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Home My WebLink AboutCLEAN ENERGY SCE PERSPECTIVE ON COMMUNITY CHOICE AGGREGATION Clean Energy Options & SCE's Perspective on Community Choice Aggregation (CCA) City of Tustin November 16, 2021 SOUTHERN CALIFORNIA Energy for What's Ahead" � E D I SO N SCE in the City of T Your Partner for a Brighter Future $53,222,929 4rlf-1 M $796,p574 5,039 Property taxes SCE paid Franchise Fees SCE Business to Orange County I SCE paid to the city Customers 00 6,547 28,562 50 0 SCE CARE Customers =` SCE Residential SCE Employees 30% bill discount �� Customers 1,766 go 1,453 64 Electric Vehicles Solar Installations L Battery registered at DMV Storage Projects Benefiting Our Communities Supporting Our Communities To improve air quality and reduce SCE sponsors the following organizations: greenhouse gas emissions in your • Goodwill Industries Orange County neighborhood, we are integrating clean • Olive Crest energy technologies such as rooftop . Orange County Rescue Mission solar, energy storage, and electric vehicle charging ports into the grid. Tustin Community Foundation • Veterans Transition Support • YMCA - Orange County Energy for What's Ahead'"" Building a Clean Energy Future California's Environmental Policy Goals • 100% Renewable/zero-carbon by 2045 (S131 00) • 80% reduction below 1990 levels by 2050 (S1332) • 1325 MW Energy Storage contracted by 2020, installed by 2024 (AB2514) SCE's Pathway 2045 paper is a blueprint for achieving these goals in a way that is both practical and affordable • As the grid gets cleaner, so too does everything connected to it • Customers who embrace an electric-led future will see greater reductions in energy costs DECARBONIZE ELECTRIFY ELECTRIFY USE LOIS SINK ELECTRICITY TRANSPORTATION BUILDINGS CARBON REMAINING FUELS CARBON - Ow 100°10 ter{ 70% 43% r { In_ 5 �� OF BUILDINGS R 108 i RETAIL44 . . .., 1P NUN.ELRG 16 MMT SALES OF VEHICLES ENERGY Clean the power grid. And electrify. * Learn more at www.Edison.com/pathway2045 Energy for What's Ahead"" 3 CUST ME BENEFITS FOR ALL 1 • Cleaner air althier communities • Savings for the average customer g • New economic opportunities • Clean ener future gy • Improved reliability & resiliency A, J /� Energy for What's Ahead` • Climate Action Plans • EV Readiness Plans • Expedite EV Charger Permits • Municipal Fleet Electrification • Building Reach Codes Energy for What's Ahead"' Additional Green Programs • Green Rate • Incentives for rooftop solar and energy storage • Clean Fuel Rewards Program w • Special EV Rates • Charge Ready Transport • Charge Ready • Smart Thermostat Incentive s ' More to fk 00- • Community Solar A k_ _ • Low- Income Building Electrification - - J - Pilots Energy for What's Ahead'"" 6 �; Charge Ready Program Highlights, .. _ M, . R 1 I $436M program to support public EV charging infrastructure for light-duty electric vehicles - Expansion of the Charge Ready Pilot r Provides significant financial and technical } assistance to install charging stations Authorized budget will support —38,000 public charging ports Three program offerings with incentive options h t 1 r�E SCE 's " Make Ready" Model SCE will cover cost of make-ready infrastructure and may offer a rebate to offset cost of procuring and installing charging stations Participant is responsible for procuring charging stations s i i Charging Stations I i Transformer �roiceCnndijitr. and Wirpr 'M ....... Mete Utility Distribution Participant Site Infrastructure Infrastructure Charging Stations Program covers costs associated with service drop, meter, panel, and circuit dedicated to EV charging. 8 Energy for What's Ahead'"" SCE 's Estimated Delivered Power Mix in 20201 Includes both owned generation and power procured from third parties. (Numbers do not sum due to rounding) 1: Biomass&Biowaste 3• 15% 3% 2: Geothermal 1% 4: 12% 3: 16% 4: 7; 1% 13% '13q/o 6; $fa 0 3: Eligible Hydroelectric 3: 6: 8% 1°No 696 2: 2: 4% g; 4: Solar 1: 43% E0.5% 6% god 5: Wind 1: Carbon-free I Power s: } b: Large Hydroelectric 1: �a.5� 1% 10: in 2020 7: Nuclear 10: 17% 2018 16% 9: 8: Other3 37% 9. 