before the public utilities commission of the · pdf fileapplication of southern california...

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE

STATE OF CALIFORNIA

Application of Southern California Edison Company (U 338-E) for Approval of the Results of Its 2013 Local Capacity Requirements Request for Offers for the Moorpark Sub-Area.

A.14-11-016

(Filed November 26, 2014)

NOTICE OF EX PARTE COMMUNICATION OF SOUTHERN CALIFORNIA EDISON

COMPANY (U 338-E)

WILLIAM V. WALSH TRISTAN REYES CLOSE

Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY

2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770 Telephone: (626) 302-2883 Facsimile: (626) 302-3990 E-mail: [email protected]

Dated: January 26, 2015

- 1 -


STATE OF CALIFORNIA


A.14-11-016

(Filed November 26, 2014)

NOTICE OF EX PARTE COMMUNICATION OF SOUTHERN CALIFORNIA EDISON

COMPANY (U338-E)

Pursuant to Rule 8.4 of the Rules of Practice and Procedure of the California Public Utilities

Commission (“Commission”), Southern California Edison Company (“SCE”) hereby gives notice of

the following ex parte communication.

On Thursday, January 22, 2015 at approximately 10:00 a.m., Muir Davis, SCE’s Manager of

Strategic Customer Solutions, spoke in-person at a publicly-noticed workshop in the Integrated

Demand Side Resource Rulemaking, R.14-10-003, regarding the results of SCE’s Local Capacity

Requirements Request for Offers. The presentation lasted approximately five minutes and was

requested by the Commission for the publicly-noticed workshop. SCE was not aware that any

decision-makers would be present at the workshop, however, at the start of the workshop it was

observed that Commissioner Florio and his advisor Matthew Tisdale were present. The Powerpoint,

titled, “2013-2014 Local Capacity Requirement (LCR) Solicitation,” that SCE presented at the

workshop is attached.

- 2 -

To receive a copy of this ex parte notice, please contact:

Norma Perez Southern California Edison Company P.O. Box 800 Rosemead, CA 91770 E-mail: [email protected] Facsimile: (626) 302-6962 Telephone: (626) 302-3104

Respectfully submitted, WILLIAM V. WALSH TRISTAN REYES CLOSE

/s/ Tristan Reyes Close By: Tristan Reyes Close

Attorneys for SOUTHERN CALIFORNIA EDISON COMPANY

2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770 Telephone: (626) 302-2883 Facsimile: (626) 302-3990 E-mail:[email protected]

January 26, 2015

Attachment

2013-2014 Local Capacity Requirement (LCR) Solicitation

Muir Davis - SCEIDSM OIR Learning Session 1

January 22, 2015

1

Overview of SCE’s LCR RFO* Selection Results

Selected offers for the LCR RFO– Total of 1883 LCR MW of new resources in LA Basin

• ~ 401 MW of customer-side resources (EE, DR, behind-the-meter solar, and behind-the-meter energy storage)

– Total of 274 LCR MW of new resources in Moorpark sub-area• ~ 12 MW of customer-side resources (EE and behind-the-meter solar)

Procurement authorization:– Long Term Procurement Plan (LTPP) Track 1 and Track 4 Decisions

order SCE to procure new resources by 2021 to meet the identified LCR needs due to retirement of:

• Once-through-cooling (OTC) units on the coast – Track 1• San Onofre Nuclear Generating Station (SONGS) – Track 4

* Local Capacity Requirement (LCR) Request for Offers (RFO)

2

LCR Objectives & Procurement Authorization

* All-source means all technologies compete against each other with selection awarded consistent with the Loading Order and need assessments

Primary Objective of LCR RFO:

– Seek new resources in both West LA Basin and Moorpark

– A technology-neutral competitive solicitation

– Delivery during peak hours to meet the identified LCR need

Western LA Basin:

Moorpark Sub-Area: • SCE shall procure between 215 and 290 MW in Big

Creek/Ventura • No minimum requirement for a specific technology

3

CostsContract Payments• Based on the contract heat rates, variable charge, and

capacity prices, expected generation and contract termTransmission Cost• Cost adders for required network upgrades based on the best

information provided by the counterparty (e.g., completed Facilities Study, Phase 1 Interconnection Study (or equivalent), or better etc.)

Debt Equivalence Cost• Cost of contract commitments on SCE’s balance sheet*

GHG Cost• Dependent on technology and Seller’s allocation of GHG

compliance costsCredit/Collateral• Dependent on Seller’s selection of various levels of

performance assurancePut Option Value• Expected value of the Put option minus the strike price

BenefitsEnergy Value• Captures market value of the energy including a forecast for

GHG while taking into account dispatchability or load reduction of resource

Capacity Value• The value of the countable Resource Adequacy capacity.

Adjustments made to energy storage value based on locational effectiveness factor of the interconnecting LA Basin substation.

Ancillary Services and Real Time Flexibility Value• Attributed to dispatchable, supply-side projects offering AS

capability

Quantitative Valuation – Components

All costs and benefits are valued using SCE’s latest forecasts; the result is a NPV for each offer:{$PV Benefits} – {$PV Costs} = $ NPV per Offer

* Risk factor is set at 20% per D.04-12-048.

