March 2016
Hello ,

Thanks to everyone who attended our quarterly meeting in February! Read on for updates and latest developments in energy efficiency, building efficiency and benchmarking, net energy metering, distributed energy, CPUC reform, and more. Since our last newsletter, the LGSEC has:
  • Submitted comments to the CPUC regarding the effectiveness of Regional Energy Networks and calling for RENs to be made permanent;
  • Submitted comments to the CEC on the scope of rulemaking for AB 802 building benchmarking;
  • Submitted comments on the new Net Energy Metering tariff; and
  • Finalized our strategic plan and the next steps in the LGSEC's evolution as a voice for local governments on energy and sustainability.
Thank You From Jody London
LGSEC Members:

In 2007, a group of us holed up in a conference room at ABAG and brainstormed how we could increase the collective voice of local governments on energy issues. Nine years later, we've made great progress, highlighting local governments as important partners in meeting State energy and environmental goals, strengthening and creating new structures for delivering energy efficiency, promoting policies that make it easier for local governments to manage energy in accordance with local priorities, and more. It's been a pleasure working with each of you, and an honor to represent the LGSEC. I'm at a point in my career where it's time for me to move in-house, to an organization or government entity still to be identified. I hope that our paths cross again! Please stay in touch.

Jody 
LGSEC February Quarterly Meeting
On February 5, the LGSEC held its quarterly networking meeting in Santa Barbara. Meeting in a fabulous room right on the beach, on a sunny day, Angie Hacker from Santa Barbara County described the work of the newly created Division of Energy and Sustainability Initiatives, which runs EmPower Central Coast, is studying community choice energy, and implements the County's energy and climate action plan. All 27 jurisdictions in Santa Barbara, Ventura, and San Luis Obispo Counties are participating in the community choice energy feasibility study.
 
The meeting included an update on regulatory issues (most of which are discussed in the rest of this newsletter) from Jody London. Lauren Casey from the Sonoma County Regional Climate Protection Authority discussed the Pay As You Save program (PAYS) that her agency is sponsoring, in conjunction with the Bay Area Regional Energy Network, that would create a financing structure for municipal water utility customers to pay for efficiency improvements.
 
Barry Hooper from San Francisco provided an update on the Energy Data Access Committee, a statewide committee of utility representatives and other stakeholders, that reviews the protocols by which utilities provide energy usage data to local governments, academic researchers, and state and federal agencies. The EDAC serves in an advisory role to the California Public Utilities Commission when there are disputes over data access. The Committee has an opening for a second local government representative to join Barry, ideally someone from another part of the state.
 
The meeting included an update on Property Assessed Clean Energy programs. Jenny Berg reported on work by the Bay Area Regional Energy Network to create a central clearinghouse for PACE vendors so individual local governments do not have to undertake that due diligence. Howard Choy from LA County described how LA County is serving as a PACE administrator, qualifying PACE vendors and designing programs and requirements. Barbara Spoonhour from the Western Riverside Council of Governments reported on the HERO program.
 
The meeting featured an update on regulatory and legislative issues related to community choice aggregation from Michael Callahan-Dudley of Marin Clean Energy. The meeting concluded with a prioritization exercise, with meeting participants highlighting the issues they believe the LGSEC should focus on in the coming year. Those who didn't attend the meeting can help us identify 2016 priorities by taking the online survey. You can find all the meeting materials here.

Energy Efficiency
Infrastructure for Energy Efficiency Rolling Portfolio Starting to Coalesce
In October, the CPUC established a stakeholder Coordinating Committee to vet programs before they are formally submitted to the Commission (Decision 15-10-028). The LGSEC was an active participant in the work that led up to the formal establishment of the Coordinating Committee. This format should allow local governments a venue for accessing the process by which energy efficiency portfolios are developed that is easier to navigate than the current regulatory process.
 
On January 15, there was a meeting of the interested parties in the energy efficiency docket to discuss the mechanics of the Coordinating Committee. The group will be meeting monthly for foreseeable future at different locations around the State. The most recent meeting occurred February 22-23 in San Diego, and you can see the meeting materials here.
 
