Northern California Power Agency September 25, 2019 Kip Lipper. - PowerPoint PPT Presentation

Presentation to Northern California Power Agency September 25, 2019 Kip Lipper. Chief Advisor Energy and Environment Office of the CA Senate Pro Tem

Legislative staff disclaimer Comments made today are those of the speaker only, and do not necessarily reflect the views of Senate Pro Tem Atkins, any member of the Senate, or the Senate as an institution.

Key Elements of My Presentation 2019 Legislative Issues:  Wildfire, Utilities, and AB 1054  PGE Late Effort to Secure Bond Financing (AB 235)  Bulk Energy Storage  Key Newsom Appts/Actions (CPUC, CEC, CAISO)  SB 1 and CA “ Resistance ”  2020 Prognostications

CA Wildfires and Climate Change  2017/2018 historically disastrous years following drought--Tubs, Thomas, Camp, Carr, Woolsey Fires  Friday of first week of new Adm — PGE files for Chapter 11 Bankruptcy  Last Year’s SB 901 almost immediately deemed inadequate  Newsom Adm hit the ground running in first week of new administration

Ca Wildfires and Climate Change (cont.)  Early February Budget Actions — over $1 billion to CALFIRE, OES, other agencies  CA Wildfire Commission begins meetings throughout state  Newsom convenes internal “strike force” (senior adm officials plus O’ Melveny, Guggenheim Partners)  Recommendations begin to take shape

CA Wildfires and Climate Change (cont.)  Newsom Administration proposes amendments to AB 1054 and AB 111:  New Catastrophic Wildfire Fund, oversight Council, Administrator  New Wildfire Mitigation Plans and Division at CPUC (to be moved later to NR Agency)  Expanded Securitization and Tax Exempt Financing  Expanded requirements on IOUs and POUs (latter submit plans to Wildfire Safety Advisory Board

CA Wildfires and Climate Change (cont.)  Late Spring — Budget is passed and allocates another $2 billion for wildfire interdiction:  New aerial and ground equipment  Mutual Aid Funding  Landscape Management (additional GGRF)  New Wildfire Attack Staging HQ-McClellan  Governor/Legislature Pivot to IOU insolvency Issue

CA Wildfires and Climate Change (cont.)  AB 1054 passes with comfortable super-majorities and becomes law:  Major Early Political Win for Newsom Administration  Other Two IOUs stave off insolvency (so far)  Wildfire Fund is being stood up, implemented  We are all praying for an early, wet winter

PGE Late Effort to Expand Tax Exempt Bond and Securitzation  Legislature reconvenes after summer recess and is immediately confronted with PGE effort (and opposition) to allow company to use tax exempt bond financing to reduce costs, pay fire victims  Legislature and Governor fatigued from prior 7 months. Little appetite to take this on.  AB 235 proposed to be amended by Assembly Member Mayes — ultimately allowed but immediately made 2 year bill  Events continue to transpire in the federal Bankruptcy Court

Bulk Energy Storage  SB 772 (Bradford) directs CAISO (not state agencies) to procure several thousdand MW of “ long duration bulk energy storage ” (i.e. Eagle Crest Project)  Costs allocated across ratepayers as federal rate  Bill passed committee but failed on Senate Floor  Other pumped hydro projects (SB 597 (Hueso), LEAPs Project)

Key Newsom Appts/Actions  New CPUC Chair — Maribel Batcher (not confirmed)  New CPUC member (Genevieve Shiroma (confirmed)  New CEC Chair (David Hochschield) and member (Patty Moynihan)  Three CAISO board members (two new)  New SWRCB Chair and 2 new board members

2020 Prognostications  Wildfire Utility Issues will continue to vex policymakers (PGE BK)  System Reliability/Resource Adequacy  Distributed Energy Resources (DER)  Centralized Procurement/Procurer of Last Resort (POLR)  New Leadership at Agencies as Newsom Adm Takes Reins

Thank you. Questions?