WEBVTT

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<v Announcer>Brought to
you by adminmonitor.com.</v>

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We'll begin momentarily,

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thank you for your patience.

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<v ->Welcome to the California
Public Utilities Commission,</v>

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2022 Affordability Rulemaking En Banc:

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Evaluating innovative
proposals for cost containment

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and customer protection.

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Mr. Chang, you may begin.

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<v ->Thank you.</v>

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And thank you for joining

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the California Public
Utility Commissions

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Affordability Rulemaking En Banc.

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We are excited about the
next two days of discussion,

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which will take a close
look at innovative proposals

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for Canadian containing costs

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and protecting customers of
both electric and gas service.

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This discussion will
build on the rates en banc

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held by the CPUC about a year ago,

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which highlighted more
than two dozen electric service

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affordability proposals.

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We hope the discussion
today and tomorrow

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stimulates creative
ideas about how California

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can ensure both electric and gas service

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remains affordable for all customers.

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The launch En Banc,

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it is my honor to introduce
signed Commissioner for CPCUs

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affordability proceeding
Commissioner Darcie Houck.

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Thank you, Commission
Houck for your leadership

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in this En Banc and in this proceeding.

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<v ->Thank you Chang.</v>

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Good morning and
welcome to today's 2022,

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affordability rulemaking En Banc,

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where we will be evaluating
innovative for proposals

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for cost containment
and customer protection.

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Again, as Jack said,
I'm Darcie Houck,

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the assigned Commissioner
for this proceeding,

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which is Rulemaking 1807006.

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I wanna recognize and thank

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the state agency
leaders joining us today.

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The honorable Eduardo Garcia,

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assembly member and chair
of the utilities energy committee.

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Chair Liane Randolph,
California Air Resources Board.

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Our colleagues at the
California Energy Commission,

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Chair David Hochschild,
Vice Chair, Siva Gunda,

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Commissioner, Andrew McAllister

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and Commissioner Patty Monahan,

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all of today's panelists and
my fellow Commissioners.

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I also wanna thank Energy Division staff

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for their excellent work,
including today's work together.

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This was a team effort,

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a special thanks to Paul
Phillips and Jack Chang

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for turning the vision of
this event into a reality.

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I also wanna thank Simon
Backer for his support

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and recommendations on this phase

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of the affordability proceeding

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and our staff moderators
today, Kathleen Yip.

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Special, thanks again to Jack

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for presenting and
moderating today's event.

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Grant Mark, Paul
Phillips, Achintya Madduri,

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Dorothy Duda and James Spencer.

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I also wanna thank
administrative law, Judge wasaga.

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My advisors, Erin Sibert, Christie Chu,

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Kathleen Yip, and Eileen Odel,

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and of course my chief
of staff to make afar in

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for all of their work and
preparing for this event.

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Senate Bill 695 requires CPUC
to prepare an annual report

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addressing electric and
gas cost and rate trends

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as well as actions to
limit or reduce utility cost.

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Last year, CPUC decided
to take a different approach

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by holding an energy
rates and cost Rn Banc.

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That effort was led by
Commissioner Shiroma

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So thank you for getting us started with

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what may become an annual En Banc.

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The 2021 En Banc focused
on the concepts raised

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by a PUC-authored white paper.

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The discussion at the En Banc last year

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and the written public comments

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were summarized and
included in a final document

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that was submitted as the
PUC 2021 SB 695 Report.

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This year, we take the
assessment a step further

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as this follow En Banc launches

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phase three of our
affordability proceeding,

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where we will examine
proposals presented today

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and tomorrow in detail

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and conclude the phase later this year

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with recommendations to the Commission,

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the Governor of the legislature
and our sister agencies

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on how to address
the affordability crisis

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that is looming before us.

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It is critical that we engage
in a dialogue on short

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and long term energy
affordability metric.

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This discussion must
include our climate goals,

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such as transportation, electrification,

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building decarbonization
and greening, updating,

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and hardening our great infrastructure

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to address reliability and safety.

