Parties Comment on Joint IOU Motion to Expand the RPS Scope to Accommodate the Voluntary Allocation and Market Offer (VAMO)

Joint IOU Motion to Amend RPS Scope re: VAMO:

The Joint IOUs request that the Commission: (1) expand the scope of this proceeding to address whether Renewable Energy Credits (RECs) retain their original Product Content Category (PCC) classification only upon allocations under the Voluntary Allocation process; (2) provide guidance on the issue of the PCC classification of allocated RECs before Load Serving Entities (LSEs) are required to decide whether to accept allocations in May 2022; and (3) clarify that Voluntary Allocation Pro Forma Contracts (Allocation Contracts) will be reviewed in early 2022 via Tier 2 advice letter without a need to review executed contracts unless there is a material deviation from the approved pro forma, which will be submitted under a Tier 1 Advice Letter for final review and approval.

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Party Responses to Joint IOU Motion:

Cal Advocates:

• Cal Advocates does not object to expanding the scope of R.18-07-003 to accommodate moving forward with the VAMO structure. However, if the Motion is granted, Cal Advocates respectfully recommends that the assigned Administrative Law Judge (ALJ) expand the scope of the proceeding to accommodate all issues raised by the IOUs with sufficient time for parties to be heard.
• The IOUs’ request that the Commission issue a proposed decision on Allocation Contracts based solely on the arguments raised in the Motion. However, this is unreasonable. Parties should have the opportunity to be heard and to build a robust record for Commission consideration because this issue is not currently in the scope of R.18-07-003.
• Finally, if the Motion is granted, Cal Advocates respectfully urges the ALJ to give the IOUs’ substantive arguments no weight. The IOUs devote a substantial portion of their Motion arguing the merits of the positions and attacking positions parties presented in protests to the IOUs’ past advice letters.

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CalCCA:

• CalCCA supports the Joint IOUs’ request to amend the Scoping Memorandum in R.18-07-003 on an expedited basis to address the classification of RECs allocated to non-investor-owned utility (IOU) load-serving entity (LSEs) during the VAMO process.
• CalCCA agrees with the Joint IOUs that voluntary allocations under VAMO are not “re-sales” that would require reclassification of RECs allocated to non-IOU LSEs.

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TURN:

• The Commission should proactively affirm that PCC 0 resources subject to allocation will be assigned the PCC that would apply if the resource were newly contracted (PCC 1, PCC 2 or PCC 3) based on the relevant contract structure, bundling of attributes, and whether there is direct delivery of the associated electricity to a California Balancing Authority.
• The IOU's claim that the VAMO is not comparable to a resale arrangement because the recipients are LSEs whose customers are obligated to pay the above-market costs regardless of allocation is not supported by the Commission’s holding in D.21-05-030, which states the allocation of contracts under the VAMO should be treated as a resale for purposes of compliance with the long-term contracting requirements outlined in §399.13(b).
• If the Commission decides to permit IOU PCC 0 resources to retain this classification for volumes allocated to LSEs through the VAMO, notwithstanding the concerns raised by TURN and CUE, it should affirmatively prohibit this treatment for any subsequent allocations or resales. Moreover, the Commission should affirm that any treatment provided to VAMO participants will not open the door to a wide range of other schemes designed by LSEs to skirt the resale rules by transferring or trading RPS compliance attributes through new “allocation” methods.

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Joint IOU Reply to Party Reponses:

SCE, PG&E, and SDG&E:

• Contrary to TURN's assertions, the Joint IOUs' voluntary allocation PCC classification proposal is consistent with Commission precedent implementing the governing statutory requirements. Contrary to TURN/CUE’s assertion, D. 21-05-030 did not decide that Voluntary Allocation RECs should be treated as a resale and did not resolve this issue that the Joint IOUs seek to have the Commission resolve.
• Each of the Commission’s decisions cited by TURN/CUE may remain in place; however none of those decisions considered or addressed the unique, limited, and timely circumstances of a voluntary allocation of RPS procurement subject to a Commission Decision.
• The Joint IOUs agree that RPS procurement subject to voluntary allocation retains its original PCC classification and would be a confined determination within the narrow circumstance of a voluntary allocation. Any subsequent re-sale of a Voluntary Allocation should be subject to the PCC rules established in D. 11-12-052.