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Ronald van der Leeden
Director
Regulatory Affairs
555 W. Fifth Street, GT14D6
Los Angeles, CA 90013-1011
Tel: 213.244.2009
Fax: 213.244.4957
RvanderLeeden@socalgas.com

February 18, 2020

Advice No. 5590
(U 904 G)
Energy Division
Public Utilities Commission of the State of California
Subject: Updates to Low-Carbon Fuel Standard (LCFS) Program
Implementation Plan
Southern California Gas Company (SoCalGas) hereby submits for approval by the
California Public Utilities Commission (Commission) updates to the Natural Gas
Vehicle (NGV) Low Carbon Fuel Standard (LCFS) Program Implementation Plan, as
directed under the disposition letter for Advice No. (AL) 5519.
Purpose
In accordance with the disposition letter for AL 5519, this submittal provides details of
SoCalGas’ LCFS revenue return plan designed to increase the quantity of LCFS
revenue returned to customers.
Background
On December 20, 2019, the Commission issued a disposition letter for AL 5519
approving the 2020 update to the Schedule No. G-NGV, Natural Gas Service for
Motor Vehicles, LCFS rate credit. The G-NGV LCFS rate credit is applied to the
pump price posted at all SoCalGas public access compressed natural gas (CNG)
stations and is available to the general public. As a result, the reduced pump price
returns revenue associated with LCFS credits generated through the operation of
utility CNG stations. SoCalGas’ LCFS Program Implementation Plan was approved
by the Commission in AL 4779.
The G-NGV LCFS rate credit first became effective on April 1, 2019 and was
designed to return LCFS credit revenue associated with a single year of LCFS credit
generation. Since the G-NGV LCFS rate credit had only been recently implemented,





