Parties Protest and Respond to IOUs' RPS-VAMO Pro Forma Advice Letters

AReM:

• The AL does not specify the length of short-term allocations. PG&E and SCE’s ALs both state the short-term allocation will be for length of the CP during which the allocation is offered.
• The AL does not address PCC Classification of the RECs being allocated, but recipients need to know the PCC status of the RECs to make an informed choice. SCE already notified potential recipients of the REC PCC status.
• The Voluntary Allocation ("VA") timeline should be extended to allow for the Market Offer ("MO") process to be established so that LSEs can compare the VA and MO contracts to decide which process would be most advantageous. Note that the IOUs have a pending Motion for permission to submit their proposed MO process on April 29 through a Tier 2 AL rather than wait to include in their RPS plans in December. Even if the Motion is approved, there would not be enough time to compare the two before making a voluntary election, so AReM’s protest requests that the last day for executing VA contracts be set to no sooner than 30 days after a resolution approving each IOU’s Market Offer AL.

CalCCA:

• The Commission should not approve the IOUs' pro forma contract for voluntary allocations and permit the investor-owned utilities to move forward with the voluntary allocation process until the Joint IOUs’ Motion filed in the Renewables Portfolio Standard proceeding regarding the PCC classification of allocated resources is decided.
• Each IOU must make clear in correspondence with potential counterparties that in accordance with D. 21-05-030, an LSE may take all or increments of its load share percentage as a short-term allocation, notwithstanding some resources may qualify for a long-term election.
• PG&E’s pro forma contract for voluntary allocations should not be approved until it is revised to correct the following errors: (1) The current draft wrongly provides PG&E virtually unlimited ability to remove resources from the allocation pool without notice to recipient LSEs, thereby thwarting planning efforts; and (2) The current draft does not provide recipient LSEs with timely access to forecast and meter data, which is necessary for LSE planning purposes. Withholding timely data provides a competitive advantage for bundled customers over CCA customers.
• SDG&E’s pro forma contract for voluntary allocations should not be approved until it is revised to correct the following errors: (1) The current draft wrongly permits SDG&E virtually unlimited ability to remove resources from the allocation pool, thereby thwarting recipient LSEs’ planning efforts; (2) The current draft does not provide recipient LSEs with timely access to meter data, which is necessary for LSE forecast and planning purposes, which is necessary for LSE planning purposes. Withholding timely data provides a competitive advantage for bundled customers over CCA customers; (3) Unlike the pro formas of the other IOUs, the current draft requires the recipient LSEs to provide collateral, which is unnecessary and inconsistent with SDG&E’s recent bilateral transactions; (4) The current draft unjustifiably alters SDG&E’s practice regarding dispute resolution; and (5) The current draft includes an erroneous definition of “Losses” which is contrary to the circumstances of the voluntary allocation.
• SCE’s pro forma contract for voluntary allocations should not be approved until it is revised to correct the following errors: (1) The current draft wrongly permits SCE to remove resources from the allocation pool without notice to recipient LSEs, thereby thwarting planning efforts; and (2) The current draft does not provide recipient LSEs with timely access to forecast and meter data, which is necessary for LSE planning purposes. Withholding timely data provides a competitive advantage for bundled customers over CCA customers.

SDCP and CEA ("Joint CCAs"):

• Generally, bundled PCC 1 RECs have a greater value to LSEs than do unbundled RECs; thus resulting in higher market prices for bundled RECs than for unbundled RECs. However, the Unbundled Confirm does not reflect these market differentials, and instead requires an LSE to pay bundled PCC 1 prices for a substantially less-valuable unbundled product.
• Even if the Commission adopts the IOUs’ PCC 0 classification proposal, filed in the Joint IOUs' Motion, the unbundled pricing terms would still be unreasonable. First, PCC 0 reduces an LSE’s total portfolio quantity requirement (“PQR”) obligation, thereby reducing PCC1/2/3 portfolio balance requirements. So, PCC 0 value is a 75% /15%/10% blend of PCC 1/2/3 value, which is clearly less than PCC 1. Second, PCC 0 RECs do not provide equal compliance value to IOUs and CCAs.
• Unbundled RECs – even those that receive PCC 0 legacy classification– will be reported as unbundled RECs on the allocatee LSE’s Power Content Label ("PCL"), resulting in an inferior product as compared to one with only bundled renewable energy purchases. Thus, to CCAs like SDCP and CEA, the unbundled allocations are even less valuable than market prices suggest and certainly far less valuable than bundled PCC 1 RECs.
• The Unbundled Confirm proposes to deliver unbundled RECs directly to the recipient LSE’s Western Renewable Energy Generation Information System (“WREGIS”) account. Currently, SDG&E receives the energy and RECs from the relevant long-term PCC 0 resource at the out-of-state generator bus bar, which allows SDG&E to apply these RECs towards an RPS adjustment and to reduce the carbon cost obligation associated with imported power. Allocatees would not enjoy these same benefits via the proposed delivery method, since they would not receive any bundled energy and thus not have the opportunity to use those RECs to offset their own carbon obligations from imported power.
• In addition to retaining access to this added value associated with its own slice of the long-term resource, SDG&E will also receive the RPS adjustment value from the unbundled RECs that are allocated to and paid for by the non-IOU allocatees.