The utilities submitted a schedule of Coordinating Committee activities to the CPUC in February. Until the Coordinating Committee can solicit proposals for a permanent facilitator, they will work with an interim facilitator.   For more information, please look for updates on  http://eecoordinator.info .
 
The CPUC is in a transitional moment with this proceeding, as ALJ Todd Edmister has resigned. The new ALJ is Julie Fitch, who has returned to being an ALJ after spending a few years as an advisor to Commissioner Peterman. Fitch was the ALJ in 2012 who authorized formation of the Regional Energy Networks. She has a long history on energy efficiency and resource planning.
 
The schedule for this proceeding calls for a Phase 2b decision that will hash out additional details of Rolling Portfolio mechanics, including timing and rules for business plans. Phase 3 will look at other issues such as who should administer programs and what constitutes "baseline".
 
The CPUC took comments on "high opportunity projects and programs" this past November, as it was directed to in AB 802, which passed last year. There was a workshop on this issue workshop in January. The Assembly Select Committee on California's Clean Energy Economy on Energy Efficiency in Existing Buildings held a hearing on this topic on February 11; you find the video of that meeting here.
First Evaluations of Regional Energy Networks
In January, the CPUC released several documents providing initial evaluations of the Bay Area Regional Energy Network ("BayREN") and the Southern California Regional Energy Network ("SoCalREN").
  • A value and effectiveness study prepared by Opinion Dynamics, which was generally favorable and recommended that the RENs continue in either a probationary or permanent status. This study also recommends steps the CPUC can take to facilitate the creation of new RENs.
  • An impact assessment of a few REN and Marin Clean Energy programs, which applied traditional cost-effectiveness metrics and considered, but did not include, non-resource benefits these programs provide.
  • A summary memo that attempts to reconcile the two reports on the RENs. Given the lack of conclusive evidence, this memo recommends the REN programs continue until the CPUC can gather more information.
The CPUC held a workshop on these studies on January 22. At the workshops, REN representatives pointed out inaccuracies and areas for improvement in the studies and the memo. You can find the slides from the workshop here. The CPUC took comments on these studies on February 26; the LGSEC submitted comments that call for the RENs to be made permanent and the CPUC to allow other regions to propose new RENs. 
MCE Submits Early Energy Efficiency Business Plan
In October, Marin Clean Energy, California's first community choice aggregation, submitted a pre-emptive business plan for its energy efficiency program (A.15-10-014). The CPUC had indicated last year that it expects to receive business plans in September 2016. MCE's request that the community choice aggregator become the "default provider" of energy efficiency could impact existing partnership and REN programs, and create additional administrative complexity. MCE hosted workshops on its application in late January and early February, and the CPUC held a scheduling conference on February 1. A forthcoming ruling will indicate timing for considering the request.
CEC Moving Forward With Building Benchmarking
The California Energy Commission ("CEC") is working on implementing the provisions of last year's AB 802 regarding building benchmarking. The CEC is tasked with determining how to require utilities to provide energy usage data for entire buildings with 5 or more residents/ tenants. The CEC took comments on the scope of rulemaking at the end of December, and you can find the LGSEC's comments here.
"Matinee Pricing" to Help with Energy-Water Nexus?
The CPUC's energy-water nexus proceeding (R.13-12-011) in September adopted tools to quantify energy-water savings (D.15-09-023). The CPUC recently held a workshop and took comments on Advanced Meter Infrastructure for water utilities. The CPUC also is looking at "matinee pricing," tariffs that encourage customers to use water, and thereby energy, off peak. The utilities submitted proposals for matinee pricing in early February. The CPUC will hold a workshop April 6 to further examine the analytic tools being used for this. You can find the various proposals and comments here.

Distributed Energy
New Net Energy Metering Tariff
On January 28, the CPUC approved a new tariff for net energy metering ("NEM"), as had been directed by AB 327 in 2013 (D.16-01-044 in R.14-07-002). The utilities had proposed new fees and charges for NEM customers, arguing that they need to recover costs and protect customers who do not participate in NEM from subsidizing NEM customers. The utility proposals would have impacted the feasibility of financial investments in these technologies. The solar industry, customers, and environmental groups, including the LGSEC, had argued for tariffs that will continue to make investments in distributed renewable resources financially viable.
 
