The Commission issued a Proposed Decision (“PD”) eliminating the PCIA cap and trigger and adopting a slightly modified version of the RPS allocation mechanism proposed in the Working Group 3 (“WG 3”) Report. The PD rejects the WG 3 proposals for RA and GHG Free Energy allocation mechanisms and proposals related to shareholder responsibility for portfolio optimization. Comments on the PD are due April 26, and a Commission vote is scheduled for May 6. The Commission declined to address any additional ERRA-related timing issues that were raised in the recent Scoping Memo.
The PD primarily focuses on the WG3 Proposal regarding Voluntary Allocations and Market Offer (“VAMO”) of PCIA-eligible RPS resources (“RPS VAMO.”) The Commission proposes to adopt the RPS VAMO proposal but to reject the proposal regarding mandatory allocations of RPS resources that remain after the VAMO. To incorporate RPS VAMO transaction, the PD adopts some of WG 3’s proposed modifications to PCIA ratemaking to incorporate RPS VAMO transactions but rejects the proposal to value unsold RPS volumes at $0 for MPB calculation. The Commission states it will continue to consider that issue in the proceeding.
As such, each year the IOU must offer allocations of PCIA-eligible resources to LSEs according to each LSE’s forecasted, vintaged, annual load share. LSEs may accept or reject all or a portion of short-term and/or long-term resources, and IOUs must offer any rejected resources for sale in the open market. Both LSE payments and market offer sales will be recorded in the PABA, offsetting costs in the PCIA.
The first allocation is expected to occur February 2022, with subsequent allocations taking place “no more than once a compliance period.”
Within 90 days of the final decision date, the IOUs, along with parties to the PCIA proceeding, must file a Tier 2 advice letter proposing methodologies for calculating voluntary allocation shares and dividing RPS portfolios into shares to be allocated.
In addition to the RPS VAMO, the Commission also adopts the WG 3 proposal that IOUs hold an annual request for information (“RFI”) process with RPS contract counterparties for interest in contract assignment or termination that would facilitate re-contracting to another LSE. The Commission rejects the annual aspect, and instead proposes to require IOUs to hold the RFI once and include it in their 2021 RPS Plans.
The Commission proposes to reject the WG 3 Proposals concerning similar VAMO processes for RA and GHG Free Energy. Additionally, the Commission proposes to reject a proposal for the Commission to hold shareholders responsible for portfolio mismanagement.
Instead, to address RA portfolio optimization, the PD requires each IOU to file a Tier 2 Advice Letter justifying its methodology for how much of its PCIA-eligible RA is reserved as part of the IOUs Bundled Portfolio Plan.
As expected, the Commission proposes to eliminate the PCIA cap and trigger mechanism as of the effective date of the decision. Recovery of 2021PCIA undercollection will be handled in the in the 2022 ERRA Forecast applications. Note that in the Joint Stipulation of SDG&E and CCA parties, SDG&E agreed to recover its 2021 CAPBA balance through a one-year amortization in2022 rates.