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Advice No. 5590 -2- February 18, 2020 the 2020 update to the G-NGV LCFS rate credit was also designed to return LCFS credit revenue associated with a single year of LCFS credit generation. As of January 1, 2020, the LCFS Balancing Account (LCFSBA) had a balance of $5.26 million. It is expected the utility will return $0.712 million in 2020. At this rate, it would take over 7 years to deplete the existing inventory of credit revenues assuming no funds were added. However, funds are being added each year as credit revenues are generated from the operation of utility owned CNG stations. Therefore, the updated LCFS Program Implementation Plan included herein is designed to exhaust the accumulated inventory of approximately $4.5 million in credit revenues. Updated LCFS Program Implementation Plan SoCalGas plans to continue returning LCFS credit revenues associated with approximately one year of LCFS credit revenue generation at its public-access NGV fueling stations, consistent with the LCFS Program Implementation Plan approved in AL 4779. However, SoCalGas proposes to supplement that plan to distribute the accumulated inventory of LCFS credit revenues through a LCFS customer incentive program encouraging the purchase of new, heavy-duty Class 8 natural gas “near zero” trucks.1 Customers participating in the program will be provided a utility station fuel card for each new, heavy-duty Class 8 natural gas “near zero” truck they purchase, pre-loaded with a balance at an amount designed to improve vehicle economics and encourage adoption.2 As an example, for a heavy-duty Class 8 natural gas “near zero” truck with a $60,000 incremental cost (compared to diesel) that travels 72,000 miles per year, a $10k fuel card could improve the simple payback from 4.4 years to 2.5 years.3 Under this example, approximately 450 new heavy-duty Class 8 natural gas “near zero” trucks would receive funds under the LCFS customer incentive program. Heavy-duty Class 8 trucks are an ideal candidate for a targeted customer incentive program since there are multiple benefits for ratepayers, as follows: • Reduces Regional Air Pollution: Heavy-duty Class 8 diesel trucks are the largest single source of NOx in both the South Coast Air Quality Management District and the San Joaquin Valley Unified Air District. Replacing diesel trucks with natural gas “near zero” trucks will reduce NOx emissions by at least 90% and diesel particulate matter by 100%; “Near zero” trucks are defined as those trucks that meet the lowest tier of the California Air Resources Board (CARB) Optional Low NOx standard (0.02 g/bhp-hr NOx). The lowest tier of the CARB Optional Low NOx standard reduces NOx by 90% compared to current heavyduty truck NOx emission standards. 2 Amount will not exceed incremental cost of a heavy-duty Class 8 natural gas “near zero” truck compared to an equivalent diesel truck. 3 Assumptions based on discussions with heavy-duty truck sales representatives and Southern California heavy-duty fleet demographics. 1
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Advice No. 5590 • • -3- February 18, 2020 Reduces GHG Emissions: Transportation accounts for almost 40% of statewide GHG emissions. Replacing diesel trucks with natural gas “near zero” trucks fueling at utility stations supplying 100% renewable natural gas will reduce GHG emissions; Supports Existing Programs and Goals: The use of “near zero” vehicles can help support state and local programs and associated policy goals. For example, the 2017 Clean Air Action Plan, sponsored by the Port of Los Angeles and Port of Long Beach, states, “In order to continue reducing NOx and GHGs, through the strategies described below, the Ports’ goal is to transition the current drayage truck fleet to near-zero technologies in the nearterm…” Administrative costs associated with the customer incentive program would be booked to the LCFSBA and accumulated inventory tracked/monitored. Fuel cards would be provided on a first come, first served basis upon receipt of a Class 8 natural gas “near zero” truck purchase order and until accumulated inventory funding is exhausted. Protest Anyone may protest this AL to the Commission. The protest must state the grounds upon which it is based, including such items as financial and service impact, and should be submitted expeditiously. The protest must be made in writing and must be received within 20 days of the date of this AL, which is March 9, 2020. The address for mailing or delivering a protest to the Commission is given below. CPUC Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, CA 94102 A copy of the protest should also be sent via e-mail to the attention of the Energy Division Tariff Unit (EDTariffUnit@cpuc.ca.gov). A copy of the protest should also be sent via both e-mail and facsimile to the address shown below on the same date it is mailed or delivered to the Commission. Attn: Ray B. Ortiz Tariff Manager - GT14D6 555 West Fifth Street Los Angeles, CA 90013-1011 Facsimile No.: (213) 244-4957 E-mail: ROrtiz@socalgas.com
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Advice No. 5590 -4- February 18, 2020 Effective Date SoCalGas believes this Advice Letter is subject to Energy Division disposition and should be classified as Tier 2 (effective after staff approval) pursuant to General Order (GO) 96-B and therefore respectfully requests that this Advice Letter be made effective on March 19, 2020, which is 30 calendar days from the date submitted. Notice A copy of this AL is being sent to SoCalGas’ GO 96-B service list and the Commission’s service list for R.11-03-012. Address change requests to the GO 96-B service list should be directed via email to tariffs@socalgas.com or call 213-244-2837. For changes to all other service lists, please contact the Commission’s Process Office at 415-703-2021 via email at Process_Office@cpuc.ca.gov. _________________________________ Ronald van der Leeden Director- Regulatory Affairs Attachments
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ADVICE LETTER SUMMARY ENERGY UTILITY MUST BE COMPLETED BY UTILITY (Attach additional pages as needed) Company name/CPUC Utility No.: Southern California Gas Company (U 904G) Utility type: ELC PLC ELC = Electric PLC = Pipeline ✔ GAS WATER HEAT Contact Person: Ray B. Ortiz Phone #: (213) 244-3837 E-mail: ROrtiz@socalgas.com E-mail Disposition Notice to: Tariffs@socalgas.com EXPLANATION OF UTILITY TYPE GAS = Gas WATER = Water HEAT = Heat (Date Submitted / Received Stamp by CPUC) Tier Designation: 2 Advice Letter (AL) #: 5590 Subject of AL: Updates to Low-Carbon Fuel Standard (LCFS) Program Implementation Plan Keywords (choose from CPUC listing): Balancing Account, Credit AL Type: Monthly Quarterly Annual ✔ One-Time Other: If AL submitted in compliance with a Commission order, indicate relevant Decision/Resolution #: Does AL replace a withdrawn or rejected AL? If so, identify the prior AL: No Summarize differences between the AL and the prior withdrawn or rejected AL: N/A Yes Yes ✔ No ✔ No 3/19/20 No. of tariff sheets: N/A Estimated system annual revenue effect (%): N/A Estimated system average rate effect (%): N/A 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: N/A Service affected and changes proposed1: N/A Pending advice letters that revise the same tariff sheets: N/A 1 Discuss in AL if more space is needed. Clear Form
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Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this submittal, unless otherwise authorized by the Commission, and shall be sent to: CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, CA 94102 Email: EDTariffUnit@cpuc.ca.gov Name: Ray B. Ortiz Title: Regulatory Tariff Manager Utility Name: Southern California Gas Company Address: 555 West Fifth Street, GT14D6 City: Los Angeles Zip: 90013-1011 State: California Telephone (xxx) xxx-xxxx: (213) 244-3837 Facsimile (xxx) xxx-xxxx: (213) 244-4957 Email: ROrtiz@socalgas.com Name: SoCalGas Tariffs Title: Utility Name: Southern California Gas Company Address: 555 West Fifth Street, GT14D6 City: Los Angeles State: California Zip: 90013-1011 Telephone (xxx) xxx-xxxx: (213) 244-2837 Facsimile (xxx) xxx-xxxx: (213) 244-4957 Email: Tariffs@socalgas.com Clear Form
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