Details for: 3742-E-A (Part 1 of 1).pdf


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Gary A. Stern, Ph.D.
Managing Director, State Regulatory Operations

May 7, 2018

ADVICE 3742-E-A
(U 338-E)
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
ENERGY DIVISION
SUBJECT:

Supplement to Advice 3742-E, Establishment of the Solar on
Multifamily Affordable Housing Program Balancing Account
Pursuant to Decision 17-12-022

PURPOSE
The purpose of this supplemental advice filing is to provide data requested by the
Energy Division in a memo dated April 18, 2018. See Attachment A for SCE’s
responses to Energy Division’s questions.
This advice filing supplements Advice 3742-E in part and will not change the substance
of the original Advice 3742-E.
This supplemental advice filing will not increase any rate or charge, cause the
withdrawal of service, or conflict with any other schedule or rule.
TIER DESIGNATION
Pursuant to General Order (GO) 96-B, Energy Industry Rule 5.1(1), this advice letter is
submitted with a Tier 1 designation which is the same Tier designation as the original
filing, Advice 3742-E.
EFFECTIVE DATE
This supplemental advice filing will become effective on the same day as the original
filing of Advice 3742-E, which is February 12, 2018.

P.O. Box 800

8631 Rush Street

Rosemead, California 91770

(626) 302-9645

Fax (626) 302-6396





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ADVICE 3742-E-A (U 338-E) -2- May 7, 2018 PROTESTS SCE asks that the Commission, pursuant to General Order (GO) 96-B, General Rules 7.5.1, maintain the original protest and comment period designated in Advice 3742-E and not reopen the protest period. The modifications included within this supplemental advice letter do not make substantive changes that would affect the overall evaluation of the filing. NOTICE In accordance with General Rule 4 of GO 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached GO 96-B and R.14-07-002 service lists. Address change requests to the GO 96-B service list should be directed by electronic mail to AdviceTariffManager@sce.com or at (626) 302-3719. For changes to all other service lists, please contact the Commission’s Process Office at (415) 703-2021 or by electronic mail at Process_Office@cpuc.ca.gov. Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE’s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE’s web site at https://www.sce.com/wps/portal/home/regulatory/advice-letters. For questions, please contact Matt Sheriff at (626) 302-1895 or by electronic mail at matt.sheriff@sce.com. Southern California Edison Company /s/ Gary A. Stern Gary A. Stern, Ph.D. GAS:ms:cm Enclosures
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Attachment A
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STATE OF CALIFORNIA EDMUND G. BROWN, Jr., Governor PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE SAN FRANCISCO, CA 94102-3298 April 18, 2018 TO: Matt Sheriff Karyn Gansecki Darrah Morgan FROM: Energy Division RE: Notification of Need for Supplemental Information for SCE Advice Letter 3742-E - Establishment of the Solar on Multifamily Affordable Housing Program Balancing Account Pursuant to Decision 17-12-022 This memo is intended to communicate the need for additional information to be provided in a supplemental advice letter to Energy Division by May 7th, 2018. 1) Please provide a table outlining the 2016, 2017, and 2018 Greenhouse Gas Revenue Balancing Account amounts available to the Solar on Multifamily Affordable Housing (SOMAH) Balancing Account. If the SOMAH/AB 693 program funding calculation methodology differs by year, please cite the calculation used to derive the reported amount. See table 1 below for a template: Table 1 Year Account Balance of Solar on Multifamily Affordable Housing (SOMAH) Balancing Account 2016 $3,036,945 2017 $5,040,278 Calculation Methodology 5% of 15% of Available Funds ($404.9) 10% of 15% of Available Funds ($336.0) Authority AB693 and ALJ March 18, 2016 R. 14-07-002 AB693 and ALJ March 18, 2016 R. 14-07-002
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2018 $46,000,000 Total 46% of $100M AB 693, as amended by SB 92, ALJ Miles email Ruling dated October 18, 2017 and email coordination with P&GE and SDG&E $54,077,223 2) Please provide a list of cost categories SCE expects to track under the umbrella of “administrative costs” as authorized by D.17-12-022 Page 37, FOF 26, and OP 2. Please provide a brief narrative explaining these cost categories. SCE proposes the following cost categories under the umbrella of “administrative costs” as authorized by D.17-12-022. These costs represent SCE’s incremental utility administrative activities necessary to support the SOMAH program and its participants. Cost Category 1: Contract Management and Program Administration Support Costs that are expected to be recorded and tracked in this category include but are not limited to:  Processing and payment of program administrator invoices  Verification and processing of incentives payments  Ongoing management of SOMAH Program Administrator (PA) contract  Ongoing utility cofounding activities  Ongoing PA support excluding contract management (as needed)  Responses to CPUC inquiries, data requests and audit support (as needed)  Responses to SOMAH customer inquiries (as needed) SCE assumes marketing, outreach, measurement, and evaluation, activities are not included in SCE’s scope. Therefore, support for these activities are not incorporated into SCE’s contract management and program administration support costs. Cost Category 2: Operational Billing Activities Costs that are expected to be recorded and tracked in this category include but are not limited to:
