Details for: SCE Reply to Protests to Advice 3722-E.pdf

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Russell G. Worden
Managing Director, State Regulatory Operations

February 9, 2018
Energy Division
Attention: Tariff Unit
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102


Southern California Edison Company’s Reply to Protests to
Advice 3722-E

Dear Energy Division:
Pursuant to General Rule 7.4.3 of the California Public Utilities Commission’s
(Commission or CPUC) General Order (GO) 96-B, SCE hereby responds to protests to
its Advice 3722-E, which sought Commission approval to sunset SCE’s Green Tariff
Shared Renewables (GTSR) program. Protests were filed by: the Office of Ratepayer
Advocates (ORA); Solar Energy Industries Association (SEIA) and Coalition for
Community Solar Access (CCSA) (collectively the Joint Solar Interests); Clean
Coalition; Shell Energy, North America (US), L.P. (Shell Energy), Direct Access
Customer Coalition (DACC), and California Choice Energy Authority (CCEA)
(collectively the Joint Parties); Coalition of California Utility Employees (CUE); and The
Utility Reform Network (TURN).
On December 22, 2017, in accordance with Ordering Paragraph (OP) 13 of
Decision (D.)15-01-051 (the Decision), SCE submitted Advice 3722-E. The Decision
directed the investor-owned utilities (IOUs)1 to “use a Tier 3 Advice Letter or application
to make changes to its [GTSR] program that would either extend it beyond January 1,
2019 (for new customers), or terminate the GTSR program as of that date. In addition,
the advice letter may include a proposal for close out of unrecovered administrative and
outreach costs.”2 Consistent with the Decision, Advice 3722-E seeks to terminate
SCE’s existing GTSR program as of January 1, 2019 and replace it with a new program,
which SCE will propose in a separate application in 2018. Advice 3722-E indicates
SCE’s intent to seek recovery of the unrecovered GTSR administrative and outreach
costs as part of SCE’s ERRA Review of Operations application in 2018. Advice 3722-E
makes no substantive cost recovery proposal; therefore, protests over cost recovery are

The IOUs consist of SCE, Pacific Gas & Electric Company (PG&E), and San Diego Gas
and Electric Company (SDG&E).
See Decision, OP 13.