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We must evaluate longer term
system costs and policy risks.

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We have cautioned in
last year's SB 695 Report

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that have handled incorrectly,

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California policy goals

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could result in rate and bill increases

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that would make our policy
goals more difficult to achieve

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and could result in overall energy bills

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becoming unaffordable for Californian.

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Electrification goals and
wildfire mitigation planning

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are among the near term needs

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that create upward pressure
on electric and gas rates.

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Another regulatory risk
that has been identified

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in our prior SB 695 Report

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is a continuing increase
in capital investments

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that are recovered in rate

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based by investor owned utilities.

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While capital investments
in decarbonized,

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renewable generation,
and a cleaner more efficient

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greater necessary to
meet California's energy

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and climate policy goals.

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These investments result in
higher build for our customers

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and create the risk
of making energy bills,

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becoming unaffordable for Californians.

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Electrification goals and,

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I apologize, my computer Jack.

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So rate players are
dealing with inflation,

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which has increased the cost
of food and other necessities.

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On top of these increasing rising costs,

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customers have recently
seen significant increases

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in electric and gas rates

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creating further hardship
for many customers.

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This is evident in the
increasing dollar amounts

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in customer rearages for and gas bills,

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which have worsened during the pandemic.

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(indistint) Commission
must carefully consider

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whether and what rate
payers can withstand

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regarding further rate increases.

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We need to explore innovative
methods to help curb increases

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and to protect the most
vulnerable Californians,

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including examining non
rate payer funded proposals

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for covering costs.

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We have many challenges
ahead of us this year

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and affordability needs
to be at the top of that list

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along with safety and reliability.

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Last year's on bank
attendees included academics,

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researchers, utilities,
consumer advocates,

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legislative staff, and
other energy stakeholders.

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For to today's follow one En Banc,

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we have again assembled
diverse panels of experts

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to consider issues presented

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in our affordability proceeding.

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I look forward to
hearing from the panelists

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and speakers today and tomorrow.

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And with that, I'll now
turn back to Mr. Chang

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to introduce my colleagues
on the virtual dials

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for additional opening comments.

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<v ->Thank you, Commissioner
Healthy for your comments.</v>

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Now I'd like to introduce
CPUC present Alice Reynolds,

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to do some welcoming remarks.

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President Reynolds.

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<v ->Thank you very much.</v>

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Good morning, I am really
pleased to be here today

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and I wanna thank everyone
who made it possible

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for us to have this dialogue

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echoing Commissioner Houck
absolutely deserved thanks

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to all of the staff and others

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who have contributed to this workshop.

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I'm joined today by my colleagues

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and fellow Commissioners

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to think through innovative approaches

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to one of the most central issues

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facing the Commission,
electric and gas affordability.

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We're very fortunate to also be joined

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by assembly member Garcia,

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chair of the assembly
utilities and energy committee.

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Welcome chair Garcia,

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and thank you for participating
in today's discussion.

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<v ->Thank you.</v>

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I hope everyone can
hear me loud and clear.

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Assembly member, Eduado Garcia,

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chair of the utilities
and energy committee.

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It is my pleasure to
be here with you today.

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And thank you for discussing a topic

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that is of extreme
importance to all Californians

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and say myself, given
the area that I represent,

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an area that is economically
challenged in our state.

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Some of our constituents,
are listening in right now

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and I'd be missed if I didn't recognize

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that their interest on
this subject, as it is mine,

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given the rising costs
of just the quality of life

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that we all want our
Californians to live under.

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Things are getting costly.

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And sometimes our constituents

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and other Californians
have to make decisions,

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whether it paying the
increasing costs of utilities

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or for that matter,

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making sure that they
have the essential goods

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that they need.

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And that means food
and medicine sometimes.

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And occasionally, taking
precedent is keeping the lights on

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for some Californians.

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And that's not the decision

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or the options that we should
be providing are constituents.

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While our district is
exclusively represented

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by publicly owned utility

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outside the jurisdiction
of this Commission,

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we do have some areas that
are represented by the IOUs

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that many of you get to see

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when discussing the issue of rates.

