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Draft Calif. PUC Resolution Would Require Municipal Aggregations To File Statement Of Intent To Serve Load One-Year Before Service, In Order To Include As Part Of RA Allocation Process

December 11, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

A draft California PUC resolution would alter the timeline for implementation of community choice aggregations (CCAs) such that CCAs would be required to file a statement of intent to serve load at least one year before such service starts, so that the CCA's load can be included in resource adequacy allocations

"The Commission through this Resolution proposes an informal process of review of Community Choice Aggregation (CCA) Implementation Plans pursuant to the requirements and directives of Public Utilities Code Section 366.21 and Decision (D.) 05-12-041. This process of review will coordinate with the timeline of the mandatory forecast filings of the Commission’s Resource Adequacy program to ensure that newly launched and expanding CCAs comply with Resource Adequacy requirements, as established by Section 380, before they serve customers," the draft states

There are two mandatory annual load forecast deadlines that an LSE must comply with in order to receive an annual RA obligation responsibility for the following year. First, an LSE must file a preliminary load forecast by mid-April for the following calendar year. An LSE then must file a revised forecast in August. The August forecast was intended to refine and improve the accuracy of April [sic] forecast.

"The timeline of RA load forecast submissions has practical implications for newly forming CCAs and expanding CCAs. If an existing or pre-operational CCA does not submit an annual load forecast, they are not allocated a year-ahead RA obligation for the following year. In this scenario, the incumbent utility remains responsible for that load and procures RA for those customers, even if those customers are about to be served by a CCA. This scenario is most likely to occur if a CCA launches or expands service to customers (or additional customers in the case of an existing, yet expanding CCA) after the RA annual load forecast deadlines without filing an annual load forecast," the draft states

"As a result, the utilities incur short-term power purchase costs for the customers of CCAs in their launch or expansion year. Utilities procuring for CCAs in their first launch or expansion year creates a cost shifting challenge. D.11-12-018 excluded power purchase transactions less than a year in term from the total portfolio calculation of the Power Charge Indifference Adjustment (PCIA). Consequently, Resource Adequacy contracts of over one year are captured by the PCIA, but Resource Adequacy contracts of less than one year are not captured by the PCIA. Therefore, such costs are borne by bundled customers, potentially resulting in millions of dollars annually of stranded costs and potentially in contravention of the indifference requirement of Section 366.2," the draft states

The draft states that, "public information illustrates the scale of load migration happening in the year-ahead RA program. Existing and new CCAs that were not a part of the year ahead 2018 RA process but plan to serve load in 2018 would have been allocated a System Peak RA requirement of approximately 3,616 MW and a local RA requirement of approximately 1,793 MW. These year-ahead RA requirements were met by the utilities that currently serve these customers. Some of these costs are recovered by the PCIA, however, any contracts less than one year are not captured by the PCIA and are borne by remaining bundled customers."

"In addition, if the California Independent System Operator (CAISO) procures back-stop capacity through its capacity procurement mechanism (CPM), it appears based on the CAISO’s tariff language these costs will be allocated only to those LSEs that exist at the time of the designation (annual designations would occur in December, before the compliance year). It is not yet clear if the PCIA addresses this potential cost-shifting issue," the draft states

Accordingly, the draft would provide that, in order to coordinate the launch of a new or expanding CCA with the RA requirements, a CCA's Implementation Plan and Statement of Intent must be submitted to the Commission on or before January 1 in order to serve load in the following year.

For example, a new or expanding CCA intending to serve new load in 2019 must submit its Implementation Plan on or before January 1, 2018, the draft would provide

"[T]he [proposed] Adopted Timeline includes a deadline by which Implementation Plans must be received in order for CCAs to serve new load beginning January 1 of the following year. The goal of this requirement is to assist the proposed CCA in securing the certification and registration within enough time to file its preliminary load forecast by mid-April in order to serve load the following calendar year," the draft states

Load forecasts would be required from the CCA in April (initial) and August (revised) the year before it would begin serving load

The draft would also require that a CCA submit its registration packet to the CPUC within 90 days of filing its Implementation Plan. This includes the $100,000 bond (current interim amount). Previously, there was no specific deadline for this submission

RESOLUTION E-4907, Agenda ID #16190

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