California Energy News
About electrical power, transmission and distribution
2023
CPUC Revises Community Solar Program for Low Income Ratepayers
EBCE Wins Federal Funding to Develop Microgrids in its Territory.
Peninsula Taps Inflation Reduction Act to Help Fund Solar/Storage in San Matao County
Peninsula Promises 100% Renewables by 2025.
2022
Sunrun Building Solar Storage for Three Bay Area CCA Residents
EBCE Advances Plan to be 100% Green by 2030
Menlo Park , BlocPower Partner to Electrify Residences.
California Community Power Buys Storage for CCAs,
2021
June 2024
In spite of finding many problems with its design of two solar programs for disadvantaged communities, the California Public Utilities Commission decided the concept was valuable enough they should be improved and combined into one program (D-24-05-065).
In a May 30 vote, the program opens up to customers of all income levels and expands the geographic boundaries of a disadvantaged community that will encourage more solar projects to serve low-income customer. The CPUC predicts an increase of roughly 45,000 additional customers up from 23,000 currently enrolled, and 45 additional solar projects to be built up from 23 signed solar contracts. It gave no timeline for this growth.
The two programs, called the Disadvantaged Communities Green Tariff program and the Community Solar Green Tariff program, were designed to allow low-income customers who could not install roof-top solar systems due to roof orientation or other reasons like affordability. The design of the programs and their requirements were described in the fall issue of California Energy News (see “Community Solar Green Tariff Attracts CCAs” in Other Stories on the left).
While the programs operated by Pacific Gas & Electric was fully subscribed, SCE and SDG&E programs were not due to a lack of solar capacity. PG&E suspended its program because it had customer waiting lists due to a lack of solar project developments that met program requirements to serve them. PG&E also reported project costs exceeded benefits. The few Community Choice Aggregators invited to participate maintained their programs.
SDG&E reported the program was successful until 2018 when most of the customers moved to CCAs service. “This caused rates to spike for its few remaining participating customers leading to customer attrition, SDG&E said. It subsequently suspended its two programs in 2022.
Seven of the eight CCAs administering their programs enrolled customers in the Disadvantaged Green Tariff program but they did not have solar projects to serve them, instead using Renewable Portfolio Standard resources. Five had procured new capacity by October 2023, however.
Disadvantaged Customers Signed up But Solar Did Not
Both programs provide qualified customers 20% rate discounts from their regular tariffs. In addition, the Community Solar Green Tariff must have a city sponsor and the community solar system must be located within five miles of a designated disadvantaged community. Both CCAs and the utilities are required to procure solar projects dedicated to these customers.
Customers enrolled rapidly and exceeded the required solar resources stemming from favorable Green Tariff rates that became lower than the default rate. It has been unsuccessful in contracting new resources which would have allowed the utility to enroll new customers.
SCE reported at its peak its Green Tariff program served 1,128 residential and 1,982 non-residential enrolled customers totaling 50 MW of capacity. It is now fully subscribed and suspended to new enrollment. There were no customers enrolled in SCE’s Communities Green Tariff program at the reporting time in 2022 because there are no solar projects online to serve customers. However, a project was anticipated to come online in August 2023 to deliver power to new customers. Until new capacity develops SCE is maintaining its waitlist.
PG&E reports its program benefits did not match its costs. It notes in 2021 it spent about $1 million more on solar resource costs than it did to deliver discounts to customers. Overall program costs were $11.4 million and only 43% of program costs provided bill savings benefits. The utility reported that the largest portion of costs were for above-market contract payments to solar resources at 55% of the program costs.
Green Access Program Streamlined
The Commission decided that the two programs should be combined, given that the Green Tariff program is more cost effective and easier to implement. The Communities Green Tariff program had a higher cost per customer and lower enrollment and procurement rates largely due to eligibility requirements, rate volatility, duplication and market confusion, the CPUC said. Therefore, the customers are to be moved to the Green Tariff program, including those wait-listed. Also, site requirements were expanded.
The decision determined a central marketing website should be created to solve the problems listed above. Applicants will be able to read about each program and learn how to apply. Procurement opportunities will be listed along with statewide enrollment. A consultant will be hired to develop the website to overcome barriers in customer and project developer awareness of the Commission’s renewable energy programs. Energy storage will be allowed in solicitations.
Reporting Mechanisms Simplified
The decision also eliminates the requirement to report on several renewable statewide renewable accounts in order to reduce time, effort and cost. Producers will also not have to retire renewable energy credits in connection with that reserve account. Instead, Green Tariff program administrators will conduct the validation and tracking.
The Commission also ordered PG&E and the CCAs to develop an automated billing solution for CCA program participants since they are eligible to remain enrolled for up to 20 years. Apparently, PG&E was using manual data transfers.
Upon recommendations by some of the utilities and CCAs, the Commission agreed to hold solicitations once a year instead of biannually. This will make the schedule more predictable and allow time for developers to prepare and submit offers.
Furthermore, upon recommendations of the interested parties, the Commission ruled that once the new Green Tariff program reaches 500 kW or less, or if “There has been no participation by developers in two consecutive solicitations the utilities may suspend their programs.” At that time, the Green Tariff program will sunset once all programs are suspended.
The Commission further removed the requirement that customer enrollment be tied to solar power procurement since this restriction may have contributed to the program’s limited performance.
The Commission also increased the customer subscription limit from 2 MW to 40 MW
June 2024
The California Public Utilities Commission is imposing large penalties on Community Choice Aggregators when the CCAs cannot satisfy strict requirements demonstrating they have enough power reserves, known as resource adequacy to serve their customers. The fines go back two years. Meanwhile, a wide range of factors are preventing CCAs from building the resources they need to satisfy the requirement in a constrained RA market.
