CPUC News Blog

The CPUC is a member of the National Association of Regulatory Utility Commissioners (NARUC), a national non-profit organization that represents state public service commissions in all 50 states plus the District of Columbia, Puerto Rico, and the Virgin Islands.

This month NARUC published a Manual on Distributed Energy Resources Rate Design and Compensation. Paul Phillips of our Energy Division and Stephen St. Marie of our Policy and Planning Division serve on NARUC’s Staff Subcommittee on Rate Design.  Steve also served on the drafting committee that prepared the Manual.

The reason for the manual is because the nature of the electric delivery system is changing to include deliveries from distributed energy resources at the edge of the grid in addition to traditional central station power.  Technologies that have only become economical in recent years are beginning to allow electric consumers to generate their own electricity, to respond to prices, to change their demand patterns in response to price signals or other direction, and even to store electric energy.  Such new technologies may become more prominent in the future as their costs decline. 

The Manual does not instruct on policy matters, but rather it explains what distributed energy resources are and  provides information on how these new technologies are beginning to affect the overall electric system and its costs, and how they can affect regulation.  The Manual presents background on the principles of rate design, describes some aspects of distributed energy resources, and provides regulators with background of how distributed energy resources are impacting existing regulatory and utility models.  

The Manual provides discussion about ways to respond.  It describes a variety of rate design options that a commission may consider, and it discusses the pros and cons of the options.

The manual is available on the CPUC website.

We have released a progress update on implementation of our 2016 Safety Action Plan, showing completion of all nine action items. The document provides a point-by-point implementation assessment for each action item in the 2016 plan, including:

1. Utility Pole En Banc (Safety Policy) – completed  
2. Administrative Law Judge Training (Safety Policy) - completed 
3. Industry Division Staff Training (Safety Policy) - completed 
4. Reorganization of Safety & Enforcement Division (Safety Compliance and Enforcement) - completed 
5. Staff Reports on Safety-Related Expenditures (Risk Management) - completed 
6. Safety Review in General Rate Cases (Risk Management) - completed 
7. Safety Intervenor Workshop (Safety Promotion) - completed 
8. Advanced Safety Seminar (Safety Promotion) - completed 
9. Building Strong Safety Capacity Through Collaboration and Coordination With Other State Agencies (Safety Promotion) - completed 

The 2016 Safety Action Plan Update, the 2015 Safety Action Plan, and the Safety Policy Statement are available online. The 2016 plan is the second Safety Action Plan to date.

To help close the digital divide, we have approved a grant for $2,962,388 from the California Advanced Services Fund (CASF) for the application of Cal.net, Inc. to provide broadband Internet and Voice over Internet Protocol (VoIP) telephony services to underserved rural communities of the Alpine, Amador, and Calaveras Counties.

The CPUC’s CASF promotes deployment of high-quality advanced communications services to unserved and underserved areas in California.

The Alpine, Amador, and Calaveras project will cover 455.56 square miles and will provide broadband speeds of up to 25 megabits per second (Mbps) download and 4 Mbps upload to 4,878 households.

Additionally, the project will provide safety benefits to the communities in the area by delivering broadband services to eight fire stations at discounted prices.  The project will also supply public safety agencies in the area with an interconnected public safety data communications network.

The 4.25kW solar system was installed free of charge to homeowners Nikki and Alan Beck as part of the Grid Alternatives low income community solar program. The project installed 17 donated Renesola solar panels with heavily discounted Enphase AC converters. Electricity produced by the system will offset 82.87 tons of carbon, equivalent to planting 1928 trees.  It is projected to save Nikki and Alan an estimated $40,323 over the lifetime

Last week, CPUC staff took part in a women’s solar installation with Grid Alternatives in Sacramento. This was the second solar installation for CPUC Policy and Planning Division staffer Mikhail Haramati, who described it as, “an opportunity to see state programs in action. This program is helping to fund job training, renewable energy production, and bill assistance for low income customers.”

Excavation damage continues to be the leading cause of natural gas pipeline incidents both nationally and in California. Pipeline incidents caused by excavation damage can result in fatalities and injuries, as well as significant costs, property damages, environmental damages, and unintentional fire or explosions. 

As such, our Safety and Enforcement Division has designated Utilities Engineer Sunil Shori as a Damage Prevention engineer in order to specialize and focus on the area of damage prevention. 

This designation allows Mr. Shori to focus exclusively on damage prevention. He will lead focused damage prevention inspections and incident investigations involving excavation damage, participate in the Common Ground Alliance committees, analyze and advise on development of new damage prevention regulations (state and federal) such as SB-661 Protection of subsurface installations, and participate in 811 damage prevention outreach.