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Energy Division Tariff Unit California Public Utilities Commission February 9, 2018 Page 2 On February 2, 2018, ORA, the Joint Solar Interests, Clean Coalition, the Joint Parties, CUE, and TURN submitted protests to Advice 3722-E. This reply addresses key issues raised in the protests. 1) SCE’s Termination of the Existing GTSR on January 1, 2019 is Reasonable CUE and others assert that SCE should be required to continue to implement – and bear the cost recovery risk of – the existing GTSR, arguing (without basis) that SCE has not done enough to “make this program successful.”3 SCE should not be precluded from exercising its right to sunset the current program as of January 1, 2019, and to replace it with a new program that can address barriers and more effectively promote renewables for Disadvantaged and other communities. It is unreasonable to require SCE to continue to implement an economically unviable program beyond January 1, 2019 while having no assurance of cost recovery for the existing administrative and outreach costs – much less future costs – on the speculation of a more robust participating customer base over which to spread those costs.4 During the pendency of the current program, SCE agrees that some modifications to the existing program may have merit, such as those proposed by PG&E and SDG&E and touted by TURN in its protest.5 Specifically, SCE agrees that eliminating the requirement that Enhanced Community Renewables (ECR) projects bid into a specific solicitation and to demonstrate community interest prior to execution of a PPA, are reasonable modifications to SCE’s existing program that can be implemented in 2018 pending proposal, approval and implementation of the replacement program. Several parties complain that SCE has not provided details about its replacement program for GTSR.6 While SCE would have preferred to file its proposal for a new program concurrently with its request to sunset the existing GTSR on January 1, 2019, 3 4 5 6 See CUE Protest, p. 2; also Clean Coalition Protest, p. 1; TURN Protest, p. 4. See TURN Protest, speculating on the likelihood of new subscriptions once projects are online by mid-2019 and the net premium declines. Without substantial growth in participation, the economics of the program cannot reasonably be expected to materially change. Moreover, despite TURN’s claims to the contrary (at pp. 3-4), SCE’s 20-year forecast of GTSR charges and credits reasonably anticipates the PCIA increasing through 2038 as a result of declining market prices and the revisions to the methodology required in R.17-06-026 to address the substantial and unlawful cost shift to bundled service customers under the existing flawed PCIA methodology. Although the PCIA is expected to decline as the above-market contracts in SCE’s PCIA portfolio expire, that decline will not begin in earnest until 2033. To assume business as usual for the PCIA rate over the majority of the next 20 years in the GTSR forecasts would risk misleading customers on the costs and benefits of the GTSR program. See TURN Protest, p. 3. Joint Solar Interests Protest, p. 3; TURN Protest, p. 3.
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Energy Division Tariff Unit California Public Utilities Commission February 9, 2018 Page 3 the Decision required the advice letter requesting modification or termination to be filed by December 31, 2017. SCE is still developing its new program proposal and plans to share more details at the GTSR Annual Program Forum scheduled for February 21, 2018, and to file an application for approval of the new program in 2018. SCE’s program development process includes evaluating options to reduce barriers of entry for customers in Disadvantaged Communities and developers who have found the ECR program to be challenging and cumbersome. We look forward to the input of stakeholders at the GTSR Annual Program Forum. 2) SCE Will Allow Current GTSR Customers to Remain on the Program ORA states that “[c]urrent GTSR customers should be allowed to stay on the GTSR program until the replacement program is available.”7 SCE agrees. The Decision grants an IOU the ability to sunset the GTSR program on January 1, 2019.8 SCE understands “sunset” to mean that the program will no longer be open to enrollment for new customers as of that date. Accordingly, SCE will allow participating customers and any new customers who enroll prior to January 1, 2019 to remain in the GTSR program until SCE’s proposed alternative is approved and implemented. 3) The Energy Resource Recovery Account (ERRA) is an Appropriate Method to Seek Recovery of the Administrative and Outreach Costs Associated with the GTSR Program ORA opposes SCE’s plan to seek recovery of GTSR administrative and outreach costs in the ERRA Review of Operations proceeding, arguing that the Decision “explicitly requires IOUs that terminate their GTSR programs to file an application in order to recover any outstanding costs, rather than use an existing recovery account as proposed by SCE.”9 The Decision does not specify that the application through which an IOU seeks recovery of outstanding costs cannot be an existing cost recovery application. Use of the annual ERRA Review of Operations application for reasonableness review and recovery of the GTSR administrative and outreach costs not only adheres to the language in the Decision, but is also a more efficient approach than ORA’s preferred approach of a separate application. SCE estimates that the GTSR costs for which it will seek reasonableness review and recovery are approximately one million dollars. It would be inefficient for the Commission and parties to engage in a new application proceeding when the same issue can be efficiently and fairly reviewed and resolved in SCE’s ERRA Review of Operations application. The Joint Parties assert that “[w]hether or not the Commission deems SCE’s GTSR marketing and administrative costs to be ‘reasonable,’ nonparticipating ratepayers may 7 8 9 ORA Protest, p. 2. See Decision, Conclusion of Law 36. ORA Protest, p. 3.
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Energy Division Tariff Unit California Public Utilities Commission February 9, 2018 Page 4 not be forced to bear these costs.”10 Advice 3722-E makes no substantive cost recovery proposal; therefore, these protests are premature. Rather, Advice 3722-E proposes a venue for GTSR administrative cost recovery. As stated above, the annual ERRA Review of Operations application will provide parties a full and fair opportunity to examine the reasonableness of the GTSR administrative and outreach expenditures and SCE’s cost recovery proposal. 4) Conclusion For the reasons stated above, SCE respectfully requests that the Commission approve SCE AL 3722-E. Sincerely, /s/ Russell G. Worden Russell G. Worden RGW:ee:cm cc: 10 Edward Randolph, Director, CPUC Energy Division James Loewen, CPUC Energy Division Helena Oh, ORA Mike Campbell, ORA Matthew Freedman, TURN Kenneth Sahm White, Director, Economic and Policy Analysis Clean Coalition John W. Leslie, Attorney for Joint Parties Marc Joseph, Attorney for CUE Mila Buckner, Attorney for CUE Jeanne B. Armstrong, Counsel for the Solar Energy Industries Association Service Lists for A.12-01-008 et al. Joint Parties Protest, p. 3.
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