Electric Transmission Rates and Related FERC Proceedings

A California consumer’s electric bill reflects a variety of separate charges associated with providing electric services, which are “bundled” into a single amount. Part of the charges on a bill are used to pay for electric transmission service, which is the part of the electric grid that is typically at a higher voltage and is considered to be part of an interstate system. Unlike the CPUC-regulated local distribution system, because transmission infrastructure is considered to be interstate, it is regulated by the Federal Energy Regulatory Commission (FERC).  The sum of the costs associated with the construction, maintenance, and operation of the transmission grid determines the Transmission Access Charge (TAC).

In California, while the transmission grid is controlled by the California Independent System Operator (CAISO), three investor-owned utilities own most of the transmission facilities: Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E). These transmission owners (TOs) are required to provide transmission service at just and reasonable rates. The rates cover the costs of providing transmission service, as well as a rate of return on associated capital investments. The total cost of providing transmission service, including the return on investment, is referred to as a utility’s transmission revenue requirement.

The collective revenue requirements for all of the participating transmission owners in the CAISO determine the TAC rate, which is charged to electric customers, or ratepayers.

Because transmission rates are subject to oversight by the FERC, the transmission revenue requirements of the various utilities and municipalities that participate in the CAISO are determined in Transmission Owner (TO) rate case proceedings at FERC.  The CPUC - along with other stakeholders – intervenes as a party in these rate cases to ensure the proposed rates that investor-owned electric utilities charge for transmission service are just and reasonable.

By statute, the CPUC has the responsibility to represent the interests of the People of the State of California, including retail electric ratepayers, in legal proceedings before the FERC.

Below are some of the FERC cases where the CPUC is intervening or has intervened on behalf of California ratepayers:

 

Transmission Owner Rate Cases:

  • PG&E TO20 Rate Case, Rate Year 2022 Annual Update (FERC Docket ER19-13) – Effective January 1, 2022, Protested by the CPUC.
  • SCE TO2022 Annual Update Filing (FERC Docket ER19-1553) – Effective January 1, 2022, Protested by the CPUC
  • SDG&E TO5 Cycle4 Annual Update Filing (FERC Docket ER22-527) – Effective January 1, 2022.
  • Trans Bay Cable Rate Case (FERC Docket ER19-2846) – settled.
  • PG&E TO18 Rate Case for March 2017 to February 2018 rate period (FERC Docket ER16-2320) – After FERC Orders on October 15, 2020 and March 17, 2022, PG&E made its compliance filing at FERC on May 16, 2022, indicating that $291.9 million in refunds are due to ratepayers, which includes interest through April 2022.

 

 Stakeholder Processes:

  • PG&E’s Stakeholder Transmission Asset Review (STAR) Process
  • SCE’s Stakeholder Review Process (SRP)
  • SDG&E’s Evaluation of Forecast Period Capital Additions

 

Rulemakings:

  • Notice of Proposed Rulemaking (NOPR), Building for the Future Through Electric Regional Transmission Planning and Cost Allocation and Generator Interconnection, issued April 21, 2022 (FERC Docket RM21-17) – Initial Comments submitted on August 17, 2022 and Reply Comments due on September 19, 2022. CPUC Initial Comments

  • Advance Notice of Proposed Rulemaking on Transmission Planning, Generator Interconnection, and Cost Allocation (FERC Docket RM21-17) - Comments and Reply Comments filed.
  • Notice of Inquiry on Rate Recovery, Reporting, and Accounting Treatment of Industry Association Dues and Certain Civic, Political, and Related Expenses (FERC Docket RM22-5) - Joint Comments and Joint Reply Comments filed.
  • Notice of Proposed Rulemaking on Cybersecurity Incentives (FERC Docket RM21-3) - Joint Comments and Joint Reply Comments filed.
  • Supplemental Notice of Proposed Rulemaking on Electric Transmission Incentives Policy Under Section 219 of the Federal Power Act (FERC Docket RM20-10) - Joint Comments and Joint Reply Comments filed.
  • Notice of Proposed Rulemaking on Electric Transmission Incentives Policy Under Section 219 of the Federal Power Act (FERC Docket RM20-10) - Comments filed.

 

Reliability Must Run Agreements:

  • Kingsburg RMR Agreement (FERC Docket ER21-1816) - Kingsburg filed a settlement package on June 30, 2022. Both CPUC and PG&E filed comments not opposing the settlement and FERC trial staff filed comments in support of the settlement. The assigned FERC ALJ certified the settlement as uncontested on July 22, 2022.
  • Midway RMR Agreement (FERC Docket ER21-998) - Protest filed on Feb. 19, 2021. On April 29, 2022, Midway filed its tariff sheet per final settlement offer to be effective 2/1/2022. The CPUC filed comments not to oppose the settlement offer and FERC Trial Staff filed supporting comments for the settlement offer. On May 23, 2022, the assigned FERC ALJ issued a final report. On July 28,2022 the FERC accepts the proposed tariff records, effective February 1, 2021, as requested.

 

Wholesale Distribution Tariffs:

  • PG&E Wholesale Distribution Tariff (FERC Docket ER20-2878)

 

Contact:

Elaine Sison-Lebrilla, Supervisor; Elaine.Sison-Lebrilla@cpuc.ca.gov; (916) 823-4808


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