On Oct. 27, 2016, the CPUC hosted a conversation between former New York Public Service Commission Energy Advisor, Rudy Stegemoeller, and CPUC Commissioner Mike Florio. Paul De Martini of ICF International moderated the two-hour discussion at the CPUC’s San Francisco headquarters.  Describing California’s Integrated Distributed Energy Resources (IDER) proceeding and New York’s Reforming the Energy Vision (REV) initiative, the pair discussed differences between the California and New York approach to the modernization of the electric distribution grid in their respective states.

While the necessity of upgrading New York’s electric system became apparent in the wake of Hurricane Sandy, in California the change has been more policy driven. Commissioner Florio pointed to aggressive mandates adopted by the Legislature for renewable energy and climate targets, including passage of Assembly Bill (AB) 327 in 2013, which directed the CPUC to conduct distribution resource planning. In the past, California had made certain efforts to address distributed generation, but was treating these resources “like dessert.” AB 327 moved preferred resources “front and center.”

“This is not an add-on to the real stuff,” Commissioner Florio explained about the increasing reliance on distributed energy resources (DERs), “this is the real stuff.”

To displace the need for capital grid improvements, DERs need to be able to come online at the right time, place, and right assurance of performance. For this, information communication is critical. In California, the California Independent System Operator has adopted tariffs to allow providers of distributed resources (large customers and/or aggregators) and ancillary services to bid into the electricity supply market.

Both speakers agreed that aggregation of DERs will become increasingly essential. Mr. Stegemoeller described a future in which the line between wholesale and retail providers will begin to blur. Dynamic load management – with demand responsive to availability of supply – will likely require a leveling out of the value streams in order to resolve conflicts between hours of operation that would benefit transmission over distribution needs. Utilities are well-positioned to serve as the aggregator of aggregators, under a new business model where they are the owners of the wires and connections – but are no longer the primary generators.  Imagining such a future, Commissioner Florio predicted jurisdiction will become increasingly important as the wholesale power system is regulated by the Federal Energy Regulatory Commission - with the transmissions systems owned and operated by the utilities.

Though the two states have taken different paths, they are now at a point of convergence towards a strikingly similar vision. Both states have adopted a target of 50 percent renewable electricity by 2030, and a 40 percent reduction in greenhouse gas emissions from 1990 levels by 2030 - in addition to comparable building energy consumption reduction goals.

Many stakeholders are participating in both processes, working together - and on regional matters to develop an integrated, 21^st century approach to grid management, resiliency, efficient utilization of existing resources, and regulation of an evolving utility business model.

An archived video of the IDER REV discussion is available online.  For more information on the California and New York programs, please see:

• CPUC Draft Distributed Energy Resources Action Plan 
• New York REV Overview 
• New York REV Benefit Cost Analysis Framework  

This discussion was held as part of the CPUC’s Thought Leaders Speaker Series, which was designed to stimulate thought on and discussion of some of the most pressing challenges facing California utility regulators and the private sector industries impacted by state policies.

A proposal has been issued for Commissioner consideration that would improve infrastructure and safety by allowing CPUC staff the ability to issue citations to communications providers.

The proposal would allow our Safety and Enforcement Division staff to assess penalties for safety violations committed by communications providers that previously required lengthy formal proceedings. Our Safety and Enforcement Division already has the authority to issue staff citations in other industries we regulate.

A citation program for communications providers would encourage companies to proactively identify and repair violations to communication facilities to avoid penalties, and to self-report potential violations to potentially reduce or avoid penalties. Communication facilities refers to wire, cable, antenna, equipment boxes, support structures, pad-mounted structures, or other equipment that a communication provider attaches or would like to attach to any utility pole or other support structure used in common with electric, telephone, or other utility providers, as well as with cable television providers.

The proposal caps staff citations at $8 million and gives staff the discretion to either address each violation in a distinct citation or to include multiple violations in a single citation regardless of whether the violations occurred in the same incident or are of a similar nature. If a citation is appealed, the matter ultimately comes before our Commissioners for a vote.

Comments by parties on the proposal are due by Nov. 17, 2016, and reply comments are due by Nov. 22, 2016. The first opportunity for the proposal to appear on a CPUC Voting Meeting agenda is Dec. 1, 2016.

Comments from the public may be submitted to the CPUC’s Public Advisor’s Office at public.advisor@cpuc.ca.gov or CPUC Public Advisor’s Office, 505 Van Ness Ave., San Francisco, CA 94102, with a reference to proceeding number SED-3.