Telephone (626) 3022810 2 PCI CIA Phas hase 2 Working g Gr - - PDF document

1

Laura Velarde

From: Legal Admin <Legal.Admin@sce.com> Sent: Wednesday, July 24, 2019 12:06 PM To: Laura Velarde Subject: R1706026 PCIA OIR: PCIA Working Group 3 Workshop #2 Presentation Attachments: R1706026 PCIA Working Group 3 Workshop #2 Presentation.pdf Importance: High To: All Parties in Rulemaking (R.) 17‐06‐026 Re: Working Group 3, Workshop # 2 Parties –

(See attached file: R1706026 PCIA Working Group 3 Workshop #2 Presentation.pdf)

Attached for your preview in advance of tomorrow’s Working Group 3, Workshop #2 are the workshop materials prepared by the Co‐Chairs. Workshop #2 logistics are set forth below. We look forward to your participation. Subject: PCIA Working Group 3, Workshop #2 Date: Thursday, July 25, 2019 Time: 10:30 a.m. – 1:30 p.m. Location: SCE Energy Education Center 6090 N. Irwindale Ave. Irwindale, CA 91702 EECI 6090 Conference Center Conference Room Lunch will be provided; other lunch options are available in the area if desired / necessary. If you have not already done so, please RSVP via email to Stephanie.Lu@sce.com if you plan to attend in person. The option to join via remotely will be available through the Skype link below.

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Legal Administration Southern California Edison Company Telephone (626) 302‐2810

PCIA Phase 2 - Working Group 3

PCI CIA Phas hase 2 – Working g Gr Group p Th Three

Portfolio Optimization and Cost Reduction, and Allocation and Auction

Detailed led RA RA Sales les Process ss Str Strawma man, Local R RA Allo locatio ion, n, GHG HG-Fr Free A ee Allo locatio ion & n & Volunt untary A Allocatio ion n Proces ess

Work rkshop No No. . 2 Ju July 25, 25, 201 2019

PCIA Phase 2 - Working Group 3

Site te Specifi fic Safe fety ty

Meeting location in the event of an evacuation: North side of the building closest to the stop sign between the 6090 & 6070 buildings. You are here

Exit

Safety Assignments: Call 911: Jabari Martin Perform CPR: Philippe Gerretsen Get AED: Marci Palmstrom Meet 1st Responders: Matt Langer Exits: Side Door or Main Entrance AED Location: Behind Front Desk North

1

PCIA Phase 2 - Working Group 3

Over vervi view

PCIA Phase 2 - Working Group 3

Ag Agend enda

• Overview
• Feedback from First WG3 Workshop
• Status of WG3 Discussions
• Proposed Excess Resource Adequacy (RA) Sales Strawman for

System and Flex RA

• Proposed Local RA Allocation Approach
• Proposed GHG-Free Allocation Approach
• Proposed Voluntary Allocation & Auction Clearinghouse Strawman
• Feedback & Next Steps

3

PCIA Phase 2 - Working Group 3

Progr gress ss o

• f Worki

king G g Group 3 p 3

• Working Group 3 (WG3) has met regularly since March 2019
• Co-leads have met 2-3 times per week
• Each of IOUs and CCAs have convened about 3 times per week
• First Workshop was held on April 29, 2019, which presented:
• Strawman for RPS and RA Excess Sales Approach
• Introduction to Voluntary Allocation & Auction Clearinghouse

proposal

• First WG3 Progress Report was filed June 24, 2019
• Third WG3 Workshop expected September/October, 2019
• RPS Excess Sales & Allocations
• Voluntary Allocations
• Second Progress Report will be due September 26, 2019
• Final WG3 Report due January 30, 2020
• Proposed Decision expected Q2 2020

4

PCIA Phase 2 - Working Group 3

Fe Feedback fr from Fi First W t Worksh shop

PCIA Phase 2 - Working Group 3

Stake keholde der F Feedba dback f ck from m Worki king S g Sess ssion 1

• Informal comments received from 10 Parties:
• Alliance for Retail Energy Markets (AReM), California Large Energy