20192 33% 20201 0 9: Unspecified' estimated () 10: Natural Gas 1 This is an estimate of SCE's 2024 delivered power mix using the methodology prescribed by the California Energy Commission's(CFC)Power Source Disclosure Program(PSDP)as of April 1,2021.SCE's f nal PSDP report will be filed with the CEC on June 1,2021 and may include data that differs from the estimate shown hereto reflect subsequent changes or clarifications to PSDP's methodology and reporting template.Numbers do not sum due to rounding. 2 2019delivered powermix data reflects final data from SCE's PSDP filing onjuly20,2420,and has been updated from the estimate shown in the 2019 Sustainability Report Restatements include,.Wind,restated from 11%to 12%,Large Hydroelectric,restated from 696 to 896;Dther,restated from 3%to<0.5%;Unspecified restated from 31%to 33%;Natural Gas restated from 18%to 16%. 3 "Other"consists of diesel from SCE-owned Pebbly Beach Generating Station on Catalina Island. 4 Unspecified power refers to electricity that is not traceable to a specific generating facility,such as electricity traded through open market transactions administered by the California Independent System operator(CAISO).The power is typically a mix of resources,largely dominated by natural gas and renewables.The generating resources in the CAISO market are getting cleaner as more renewables are added to the grid in line with California state law.Unspecified power also consists of energy from out-of-state wind projects that are not delivered into California.This energy is considered RPS-eligible for RPS compliance purposes,however. Energy for What's Ahead" I 9 Green Rate Program • A voluntary clean energy rate program for Residential and Non-Residential customers that supports renewable energy for a cleaner, healthier environment and reduces greenhouse gas emissions associated with your electricity usage. • For an additional cost, you can choose to purchase clean power for a portion (50%) or all (100%) of your electricity use. • SCE will purchase solar energy on your behalf from local solar developers. • The Green Rate and Community Renewables clean energy rate programs are both Green-e Energy certified. • Green-e Energy certification guarantees that our programs meet strict environmental and consumer protection standards. • Bundled service customers, meaning those who pay SCE for generation, transmission, and distribution services, are eligible to participate. reen-e Ene?ir g y C E R T I F I E D Energy for What's Ahead"' 10 2021 Green Rate Premiums ( 4/kWh Residential rAqr- • • TOU-8-Pri Green 0.854 -0.306 1.745 0.380 1.050 1.446 1.848 Premium Avg Rate 25.38 22.13 23.79 22.13 19.76 17.19 15.69 Avg + 100% 26.234 21.824 25.505 22.510 20.81 18.636 17.538 Green Avg + 50% 25.807 21.977 24.663 22.320 20.285 17.913 16.614 Green Average Tustin Residential Monthly Usage: 267 kWh 100% Green Rate: $2.28/mo extra 50% Green Rate: $1.14/mo extra Notations: • Credits that are built into the premiums are subject to change, based on usage or future rate changes • If you select the 50% rate option, you pay half the premium listed Energy for What's Ahead'"" 11 SCE Follows the CCA Code of Conduct (D.12- 12-036) SCE does not lobby or market against CCA formation, but only provides factual information about SCE's programs & rates Community Choice Aggregation is a customer choice program that permits cities, counties, and Joint Power Authorities to buy and sell electricity on behalf of the utility customers within their jurisdiction and transmit over SCE's lines. El SOUTHERN CALIFORNIA Energy for What's AheadSM E D I SO N° SCE's Perspective How Community Aggregation Works � r - SCE c-1 WORTS CUSTOMER CHOICE source delivery customer We believe in supporting customer choice as long as: CCA UTILITY END-USERS 1 ) all customers are treated fairly and (SCE) customer indifference is maintained, and buy deliver enable electricity electricity, customer 2) grid reliability and safety are preserved supply maintain lines & energy billing choices CCA generation charges appear as new section on bill: COMMITMENT TO SERVING OUR Your account summary Previous Balance 573.71 Payment Received mmldd -S73.71 Deliver Component CUSTOMERS Balance lo", $0.00 y p Your neap ch arges 573.18 Total amount you owe by Mmm dd'yy $73.78 from S C E SCE is not allowed to profit