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But nevertheless,

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I still bring this level of
sensitivity to the conversation,

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and I really look at
things through those lens

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as I make policy decisions
in the state legislature

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now as chair of the assembly
committee on utilities,

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energy as well,

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I'm concerned about
rate shocks and costs

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that impact all Californians.

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So I appreciate the fact that

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you're holding this conversation today

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and being able to build off of the work

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that's happening in the
various levels of government,

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the agencies, including the legislature.

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We know that rising costs

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are a symptom also of our
climate change activities.

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It's unfortunate,

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but it's true that we have
seen this happen firsthand

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in places like our district.

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We're reactive in addressing
climate change, it's expensive

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as we see the rapid
deployment of wildfire mitigation

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and measures that are
coming too late for some.

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And if we're proactive in
addressing climate change,

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it's also expensive,

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an early adoption of
never before tri-technology

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carries risks and often high costs.

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So it's damned, if you're doing damned,

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if you don't, I guess, is
what the we conveying here.

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It is our duty though,

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to make sure that we
can find that balance

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and make this effort of
affordable for all Californians,

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particularly those who're
economically challenged,

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'cause we cannot eliminate the cost

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of addressing climate change

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and grid modernization
requires a lot of investments.

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Are we less this burden?

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We must be honest in our
assessments and think critically

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about listening the burden first

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for those that are already overburdened

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by this climate crisis.

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Like any of those in our district

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and other parts of California

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that I don't need to
highlight to you all

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and can clearly identify
these workshops,

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allow us to of the thick of things,

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come up with creative solutions

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and hopefully, find an affordable path.

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We know these solutions won't come easy.

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We know the solutions will be difficult

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to deliberate in debate,

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whether they be in the legislature

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or in the agencies that you
respect the leas you represent.

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I look forward to working in
collaboration with all of you.

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And I also just want to take a moment

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to acknowledge some
news worthy of celebrate.

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This last year, we were
able to help many Californians

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with an investment
of over a billion dollars

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to help people get
back in line with the debt

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that they accumulated over
the course of this pandemic

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and perhaps even further back.

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And so that is much
news worthy to celebrate

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and acknowledge how
all of us coming together,

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we're able to prioritize the needs

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of those most challenged in California.

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I'll end with this.

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We represent a very
unique district in California.

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One that has a tremendous amount

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of renewable energy investments

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and renewable energy opportunities

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that lead to many of
our goals and objectives

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within the climate
space and electrification.

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I'm excited to see the
work that's happening,

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collaboration by many of you
to advance the conversation

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taking place today in
the Salton Sea region,

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known as Lithium Valley.

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It is amazing to see how
significant this discussion

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has been and where it's going,

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given the level of
attention that it has received

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over the last week and a half

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by the highest office of government

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and our executive office and
Governor and everyone involved.

00:13:17.090 --> 00:13:18.794
We have a unique opportunity to continue

00:13:18.794 --> 00:13:22.720
to democratize our
climate change policies

00:13:22.720 --> 00:13:26.300
and bring more people
along than ever before

00:13:26.300 --> 00:13:27.872
by making these investments

00:13:27.872 --> 00:13:30.548
in the right places at the right time.

00:13:30.548 --> 00:13:33.093
And so with that, I just
wanted to say thank you all

00:13:33.093 --> 00:13:35.370
for the work that you've do.

00:13:35.370 --> 00:13:37.400
And thank you so
much for the opportunity

00:13:37.400 --> 00:13:39.260
to say a few words this morning,

00:13:39.260 --> 00:13:42.950
as you kick off this very
important conversation.

00:13:42.950 --> 00:13:43.903
Be well, everyone.

00:13:45.890 --> 00:13:46.723
<v ->Thank you very much,</v>

00:13:46.723 --> 00:13:50.017
assembly member
Garcia for your comments.