Consumers Association (CLECA), City of San Diego, NextEra Energy, Pacific Gas & Electric (PG&E), Protect Our Communities Foundation (POC), Public Advocates Office (Cal PA), San Jose Clean Energy (SJCE), Shell Energy, The Utilities Consumers’ Action Network (UCAN)

• Questions posed to Stakeholder Group:
• Resource Adequacy (RA):

1. Thoughts regarding the mechanics of reporting a RA buffer? 2. Input on proposed timing and frequency of RA sales?

• Renewable Portfolio Standard (RPS):

1. Cal CCA and SCE presented 2 versions on what constitutes excess

• RPS. Please provide your feedback and pros/cons on those

approaches. 2. Input on proposed timing and frequency of RPS sales? 3. What type(s) of RPS transactions are needed?

6

PCIA Phase 2 - Working Group 3

T

• pi

pics cs Raised i d in I Informal Comme mments

• Resource Adequacy (RA) Sales – Addressed in this workshop
• Existence of RA Buffer
• Transparency of RA Buffer
• Proposed Timing and Frequency of RA Sales
• Renewables Portfolio Standard (RPS) Sales - Addressed in next

workshop

• Definition of “Excess” RPS
• Proposed Timing and Frequency of RPS Sales
• Types of RPS Transactions
• Voluntary Allocation and Auction Clearinghouse (VAAC) –

Addressed in this and next workshop

• Other Topics:
• WG3 Principles – Not updating at this time
• Solicitation Mechanisms & Terms and Conditions – To be discussed at

later workshop

7

PCIA Phase 2 - Working Group 3

Status us of R RA P A Proposals

PCIA Phase 2 - Working Group 3

Status us o

• f RA

A Propos

• sal D

Discus ussions

• Co-Leads developed a proposed end-to-end Excess Sales

framework for RA

• Robust discussion however there were challenges in finding

alignment among co-leads and between IOUs

• What is the appropriate amount of capacity to be used as a buffer by

IOUs for compliance and risk mitigation purposes?

• How do we account for uncertainty prior to the final RA requirement?
• Co-Leads began exploring allocations of Local RA as a path

forward

• Proposal for allocation would remove requirements around buffers

and uncertainty tranches in favor of pro rata allocation of entire PCIA- eligible Local RA position in the portfolio

• Co-Leads are aligning in favor of an allocation proposal over an

excess sales approach for Local RA

• Continuing to explore approaches for System and Flex RA

9

PCIA Phase 2 - Working Group 3

Exce cess RA Sales Strawma man For Syst stem m and d Flex RA

PCIA Phase 2 - Working Group 3

Ba Basic ic Struct cture f for a System/Flex Exce cess S s Sales Appr pproach ch

• IOU will offer for sale RA that is above its compliance obligation,

based upon the IOU’s final allocation, plus a buffer.

• Excess RA will be made available to the market as follows:
• Annually - Spring and Fall solicitation
• Quarterly
• Major areas where Co-Leads struggled with finding alignment:
• Methodology for RA Buffer to meet unforeseen requirements;
• Amounts of capacity that are considered Excess but which IOUs may

retain in forward solicitations to account for forecast uncertainty;

• PCIA cost treatment for capacity that is not offered for sale in Spring

solicitation; and

• Treatment of capacity not shown in Supply Plan due to foreseen
• perational constraints and outages

11

PCIA Phase 2 - Working Group 3 Supply-Side:

• Planned/forced outages
• Delays to new generation or

deliverability

• Operational constraints
• Distribution deferral capacity
• Regulatory rule changes
• NQC changes
• Contract default risk

Factors A Affec ecting ing R RA Complia lianc nce e Uncertaint inty

• An Excess RA Sales Framework must be designed to account for

uncertainties that can impact how LSEs manage their RA

• bligations

Load-Side:

