Utility Procurement From Diverse Suppliers Hits New Record

Companies participating in the CPUC’s Supplier Diversity Program achieved a new record, procuring approximately $8 billion in goods and services from women, minority, and disabled veteran-owned business enterprises. In addition, the largest utilities all procured more than 36 percent from diverse firms, with Verizon achieving a record 50.44 percent.

The CPUC encourages companies to procure from diverse suppliers, who are by and large small businesses. In its General Order 156, the CPUC encourages investor-owned utilities to purchase 21.5 percent of its goods and services from diverse firms (15 percent minority owned firms, 5 percent women-owned firms, and 1.5 percent disabled veteran-owned firms). The state’s utilities and telecommunication companies report annually on their procurement purchases from diverse firms and reports were submitted to the CPUC on March 1, 2013.

Of the more than 30 companies participating in the Supplier Diversity Program, those doing the most business with diverse firms in the past year include:

• AT&T: $1.02 billion, or 44.7 percent
• AT&T Wireless: $813 million, or 24.8 percent
• Comcast: $56.4 million, or 22.3 percent
• Pacific Gas and Electric Company: $2 billion, or 38.5 percent
• San Diego Gas and Electric: $435 million, or 36.1 percent
• Southern California Edison: $1.5 billion, or 38.2 percent
• Southern California Gas Company: $348 million, or 41.9 percent
• Verizon: $114 million, or 50.4 percent

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CPUC Moves to Expand Deaf and Disabled Telecommunications Program

The CPUC has taken action to expand its Deaf and Disabled Telecommunications Program (DDTP) to enable persons with speech disabilities to qualify for speech generating devices provided under the program.

The DDTP provides assistive telecommunications equipment and services to individuals who are certified as having a hearing, speech, mobility, vision, or cognitive disability. As called for in Assembly Bill 136 (Beall, Statutes 2011, Chapter 404, effective January 1, 2012), the CPUC opened a proceeding that will allow it to modify the DDTP program to institute rules and procedures that will govern the provision of speech generating devices to qualified individuals. The provision of speech generating devices will enable persons with speech disabilities to use telecommunications services, including 9-1-1 emergency calls.

The durable medical nature of these often custom devices, combined with the price, requires the CPUC to develop a unique set of rules, guidelines, and procedures for speech generating device distribution within the current DDTP framework.

The CPUC is considering a phased deployment of the speech generating devices, which would allow the CPUC to institute interim rules and procedures by the January 1, 2014, deadline imposed by the legislation, and final procedures at a later date that would benefit from the assessment of participant experience with the interim rules and procedures.

The goal of the first phase of speech generating device deployment is to develop an interim structure that will allow the CPUC to work directly with speech language pathologists. This phase will target providing speech generating devices to potential applicants.

In the second phase of the proceeding, the CPUC may consider: 1) expanding speech generating device distribution to those who have not yet been assessed for a speech generating device and/or do not qualify for funding from any other funding source; and 2) amending the scope of this proceeding to address concerns raised that were not otherwise considered in phase one.

Those interested in participating in this proceeding who are unfamiliar with the CPUC’s procedures should contact the CPUC’s Public Advisor’s Office at (415) 703-2074 or (866) 849-8390 or TTY (866) 836-7825 or public.advisor@cpuc.ca.gov.

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CPUC Acts to Ensure Reliable Energy for San Diego

The CPUC, in its ongoing mission to ensure safe, reliable, and affordable utility service to customers, has directed San Diego Gas & Electric (SDG&E) to procure up to 298 megawatts (MW) of local generation beginning in 2018, and authorized the utility to enter into a purchase power tolling agreement with Escondido Energy Center.

SDG&E’s contract with Escondido Energy Center is a repowering of an existing 35 MW facility with a contract term of 25 years. After repowering is complete, the facility will be expanded to a total of 45 MW. The CPUC approved the contract due to the project’s relative low cost, small size increase, high viability, and environmental benefits resulting from a repower.

The CPUC declined to allow SDG&E to enter into similar purchase power tolling agreements with Pio Pico Energy Center and Quail Brush Power. The agreements were denied, in part, because they were scheduled to come online in 2014, but the evidence demonstrated that there is no need for incremental local capacity until 2018, four years into the 20 year terms of the contracts. The CPUC found the timing mismatch ultimately to be unreasonable to ratepayers. In order to meet the remainder of the 298 MW need, the CPUC directed SDG&E to either issue new Requests for Offers or to submit for CPUC consideration a renewed application that better matches the timing issue or demonstrates a different showing of need for either Pio Pico and/or Quail Brush.

This decision was made as part of the CPUC’s Long-Term Procurement Planning process, which established the need for additional energy supplies for the San Diego area beginning in 2018.

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CPUC Renewable Energy Reports Show Declining Contract Prices and a Robust Market

The CPUC has submitted three renewable energy related reports to the state Legislature demonstrating that renewable contract prices in the past two years show continuing decline from prior years and a robust and competitive market.

The state’s Renewables Portfolio Standard (RPS) program, one of the most ambitious in the country, requires investor-owned utilities, electric service providers, and community choice aggregators to increase procurement from eligible renewable energy resources to 33 percent of total procurement by 2020. The RPS is a key element in California’s efforts to reduce greenhouse gas (GHG) emissions to 1990 levels by 2020. GHG emissions from the power sector declined by 22 percent in 2011 from the prior year.

As outlined in the CPUC’s 3rd and 4th Quarter 2012 RPS Report, as of the close of 2012, California is on track to meet its interim requirement of 25 percent renewables by 2016, and is well-positioned to meet 33 percent by 2020. As of Dec. 28, 2012, the large investor-owned utilities reported that they served 19.8 percent of their electricity with RPS-eligible generation in 2012. Pacific Gas and Electric Company served 19 percent of its 2012 retail sales with RPS-eligible renewable energy, Southern California Edison with 20.6 percent, and San Diego Gas & Electric with 20.3 percent.

Since 2003, 4,498 megawatts (MW) of new renewable capacity achieved commercial operation under the RPS program. During 2012, 1,957 MW of new renewable capacity came online and more than 3,000 MW is scheduled to come online before the end of 2013.

In 2012, the utilities filed 63 new contracts for 1,311 MW of renewable capacity, and the CPUC approved 64 contracts representing 3,725 MW of renewable capacity.

As outlined in the CPUC’s Padilla Report, renewable contract prices in the past two years show continuing decline from prior years, and the renewable market overall is robust and competitive and has matured since the start of the RPS program.

The weighted average time-of-delivery (TOD) adjusted price was approximately 9.6 cents/kilowatt hour (kWh) for all contracts approved in 2012 (including renewable energy credit (REC) only transactions), and approximately 9.9 cents/kWh for bundled energy product (excluding REC transactions). These costs are lower than those approved in 2011, which were 12.6 cents/kWh on average, as a result of lower cost projects contracted through the 2011 RPS solicitations and bilateral transactions.

The weighted average TOD adjusted RPS procurement expenditures for 2012 were approximately 7.7 cents/kWh (including REC only transactions), and approximately 7.8 cents/kWh for bundled energy product (excluding REC transactions). The RPS procurement expenditures for 2012 are lower than the RPS procurement expenditures in 2011, which cost 8 cents/kWh on average.

The CPUC’s Section 910 Report addresses utility direct and indirect costs and savings associated with reaching the 33 percent by 2020 renewable energy goal. The report focuses primarily on 2011 because the legislatively mandated February reporting deadline makes it difficult to obtain and sufficiently review 2012 expenditures and other requested data.

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