Commissioner Florio, Will Maguire, Syche Cai, Gurbux Kahlon and others from Energy Division, as well as legal division attended the entire workshop. Find the
workshop agenda here.
ALJ Tsen did not participate at the dais, but was present in the auditorium.
Four sets of invited presenters dominated the morning session. We summarize below their presentations.
1)
Robert Kinney and Donna Barry of PG&E, representing all three IOUs, offered some guiding principles for the PCIA from the utilities' perspective, as well as the regulatory timeline of its evolution and an overview of the PCIA calculation mechanics. View full presentation
here.
2)
Syche Cai of Energy Division provided additional details about the Market Price Benchmark, its data sources and a sample calculation using 2013 actual data. View full presentation
here.
3)
Mark Fulmer from MRW representing the Direct Access perspective noted that DA currently represents about 13% of the IOUs combined total load with almost 25 million MWh; CCA is about ¼ that currently, but he believes that share is likely to change significantly in just the next year. PCIA priorities of the DA community include allowing DA customers to pre-pay PCIA obligations, limiting the duration of the PCIA, and eliminating vintaging. View full presentation
here.
4)
Kevin Haroff (City of Larkspur), Jeremy Waen (MCE) and Geof Syphers (SCP) represented the CCA community, focusing on concerns about transparency of the PCIA calculation and data inputs, utility accountability to minimize the costs that drive the PCIA, the reasonableness of the mechanism itself, and the anti-competitive effect the current mechanism has over the long term. Click
here for Jeremy's presentation, and
here for Geof's.
Questions and comments during the PG&E and Energy Division presentations, as well as during the afternoon discussion of Energy Division's proposed technical and policy changes, illustrated the complexity and opacity of the current PCIA calculation and inputs.
Specific Issues Raised
Four areas dominated the area of the reasonableness of the PCIA mechanism itself: the evolution of and options for the so-called "green adder" to the Market Price Benchmark (Platts index was proposed as an alternative); the duration of the assessment of a PCIA charge on customers (DA and CCA parties suggested 10 years, with Commissioner Florio observing that if utilities were limited to ten years of cost recovery, they would be likely to only sign ten-year contracts which he believes would be higher-priced, resulting in higher costs for all customers); the challenges created by customer vintaging particularly in situations where just the CCA or DA customer changes but the location and load do not (parties are awaiting a proposed decision on vintaging in a separate phase of this proceeding); and options for and implications of pre-paying the PCIA share as a lump sum.
Parties also raised contract amendments as opportunities to ensure utilities remain accountable for minimizing the costs that feed into the PCIA.
Themes of transparency generally and certainty (including the need for a longer-term PCIA forecast) touched virtually every issue. CCA and DA representatives provided examples of the practical limitations of current confidentiality rules and Nondisclosure Agreement requirements. Commissioner Florio responded positively to a proposal offered by Sonoma Clean Power to have the utilities provide a ten-year PCIA data set for each vintage year at three different Market Benchmark levels, or "Indicator Metric".
Issues Not Covered
Two issues raised in the "homework" questions were not addressed in the workshop: how to handle the so-called departing "large load" issue, which Will Maguire noted at the outset was a distinct issue that probably requires a separate discussion, and whether DA and CCA load should be treated differently vis-à-vis the PCIA. Parties' responses to the homework questions consistently advocated for similar treatment for CCA and DA (with legacy negative PCIA balances being the exception); Mr. Maguire announced this issue thus required no workshop discussion.
Public Comment
The CCA community was very well represented - thank you for your support! In addition to the operational CCAs, the Commission was able to hear from Peninsula Clean Energy, Silicon Valley Clean Energy, Lake County, Los Angeles County and the cities of Benicia and Walnut Creek as well as numerous clean energy and low income advocacy organizations about the importance of the sustainability and transparency of this complex regulatory mechanism. Thank you for taking the time to make your voice heard! Your support and participation really matters.
Next Steps
Energy Division will make available all workshop presentations, as well as its workshop report, on the CPUC website. The workshop report and parties' future comments on it will become part of the record in A.14-05-024. Energy Division committed to making a "single source" PCIA calculator model available.
Commissioner Florio and Energy Division expressed support for a working group to address those technical and policy issues that can be resolved informally. On this front, parties can convene as a working group (more informal, possibly faster) or under the Commission's settlement rules (more formal, offering certain protections and possibly greater access to utility data). It appears likely that Energy Division will be facilitating and initiating the first working group meeting, so stay tuned.
When all is said and done however, a Commission decision is necessary to change either technical calculation or policy application issues. Two avenues exist: 1) one or more Petition(s) for Modification of existing PCIA and/or Confidentiality proceeding decisions; or 2) a new Rulemaking, in response to a Petition for Rulemaking that parties could file. There was no commitment to pursue either option; only an acknowledgement of that requirement and a statement by Commissioner Florio that the workshop was "the beginning, not the end" of this issue.