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 Account set up (Initial and New Party) – Initial account set up are on-going costs that include reviewing and/or modifying each account in a SOMAH VNM arrangement to ensure proper metering is in place so that interval billing is possible; and reviewing the billing cycle for each account in a SOMAH VNM arrangement to ensure that all accounts are on the same billing cycle and modifying the billing cycles, where necessary. In addition, if SOMAH VNM is manually billed, spreadsheets will need to be created to calculate monthly bills for each account in the arrangement. New party account setup are on-going costs that are incurred only if SOMAH VNM is manually billed. The process would be similar to the initial setup but would exclude initial account profiling and network setup. This process would be executed only when new tenants move in to a SOMAH apartment complex.  System automation of routine billing for SOMAH VNM – this is a one-time investment to automate the routine billing process.  Exception processing – these are on-going costs that are incurred when automated routine billing fails e.g. meter usage data collection failure. While billing is intended to be automated, there will be accounts that cannot be automatically processed and must be reviewed and processed manually by a billing representative.  Manual routine billing of SOMAH VNM (if automation is not possible or deferred) - these are on-going costs that include preparation and review of manual spreadsheets used to calculate and track customer charges and credits through the relevant period and performing manual billing adjustment(s) to the standard billing statements. Cost Category 3: Interconnection Application Processing Costs that are expected to be recorded and tracked in this category include but are not limited to:  Application processing (e.g. validating and approving single line diagram, interconnection agreement, electrical inspection clearance from governmental agency having jurisdiction, and other required documents)  Responding to inquiry calls and emails associated with the application Distribution engineering costs (e.g. technical analysis, studies, etc.)  3) For each cost category identified above and using the Energy Division provided list of Low Income Housing Tax Credit properties (and their respective number of units) served by SCE, please provide a table for both
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the to-date and projected administration costs under low, mid, and high program participation scenarios. See table 2 and 3 below for templates: The cost information provided below are estimates based on an Energy Division provided list of Low Income Housing Tax Credit properties (‘property list”) served by SCE. It is important to note that actual costs are likely to be higher than the estimates for the following reasons:  Property list does not take into account the number of common area accounts for each apartment complex. These accounts would also need to be billed under the SOMAH VNM tariff along with the tenant accounts thereby increasing the number of accounts that require set up and routine billing.  Property list includes 149 properties that do not have a total number of units and therefore customer billing enrollments could not be determined. Properties appear to be future construction projects.  Property list may not include all SOMAH-eligible projects in SCE territory. Therefore, volume of SOMAH projects and customer accounts could be underestimated. Although the variance between the estimate and actual costs is not known at this time, the allocation of administrative budget for SCE’s incremental costs should account for this difference in order to avoid a shortfall in the SOMAH annual administrative budget. Table 2 To-Date Costs ($)* Administrative Cost Category Cost Category 1: Contract Management and Program Administration Support Cost Category 2: Operational Billing Activities Cost Category 3: Interconnection Application Processing Total $0 $0 $0 $0 *Note: No costs have been recorded against the SOMAH balancing account to-date. Request for Proposal activities performed thus far are part of standard business operations and therefore not considered incremental costs that would be recorded in the balancing account. Table 3: Projected Total Administration Costs
