Details for: SCE's Protest Response to Advice 3904-E.pdf

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

December 21, 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 3904-E

Dear Energy Division Tariff Unit:
Pursuant to General Rule 7.4.3 of the California Public Utilities Commission’s
(“Commission’s” or “CPUC’s”) General Order (GO) 96-B, Southern California Edison
Company (“SCE”) hereby submits its reply comments to the Protest of the Public

Advocates Office (“Cal Advocates”) and the Responses of the California
Efficiency + Demand Management Council (“Council”) and the California Energy
Storage Alliance (“CESA”) regarding Southern California Edison Company’s Request
for Approval to Launch the Distribution Investment Deferral Framework Solicitation
(“Advice 3904-E”).
On November 28, 2018, SCE submitted Advice 3904-E for Approval to Launch the
Distribution Investment Deferral Framework Solicitation. On December 7, 2018, SCE
submitted a supplemental filing to Advice 3904-E to make changes to the description of
the Newhall deferral project contained within Advice 3904-E.
On December 17, the Cal Advocates submitted a Protest,1 the Council submitted a
Response2 and the CESA submitted a Response.3



Protest of the Public Advocates Office to Pacific Gas and Electric Company’s Advice Letter
5435-E, Southern California Edison Company’s Advice Letters 3904-E and 3904-E-A, and
San Diego Gas & Electric Company’s Advice Letter 3309-E, Requesting Approval to
Launch Distribution Investment Deferral Framework Solicitations (“Cal Advocates Protest”).
Response Of California Efficiency + Demand Management Council (“Council Response”).
Response of the California Energy Storage Alliance to Advice Letter 5435-E of Pacific Gas
and Electric Company, Advice Letter 3904-E of Southern California Edison Company, and
Advice Letter 3309-E of San Diego Gas and Electric Company (“CESA Response”).

