Incremental Cost of Compliance Discussion - Clean Energy Transformation

March 17, 2020 Joint Discussion on the Incremental Cost of Compliance with the Clean Energy Transformation Act

Agenda Scope and Process for the Issues and Workshop Brad Cebulko, Commission Senior Policy Advisor Glenn Blackmon, Commerce Energy Policy Manager 9-9:10 a.m. Incremental Cost of Compliance: Options and Considerations9:10-10:10 a.m. Jessica Shipley, Senior Associate, Regulatory Assistance Project Megan O Reilly, Associate, Regulatory Assistance Project Break 10:10 10:25 a.m. Facilitated Discussion Based on public comment received and the Regulatory Assistance Project s presentation, we will engage stakeholders in additional conversation on the topics that generated the most interest. 10:25 11:45 a.m. Next Steps 11:45 a.m. noon Updates on rulemaking(s), comments and information gathering.

Break Come back at 10:25 a.m. Facilitated Discussion Questions 1. Are there implementation options, including what RAP presented, that seem most workable to you? 4. We would like parties to discuss what it means for a utility to demonstrate that it has maximized its investments in renewable and nonemitting energy. What guidance, if any, should the Commission and Commerce provide utilities on how it must demonstrate that it has maximized its investments in renewable and nonemitting energy? 2. Should the methodology that establishes incremental cost allow flexibility for different situations? For example, should the methodology allow for some incremental costs to be modeled through the IRP/CEAP process, and some incremental costs to be determined by comparing investments to proxy resources or justified in some other way? 5. In its comments to the Commission, Public Counsel wrote that it is unclear whether the 2% threshold is intended as 1) a maximum limit on the amount a utility can spend in a compliance period, 2) a maximum limit on the amount customers may be charged for CETA compliance, or 3) simply an option a utility may choose to show compliance with its CETA obligations that does not impact total spending or cost recovery within a compliance period. How should the commission interpret the statute? Other parties should weigh in after Public Counsel. 3. Comments to the Commission varied in terms of what expenditures should be included in baseline for the incremental cost calculation. Please describe (1) which types of expenditures you believe should be in the baseline and (2) why those expenditures belong in the baseline.

Facilitated Discussion Instructions Please submit questions for discussion using the chat function on your screen. If you wish to respond to a question, please *raise your hand* using the WebEx function. If you need assistance, please send a direct chat to the WebEx administrators Austin Scharff and Amy Andrews.

Facilitated Discussion 1. Are there implementation options, including what RAP presented, that seem most workable to you? Please submit questions for discussion using the chat function on your screen. If you wish to respond to a question, please *raise your hand* using the WebEx function. If you need assistance, please send a direct chat to the WebEx administrators Austin Scharff and Amy Andrews.

Facilitated Discussion 2. Should the methodology that establishes incremental cost allow flexibility for different situations? For example, should the methodology allow for some incremental costs to be modeled through the IRP/CEAP process, and some incremental costs to be determined by comparing investments to proxy resources or justified in some other way? Please submit questions for discussion using the chat function on your screen. If you wish to respond to a question, please *raise your hand* using the WebEx function. If you need assistance, please send a direct chat to the WebEx administrators Austin Scharff and Amy Andrews.

Facilitated Discussion 3. Comments to the Commission varied in terms of what expenditures should be included in baseline for the incremental cost calculation. Please describe: (1) which types of expenditures you believe should be in the baseline, and (2) why those expenditures belong in the baseline. Please submit questions for discussion using the chat function on your screen. If you wish to respond to a question, please *raise your hand* using the WebEx function. If you need assistance, please send a direct chat to the WebEx administrators Austin Scharff and Amy Andrews.

Facilitated Discussion 4. We would like parties to discuss what it means for a utility to demonstrate that it has maximized its investments in renewable and nonemitting energy. What guidance, if any, should the Commission and Commerce provide utilities on how it must demonstrate that it has maximized its investments in renewable and nonemitting energy? Please submit questions for discussion using the chat function on your screen. If you wish to respond to a question, please *raise your hand* using the WebEx function. If you need assistance, please send a direct chat to the WebEx administrators Austin Scharff and Amy Andrews.

Facilitated Discussion 5. In its comments to the Commission, Public Counsel wrote that it is unclear whether the 2% threshold is intended as 1) a maximum limit on the amount a utility can spend in a compliance period, 2) a maximum limit on the amount customers may be charged for CETA compliance, or 3) simply an option a utility may choose to show compliance with its CETA obligations that does not impact total spending or cost recovery within a compliance period. How should the commission interpret the statute? Other parties should weigh in after Public Counsel. Please submit questions for discussion using the chat function on your screen. If you wish to respond to a question, please *raise your hand* using the WebEx function. If you need assistance, please send a direct chat to the WebEx administrators Austin Scharff and Amy Andrews.

Thank you