• Load growth/decline
• Regulatory rule changes
• Customer migration

12

PCIA Phase 2 - Working Group 3

Exce cess RA

• Excess RA are amounts of RA that are above 100% of the IOU’s

monthly bundled service load compliance obligation, plus a Buffer

• The compliance obligation amount is based upon the IOU’s final RA

allocation adopted by the CPUC for each period

• Applies for each RA product category: System, Flex

5000 10000 15000 20000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Illustrative RA Position (MW)

Excess RA as of Fall Solicitation

Compliance Obligation Buffer (5%) Will Offer 13

PCIA Phase 2 - Working Group 3

RA RA Buffe ffer

• CalCCA proposes the IOU be subject to penalties for failing to comply with

the approved Buffer process Purpose of the Buffer Maximum Buffer Volumes Incremental Buffer Volumes Retain an additional portion above the IOU’s need to account for unforeseen position changes after the annual compliance filing Not to exceed a [%]* relating to IOU’s highest monthly peak RA compliance obligation or position for which IOU is Scheduling Coordinator

*Percentage may have to be customized for each IOU

IOUs may file a request to increase the buffer through an expedited advice letter* demonstrating the need for the incremental amount

*Provides Parties the

• pportunity to review and

comment

An amount of RA reserved to meet unforeseen requirements and valued at the RA Market Price Benchmark in the PCIA calculation.

• Co-Leads are considering appropriate avenue for filing of the Buffer
• If IOU stays within the Buffer it is per se reasonable (i.e., acts as a safe harbor)

14

PCIA Phase 2 - Working Group 3

Un Uncertai ainty Tranc nche he

Uncertainty Tranche is defined as an amount that is considered Excess but which will be retained for:

• System/Flex:

Until the Fall publication of final year-ahead requirements

• Local*:

Until the Fall publication of final N-2 requirements.

• This amount will be capped at a percentage** of the IOU’s peak

monthly compliance obligation for the year

• Uncertainty Tranche will be reduced to 0 MW in Fall solicitation,

with all Excess capacity being made available for sale

* A Local RA Excess Sales Approach is not supported by the Co-Leads ** IOUs would likely have different percentages for their Uncertainty Tranches

15

PCIA Phase 2 - Working Group 3

Syst stem/ m/Flex T Treatment i in Solic icit itations ions

A [%] of System/Flex obligation will be retained in Spring solicitation as Uncertainty Tranche, pending IOU’s final allocation. The Fall solicitation will offer remaining Excess RA.

Illustrative Position

• 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Apr Oct Actual Expected Buffer Uncertainty Tranche Offered for Sale

Expected Month-Ahead Compliance Obligation Actual Month-Ahead Excess IOU’s Need Excess Uncertainty Tranche IOU’s Need

16

PCIA Phase 2 - Working Group 3

Additiona

• nal

l IOU Consid ider erations ions

• IOUs may not be able show certain resources with operational

constraints (e.g., hydro, old PURPA contracts, use-limited gas turbines, etc.) as the NQC may be greater than the available capacity. Therefore, it should not be sold due to risks and costs of non-performance. Some alternatives to address this issue are:

1. Capacity not offered and not shown should receive $0 value in the PCIA mechanism; 2. If forced to sell, capacity could be sold at a price floor to account for RAAIM penalty and substitution risk, but receive $0 value if unsold; or 3. Implementation of UCAP* mechanism could appropriately assess resources’ actual capabilities

• Granting appropriate protections for IOUs as POLR (e.g., improving

load migration forecasting, requiring BNIs, and granting RA waivers), may minimize uncertainty tranche and buffer requirements

• Substitution costs associated with sold RA capacity should receive

PCIA cost recovery attributable to the vintage of substituted resource

*CAISO proposal for Minimum Unforced Capacity (UCAP) Requirements

17

PCIA Phase 2 - Working Group 3

Quarter erly ly Solic icit itations ions

• Quarterly solicitations to be completed no later than 10 Business Days prior

to T-45 for the first month in the following quarter to allow LSEs time to procure any remaining shortfall

• IOU can offer balance of year, quarterly or monthly Excess unsold RA from

annual solicitations in Year n-1 and incremental excess due to position changes within Year n

• Quarterly solicitations may coincide with Spring and Fall Annual solicitations
• Otherwise: January, April, July, October
• Capacity may be made available via other mechanisms, as available and

appropriate Solicitations shall only occur to the extent there is Excess RA

* Dates used for illustrative purposes only.

