General Rate Case Workshop for California Energy Utilities
Explore options to streamline GRC proceedings and related major rate cases in California for energy investor-owned utilities. Learn about the background and purpose behind the workshop and the challenges faced in the timely processing of GRCs.
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Presentation Transcript
General Rate Case Cycle Workshop For California s 4 major energy investor-owned utilities (PG&E, SCE, SDG&E, and SoCalGas) Facilitators: Elaine Lau, Electric Costs Section, Energy Division Belinda Gatti, Natural Gas Section, Energy Division January 11, 2017 1
Purpose To explore options to facilitate the timely completion of General Rate Case (GRC) proceedings and other related major rate proceedings, including the Safety Model Assessment (SMAP) Proceeding, Risk Assessment and Mitigation Phase (RAMP) proceeding, and PG&E s Gas Transmission and Storage (GT&S) proceeding. 3
Background In September 2015, Office of Ratepayer Advocates (ORA), San Diego Gas & Electric Company (SDG&E), and Southern California Gas Company (SoCalGas) filed a petition for modification of D.14-12-025, to change the current three-year GRC cycle to a four-year GRC cycle. In June 2016, D.16-06-005 rejected the petition for modification and retained the current three-year GRC cycle. 4
Background The decision directed Energy Division to hold a workshop within six months to explore options, including moving to a longer GRC cycle, to facilitate the timely completion of GRC and related proceedings, such as SMAP, RAMP, and PG&E s GTS. The decision also noted the importance of examining these issues to help facilitate smoother workload flow processes, in addition to the timely and efficient processing of all these proceedings. Energy Division shall provide a report following the workshop. 5
Background Ordering Paragraph 2 of D.16-06-005 states, The Commission s Energy Division shall hold a workshop within six months of today s date to explore options, including moving toward a longer general rate case (GRC) cycle, to facilitate the timely completion of GRC and related proceedings, and to provide a report following the workshop. 6
Morning Discussion Topic Challenges to the Timely Processing of GRCs within the current Rate Case Plan 7
Current Rate Case Plan per D.14-12-025 Base Year Base Year + 1 Base Year + 2 Any Energy Utility Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov RAMP GRC Application & Testimonies Evidentiary Hearing Proposed Decision Drafting Final Decision Start Date End Date RAMP November (Base Year) May (Base Year + 1) GRC Application & Testimonies Sept 1st of (Base Year +1) May 1st of (Base Year + 2) Evidentiary Hearing May (Base Year + 2) June (Base Year + 2) Proposed Decision Drafting June (Base Year + 2) October (Base Year + 2) Final Decision October (Base Year + 2) Nov (Base Year + 2) 8
Previous Rate Case Plan for each utility per D.07-07-004 2 Years D.07-07-004 RCP 1 Year before Test Year before Test Year "Day" as indicated in the RCP -60 -30 0 30 60 90 120 150 180 210 240 270 300 330 360 Calendar Month for Illustrative Purposes Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec NOI Served Application & Testimonies Evidentiary Hearing Opening/Reply Brief Proposed Decision Final Decision "Day", Calendar Month for Illustrative Purposes D.07-07-004 RCP as indicated in RCP NOI Served -60 October of Test Year - 2 Application & Testimonies 0 December of Test Year - 2 Evidentiary Hearing 177 April of Test Year -1 Opening/Reply Brief 234 August of Test Year -1 Proposed Decision 248 November of Test Year - 1 Final Decision 344 December of Test Year - 1 9
History: Last ten years of GRC proceedings Since PG&E s 2007 GRC until SDG&E/SoCalGas 2016 GRC, GRC final decisions were issued an average of 225 days after the first date of the test year. For GRCs with settled test year revenue requirement, the decisions were issued an average of 146 days after the test year. For GRCs that is fully litigated, the decisions were issued an average of 288 days after the test year. The delay in GRC decisions are due to many reasons. One of the reason is the concurrent filing of GRC applications. The longest delays in this period were for the 2012 GRCs of SCE and SDG&E/SoCalGas because the Commission reviewed GRCs from two major IOUs concurrently. Additionally, both GRCs were fully litigated. 10