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 December 21, 2018 I. Discussion The Administrative Law Judge’s Ruling on the Application of the Competitive Solicitation Framework for Distribution Investment Deferrals in the Distribution Resource Planning Proceeding (“ALJ Ruling”) issued on November 19, 2018, specifies that the Commission anticipates requesting detailed feedback from all parties on the Distribution Investment Deferral Framework (“DIDF”) process and proposed modifications to the future DIDF process following the issuance of competitive solicitations in early 2019.4 SCE appreciates the recommendations submitted by Cal Advocates and CESA regarding future modifications to the DIDF process;5 however, consistent with the ALJ Ruling, SCE believes that it is most appropriate to address all future modifications through this upcoming regulatory process. SCE looks forward to working with all stakeholders to further refine the DIDF process and hereby submits the following response to the Protest and Responses on the upcoming DIDF process. A. Reply to Cal Advocates Protest 1. Cal Advocates supports SCE’s selected distribution deferral projects. SCE appreciates Cal Advocates’ support of the selected distribution deferral projects and requests that the Commission approve the projects submitted within its Advice Letter. 2. All proposed modifications to future DIDF processes should be discussed in early 2019 as indicated in the ALJ Ruling. As noted above, SCE believes the appropriate forum to discuss changes to the future DIDF process is through a stakeholder process that the Commission anticipates commencing in early 2019; however, SCE offers a limited response, in the subsections below, to select recommendations proposed by Cal Advocates. a. The next cycle of DDORs and Solicitation Advice Letters should not require additional information to establish a baseline for prioritization of candidate deferral projects based on the cost-effectiveness metric. Per D. 18-02-004, “the main objective of prioritization metrics is to characterize candidate deferral projects in a way that enables the IOUs and the DPAG to identify 4 5 Administrative Law Judge’s Ruling on the Application of the Competitive Solicitation Framework for Distribution Investment Deferrals in the Distribution Resource Planning Proceeding (“ALJ Ruling”) issued on November 19, 2018 at p.5 (“[W]e anticipate inviting more detailed feedback on the DIDF process from all parties following the issuance of competitive solicitations in early 2019, with a view towards implementing any appropriate changes prior to June 1.”). Cal Advocates Protest at p. 2 and CESA Response at p. 7.
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Energy Division Tariff Unit Page 3 December 21, 2018 which project are most likely to result in successful, cost-effective deferrals …”6 The current process provides an opportunity for stakeholders to submit feedback on the application of the prioritization metrics and thus Cal Advocates recommendation is unnecessary. Furthermore, providing additional information for only one of the three prioritization metrics (cost-effectiveness) places too much emphasis on a single metric at the expense of the other metrics, which could cause bias in future evaluations. b. Spending on planned investments while the projects are being bid out for distribution deferral should occur in future DIDF cycles. SCE disagrees with Cal Advocates’s suggestion that spending on planned investments while the projects are being bid out for distribution deferral should not occur in future DIDF cycles.7 This proposal is counter to D.18-02-004 regarding contingency planning which involves, “escalating degrees of design, cost estimation, procurement, and construction of traditional infrastructure solutions that can be implemented as the DER alternative progresses…”8 As stated in SCE’s AL 3904-E, SCE will attempt to utilize DERs as a contingency measure before turning to a traditional solution. Disallowing spend on planned investments is not only counterintuitive to what the Commission has prescribed, but also limits the flexibility SCE has in responding to any unsuccessful DER deployments. 3. SCE’s Initial Cost Effectiveness Cap Calculation and Forecast of Expected Incremental Administrative Costs Should Be Confidential Cal Advocates assert that SCE’s Appendices B and C should not be confidential because “It is the Public Advocates Office’s understanding that the Commission intended for administrative costs and deferral values to be made public with the adoption of D.18-02-004, which modified the Commission’s conclusion reached in D.1612-036.”9 SCE disagrees with this interpretation of D.18-02-004. SCE believes D.18-02-004’s confidentiality determination concerned the cost of the distribution system upgrades and did not apply to the Initial Cost Effectiveness Cap Calculation and Forecast of Expected Incremental Administrative Costs reflected in SCE’s confidential Appendices B and C.10 6 7 8 9 10 D.18-02-004, at p. 48 Cal Advocates Protest at p. 2. D.18-02-004, at p. 67 Cal Advocates Protest at p. 11. D.18-02-004, at Conclusion of Law No. 6 (“It is reasonable to conclude that the actual cost of distribution system upgrades shall be considered public information as part of the ongoing DIDF, and in associated DRP tools such as the Locational Net Benefits Analysis. It is reasonable to distinguish this conclusion from the conclusions reached in D.16-12-036 based on a closer examination of the applicability of the confidentiality provisions adopted in D.06-06-066 to the types of information at issue in the ongoing DIDF.”).
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Energy Division Tariff Unit Page 4 December 21, 2018 B. Reply to Council Response 1. Bidders are able to assess incrementality without detailed load forecast information. The Council recommends that the “Commission require SCE (and the other IOUs) to include detailed load forecast information at the circuit level in its RFOs so that bidders can determine with certainty the incrementality of their DER solutions. If that level of information is not available, an alternative approach, such as the overlap factor could be used for energy efficiency resources and for other DERs when applicable.”11 SCE strongly supports transparency and strives to ensure that bidders have information necessary to successfully participate in its Request for Offers (RFO). Per guidance from the Commission, SCE has already provided planning level information for each candidate location, including demand and DER forecasts in it filed 2018 Grid Needs Assessment (GNA). However, that information is not useful for bidders to assess whether their bid would be considered incremental, as these data do not describe the underlying assumptions used to forecast demand and DER growth. SCE’s incrementality assessment, as described in the Advice Letter (and consistent with the Integrated Distributed Energy Resources (IDER) Pilot), is primarily based on whether the DER technologies and services offered are currently already being sourced through other utility procurement, programs, or tariff activities. D.18-02-004 required the Utilities to adopt the California Energy Commission’s (“CEC’s”) updated Integrated Energy Policy report (“IEPR”) for use in their 2018-2019 distribution planning cycle.12 The IEPR includes several assumptions of DER growth based on natural adoption, the impact of Codes and Standards, as well as Utility-funded programs and tariffs. SCE is currently examining the definitions in the RFO matrix to ensure consistency with how assumptions are defined in IEPR. C. Reply to CESA Response 1. SCE Does Not Object to CESA’s recommendation to include the MacArthur project, but requests that the Commission reject their recommendation to include the Crater project. SCE does not object to CESA's recommendation to include the MacArthur 66/12 kV project contingent on the finalization of the 2019 planning cycle's forecast. 13 Based on SCE's prioritization metrics, MacArthur was not initially selected for DER deferral due to its forecast certainty. SCE still believes that there is a potential for the need date for this project to be pushed out beyond the deferral window (2021 and 2022). If the updated forecast, prior to the solicitation, projects a need beyond this deferral window, SCE will not include MacArthur in the solicitation and would revisit the project in a future planning 11 12 13 Council Response at p. 3. D.18-02-004, at Ordering Paragraph No. 1.a. CESA’s Protest at p.2.
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Energy Division Tariff Unit Page 5 December 21, 2018 cycle. However, if feasible and with Commission approval, SCE will include the MacArthur project in its solicitation. SCE strongly disagrees with CESA’s recommendation to move forward with the Crater 66/16 Substation project.14 The project is being installed for both capacity and reliability purposes. For capacity, the project would add a line to provide capacity when the transformer experiences a certain MW of customer demand that must be fed by a two line service (per internal planning criteria). For reliability, the project would add the line in case outage occurs on the primary line. The traditional solution is providing redundancy such that if one line experiences an outage, the other line will be able to maintain electrical service to customers. DERs are unable to meet the need of this project as a line outage would result in all customers being de-energized including the DERs that would have been installed to meet the need per Rule 21 interconnection standards. Although SCE agrees in theory with the IPE’s assessment that a DER solution has the potential to provide islanding and Microgrid services, there are still many reliability and technical interconnection challenges to overcome before a Microgrid can be safely operated in the distribution system. As reflected in SCE’s 2018 DDOR cover letter, SCE does not currently develop projects that provide Microgrid as there are still major challenges in the safe and reliable operations of these configurations, specifically control and protection. This type of configuration is still immature and in infancy to be considered a solution to defer the traditional wires solution. Furthermore, this nature of islanding is better suited for pilot demonstration. Due to these reasons, SCE believes an RFO will not lead to a successful deferral of the Crater project and therefore urges against the inclusion of this project. II. Conclusion SCE thanks the Commission for the opportunity to provide these reply comments to the Protest and Responses to Advice 3904-E. Sincerely, /s/ Gary A. Stern, Ph.D. Gary A, Stern, Ph.D. GAS:ag/md:jm cc: 14 Edward Randolph, Director, CPUC Energy Division Dorothy Duda, CPUC Energy Division CESA Response at p. 4.
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Energy Division Tariff Unit Page 6 December 21, 2018 President Michael Picker, CPUC Commissioner Martha Guzman Aceves, CPUC Commissioner Carla Peterman, CPUC Commissioner Liane Randolph, CPUC Commissioner Clifford Rechtschaffen, CPUC Anne E. Simon, Chief ALJ, CPUC Gabe Petlin, CPUC Energy Division Megan Caulson, SDG&E Chloe Lukins, Cal Advocates Alex J. Morris, CESA Melanie Gillette, The Council Service Lists for R.14-08-013 and R.14-10-003
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