00:13:50.017 --> 00:13:51.820
Now I'd like to introduce

00:13:51.820 --> 00:13:55.471
California Air Resources
Board Chair, the Randolph

00:13:55.471 --> 00:13:57.876
to make a few comments as well.

00:13:57.876 --> 00:13:59.640
Chair Randolph.

00:13:59.640 --> 00:14:00.550
<v ->Thanks so much.</v>

00:14:00.550 --> 00:14:03.120
I just wanted to thank the CPUC

00:14:03.120 --> 00:14:06.120
for convening this
important conversation.

00:14:06.120 --> 00:14:08.430
Last week at our Air
Resources Board meeting,

00:14:08.430 --> 00:14:11.070
we heard updates on
two key planning efforts

00:14:11.070 --> 00:14:12.320
we have underway.

00:14:12.320 --> 00:14:14.700
The first is our state
implementation plan

00:14:14.700 --> 00:14:18.250
for the Clean Act 70 ppb ozone standard,

00:14:18.250 --> 00:14:20.780
which must be met by 2037

00:14:21.883 --> 00:14:24.570
and will require massive
reductions in Nox emissions.

00:14:24.570 --> 00:14:28.640
And the second is the AB 32
Climate Change Scoping Plan

00:14:28.640 --> 00:14:31.520
which will assess the
progress towards our 2030 goal

00:14:31.520 --> 00:14:34.020
of 40% reduction of
greenhouse gas emissions

00:14:34.020 --> 00:14:35.870
below 1990 levels,

00:14:35.870 --> 00:14:38.390
and assess how to
achieve carbon neutrality

00:14:38.390 --> 00:14:40.430
by 2045 or sooner.

00:14:40.430 --> 00:14:42.260
And both of those planning efforts

00:14:42.260 --> 00:14:44.040
are showing the urgent need

00:14:44.040 --> 00:14:45.970
to transition away from fossil fuels

00:14:45.970 --> 00:14:48.940
to meet our public
health and climate goals.

00:14:48.940 --> 00:14:52.000
And of course, a key
strategy for decarbonization

00:14:52.000 --> 00:14:53.543
is electrification of transportation,

00:14:53.543 --> 00:14:57.740
off-road equipment,
buildings, and other uses.

00:14:57.740 --> 00:14:59.388
And as I talk to people
about this transition,

00:14:59.388 --> 00:15:02.620
the top two concerns I hear

00:15:02.620 --> 00:15:05.830
are reliability and affordability.

00:15:05.830 --> 00:15:09.630
As we move individuals to
electric transportation in homes,

00:15:09.630 --> 00:15:10.980
they wanna know that the system

00:15:10.980 --> 00:15:12.740
will be there to meet their needs

00:15:12.740 --> 00:15:16.000
and that it won't dramatically
increase their costs.

00:15:16.000 --> 00:15:19.270
And we know these
things are interrelated.

00:15:19.270 --> 00:15:22.810
We need fast and wide
deployment of renewable energy

00:15:22.810 --> 00:15:24.560
and dispatchable clean power,

00:15:24.560 --> 00:15:26.980
which takes significant capital.

00:15:26.980 --> 00:15:28.220
But we also know that

00:15:28.220 --> 00:15:30.183
when you're working two
or three jobs to stay afloat,

00:15:30.183 --> 00:15:33.800
having affordable
energy is just as important

00:15:33.800 --> 00:15:36.010
as knowing that your
health and community

00:15:36.010 --> 00:15:38.333
are being protected by clean energy.

00:15:39.270 --> 00:15:40.559
As Commissioner Houck
noted in her remarks,

00:15:40.559 --> 00:15:45.243
we need to be mindful of the
long term affordability issues.

00:15:46.080 --> 00:15:47.763
How do we meet the critical safety needs

00:15:47.763 --> 00:15:49.730
of the fossil gas system

00:15:49.730 --> 00:15:52.873
while at the same time reducing
our reliance on that system.

00:15:53.934 --> 00:15:55.465
And the agenda for
this two day discussion

00:15:55.465 --> 00:15:57.970
shows that there are many strategies

00:15:57.970 --> 00:16:00.457
for how we can reduce costs as a whole.