The CPUC decision is positive for rooftop solar in particular, and interesting in light of recent decisions in other states. For example, in Nevada regulators recently changed the financial paradigm, imposing new fees and costs. The reaction from the solar industry was to pack up and leave the state, causing the Nevada regulatory agency to reconsider. A recent post by UC Berkeley Professor Catherine Wolfram provides a good overview of this debate and the key role of regulators in ensuring the long-term viability of a solar investment.
CPUC, Parties Looking at Benefits to Include in Distribution Plans
As part of its work to help the utilities develop distribution resources plans (R.14-08-013), the CPUC is trying to define the benefits that investments in the distribution grid provide. The utilities, in the plans they submitted last summer, are proposing investments that others argue could be avoided using different processes and assumptions. These costs will accrue to customers, including local governments. It appears that these plans have not considered local planning documents, including climate action plans, energy plans, and other related documents.
 
The CPUC on February 1 held a workshop to discuss "locational net benefits analysis." At the workshop, CPUC staff were dismissive of the utility proposals. The LGSEC has been collaborating with a number of parties that want to see analysis that looks at benefits as well as costs of investments in the distribution grid.
 
The CPUC is taking comments on March 3 on the issues discussed above, as well as methodologies for integrated capacity analysis and pilot projects the utilities have proposed.
Scope Broadens for Integrated Distributed Energy Resources
On February 26, the CPUC issued a ruling that expands the scope of the rulemaking on Integrated Distributed Energy Resources (R.14-10-003). A decision in September adopted a definition and goal for integrated distributed energy resources. In October, the ALJ established a working group to update the cost-effectiveness framework. That working group met January 14 to develop recommendations on Definitions of Costs and Benefits and Social Cost Test. Comments and reply comments on the working group report are due March 14 and 21, respectively.
 
The new Scoping Memo broadens the issues to be addressed in Phase I to include:
  1. A determination of how the distributed energy resources needed to fill the required characteristics and values will be procured;
  2. A focus on the integration of distributed energy resources in a holistic way; and
  3. A consideration of the adoption of localized incentives and the methodology used in determining the incentives.
The schedule calls for a workshop on March 28 to discuss prior experiences with solicitations for resources. The CPUC will establish a Competitive Solicitation Framework Working Group in March, which will meet and issue a report August 1, with comments on the report due August 22.
CEC Adopts Final Energy Policy Report
On Wednesday Feb. 10th, the CEC adopted the final 2015 Integrated Energy Policy Report. This report not only provides a 10-year forecast of electricity consumption and peak demand and natural gas demand throughout California, but also provides energy plant and infrastructure updates, and discusses building efficiency, appliance efficiency and decarbonization toward the 40% GHG reduction by 2030 goal. The full report is available  here.  
New CPUC Docket for Long-term Resource Planning
On February 11, the CPUC moved all long-term resource planning to a new docket, R.16-02-007.

The proceeding will focus on:
  • Bringing together various ongoing analytical efforts from other proceedings, along with new analysis to be conducted in this proceeding.
  • Developing a standard framework for regulated load-serving entities in the future.
  • Ensuring optimized portfolios of Load Serving Entitiess to achieve the electric sector greenhouse gas reduction goals by 2030, being sure to preserve system reliability, at reasonable costs, while also meeting other statutory requirements.
Alternative Fueled Vehicles Update
Utilities are submitting individual applications to the CPUC to build out charging infrastructure, including charging stations, education programs, and pilots. In January, the CPUC authorized San Diego Gas & Electric to spend $45 million over 3 years to install 3,500 chargers at 350 locations. SDG&E had asked for 5,500 chargers at 550 sites for $65 million (D.16-01-045).
 
Also in January, the CPUC authorized the first phase of 5-year program for Southern California Edison (D.16-01-023). This first phase is a one-year pilot to deploy up to 1,500 charging stations at $22 million, with a proposed second phase deploying up to 30,000 more charging stations at $330 million. The January decision adopted a settlement that includes a 100% rebate for sites in disadvantaged communities, 50% rebate for multi-unit residences, and 25% rebate for f leets, rebates, and destination centers.
 