Launch RFO

(January) 10 Business Days T-45 Deadline

Conclude RFO

(Feb 1)

T-45 Filing Deadline

(Feb 15)

April Showing Month

18

PCIA Phase 2 - Working Group 3

Open en Is Issue ues with h Ex Exces ess Sales F Frame mework

• Perceived lack of transparency around process for determining

appropriate Buffer

• Oversight or approval of Buffer and Uncertainty Tranche
• Percentage maintained may be unique to each IOU
• How to value unsold Uncertainty Tranche RA, since it was not

available for sale in first available annual solicitation

• May impact ability of IOUs to offer a Spring solicitation
• Treatment of capacity not shown in Supply Plan due to known
• perational and reliability issues
• Impact of Uncertainty Tranche upon ability of LSEs to hedge RA

positions forward

19

PCIA Phase 2 - Working Group 3

Co Conc ncerns with L h Local R RA Ex A Exces ess Sales F Frame mework

A Local RA Excess Sales approach is not recommended by Co-Leads Issues:

• Impact of Buffer on Local RA market availability
• Concerns that IOUs could retain too much Local Buffer, leaving

insufficient capacity for sale for other LSEs to meet compliance requirements

• Requirements around swaps of Local for System or Flex RA
• Complexity around 3 year-forward Local requirements
• Forward compliance requirements can shift around between LSEs

20

PCIA Phase 2 - Working Group 3

Propos

• sal f

for L Local R RA A Al Allocations

PCIA Phase 2 - Working Group 3

Ba Basic ic St Stru ructure for

• r Loc

Local l RA Allo llocation

• n Pr

Prop

• pos
• sal
• Each IOU’s full PCIA-eligible local RA position is allocated out to

LSEs through a CAM-like* mechanism

• Allocation is in proportion to each LSE’s forecasted share of PCIA

costs within the vintage in which the asset resides

• i.e., if an LSE is expected to pay 5% of PCIA costs in vintage, it receives

5% of the Local RA capacity from that vintage

• Positions to be allocated shall account for any existing forward sales,

contract terminations, etc.

• Allocations for two- and three-year forward Local RA requirements

will track the mechanisms adopted by the CPUC for the

• bligations imposed upon LSEs
• Expected that benchmark percentage for year 1 will apply to years 2

and 3, but will follow any final CPUC decision

• Exception that PCIA allocations will track cost shares, rather than

contributions to peak capacity needs

• System and Flex RA attributes will follow the allocation of the

Local RA attributes toward the position of benefiting LSEs

* See Appendix (pg. 41) for explanation of how this mechanism would compare to CAM

22

PCIA Phase 2 - Working Group 3

Ba Basic ic St Stru ructure for

• r Loc

Local l RA Allo llocation

• n Propo

posal (continue inued) )

• Preference to follow mechanisms utilized in current PCIA

ratemaking for determining how to allocate capacity

• Allocation is credited to LSEs and debited from IOUs in accordance

with the CAM schedule

• Disagreement on Voluntary vs. Mandatory Allocation:
• CalCCA and SCE: No opting out of the Local RA allocation
• Commercial Energy: LSEs may elect what portion of Local RA

allocation to accept or reject

• Unallocated capacity to be offered via an auction process
• Revenues from sales credited back pro rata to opt-out LSEs

23

PCIA Phase 2 - Working Group 3

Loc

• cal R

RA A Alloc

• cation

ion Proces ess: : Trading, T e T erm

• Trading Local Attributes:
• LSEs may trade or sell their RA allocations to other LSEs in the RA

program and must notify CPUC monthly* of the resulting changes in RA allocation “showings”

