Details for: SCE Reply to Protest and Response to Advice 3874-E_Public Version.pdf


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

November 1, 2018
Energy Division
Attention: Tariff Unit
California Public Utilities Commission
505 Van Ness Avenue
San Francisco, CA 94102
Re:

Southern California Edison Company’s Reply to Protest of the Public
Advocates Office and Response of the California Energy Storage Alliance
to Advice 3874-E, Submission of Contracts for Procurement of Energy
Storage Resulting From the Integrated Distributed Energy Resources
Incentive Pilot Solicitation (PUBLIC VERSION)

Dear Energy Division Tariff Unit:
In accordance with Section 7.4.3 of General Order (GO) 96-B, Southern California
Edison Company (SCE) hereby replies to the Public Advocates Office’s protest and the
California Energy Storage Alliance’s (CESA’s) response to SCE’s Advice 3874-E.
On October 5, 2018, SCE submitted Advice 3874-E seeking California Public Utilities
Commission (Commission or CPUC) approval of four in-front-of-the-meter (IFOM)
energy storage contracts for Resource Adequacy (RA) capacity (the IDER Contracts),
procured as a result of SCE’s Integrated Distributed Energy Resources (IDER) Incentive
Pilot Request for Offers (the IDER RFO). The Public Advocates Office submitted a
protest to Advice 3874-E on October 25, 2018. That same day, CESA submitted a
response to Advice 3874-E.
Importantly, neither the Public Advocates Office nor CESA oppose Commission
approval of the IDER Contracts or any finding requested by SCE in Advice 3874-E.
Indeed, “CESA supports SCE’s selection of 9.5 MW of [IFOM] energy storage projects
to defer the Eisenhower and Newbury projects” and “commends SCE for conducting a
fair and successful solicitation that seeks to demonstrate the planning, procurement,
and contracting processes for third-party [distributed energy resources] to costeffectively defer traditional capital investments and upgrades.”1 CESA “recommends
that the Commission approve the proposed IFOM energy storage projects.”2 The Public
Advocates Office also states that it “does not protest SCE’s requested relief.”3
Accordingly, given that no party objects to Commission approval of the IDER Contracts
or any other relief requested by SCE, the Energy Division should issue a disposition

1
2
3

CESA Response at 2.
Id.
Public Advocates Office Protest at 1.

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 November 1, 2018 within 30 days of the submission of Advice 3874-E, including the findings of fact and conclusions of law requested by SCE. Below, SCE responds to the Public Advocates Office’s comments regarding the energy storage multi-use application (MUA) rules. SCE’S FINAL SELECTION OF THE IDER CONTRACTS DOES NOT VIOLATE MUA RULE 6 As discussed above, the Public Advocates Office does not oppose approval of the IDER Contracts or any other relief requested by SCE. However, the Public Advocates Office protests SCE’s use of two separate methodologies to value IDER RFO offers in accordance with the Commission’s MUA rules.4 Specifically, SCE valued IDER RFO offers using both: (1) the strict interpretation of D.18-01-003 assigning no RA value to offers in the months in which there is an expected deferral need; and (2) SCE’s view of RA capacity during the deferral periods.5 The Public Advocates Office argues that the Commission should disregard SCE’s use of the second methodology because it is inconsistent with the Commission’s MUA Rule 6 and inappropriate for disposition in a Tier 2 advice letter.6 Although SCE valued IDER RFO offers using both methodologies, Therefore, SCE’s inclusion of an alternative valuation assigning some RA value during the months where the resource could be used for a few days for distribution reliability and used for RA the rest of the time, should not affect approval of the IDER Contracts. 7 SCE also notes that while the Public Advocates Office states that SCE’s second methodology 4 5 6 7 8 9 Id. at 1-5. Advice 3874-E at 19. Public Advocates Office Protest at 2-5. Advice 3874-E, Confidential Appendix C at C-12. Public Advocates Office Protest at 3. Advice 3874-E, Confidential Appendix C at C-6, C-11-C-12.
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Energy Division Tariff Unit Page 3 November 1, 2018 The Public Advocates Office does not argue that the IDER Contracts themselves violate MUA Rule 6 or any other aspect of the MUA rules. Under the IDER Contracts, SCE is procuring the capacity of the energy storage resources. It is up to SCE to decide whether to use this capacity for distribution deferral only, for RA only in the months when it is not needed for distribution deferral, or for distribution deferral and RA in the same month (while fully complying with California Independent System Operator (CAISO) tariffs) to the extent that is permitted under the Commission’s MUA rules. SCE notes that the IDER Contracts simply gives it access to the underlying capacity. There are a number of operational levers that SCE employs in least cost/best fit dispatch of resources under its control. Specifically for RA, there is the capability to not submit a resource as part of a RA showing filing, or provide substitute RA (from a different resource) if it is determined that the IDER resource is required for a distribution need. In D.18-01-003, the Commission stated that “[f]or storage projects that are either owned or controlled enitrely by the utility, we encourage the utility to maximize value to ratepayers by providing multiple services, consistent with the rules we adopt here.”10 Although SCE does not control the energy storage resources entirely under the IDER Contracts, SCE has partial control through its ability to designate Local Resource Constrained Days on which the sellers must submit the resources to the CAISO based on SCE’s direction. It is therefore appropriate and consistent with D.18-01-003 for SCE to maximize value to its customers by providing multiple services consistent with the MUA rules. SCE agrees with the Public Advocates Office that the Commission should clarify and/or establish additional MUA rules governing energy storage resources providing both RA and other reliability services.11 A healthy dialogue is necessary to ensure that reliability needs are met and also allow for all parties to value stack in a manner that fully realizes the potential of these resources. REQUEST FOR CONFIDENTIAL TREATMENT In accordance with GO 96-B, SCE is requesting confidential treatment of the confidential version of this reply. The information for which SCE seeks confidential treatment, which is highlighted in gray and redacted in the public version of this reply, is the same information for which SCE sought confidential treatment in Advice 3874-E. 10 11 D.18-01-003 at 24. Public Advocates Office Protest at 5.
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Energy Division Tariff Unit Page 4 November 1, 2018 That information was identified in the Confidentiality Declarations attached as Appendix F to Advice 3874-E. The confidential version of this reply will be made available to appropriate parties (in accordance with SCE’s Proposed Protective Order included with Advice 3874-E) upon execution of the required non-disclosure agreement. Parties wishing to obtain access to the confidential version of this reply may contact Cathy Karlstad in SCE’s Law Department at Cathy.Karlstad@sce.com or (626) 302-1096 to obtain a non-disclosure agreement. It is appropriate to accord confidential treatment to the information for which SCE requests confidential treatment in the first instance in the advice letter process because such information is entitled to confidentiality protection pursuant to D.06-06-066, and is required to be included in this reply to fully respond to the Public Advocates Office’s protest. SCE would object if the information were disclosed in an aggregated format. CONCLUSION For the reasons stated above, the Energy Division should issue a disposition within 30 days of the submission of Advice 3874-E, including the findings of fact and conclusions of law requested by SCE. Sincerely, /s/ Gary A. Stern Gary A, Stern, Ph.D. GAS:ra:cm cc: Edward Randolph, Director, CPUC Energy Division Chari Worster, CPUC Energy Division Mike Campbell, Public Advocates Office Christopher Myers, Public Advocates Office Alex Morris, CESA (public version only) Service List for R.14-10-003 (public version only)
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