00:16:00.457 --> 00:16:02.020
And more importantly,

00:16:02.020 --> 00:16:03.721
how can we think about
the most equitable way

00:16:03.721 --> 00:16:06.170
to distribute those costs?

00:16:06.170 --> 00:16:09.760
So I'm really impressed with the panels

00:16:09.760 --> 00:16:11.320
that you have all assembled

00:16:11.320 --> 00:16:14.460
and looking forward to this discussion,

00:16:14.460 --> 00:16:17.550
looking forward to learning
more about these strategies

00:16:17.550 --> 00:16:19.180
and most important looking forward

00:16:19.180 --> 00:16:22.660
to working closely with our
sister agencies and others

00:16:22.660 --> 00:16:24.289
to implement these strategies.

00:16:24.289 --> 00:16:25.890
So thank you very much

00:16:25.890 --> 00:16:27.890
and looking forward to the discussion.

00:16:29.390 --> 00:16:30.865
<v ->Thank you very
much, Chair Randolph.</v>

00:16:30.865 --> 00:16:32.970
Now I'd like to introduce,

00:16:32.970 --> 00:16:35.700
California Energy Commission
chair, David Hochschild.

00:16:37.786 --> 00:16:39.493
Welcome.

00:16:39.493 --> 00:16:40.326
<v ->Thank you.</v>

00:16:40.326 --> 00:16:41.270
And welcome friends, good morning.

00:16:41.270 --> 00:16:43.470
I'm David Hochschild with
California Energy Commission.

00:16:43.470 --> 00:16:46.970
Wanna thank my colleague
Commissioner Houck

00:16:46.970 --> 00:16:50.520
and her team at the PUC
for bringing us together.

00:16:50.520 --> 00:16:53.150
I really just wanna say,
I feel like we're dealing

00:16:53.150 --> 00:16:54.884
with multiple imperatives right now.

00:16:54.884 --> 00:16:57.453
The imperative to decarbonize

00:16:57.453 --> 00:17:00.100
and save off the worst
impact of climate change,

00:17:00.100 --> 00:17:03.000
the imperative to deal with
some of the climate consequences

00:17:03.000 --> 00:17:04.670
that are already upon us

00:17:04.670 --> 00:17:06.408
and the imperative to
deal with rising costs.

00:17:06.408 --> 00:17:09.500
And we have to face
all of those together

00:17:09.500 --> 00:17:11.350
and there's not one
we can leave off the list

00:17:11.350 --> 00:17:14.150
and this is the challenge ahead of us.

00:17:14.150 --> 00:17:16.570
I think the best path to solutions

00:17:16.570 --> 00:17:20.110
is bringing together experts
and having a dialogue

00:17:20.110 --> 00:17:21.910
exactly like we're doing
today and tomorrow.

00:17:21.910 --> 00:17:25.700
So I'm so grateful to the
POC for bringing us together

00:17:25.700 --> 00:17:27.317
and look forward to
working with everyone

00:17:27.317 --> 00:17:29.390
on all these solutions.

00:17:29.390 --> 00:17:30.740
And with that, let me pass it off

00:17:30.740 --> 00:17:32.890
to my colleague
Commissioner Patty Monahan.

00:17:39.660 --> 00:17:40.673
<v ->Well, good morning everybody.</v>

00:17:40.673 --> 00:17:42.080
It's a pleasure to be here

00:17:42.080 --> 00:17:44.763
and I too am really
excited for this conversation.

00:17:45.670 --> 00:17:48.440
And I wanna thank the
CPUC for convening it

00:17:48.440 --> 00:17:52.320
and for getting such a great
list of speakers for today

00:17:52.320 --> 00:17:55.100
so really looking forward
to the conversation.

00:17:55.100 --> 00:17:57.760
I've heard chair Hochschild
say time and again,

00:17:57.760 --> 00:17:59.821
that rates are climate policy.