4

LA Basin Recommended Selection • About 100 MW short in meeting the minimum procurement authorization for the

preferred resources “bucket”

* Johanna and Santiago (J/S) Substations (PRP sub-area). Procured a total of 89.32 MW in J/S

RESOURCEBUCKET

COUNTERPARTY LCR MW

DETAILS TOTAL LCR MW

Gas-fired Generation (GFG)

AES 640 Combined Cycle, GE 7FA 2X1, ~ 6.8 HR @ Alamitos 640

AES 644 Combined Cycle, GE 7FA 2X1, ~ 6.8 HR @ Huntington Beach 644

Wellhead (DBE) 98 2LM 6000 Peakers @ Barre (RA-only Contract) 98

TOTAL GFG 1,382

Renewables (RPS)Sun Power 10.32 Behind the Meter (BTM) Solar in J/S*

38Sun Power 27.6 BTM Solar in LA Basin

Energy Storage (ES)

Ice Bear 28.64 ES BTM Permanent Load Shift Thermal ES in J/S

264AES 100 Front of Meter (IFOM) 4hr @ Alamitos

Stem 85 BTM 4 hour like DR

Hybrid Electric 50 BTM 4 hour like DR

Energy Efficiency (EE)

Onsite Energy, Sterling Analytics, & NRG

23.36 EE offers in J/S124

100.68 EE offers in LA Basin

Demand Response (DR) NRG

10 DR offers in J/S, at least 4 hour dispatch75

65 DR offers in LA Basin, at least 4 hour dispatch

TOTAL PREFERRED RESOURCES & ENERGY STORAGE 501

TOTAL 1,883

5

Moorpark Recommended Selection

• Contract with the GFG resources will be in the form of a fixed price RA-only contract to avoid capital lease treatment

* The 54 MW does not count towards the LCR MW target.

RESOURCEBUCKET

COUNTERPARTY LCR MW

DETAILS TOTAL LCR MW

Gas-fired Generation (GFG) NRG 262 GE 7HA Peaker, 9.6 HR, RA-only contract 262

TOTAL GFG 262

Renewables (RPS)Sun Power 0.89 Behind the Meter (BTM) Solar in Goleta

5.66Sun Power 4.77 BTM Solar, Moorpark

Energy Storage (ES) NRG* 0.5In Front of Meter (IFOM) 4 hour ES in Goleta. This offer includes 54 MW of Ellwood GFG enhancement.*

0.5

Energy Efficiency (EE) Onsite Energy1 EE offers in Goleta

65 EE offers in Moorpark

TOTAL PREFERRED RESOURCES & ENERGY STORAGE 12

TOTAL 274

6

Appendix

7

Internal Management Approved Short List

(1/28)

Negotiate and Finalize

Agreements

Receive Final Binding Offers

(9/04)

Quantitative Valuation ($NPV)

Optimization

Qualitative Review

Internal Management

Approval(10/24)

LCR RFO Selection Process

LCR RFO Launched (9/12/2013)

During this period, the LCR RFO team was in collaborative discussions with internal and external stakeholders

• Track 1 Decision: 2/13/2013

• SCE’s LCR Procurement Plan approved by the Energy Division: 9/4/2013

• Track 4 Decision: 3/13/2014

SCE will file its LCR RFO Application for LABasin on 11/21 and for Moorpark by 11/26.

8

The optimization process allows SCE to consider different portfolios of projects that provide the best NPV while controlling for specific MW targets, selected procurement constraints, and consistency with the loading order.

Input each project’s NPV, LCR MW, technology type, location, and inclusive and exclusive designations into the optimization model

Create portfolios that provide the best NPV while controlling for quantity of MW

Review results and create additional runs for areas of interest with tighter constraint increments or different volume targets for technology types and locations

Repeat above step as necessary

ConstraintsTotal MW minimums and maximums

Technology minimums and maximums (LA Basin only)Counterparty offer inclusivity & exclusivity

Attribute maximums (2 hr. ES and DR)

Cross-counterparty offer exclusivity (multiple CPs offering the same end-user EE installation)Maximum MW of DR at Johanna/Santiago and Goleta

Selection – Optimization Process


STATE OF CALIFORNIA


A.14-11-016 (Filed November 26, 2014)

CERTIFICATE OF SERVICE

I hereby certify that, pursuant to the Commission’s Rules of Practice and Procedure, I have this day served a true copy of NOTICE OF EX PARTE COMMUNICATION OF SOUTHERN CALIFORNIA EDISON COMPANY (U 338-E) on all parties identified on the attached service list A.14-11-016. Service was effected by one or more means indicated below:

☒ Transmitting the copies via e-mail to all parties who have provided an e-mail address.

☒ Placing the copies in sealed envelopes and causing such envelopes to be delivered

by hand or by overnight courier to the offices of the ALJ(s) or other addressee(s).

ALJ Regina DeAngelis CPUC 505 Van Ness Ave. San Francisco, CA 94102

Executed January 27, 2015, at Rosemead, California.

/S/ Cynthia Childs Cynthia Childs Project Analyst SOUTHERN CALIFORNIA EDISON COMPANY

2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

PROCEEDING: A1411016 - EDISON - FOR APPROVA FILER: SOUTHERN CALIFORNIA EDISON COMPANY LIST NAME: LIST LAST CHANGED: JANUARY 26, 2015

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DANIEL W. DOUGLASS TRISTAN REYES CLOSE ATTORNEY SR. ATTORNEY DOUGLASS & LIDDELL SOUTHERN CALIFORNIA EDISON COMPANY 21700 OXNARD STREET, SUITE 1030 2244 WALNUT GROVE AVE. / PO BOX 800 WOODLAND HILLS, CA 91367 ROSEMEAD, CA 91770 FOR: WESTERN POWER TRADING FORUM (WPTF) FOR: SOUTHERN CALIFORNIA EDISON COMPANY / ALLIANCE FOR RETAIL ENERGY MARKETS (AREM) / DIRECT ACCESS CUSTOMER COALITION (DACC)

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