• i.e., move 5 MW shown for LSE A to the credit of LSE B
• Would not require any involvement by IOUs
• i.e. no supply plan check out requirement
• Trading of allocated RA attributes will have no impact upon any PCIA

Market Price Benchmarks

• Term:
• The allocation spans a rolling three-year period, and is adjusted each

year

• Two- and three-year forward allocations are subject to change in

subsequent year

* See Appendix (pg. 42) for draft CalCCA proposal on how to enable simple CPUC review process

24

PCIA Phase 2 - Working Group 3

Loc

• cal R

RA Al A Allocation P Proc

• cess: Ef

Effec ect on n PCIA CIA

• RA attributes allocated to LSEs receive $0 value in the PCIA

mechanism

• Allocations do not contribute to the RA market price benchmarks
• Any substitution capacity and any CAISO costs or penalties

required for, or imposed as a result of, Local RA resource outages will receive full cost-recovery through the PCIA

• This proposal would allocate the full costs and full benefits of Local

RA to all LSEs, except for any costs disallowed through the IOU’s ERRA proceeding

25

PCIA Phase 2 - Working Group 3

GH GHG-Free ee Alloc

• cation

ion Proposal

PCIA Phase 2 - Working Group 3

Ba Basic ic St Stru ructure for

• r GHG

HG-Free ee A Alloc

• catio

ions ns

• LSEs have an option to receive a proportional share of GHG-free

attributes from each applicable vintage of the IOU’s GHG-free, non-RPS, PCIA-eligible asset portfolios on an hourly basis

• Options for nuclear pool and non-nuclear (i.e., large hydro) pool
• Energy will be liquidated in the CAISO market by IOU, acting as

Scheduling Coordinator

• Each benefiting LSE will receive credit within Power Content Label,

Clean Net Short, or other similar reporting mechanisms

• IOUs will convey the pool’s aggregated meter data on a regular basis

to indicate estimated YTD production available for allocation

27

PCIA Phase 2 - Working Group 3

GH GHG-Free ee Alloc

• cation: O

ion: Opt Out, Trading, a , and T erm

• Voluntary Allocation:
• CalCCA & SCE: An LSE may elect to opt out of a pool in its entirety.

Allocations not accepted by a participant would be reallocated automatically amongst LSEs participating in the allocation of that pool

• Commercial Energy: An LSE may opt out of all or a portion of each
• pool. Unallocated attributes are auctioned off with revenues credited

pro-rata to LSEs that opted out.

• Trading Attributes:
• Attributes would be tradeable bilaterally in a secondary market after

received by an LSE, with no further involvement of the IOU

• Term:
• LSEs could opt in or out for each year’s allocation by a certain

deadline

28

PCIA Phase 2 - Working Group 3

GH GHG-Free ee Alloc

• cation:

ion: Forec ecasting ing

• IOU will provide past three years of historical, aggregated, hourly

production data by nuclear or non-nuclear pool

• IOU will provide the following forecasts of aggregated* GHG-free,

non-nuclear and aggregated* nuclear production:

• Resource IDs for all resources in the hydro pool of assets and nuclear

pool

• Aggregated, total year-ahead ERRA forecast;
• Aggregated, year-ahead ERRA forecast of the total production for

each of the 12 months; and

• Quarterly updates for remaining balance of year of the monthly total,

aggregated production

• The forecast is provided as is, without any warranty

* If forecasts cannot be aggregated, then only historical data would be provided

• Specific forecasting requirements still under discussion by Co-Leads

29

PCIA Phase 2 - Working Group 3

GH GHG-Free Alloc

• cation:

ion: Impact o

• n P

PCIA IA

• Current PCIA would be unchanged
• Currently, no benchmark value is added for GHG-free attributes
• GHG-free resources are accounted for identically to brown power

resources

• i.e., benchmarked against Platts forward and trued-up to actual CAISO

revenues

• Participating LSEs would receive their allocation at no additional cost

and receive no credit if opting out

• Commercial Energy: Opting out LSEs would receive revenues from sale
• f GHG-free attributes from auction process