Energy Divisions Proposal Streamline review of GRC filings between all major utilities: Joint Comparison Exhibit outlining all the parties position drafted before evidentiary hearings Uniform Results of Operations user input format Uniform Summary of Earnings table format Standardized labelling of testimony IOUs label their testimonies according to a standard index. The index would reference a standard chapter/exhibit number for testimony supporting a certain class of expenses. (For PG&E) Consolidated PG&E Gas GRC: Combine the review of GT&S and Gas Distribution 11
Afternoon Discussion Topic Exploring the Pros and Cons of a 3-year versus a 4-year GRC Cycle 12
Current 3-year Rate Case Plan 2016 2017 2018 SDG&E and SoCalGas TY 2019 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov RAMP GRC Application & Testimonies Evidentiary Hearing Proposed Decision Drafting Final Decision 2017 2018 2019 PG&E TY 2020 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov RAMP GRC Application & Testimonies Evidentiary Hearing Proposed Decision Drafting Final Decision 2018 2019 2020 SCE TY 2021 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov RAMP GRC Application & Testimonies Evidentiary Hearing Proposed Decision Drafting 13 Final Decision
Concurrent Proceedings under the Current 3-year RCP SMAP Phase 2 is in progress Estimated Schedule: Nov 2016 thru 2017 Next PG&E GT&S would be filed in 2017 for Test Year 2019, for rates effective 2019-2021 (3 years). Under the current 3-year GRC cycle, SMAP Phase 2 overlaps with SDG&E s RAMP and SCE s 2018 GRC PG&E s GT&S proceedings will always overlap with SoCalGas/SDG&E s GRC proceedings (e.g. Test Year 2019) 14
Hypothetical 4 year GRC cycle Assumptions: Utility Test Year 1) PG&E GT&S would need to be changed to be on 4-year cycles. 2) SDG&E/SoCalGas request for a 4-year cycle in its 2016 GRC would be retroactively granted. PG&E GT&S 2019 SDG&E/SoCalGas 2020 PG&E GRC 2021 SCE 2022 PG&E GT&S 2023 Overlapping Proceedings: 1) There is no overlap between PG&E s GT&S and other GRC proceedings. 2) As with the current 3-year RCP, there continues to be overlapping between GRC proceedings. For example, the RAMP proceeding of one utility will occur simultaneously with a GRC proceeding of another utility. SDG&E/SoCalGas 2024 PG&E GRC 2025 SCE 2026 PG&E GT&S 2027 SDG&E/SoCalGas 2028 PG&E GRC 2029 SCE 2030 15
Comparison of 3-year vs 4-year GRC Cycle 3-Year Cycle 4-Year Cycle Proceeding Test Year Procedural Schedule Test Year Procedural Schedule SCE GRC 2018 Sept 2016 to Dec 2017 2018 Sept 2016 to Dec 2017 SMAP Phase II Nov 2016 to end of 2017 Nov 2016 to end of 2017 PG&E GT&S 2017-2018 2017-2018 2019 2019 SDG&E/SoCalGas RAMP Nov 2016 to May 2017 Nov 2016 to May 2017 SDG&E/SoCalGas GRC 2019 Sept 2017 to Dec 2018 2020* Sept 2018 to Dec 2019 PG&E RAMP Nov 2017 to May 2018 Nov 2018 to May 2019 2020 2021* PG&E GRC Sept 2018 to Dec 2019 Sept 2019 to Dec 2020 SCE RAMP Nov 2018 to May 2019 Nov 2019 to May 2020 2021 2022 SCE GRC Sept 2019 to Dec 2020 Sep 2020 to Dec 2021 PG&E GT&S 2022 2020-2021 2023* 2021-2022* SDG&E/SoCalGas RAMP Nov 2019 to May 2020 Nov 2021 to May 2022 2022 2024 SDG&E/SoCalGas GRC Sept 2020 to Dec 2021 Sept 2022 to Dec 2023 PG&E RAMP Nov 2020 to May 2021 Nov 2022 to May 2023 2023 2025 PG&E GRC Sept 2021 to Dec 2022 Sept 2023 to Dec 2024 SCE RAMP Nov 2021 to May 2022 Nov 2023 to May 2024 2024 2026 SCE GRC Sept 2022 to Dec 2023 Sept 2024 to Dec 2025 PG&E's GT&S 2025 2023-2024 2027 2023-2024 SDG&E/SoCalGas RAMP Nov 2022 to May 2023 Nov 2025 to May 2026 2025 2028 SDG&E/SoCalGas GRC Sept 2023 to Dec 2024 Sept 2026 to Dec 2027 PG&E RAMP Nov 2023 to May 2024 Nov 2016 to May 2027 16 2026 2029 PG&E GRC Sept 2024 to Dec 2025 Sept 2027 to Dec 2028
Energy Divisions Observations Under the current 3-year GRC cycle, PG&E s GT&S proceedings will always overlap with SDG&E/SoCalGas GRC proceedings. A 4-year GRC cycle would eliminate the overlapping of GRCs and PG&E s GT&S, but RAMP proceedings would still overlap with a GRC or a GT&S proceedings. Challenges to the timely processing of GRC proceedings may still exist in a 4-year GRC Rate Cycle framework. With a 4-year GRC cycle, there is more uncertainty to the forecasts of attrition year expenditures, due to the extra length of time in between test year forecasts. There would be more reliance on post-test year ratemaking mechanism. In recent GRC filings (PG&E 2017 and SCE 2018), the attrition year revenue requirements have higher % increases compared to test year revenue requirements. 17
Questions? 18