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Administrative Cost Category Cost Category 1: Contract Management and Program Administration Support Cost Category 2: Operational Billing Activities – Account Set Up Cost Category 2: Operational Billing Activities – Manual Routine Billing Cost Category 2: Operational Billing Activities – System Automation* Cost Category 3: Interconnection Application Processing Total Category 1, 2 & 3 (with billing automation) Total Category 1, 2 & 3 (no billing automation) Projected Projected Projected Administration Administration Administration Costs ($) if Costs ($) if Costs ($) if 25% of eligible 50% of eligible 75% of eligible properties properties properties participate participate participate (Low) (Mid) (High) $263,531 $527,067 $790,115 $2.30M $4.61M $6.91M $9.41M $18.81M $28.22M Approx. $1.4M Approx. $1.4M Approx. $1.4M $41,475 $82,950 $124,350 $3.72M $6.05M $8.37M $12.02M $24.03M $36.05M *Note: The system automation estimate is based on the actual cost to initially implement the MASHVNM tariff in the billing system. Technology assessment is currently underway to determine the costs for the SOMAH-VNM implementation and therefore a good faith estimate has been provided. The estimates provided in Table 3 assumes a billing start date of January 1, 2019 and continues through December 31, 2030. New SOMAH account enrollments are also assumed to take place on the first of each year. Additionally, cost estimates for interconnection application processing calculated based on the number Low Income Housing Tax Credit properties served by SCE multiplied by a $75 application fee. The $75 fee is used in this calculation because interconnection activities are likely to be the same or similar to the processing costs associated with similar projects in the NEM program.
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Total costs with billing automation includes system automation and initial setup costs only. Manual routine billing and new party account set up are excluded since automation will address these processes. Total costs without routine billing automation includes initial and new party account set up as well as manual routine billing. It is also important to note that a good faith estimate for the SOMAH VNM system automation has been approximated using data from the initial MASH VNM tariff implementation. As shown in Table 3, a majority of SCE’s costs are associated with billing customers on the SOMAH VNM tariff. These costs are significant due to the following key reasons:  High volume of potential SOMAH VNM billing enrollments  System enhancement for routine billing automation  Manual processing of account set up for SOMAH VNM arrangements  Manual billing due to implementation conflicts with current billing system replacement timeline (if automation is not possible or deferred) For these reasons, SCE would need to have an appropriate cost recovery mechanism for its costs resulting from SOMAH VNM billing. With limited funds available in the SOMAH administration budget, SCE is trying to mitigate its costs by taking the necessary steps to automate routine billing of the SOMAH VNM tariff. With that said, efforts to do so are affected by an enterprise-wide project to replace an obsolete billing system with a more modern, stable and agile customer technology platform (referred to as the Customer Service Re-Platform Project or CSRP). The CSRP will directly impact the feasibility and timing for implementing SOMAH VNM because the initial development of the CSRP, its launch, and its stabilization process will require SCE to avoid major new transactions during the period approximately beginning 2019 through end of 2020. SCE must appropriately balance the competing priorities of a successful implementation of the SOMAH VNM tariff as well as the launch of CSRP in order to reduce the risks associated with concurrent implementations and enable a higher probability of success without significantly impacting SCE’s entire customer population. Although our goal is to automate routine billing of the SOMAH VNM tariff, there is a probability that manual billing will need to be in place until we are able to implement the billing logic into CSRP. Assessments are currently underway to determine how SOMAH VNM can be accommodated into CSRP