Of the 25 operating CCAs, seven are believed to have already paid fines ranging from $124,000 to over $1,000,000. The fines date to 2022. Based on a 2023 CPUC decision, (see D.23-06-029) CCAs are not allowed to expand their service territories if they have not satisfied the penalties. But Ava Community Energy, formally East Bay Community Energy, was allowed to expand its service territory to Stockton once it paid its fine.
The California Community Choice Association (CalCCA) is charging the CPUC with overreaching its authority among other charges. CalCCA was created in 2016 to represent the interests of operational CCA providers of renewable energy to their local jurisdictions at the California Legislature and regulatory agencies.
Does the CPUC Have Jurisdiction over the CCAs?
CCAs were created in 2002 – the first rolled out in 2010 – and are an entity of the local jurisdictions in which they were formed, usually through a joint powers authority mechanism.
In its application for rehearing of the 2023 CPUC decision CalCCA argued that the CPUC has no jurisdiction over the actions of local government bodies such as the CCAs (R.21-10-002). The CPUC countered in its decision denying the rehearing saying “the legislature deferred to our expertise in resource adequacy and granted us considerable discretion to determine what actions are necessary to accomplish the stated goals” among other arguments (D.23-12-038).
CalCCA filed a petition for Writ of Mandate with California’s First Appellate District Court of Appeal in in October 2023 and refiled it again in January 2024. Greg Klatt, a California energy attorney, said “It’s already an uphill battle to get courts to overturn CPUC decisions – they are very deferential to the CPUC … the key here is to charge that the CCAs are entities of local governments,” not the CPUC. “If the court does rule in favor of CCAs, it will be based on their being a local government agency,” Klatt added.
CalCCA did not respond to several phone calls and emails seeking comment on this issue and on the constrained RA market. However, it produced an analysis of the constrained RA market, entitled “Ratepayers Left Standing in a Game of Musical Chairs” and can be found on its website, www.cal-cca.org.
Reserves are Constrained
While the state’s three major utilities have plenty of reserves to satisfy the rule, CCAs are new entities and have to develop new power resources. At the same time a wide range of factors like extreme weather events, declining hydro resources, delays in permitting, interconnection and supply chain challenges are holding back power contracts CCAs have signed which would help satisfy the resource adequacy requirement.
Other factors delaying project development, according to CalCCA, include constraints on importing resources from other regions into California, and the CPUC revising capacity values leading to reduced reliance on wind and solar resources meeting RA requirements. All have contributed to resource instability, which CalCCA explained in its website paper referred to above.
Ava was forced to delay adding the City of Stockton to its service territory, under CPUC rules, until it paid $879,000 in penalties dating from 2022. Now that the penalties are paid, the CPUC has approved the addition which will happen in April 2025, according to Karen Lee, power resources manager for Ava.
Procurement Strategies Impacted
Lee agreed with CalCCA and said there are additional factors that impact Ava’s procurement strategy which can delay its ability to develop the resources to satisfy its RA requirements. She pointed to California’s renewable procurement goals under SB 350, Integrated Resource Planning and associated procurement orders, plus Ava’s customers demanding renewable energy.
For example, Lee said a city in Ava’s service territory may elect to increase renewable energy supplies to its customers to 100%. This will “likely impact the volume of renewable energy we seek in the next request for offers or solicitation” and possibly affect “an Integrated Resource Plan procurement order focused on long lead time resources [which have] catalyzed Ava’s procurement” of those resouces. This will affect costs either positive or negative, Lee said in an email.
Klatt, the energy attorney, agrees. “The State and the PUC have enacted policies that created the problems CCAs energy service companies and utilities (LSEs) are having in accessing resources to satisfy the RA requirement, he said.
The Clean Energy Alliance, a CCA headquartered in Carlsbad serving seven San Diego County cities, is experiencing similar problems. It has paid $616,627 in penalties in 2023, according to CPUC records. Andy Stern CEA’s chief financial officer told the Board of Directors at an April 25 Board of Directors meeting, RA prices have skyrocketed in summer months to $70 to $80 from $20.00 a few years ago. “Very onerous prices are out of control,” he said.
Continuing, Stern said at the Board meeting, supply chain disruptions following the COVID epidemic have not yet picked up, contributing to the capacity shortage. Furthermore, renewable projects are not accounted fully as resources, as fossil fuel plants are, as pointed out by CalCCA above.
Resource Adequacy an Anachronism?
Resource adequacy, created in 2004, requires all utilities, CCAs and energy service companies to procure capacity to be made available to the California Independent System Operator when it is needed, for example, in a heat wave or other environmental catastrophes when power demand is stressed.
The CPUC is updating the rule, a draft of which became available May 17 for comment (R.23.10.11). The Commission could have voted on it on as early as June 20 but did not. It proposes a slice-of-day methodology in which an LSE’s RA is calculated hourly rather than monthly or yearly as it is today to become effective in 2025. Stern explained, in CEA’s Board meeting, the reason for the change was to come up with a more accurate alignment of resources with resource needs. He cited energy storage as an example. The CPUC draft suggests if it is counted in an LSE’s resource adequacy it would need to show excess energy.
The draft decision said the CPUC’s Energy Division will host office hours and trainings prior to the 2025 year-ahead filing deadline to assist CCAs and other LSEs with using the slice-of-day template. Several stakeholders familiar with it have commented the draft slice-of-day method is extremely complex.