Details for: SCE's Protest Response to Advice 3785-E_Reserved.pdf


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

May 10, 2018
Energy Division
Attention: Tariff Unit
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Re:

Reply of Southern California Edison Company to the
Protest of Advice 3785-E, Plan to Procure Energy
Storage Resources Pursuant to Senate Bill 801

Dear Energy Division Tariff Unit:
Pursuant to General Rule 7.4.3 of the California Public Utilities Commission’s
(Commission or CPUC) General Order 96-B, Southern California Edison Company
(SCE) hereby submits this reply to the protest of the Office of Ratepayer Advocates
(ORA) of SCE Advice Letter 3785-E, Plan to Procure Energy Storage Resources
Pursuant to Senate Bill 801.
I.

INTRODUCTION

On April 13, 2018, pursuant to guidance provided in two letters from the Commission’s
Energy Division, SCE filed Advice Letter (AL) 3785-E requesting approval of its plan to
procure energy storage resources in accordance with SB 801.
On May 3, 2018, ORA filed its protest of AL 3785-E. In their protest, ORA: (i) claims
SCE is seeking to expand this solicitation outside of South of Path (SP) 26; (ii)
recommends the Commission count the procurement toward SCE’s Assembly Bill (AB)
2868 target if it is not needed to meet the AB 2514 target; and (iii) requests SCE adhere
to the statutory cost effectiveness requirement for energy storage.

II.

DISCUSSION

All of SCE’s Proposed Procurement Will Be Located Within SP 26 and Addresses
Reliability
ORA incorrectly asserts that SCE is seeking to expand the SB 801 solicitation beyond
SP 26 and for purposes other than “those require[d] by SB 801.”1 ORA requests that the
1

ORA Protest, pp. 2-3.

P.O. Box 800

8631 Rush Street

Rosemead, California 91770

(626) 302-9645

FAX (626) 302-6396





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Energy Division Tariff Unit Page 2 May 10, 2018 Commission deny “SCE’s request to expand its solicitation to include the siting of energy storage outside the area specified in Resolution E-4791 until SCE demonstrates how its proposal will address the Aliso Canyon-related reliability needs.”2 The Commission should deny ORA’s request because it is predicated upon a misunderstanding of SCE’s procurement plan. In its AL, SCE proposes to include in its solicitation “a preference for energy storage in certain locations that enhance both gas system and electrical system performance and reliability” and that is has “identified candidate areas for demonstrating the value that energy storage can provide in constrained electrical areas while simultaneously reducing demand on the gas system.”3 All of the preferred locations identified by SCE are within the procurement area of SP 26. Because all of SCE’s preferred locations are within SP 26 and because SCE’s procurement plan achieves the purpose of SB 801, the Commission should deny ORA’s request that the Commission require SCE to demonstrate how the preferred locations will help address Aliso Canyon-related reliability needs. It Is Appropriate for SCE to Count SB 801 Procurement Toward its AB 2514 Targets ORA’s recommendations concerning how and where SCE should count SB 801 procurement are likewise erroneous. ORA recommends that the Commission deny SCE’s request to count any procurement toward its AB 2514 target rather than its AB 2868 target, and notes that SCE does not describe whether it has any existing procurement need under AB 2514.4 First, SCE does have a 2018 and 2020 energy storage procurement net short, as described in SCE’s 2018 Energy Storage Procurement and Investment Plan. There, SCE stated, “SCE’s total eligible procurement through the 2018 procurement cycle is 363.5 MW, which is 6.5 MW short of the 2018 cumulative target. To meet the 2018 interim target, SCE will procure energy storage resources to satisfy SB 801, which requires an electrical corporation operating in the Los Angeles Basin to procure a minimum aggregate total of 20 MW.”5 Second, while SB 801 provides that SCE “may” count procurement towards its AB 2868 programs and investments, it does not prohibit SCE from counting third-party procurement towards AB 2514 targets as appropriate. Moreover, as SCE explained in its AL, AB 2868 is intended for utility investment (i.e., utility-owned projects) and 2 3 4 5 Id. at p. 3. AL 3785-E, p. 2. ORA Protest, p. 4. See A.18-02-002, Testimony of Southern California Edison Company in Support of its 2018 Energy Storage Procurement and Investment Plan, at 5. See also Tables II-2 and III-10 which reflect SCE’s progress towards the total 580 MW cumulative target.
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Energy Division Tariff Unit Page 3 May 10, 2018 customer programs.6 SB 801, by contrast, explicitly precludes utility-owned investments. Thus, SB 801 projects cannot, and should not, count against the MW allowed under AB 2868 for utility investment. The Commission should therefore grant SCE’s proper proposal to count third-party procurement against the appropriate target, consistent with Decision 13-10-040, which provides that energy storage projects procured through other Commission proceedings may count towards the IOU’s AB 2514 targets once approved by the Commission.7 SCE Will Adhere to Statutory Requirements ORA asks the Commission to require SCE to adhere to the statutory requirement that any storage projects SCE procures be cost-effective.8 SCE intends to minimize costs for customers by procuring the resources consistent with its least-cost best-fit methodology. To SCE’s knowledge, the Commission has not defined cost effective for purposes of procuring energy storage. In SCE’s view, and in light of the mandate to procure energy storage, cost effective refers to the reasonableness of the value proposition to SCE’s customers relative to the procurement objective. Rather than a bright-line rule, this standard requires the utilities and Commission to exercise judgment in procuring resources to avoid imposing unreasonable financial obligation on their customers. More specifically, the utilities must balance the forecasted impacts on customer costs and the advancement of the Commission’s and the State’s policy goals. SCE therefore seeks to maximize the value of energy storage procurement on behalf of its customers in furtherance of the Commission’s and Legislature’s stated objectives. Additionally, ORA and other stakeholders will have several opportunities to review SCE’s SB 801 procurement at various stages through its participation in the Cost Allocation Mechanism (CAM) group and during its review of the Tier 3 advice letter for approval of SB 801 contracts. 6 7 8 SCE notes that AB 2868, by statue, is an opportunity for SCE to pursue 166.6 MW of energy storage for utility investments and programs. In other words, the 166.6 MW is a ceiling, not a floor. As ORA notes, SCE has met its customer domain target. Nevertheless, given the language in SB 801 which includes behind-the-meter (BTM) projects within the statute’s definition of “cost effective energy storage solution,” SCE proposes to solicit behind-the-meter projects in addition to in-front of the meter (IFOM) projects. Even though SCE can count the SB 801 BTM projects against the BTM customer program portion of 2868, doing so would only further limit the available customer program MW under AB 2868. ORA Protest, pp. 4-5.
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Energy Division Tariff Unit Page 4 May 10, 2018 III. CONCLUSION SCE requests that the Commission approve the Advice Letter as filed. Sincerely, /s/ Gary A. Stern Gary A. Stern, Ph.D. GAS:db:cm cc: President Michael Picker, CPUC Commissioner Carla Peterman, CPUC Commissioner Liane Randolph, CPUC Commissioner Clifford Rechtschaffen, CPUC Commissioner Martha Guzman Aceves, CPUC Karen Clopton, General Counsel, CPUC Edward Randolph, Director, CPUC Energy Division Rachel McMahon, CPUC Energy Division Dorothy Duda, CPUC Energy Division Sandy Goldberg, CPUC Julie Halligan, ORA Mike Campbell, ORA
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