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and when it can be implemented. As a result, routine billing costs will differ depending on the timing of the automation. It is also important to note that even with the routine billing automation, SCE will continue to incur incremental costs for the SOMAH VNM account setup. The initial account setup is not included in the automation due to the complexities related to executing this activity. Additionally, if routine billing is not automated in the billing system, this would require manual account setup of the new party. This is done so in order to update the SOMAH VNM arrangement and ensure that the new tenant(s) receives the solar credits on their bill. The rate in which tenants move out of a SOMAH apartment complex drives the frequency of this manual process. 4) Using the estimates above, please identify what percentage (and total) of SOMAH Program administrative costs identified in Table 3 will be paid for by interconnection request fees1 outlined in the recently filed SCE Advice Letter 3767-E – Establishment of Schedule SOMAH-VNM-ST, Solar on Multifamily Affordable Housing Virtual Net Metering Successor Tariff, and Modifications to Associated Agreements in Compliance with Decision 17-12-022. None of the SOMAH program administrative costs identified in Table 3 will be paid for by interconnection request fees outlined in the recently filed SCE Advice Letter 3767-E. SOMAH is not a NEM program and, as such, the Commission is not statutorily directed or authorized to use general ratepayer funds or NEM application fees to fund the SOMAH program. The SOMAH program arises out of the Commission’s implementation of Assembly Bill (AB) 693. AB 693 provides for a program funded using GHG Cap-and-Trade revenues. Accordingly, instead of being funded as a NEM program, the SOMAH program must be funded entirely by the percentage of GHG Cap-and-Trade program revenues AB 693 authorized. In other words, a finite pot of funds must support the entirety of the SOMAH program. In any event, it would not be appropriate to use NEM application fees to fund SOMAH incentive program related activities because they are collected solely for the purpose of covering the costs of processing NEM applications. The NEM successor tariff decision awarded utilities application fees in different amounts based on their documented costs associated with processing NEM 1 It is understood that interconnection fees differ based on project size. Please use historical MASH system size data, and the Energy Division provided list of Low Income Housing Tax Credit properties (and their respective number of units) served by SCE to estimate the number of systems that will be installed by the SOMAH Program that will be greater than and less than 1MW.
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interconnection applications. The purpose of the application fees to is to cover the costs associated with that activity. The funds are therefore not properly appropriated to other activities unrelated to NEM administration. For the foregoing reasons, SCE contends the costs of application processing and interconnection must be covered by the GHG funds that are set aside for the administration of the SOMAH program. SCE estimates the cost of these activities are likely the same or similar to the costs associated with these same activities under the NEM program, i.e., $75 for up to 1 MW and $800 for greater than 1 MW. Thus, the Commission should ensure sufficient administrative funds are available to cover those costs.
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CALIFORNIA PUBLIC UTILITIES COMMISSION ADVICE LETTER FILING SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/CPUC Utility No.: Southern California Edison Company (U 338-E) Utility type: Contact Person: Darrah Morgan  ELC  GAS  PLC  HEAT Phone #: (626) 302-2086  WATER E-mail: Darrah.Morgan@sce.com E-mail Disposition Notice to: AdviceTariffManager@sce.com EXPLANATION OF UTILITY TYPE ELC = Electric PLC = Pipeline GAS = Gas HEAT = Heat Advice Letter (AL) #: Subject of AL: (Date Filed/ Received Stamp by CPUC) WATER = Water 3742-E-A Tier Designation: 1 Supplement to Advice 3742-E, Establishment of the Solar on Multifamily Affordable Housing Program Balancing Account Pursuant to Decision 17-12-022 Keywords (choose from CPUC listing): Compliance, Balancing Account AL filing type:  Monthly  Quarterly  Annual  One-Time  Other If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #: Decision 17-12-022 Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: Summarize differences between the AL and the prior withdrawn or rejected AL: Confidential treatment requested?  Yes  No If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information: Resolution Required?  Yes  No Requested effective date: 2/12/18 No. of tariff sheets: -0- Estimated system annual revenue effect: (%): Estimated system average rate effect (%): When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting). Tariff schedules affected: None Service affected and changes proposed1: Pending advice letters that revise the same tariff sheets: 1 Discuss in AL if more space is needed. None
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All correspondence regarding this AL shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102 E-mail: EDTariffUnit@cpuc.ca.gov Gary A. Stern, Ph.D. Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770 Telephone: (626) 302-9645 Facsimile: (626) 302-6396 E-mail: AdviceTariffManager@sce.com Laura Genao Managing Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5544 E-mail: Karyn.Gansecki@sce.com
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