30

PCIA Phase 2 - Working Group 3

Volunt luntary Alloc

• catio

ion n & Auction

• n

Clea earing ingho hous use e Strawman

PCIA Phase 2 - Working Group 3

Volunt luntary A Alloc

• catio

ion n & Auction C

• n Clea

earing inghous house

• Principles:
• Preservation of IOU Portfolio balanced with LSE planning
• Transparency of Forward Attribute value
• Creation of Markets for Emerging Products
• Tool to clear All “Unallocated Resources” while minimizing over-

saturation of various resource types

• Potential Concerns of CCAs/IOUs:
• Minimize number and variety of attribute pools offered
• Resource-specific energy scheduling too difficult to implement
• PCIA cost recovery by meter/customer challenging versus LSE

payments

• Attributes must count towards LSE compliance requirements
• Allocated attributes should be at no incremental cost to the LSE if

customers are bearing full costs

• Ability to enter into year-plus sales terms

32

PCIA Phase 2 - Working Group 3

Volunt luntary A Alloc

• catio

ion n & Auction C

• n Clea

earing inghous house

• Solutions/compromises:
• Annual Attributes only, with no energy scheduled on behalf of LSE
• 5 Pools: Local RA/GHG Free Nukes/No-Nukes/System RA/RPS
• No cost to Allocated LSE for Attributes, as costs are recovered in PCIA
• IOU liquidates unallocated attributes through Auction
• Money from auctions will be credited back to Unallocated LSEs
• IOU sums revenues from all auctions and credits LSEs pro rata
• All market participants may bid
• Next Steps/Issue
• Co-Leads to continue to vet issues around VAAC proposal
• Flexibility on LSE discretion over allocation options/percentages
• Work through vintaging by LSE for Auction revenues
• Define treatment of System RA and RPS
• Ability to utilize or not utilize price floors or caps and/or minimums
• Regulatory commitment to Compliance from VAAC products

33

PCIA Phase 2 - Working Group 3

Next xt S Steps

PCIA Phase 2 - Working Group 3

Feedba dback R ck Requ quested

• Co-Leads are seeking feedback on concepts presented by 8/9
• Please submit informal comments through CPUC Service List
• Topics the Co-Leads would ask the audience to opine upon in

informal comments:

• Excess RA Sales Strawman Proposal
• Local RA Allocation Proposal
• GHG-Free Allocations Proposal
• Voluntary Allocation & Auction Clearinghouse Proposal

PCIA Phase 2 - Working Group 3

Next xt S Steps

• Review informal comments received from workshop participants
• Continue discussions on Allocations and incorporate comments

and feedback

• Focus on determining an appropriate mechanism for transfers of

RPS attributes:

• Explore Excess RPS Sales structures; and
• Explore RPS Allocations
• Upcoming deliverables:
• Second Progress Report will be due September 26, 2019
• Third WG3 Workshop expected September/October, 2019

36

PCIA Phase 2 - Working Group 3

Ap Append endix A A – Exce cess R RA S Sales Straw awman an

PCIA Phase 2 - Working Group 3

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 n-3 (2019) n-2 (2020) n-1 (2021) n (2022)

Local RA (3-Year Ahead) Illustration

Local Requirement Buffer Local Uncertainty Tranche Excess

Exce cess RA Sales: Loc

• cal RA

RA Treatment ent i in S Solic icit itations ions

An Excess Sales approach for Local RA is not recommended by the Co-Leads, but would function in a similar fashion as for System/Flex RA, except that Uncertainty Tranche would be released in Fall of N-2.