00:17:59.821 --> 00:18:04.821
And as I think about how we continue

00:18:06.230 --> 00:18:07.660
to decarbonize our economy,

00:18:07.660 --> 00:18:09.200
while making sure that we have a safe,

00:18:09.200 --> 00:18:11.710
affordable, and reliable energy system,

00:18:11.710 --> 00:18:13.830
I mean these issues really,

00:18:13.830 --> 00:18:18.300
this is the challenge I
think of our generation

00:18:18.300 --> 00:18:23.300
is to make sure that we set
the right rates and structure

00:18:24.010 --> 00:18:28.490
to protect especially the most
vulnerable in our communities

00:18:28.490 --> 00:18:31.090
as we continue to decarbonize.

00:18:31.090 --> 00:18:35.050
I think the struggle that
Chair Randolph spoke about

00:18:35.050 --> 00:18:36.616
in terms of electrifying transportation

00:18:36.616 --> 00:18:39.166
is one that's near and dear to my heart.

00:18:39.166 --> 00:18:44.166
And we did an analysis last
year that indicated that at 2030

00:18:46.160 --> 00:18:48.091
to meet our transportation
electrification goals,

00:18:48.091 --> 00:18:51.410
there would be up to a 21% increase

00:18:51.410 --> 00:18:53.003
in electricity usage compared to today.

00:18:53.003 --> 00:18:56.270
That's a huge, flexible load

00:18:56.270 --> 00:18:58.890
that if we charge at the
right times of the day,

00:18:58.890 --> 00:19:01.070
we could literally be
running our electric vehicles

00:19:01.070 --> 00:19:03.190
on sunshine, but we
have to make sure that

00:19:03.190 --> 00:19:05.290
we have the right
rate structures in place

00:19:06.210 --> 00:19:09.170
and that especially
lower income families

00:19:09.170 --> 00:19:12.200
can benefit on the savings
that they would incur

00:19:12.200 --> 00:19:15.640
at the pocketbook by not
paying so much for fossil fuels.

00:19:15.640 --> 00:19:19.840
So really, really
appreciate this conversation

00:19:19.840 --> 00:19:22.530
and I will pass the baton,

00:19:22.530 --> 00:19:24.853
I'm not sure who is next.

00:19:25.910 --> 00:19:30.060
<v Jack>I can introduce
the next speaker here.</v>

00:19:30.060 --> 00:19:31.597
<v ->Okay, thank you.</v>

00:19:31.597 --> 00:19:34.367
<v Jack>Sure, thank you very
much for your comments.</v>

00:19:34.367 --> 00:19:38.610
I'd like to now bring on
CPUC Commissioner,

00:19:38.610 --> 00:19:41.290
Genevieve Shiroma to help introduce

00:19:41.290 --> 00:19:43.740
our feature speaker at gasoline leads.

00:19:43.740 --> 00:19:45.850
Welcome Commission Shiroma.

00:19:45.850 --> 00:19:46.947
<v ->Thank you, Jack.</v>

00:19:47.967 --> 00:19:51.560
And thank you to Commissioner Houck

00:19:51.560 --> 00:19:55.620
and all of our colleagues from the CPUC

00:19:55.620 --> 00:19:58.650
and the Energy Commission,
the Air Ressources Board,

00:19:58.650 --> 00:20:02.270
the legislature to the
energy division staff.

00:20:02.270 --> 00:20:05.150
Our speakers over the next two days

00:20:06.263 --> 00:20:08.340
for the tremendous efforts

00:20:08.340 --> 00:20:13.340
in organizing driving this
event and providing in insights.

00:20:13.390 --> 00:20:15.230
The timing of this
workshop is appropriate

00:20:15.230 --> 00:20:19.730
as we have seen energy bill
spike as natural gas prices rise

00:20:19.730 --> 00:20:21.070
and customers begin to pay

00:20:21.070 --> 00:20:23.647
for new infrastructure investments.

