GHG-Free Allocation – SCE Advice Letter (AL) 4194-E

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On February 1, 2019, the California Public Utilities Commission (Commission) issued a Scoping Memo for Phase 2 of the Power Charge Indifference Adjustment (PCIA) proceeding that created various working groups. Working Group 3 (WG 3) was assigned to strategize and provide proposals for IOU portfolio optimization to address excess resources held in the IOUs’ portfolios. The above-market costs of each of the IOUs’ portfolios become part of the overall PCIA costs. WG 3 identified greenhouse gas-free energy from the large hydroelectric and nuclear generating facilities (GHG-Free Energy) to be within the scope of the proceeding because the GHG-Free Energy facilities were constructed to meet the needs of customers that since have departed from the IOU bundled service and become CCA customers.

On April 17, SCE filed AL 4194-E, which proposes a mechanism for the voluntary allocation of GHG-Free Energy. The AL acknowledges that through cost recovery charges, such as the PCIA, CCA customers have paid for the GHG-Free Energy, and therefore should receive their share of the benefits of the GHG-Free Energy in their respective energy portfolios. Under AL 4194-E, SCE will provide notification to eligible parties of their annual allocation and opening of a window within which parties may elect to receive their customers’ vintage shares of the allocation of one or both GHG-Free Energy products. Subsequent to the annual allocation, SCE will calculate and determine the amount to be allocated to each load serving entity’s Power Content Label.  Allocation amounts per product are based on a participating load serving entity’s customers’ actual, vintaged annual load shares relative to the sum total of all other actual loads in each vintage year.

There have been some responses to the filing of the AL that claim CCAs as government agency load serving entities are being given preferential treatment over non-governmental load serving entities, and the Commission may consider this when acting on the AL approval. Currently, allocation to CCAs will commence on July 1 for July through December 2020 allocations.

Next Steps

On May 27, SCE held a webinar for participating load serving entities during which they addressed the allocation process, provided information about how to enroll and issued an enrollment schedule. Enrollment for government agency load serving entities began May 15 and will close June 15. SCE is using DocuSign for participating load serving entities to sign and submit terms sheets to request their allocation. CalChoice will prepare the terms sheets for each member city and communicate with members regarding processing to ensure each city receives their allocation. Enrollment is on an annual basis and CalChoice will continue to facilitate future enrollments on behalf of its member cities.