Procurement Year for Delivery in 2022 Expected 2 Year- Ahead Expected 3 Year- Ahead (50%) Expected 1 Year- Ahead Delivery Year

IOU’s Need

Excess

IOU’s Need

Excess Uncertainty Tranche

Compliance Requirement

Excess

Illustrative Position

38

PCIA Phase 2 - Working Group 3

Exce cess RA Sales: Swap L Local f for Sys ystem/Flex

A Local RA Excess Sales approach is not recommended by Co-Leads, but if it existed, the following approach could be pursued for Local for System or Flex swaps to enable LSEs to meet Local procurement

• bligations.
• IOUs agreed to offer swaps when long Local and short System
• IOUs do not agree to a mandatory obligation
• IOUs should not be required to sell Local without receiving System

in exchange, if they are short System

• Same rules apply for being long Local and short Flex
• All annual solicitations to be reviewed by IE and in consultation

with PRG

• CalCCA proposes that acquiring party may pay a premium for Local RA
• IOUs propose no swaps if results in net cost to bundled service customers, and

can otherwise show Local resource on System supply plan

39

PCIA Phase 2 - Working Group 3

Appe ppendi dix B B – Loc

• cal RA

A Al Allocation

• ns

PCIA Phase 2 - Working Group 3

Loc

• cal R

RA Al A Allocation: “ “CAM CAM-lik like” e” Mechanis ism

• IOU will show all PCIA-eligible Local RA resources on its supply plan and for each Local

RA compliance filing

• Annually in the Fall, CPUC will determine appropriate share of each vintage’s Local RA

position to be allocated to each LSE for N+1, N+2, and N+3 and System and Flex RA position to be allocated to each LSE for N+1

• Annually, concurrently with the publication of the final RA compliance requirements,

CPUC will:

• Issue a letter to IOU indicating quantities of RA debited from IOU positions for allocation

purposes; and

• Issue a letter to each benefiting LSE indicating quantities of RA credited towards LSE’s

positions

• Each LSE will reflect the PCIA credit/debit within its annual CAISO RA showing
• Actual quantities debited and credited may vary year-over-year, subject to changes in

load share, IOU contract management activities, NQC adjustments, etc.

• Contract management activities are governed through ERRA and AB57, with PRG

consultation (as appropriate)

• IOU will maintain responsibility for outages, substitution capacity, backstop

procurement, penalties, etc.

• Costs incurred passed through PCIA mechanism, except for any costs disallowed through the

IOU’s ERRA proceeding

For more information on CAM process, refer to: https://www.cpuc.ca.gov/General.aspx?id=6311 See 2019 Final RA Guide and CAM Allocation links

41

PCIA Phase 2 - Working Group 3

Loc

• cal R

RA A Alloc

• cation: C

ion: CPUC R C Review o iew of Trades

• Propose that CPUC Staff could insert a new table in the RA

template (LSE Allocations tab) to credit and debit Local RA allocation trades

• LSE would be responsible for updating template as trades occur
• Propose that CPUC Energy Division staff would match debit and

credit updates on LSE template

• Similar to current process of Table 5 in RA compliance filing for

incremental true-up allocation process

• LSEs will list debits and credits on their year-ahead and/or month-

ahead compliance filing deadlines, unless requested otherwise by Energy Division Staff.

42

PCIA Phase 2 - Working Group 3

Ap Append endix C C – Nat atural al G Gas as Allocat ation Proces ess us used ed on P

• n PG&

G&E Ga E Gas Transmi smiss ssion System m si since ce 2011

PCIA Phase 2 - Working Group 3

PG&E Natural Gas Allocation Process

Product Pools

• Pipeline transmission capacity from three primary producing basins
• Storage capacity owned or contracted
• Natural gas in storage at time of Allocation

Process for Allocations

• Every four (4) months for pipeline transmission capacity contracted from

GTN, Ruby, and El Paso, semi-annual for gas storage capacity

• All holdings allocated proportionate to CTAs market share of consumption

for forward period

• All contract costs shown for each pipeline for the period borne by CTA
• Each CTA dispatches its Allocated pipeline and storage assets
• Temporary assignment issued to each CTA (approx. 20)

Residual, Un-Allocated Assets

• Any remaining balance auctioned within a month, for the same period,

with no minimums

• All revenues deducted from stranded costs borne by CTAs.

44