code (BPC) section 7169, which ultimately would require Home Improvement Contractors, which include contractors that install solar systems on residences, to issue specific disclosures to any residential consumers who may want to purchase, finance or lease, and install a solar system on their property. Recently in August, the California Public Utilities Commission “endorse[d] the solar energy systems disclosure document as being compliant with [BPC section 7169]….” The Disclosure terms include:
- The total cost for the solar system, including financing and energy/power costs (if applicable);
- The statutory License Board Disclosure statement for contractors and / or the home improvement salesperson who sold the system information regarding with whom to file if there are complaints; and
- The statutory Three-Day Right to Cancel Disclosure if the contract is not negotiated at the contractor’s place of business.