00:20:23.647 --> 00:20:28.100
Along with these factors,
we have seen a cold snap,

00:20:28.100 --> 00:20:31.797
although today is predicted
to be a very (indistinct)

00:20:31.797 --> 00:20:34.440
set 93 degrees in Sacramento.

00:20:34.440 --> 00:20:37.050
There has been a cold
snap in Northern California

00:20:37.050 --> 00:20:38.860
and through the United States,

00:20:38.860 --> 00:20:41.590
which has been further
driving energy use

00:20:41.590 --> 00:20:43.430
among our most vulnerable customers.

00:20:43.430 --> 00:20:47.570
So, with that context is my pleasure

00:20:47.570 --> 00:20:49.133
to introduce Abigail Solis,

00:20:49.133 --> 00:20:54.133
who will help us keep in
the forefront and top of mind,

00:20:55.170 --> 00:21:00.170
the needs and innovation of
our disadvantaged communities,

00:21:00.290 --> 00:21:04.610
our low income communities,
our most vulnerable communities.

00:21:04.610 --> 00:21:08.260
Abigail is the manager of
Sustainable Energy Solutions

00:21:08.260 --> 00:21:09.794
for Self-Help Enterprises,

00:21:09.794 --> 00:21:14.794
A Visalia-based
organization funded in 1965

00:21:15.270 --> 00:21:17.910
that works with low
income families to build

00:21:17.910 --> 00:21:20.193
and sustain healthy
homes and communities.

00:21:21.280 --> 00:21:24.700
In her work, Abigail oversees
several sustainable energy

00:21:24.700 --> 00:21:27.070
and clean transportation initiative

00:21:27.070 --> 00:21:28.730
in disadvantaged communities.

00:21:28.730 --> 00:21:32.900
She leads the community
energy navigator teamwork,

00:21:32.900 --> 00:21:34.469
a network of community based leaders,

00:21:34.469 --> 00:21:38.240
providing robust community engagements,

00:21:38.240 --> 00:21:40.680
enrollment and technical assistance

00:21:40.680 --> 00:21:43.530
for the CPUCs San Joaquin valley's

00:21:43.530 --> 00:21:46.250
affordable energy
pilots that demonstrate

00:21:46.250 --> 00:21:51.250
how electric buy homes can
reduce household energy costs.

00:21:51.590 --> 00:21:55.500
Additionally, Abigail
helped to launch meal cars.

00:21:55.500 --> 00:21:59.150
The San Joaquin valley's
first electric car share program,

00:21:59.150 --> 00:22:01.810
which provides residents
with affordable access

00:22:01.810 --> 00:22:04.093
to electric vehicles
and charging stations.

00:22:05.090 --> 00:22:08.670
On top of that, Abigail
is an elected board

00:22:08.670 --> 00:22:11.600
and president of the
Earlimart School Board

00:22:11.600 --> 00:22:13.217
and advocates for underserved students.

00:22:13.217 --> 00:22:15.150
And last December,

00:22:15.150 --> 00:22:16.791
the California Energy Commission

00:22:16.791 --> 00:22:21.600
recognized Abigail's
dedicated and effective work

00:22:21.600 --> 00:22:22.490
by presenting her

00:22:22.490 --> 00:22:27.240
with 2021 Clean Energy
Hall of Fame Awards.

00:22:27.240 --> 00:22:32.240
She is truly a tireless
advocate for her community,

00:22:32.260 --> 00:22:35.920
our communities, disadvantaged
communities across the state.

00:22:35.920 --> 00:22:40.013
With that, please join me
in welcoming Abigail Solis.

00:22:41.531 --> 00:22:44.570
(clapping)

00:22:44.570 --> 00:22:48.780
<v ->Thank you Commissioner, I
appreciate that introduction.</v>

00:22:48.780 --> 00:22:52.500
And I wanna thank you
and everyone on this panel

00:22:52.500 --> 00:22:55.960
for the opportunity to be
with you this morning here,

00:22:55.960 --> 00:23:00.960
as we kick off the 2022
Affordability Rulemaking En Banc.