Reforming the CPUC

Even though Governor Brown vetoed several bills last year that would have reformed the CPUC, the agency continues to be under attack. Assemblymember Mike Gatto (D-Glendale), the new chair of Utilities and Commerce Committee, is calling for CPUC overhaul and possible elimination. Stating that the CPUC is "too big to succeed," Gatto is introducing a ballot initiative to repeal Public Utilities Act, the 1912 proposition that created the CPUC. Under Gatto's proposal, current CPUC work would be reallocated to other agencies and departments, or a successor agency. The Aliso Canyon gas leak was the final straw for Gatto, combined with the San Bruno blast, the San Onofre Nuclear shutdown, and the subsequent revelations about allegedly cozy relationships between the CPUC and the utilities it regulates.
 
In the Legislature, new bills are coming forward that are also looking at CPUC reform. SB 215 (Leno) would set modify various CPUC procedures, for example, it would disqualify commissioners and ALJs from cases if there is an appearance of bias and require the CPUC to maintain a public log of ex parte communication. SB 512 (Hill) would require the CPUC to meet in Sacramento part of the time, make testimony and other documents more easily accessible, and set procedures to better get input from those likely affected by CPUC proceedings. 

Resources, Events, and Happenings
California Adaptation Forum - Call for Session Proposals Now Open

The Local Government Commission and the State of California will be hosting the 2nd California Adaptation Forum in Long Beach on September 7-8, 2016! The Forum will bring together a diverse audience of local, regional, and state leaders committed to addressing California's adaptation needs and will feature:
  • A series of plenaries with high-level adaptation leaders
  • A variety of sessions on new legislation, resources and other essential topics
  • Regional project tours highlighting local adaptation and resilience efforts
  • Pre-forum workshops on tools and strategies for implementing adaptation solutions
The call for session proposals is now open! We will be looking for strong energy-related proposals to add to our dynamic, cross-cutting tracks. Visit CaliforniaAdaptationForum.org to sign up for updates and to learn more about this event! 
Energy Code Trainings in the Bay Area
The BayREN Codes & Standards Program promotes and provides trainings that engage building department staff and the building professionals they serve to increase understanding of new Energy Code developments and best practices for compliance (permit applicants) and enforcement (building departments). More than 50 free trainings will be provided in support of this effort, based on locally indicated desires and goals. Trainings are delivered on-site at your jurisdiction Monday through Friday. For more details about the specific training that are offered, visit their website here.
The Bay Area Regional Energy Network and Sonoma County Regional Climate Protection Authority are working with Senator Mike McGuire to advance SB 1233 (McGuire) - the Water Bill Savings Act. This legislation would create another tool for local governments in responding to drought pressures and conservation mandates. It will allow Joint Powers Authorities to issue pooled revenue bonds to pay for customer water efficiency improvements. The debt service will be provided by an efficiency charge added to participating customer utility accounts, that is designed to be less than participant's utility bill cost savings. It's core intent is to make water efficiency easier and financially smart for both water retailers and water utility customers.
 
If successful, SB 1233 will enable growth in programs like the BayREN Efficiency PAYS (Pay As You Save) pilots underway in the San Francisco Bay Area: https://www.bayren.org/pays, by allowing access to low cost public financing and efficient regional administration that would allow many more utilities to participate. Letters of support should be sent to Senator Mike McGuire, State Capitol, 1303 10th Street, Room 5064, Sacramento, CA 95814. 

Join the Efficiency Council and guest speakers for a one-day professional education symposium on May 3rd, 2016 in Berkeley. The symposium, "Building Blocks to Integrate Efficiency and Demand Response into California's Distributed Energy Future", is designed to build a deeper understanding of how efficiency and demand response will fit into California's emerging distributed energy future and is an excellent opportunity for professionals to stay current in this rapidly changing field.

LGSEC  members are eligible to receive a 15% discount for attending this event; click here to receive the offer.
This newsletter is one of the benefits of your membership in the LGSEC.  We appreciate your support!

Sincerely,

Jody London
Regulatory Consultant


Howard Choy
Chair, LGSEC and General Manager, Los Angeles County Office of Sustainability