Details for: Joint Comments to Resolution E-5059 Revision 1.pdf

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

September 30, 2020

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

Joint Comments of Southern California Edison Company,
Pacific Gas and Electric Company, and San Diego Gas &
Electric Company on Revision 1, Draft Resolution E-5059 of
the Energy Division, that approves, with modifications, PG&E
Advice Letter 5354-E, SCE Advice Letter 3840-E, and SDG&E
Advice Letter 3257-E

Dear Energy Division Tariff Unit
Pursuant to Rule 14.5 of the California Public Utilities Commission’s
(Commission or CPUC) Rules of Practice and Procedure, Southern California
Edison Company (SCE), Pacific Gas and Electric Company (PG&E), and San
Diego Gas & Electric Company (SDG&E) (together, “the Joint Utilities”)
respectfully submit the following comments on Revision 1, Draft Resolution
E-5059 (“Revision 1”), issued September 10, 2020, approving the
implementation of the Community Choice Aggregation (CCA) Financial Security
Requirements (FSR) and Reentry Fees adopted in Decision (D.)18-05-022.
The Joint Utilities appreciate the Commission’s careful review of earlier
comments and its comprehensive revisions to address the legitimate concerns
with the initial Draft Resolution. Revision 1 appropriately resolves the
longstanding requirements of CCA FSRs and reentry fees in Section 394.25(e).1
In particular, Revision 1 correctly concludes that if a CCA fails to discharge its
obligation to fully cover the reentry fees caused by the CCA’s mass involuntary
return of its customers to the utility, the “residual” reentry fees (i.e., what remains
after the CCA payment/FSR is applied) must be recovered from the involuntarily
returned CCA customers because those costs cannot be recovered from the
utility’s other customers. This conclusion is compelled by the express
requirements of Section 394.25(e) itself, as well as other statutes prohibiting cost


All code section references herein are to the California Public Utilities Code.

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 September 30, 2020 shifting.2 This conclusion is also consistent with the Electric Service Provider (ESP) FSRs and reentry fees,3 and equitable because the reentry fees recover the costs the utility incurs directly on behalf of the involuntarily returned CCA customers. The residual reentry fee exposure is manageable because the Commission has the discretion to amortize the recovery of the residual reentry fees over a reasonable time period depending on the circumstances. Revision 1 provides customers with sufficient information and certainty about the costs, requirements and risks associated with these choices to make informed choices. It also gives customers that do not have a choice the certainty that they will not be responsible for the costs and risks associated with other customers’ choices. For all these reasons, the Joint Utilities strongly support Revision 1 and urge the Commission to adopt it without delay, with the following two clarifications: First, the Joint Utilities should be permitted to include “recipient or beneficiary” in their revised advice letters. Revision 1 responds to comments of SEA seeking clarity that the CCA FSR will be issued by third parties (and not posted with the utilities)4 by striking the word “beneficiary” in most places and inserting “recipient.”5 While “recipient” is generally synonymous with “beneficiary,” the Joint Utilities note that in industry-standard, third party-issued letters of credit (and perhaps in third party-issued surety bonds and cash escrows as well), the term “beneficiary” is a standard term likely to be used to describe the utility’s role, rights and obligations under the FSR. Use of “recipient” in lieu of “beneficiary” in Revision 1 should not be viewed as precluding the use of the term “beneficiary” in any CCA FSR written agreement, because “beneficiary” is a commercially acceptable, industry standard term. Thus, the Joint Utilities should be permitted to include “recipient or beneficiary” in their 2 3 4 5 See Revision 1, pp. 9-10, finding Section 394.25(e) explicit that reentry fees are imposed on involuntarily returned customers to avoid imposing cost on other customers of the utility; and citing to Section 366.2(a)(4), which states “[t]he implementation of a community choice aggregation program shall not result in a shifting of costs between the customers of the community choice aggregator and the bundled service customers of an electrical corporation.” See also Sections 366.2(d), 366.3, 365.2, prohibiting cost shifting among customers. See id., explaining that “[w]hile D.18-05-022 does not address residual reentry fees directly, it does conclude [as a matter of law] that reentry fees and FSRs for CCAs should generally be similar to those implemented for ESPs in D.11-12-018. In that decision, residual ESP reentry fees are allocated to returned customers.” (citing D.18-05-022, Conclusion of Law 5). See id., at p. 20. See id., pp. 20 and Finding of Fact 17.
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Energy Division Tariff Unit Page 3 September 30, 2020 revised advice letters, consistent with the wording at the top of page 20 of Revision 1.6 Second, Finding 18 should be modified to be more consistent with Revision 1. Regarding the transparency of the CCA FSR calculation, Revision 1 correctly observes that “[t]he proprietary data not owned by the IOU that are necessary to calculate the FSR are publicly available and can be acquired through a subscription with the Intercontinental Exchange (ICE).”7 However, Finding 18 continues to direct the IOUs “make efforts to secure permission to release” price forecast information to other market participants “to the extent that is possible.”8 It is unreasonable to direct the Joint Utilities to try to secure for free for other load serving entities data that is owned by a private company whose business is selling subscriptions to the data to electricity market participants. The Joint Utilities pay for this data – principally for their electricity procurement for bundled service customers – and other load serving entities should likewise be expected to pay for the data if they want access to it, in the event they do not already have subscriptions to the ICE service. Accordingly, the Joint Utilities ask that Finding 18 be modified as follows, consistent with the discussion in Revision 1: 18. The establishment of CCA FSRs should be transparent. The proprietary data not owned by the IOU that are necessary to calculate the FSR are publicly available and can be acquired through a subscription with the Intercontinental Exchange (ICE). Therefore, the IOUs should make efforts to secure permission to release the price forecast information necessary to calculate FSRs for CCAs within their service areas to the extent that is possible. Conclusion The Joint Utilities appreciate the opportunity to provide these comments on Revision 1 and urge the Commission to adopt it with the two clarifications discussed herein. 6 7 8 See Revision 1, explaining “SEA is correct that the proposed language in the advice letters do not appropriately reflect the role assigned to IOUs as the beneficiary or recipient of the CCA FSR instrument” (as revised, emphasis added). See id., p. 21. Id., Finding 18.
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Energy Division Tariff Unit Page 4 September 30, 2020 Southern California Edison Company /s/ Gary A. Stern Gary A. Stern, Ph.D. GAS:kw:cm cc: Edward Randolph, Director, CPUC Energy Division Dorothy Duda, CPUC Energy Division Dina Mackin, CPUC Energy Division Travis Blecha, CPUC Energy Division Service List for Draft Resolution E-5059 R.03-10-003 Service List
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