from the sale of energy, the California Public Summary of your billing detail c Service account Service address Billing period Your rate New charges -000 -0D 1234 STREET ADRESS Mmm dd'yy to Mmm did yy DOMESTIC $39 49 Utilities Commission regulates SCE's ci CA DaooO (SCE) 3-000-0000-00 1234 STREET ADDRESS Mmm dd'yy to Mmm dd'yy DOMESTIC $33.69 energy procurement activities. City CA 00000 (CCA) $73.18 Generation Component from CCA Energy for What's Ahead'"" 13 Where Your Money Goes • 464 Generation — Cost of energy sources, including natural gas, hydro, solar and wind. SCE generates less than 20% of the power it sells. • 374 Distribution — Grid maintenance and new equipment, including poles and wires, and substations. • 84 Transmission — Investment in operations & maintenance for high-voltage transmission lines. • 54 Wildfire — Insulated wire, vegetation clearing, enhanced inspections, weather stations, HD cameras, and insurance. • 44 Programs — Mandated state programs, including incentives for energy efficiency and protection for low-income customers. • This breakdown shows SCE's costs to serve customers and implement state policies. It is based on calculations for June 2027. Energy for What's Ahead'"" 14 What Is Power Charge Indifference Adjustment (PCIA)? • PCIA is a ratemaking mechanism instituted to ensure that bundled service customers are indifferent when departing load customers leave and choose generation services from a different provider, e.g. CCA formation • Ensures the above-market costs associated with prior resource commitments are not avoided by departing load customers, and therefore shifted to the remaining utility customers • Not quite accurately labeled by the media and CCAs as an "exit fee" charge • Calculated annually, and costs collected directly from customer bills through a PCIA charge $100/MWh $60/MWh Illustrative Figures Only $40/MWh -------------- �W------------- 6d Cost of Portfolio "Market Value" of Portfolio "Above Market" Costs • Is intended to recover the "above-market costs" in an equitable manner • The "fair" market value of certain eligible resources can be hard to quantify creating differences in what departing load entities consider appropriate above market costs Energy for What's Ahead"" 15 How PCIA Flows into Customer Rates PCIA Eligible Resources PABA PABA costs allocated — Above Market Costs > out to Customers J _j _j • Mandated Procurement Contracts segregated into Above market net costs • RPS sub-accounts by vintage allocated out on a • BioMAT • CTC-eligible vintaged load share basis • QFs • Legacy UOG to customers • RAM • 2004-2009 vintages • SCE bundled • Re-MAT • 2010 vintage • Lancaster (2017) • Energy Storage (Non- • ... • Apple Valley (2017) CAM) • 2018 vintage • PRIME (2018) • San Jacinto Power • Non PCIA Eligible (2018) • Procurement contracts • Rancho Mirage (2018) < 1 yr in term • Clean Power Alliance • CAM (Phased 2018-2020) • Non-bypassable • Etc. charges, e.g. EE, PPP Energy for What's Ahead"" 16 Energy for What's Ahead'"" 17 Statutory/Regulatory Background and Formation Process • Post-California Energy Crisis, communities clamored for and passed legislation on the right to choose an alternative electricity provider for bulk power and related services • AB 117 authorized the creation of CCAs in 2002, and codified the prohibition on cost shifting in the context of customer choice programs • Protects existing utility customers from liabilities they might otherwise incur when a portion of the utility's customers transfer their energy services to a CCA — The Indifference Principle • D.04-12-046 implemented AB 117 and established Cost Responsibility Surcharges (CRS) • CPUC has jurisdiction over CCAs for consumer protections, and compliance with procurement mandates MENNIF- kk CCA Declaration d Non- CCA Compliance Mass disclosure Establishment Testin Enrollment Agreement PF F Energy for What's Ahead"" 18 Regulatory Framework • PCIA OR Proceeding (R. 17-06-026) • Track 1 (CARE and Medical Baseline Exemptions) • D.18-07-000 • Track 2 (Consideration of Modifications and Alternatives to the Current PCIA) • Phase 1 : D.18-10-019 (PCIA Decision) Modifying PCIA • Modified "forecast" benchmarks • Required that PCIA be "trued-up" annually • Established a second phase of the proceeding • Phase 2: Established to further work through issues • Each working group is being jointly co-lead by an IOU and DA/CCA lead • Working Group 1 : Benchmark and True-Up Methodology • PD issued 9/6/19, adopting PG&E and Joint IOU proposals • Revised PD issued 10/10/19, more favorable for IOUs • Working Group 2: Prepayments • Decision anticipated by Q1 2020 • Working Group 3: Portfolio Optimization • Decision anticipated by Q2 2020 Energy for What's Ahead"" 19 Overview of PCIA Formula • PCIA Rate = Contract/UOG Costs - Energy Revenues - RA Value - RPS Value • Energy Revenues are forecasted based upon forward SP/NP-15 prices and trued-up based upon actual energy and A/S revenues in CAISO • RA and RPS Value is forecasted based upon product of (a) MPB (set by existing transactions) and (b) the sum of forecasted IOU need and forecasted sales • RA and RPS Value are trued-up based upon product of (a) updated MPB set by all transactions for Year N and (b) actual IOU need, plus (c) actual sales revenues PCIA Ratemaking $120 $Zoo Sales $so Above market $60 Bundled Load costs $40 Compliancepaid for by all $zo Requirement customers through PCIA S- Contract Costs Energy Revenues RA Value RPS Value Above Market Costs Energy for What's Ahead"" 20 PABA Vintage Structure • PABA has several sub-accounts that track Above-Market Costs by "Resource Vintage" • Each "PABA-eligible"'/ generation resource is assigned a Resource Vintage based on the calendar year the resource was originally executed (contracts) or approved by the Commission for cost recovery (UOG) • Customers are responsible for all resources executed/approved while they were bundled service customers • Departing load customers responsible for multiple sub-accounts in PABA • Bundled service customers responsible for all sub-accounts in PABA, as well as ERRA • CTC- Legacy 0' ...sub-accounts for each 2018 New sub-account Eligible • year between 2010-2018 Vintage added every year > Q DL customers subject only to CTC(e.g.,exempt DA, pre-2009 vintage DA) that> 1 year contracts are o signed on 2009 Vintage Customers 0E O O 2010 Vintage Customers 0-Ln N v = v Current bundled service customersz/(including those who depart after June 2018) 1/ PABA-eligible generation resources do not include resources eligible for CAM (which are tracked in the New System Generation Balancing Account) and resources < 1 year in length (which are tracked in ERRA). 2/A portion of bundled service customers' generation revenues will also be directed to ERRA and BRRBA-G. Energy for What's Ahead'"' 21 Impacts on Customer Rates - Reentry Fees and Financial Security Requirements (FSR) for CCAs If a customer of a CCA is involuntarily returned to service, any reentry fee imposed that the commission deems is necessary to avoid imposing costs on other customers shall be the obligation of the CCA • Exceptions • Customer returned due to default of payment or other contractual obligations In the event the CCA is unable to discharge its obligation, the fees shall be allocated to the returning customers • Calculation of FSR and reentry fees 1 . Incremental administrative costs 2. Incremental costs incurred for procuring electricity based on six month period 3. FSR updated every six months with a minimum FSR of $147,000 Energy for What's Ahead"" 22 California 's Environmental Policy Goals • SB100 clean energy targets: • 44% Renewable by 2024 • 50% Renewable by 2026 • 52% Renewable by 2027 • 60% Renewable by 2030 • 100% Renewable/zero-carbon by 2045 • AB32/SB32 Green House Gas (GHG) reduction goals: • 40% reduction below 1990 levels by 2030 • 80% reduction below 1990 levels by 2050 • AB2514 Energy Storage Target' • 1325 MW contracted by 2020, installed by 2024 • SB350 Clean Energy and Pollution Reduction Act • Requires each Load Serving Entity to file an Integrated Resource Plan every two years with the Commission Additionally, AB 2868 was passed as an opportunity to contract for 500 MW of distributed energy storage systems, above and beyond the existing AB 2514 target to achieve ratepayer benefits, reduce dependence on petroleum, meet air quality standards, and reduce emissions of GHGs. Energy for What's Ahead"" 23