00:23:02.020 --> 00:23:04.490
Affordability and energy access

00:23:04.490 --> 00:23:07.300
are extremely important issues,

00:23:07.300 --> 00:23:10.200
especially right now,
as we enter this third

00:23:10.200 --> 00:23:15.200
and hopefully final year of
the Coronavirus pandemic.

00:23:15.550 --> 00:23:17.620
During my time with you this morning,

00:23:17.620 --> 00:23:21.560
I would like to share a
little bit about my experience

00:23:21.560 --> 00:23:25.270
working in low income communities
with low income residents,

00:23:25.270 --> 00:23:29.240
as well as my thoughts
on the issue of affordability

00:23:29.240 --> 00:23:30.832
and how the discussions
that we will have

00:23:30.832 --> 00:23:35.340
over the next two days
have real life consequences

00:23:35.340 --> 00:23:38.863
for millions of people
across the state of California.

00:23:40.880 --> 00:23:44.130
I often look at all of the wonderful

00:23:44.130 --> 00:23:48.350
and highly capable panelists

00:23:49.230 --> 00:23:52.920
that participate in events like this one

00:23:52.920 --> 00:23:55.810
and often ask myself what I have to add

00:23:55.810 --> 00:23:57.720
to these conversations.

00:23:57.720 --> 00:24:00.693
And I think my,

00:24:01.940 --> 00:24:04.930
what I bring to the table and
hopefully to the discussion

00:24:04.930 --> 00:24:09.500
is just the truth of how
decisions made at a high level

00:24:09.500 --> 00:24:12.810
impact those who have to live

00:24:12.810 --> 00:24:14.433
with the decisions that are made

00:24:14.433 --> 00:24:17.903
in settings like we are in today.

00:24:19.200 --> 00:24:20.180
Throughout my career,

00:24:20.180 --> 00:24:24.240
I've had the opportunity to
work in low income communities,

00:24:24.240 --> 00:24:25.969
alongside rare residents who
are dealing with challenges

00:24:25.969 --> 00:24:28.953
stemming from historic
disinvest investment.

00:24:28.953 --> 00:24:32.030
Many are dealing with bad air quality,

00:24:32.030 --> 00:24:34.402
contaminated drinking water, bad roads,

00:24:34.402 --> 00:24:37.082
high energy costs, and more.

00:24:37.082 --> 00:24:41.060
These communities are
made up of hardworking people.

00:24:41.060 --> 00:24:44.620
Many who start work before the sun rises

00:24:44.620 --> 00:24:46.803
and keep working until the sunset.

00:24:48.440 --> 00:24:52.450
They do this week after
week, month after months,

00:24:52.450 --> 00:24:56.800
and ultimately year after
year for their entire lives.

00:24:56.800 --> 00:24:59.920
They do it to provide
the best life possible

00:24:59.920 --> 00:25:01.499
for their families.

00:25:01.499 --> 00:25:04.520
And although they work so very hard,

00:25:04.520 --> 00:25:06.890
they often cannot make meet.

00:25:06.890 --> 00:25:09.490
Many families struggle
to pay their monthly bills,

00:25:09.490 --> 00:25:14.300
often having to choose between
which expenses they'll pay

00:25:14.300 --> 00:25:16.230
at the end of the month.

00:25:16.230 --> 00:25:19.160
often having to choose
between paying the light bill

00:25:19.160 --> 00:25:22.040
or buying groceries, paying the gas bill

00:25:22.040 --> 00:25:23.653
or buying gas for their car.

00:25:25.240 --> 00:25:28.380
And we often often say things like this

00:25:28.380 --> 00:25:30.057
people must choose between what to pay,

00:25:30.057 --> 00:25:32.698
but I think a lot of
times we don't consider

00:25:32.698 --> 00:25:36.560
that these are the same
families that have to decide

00:25:36.560 --> 00:25:39.560
whether or not they're
going to turn on the heat

00:25:39.560 --> 00:25:41.148
when it's 30 degrees outside,

00:25:41.148 --> 00:25:45.070
whether or not they're going
to turn on the air conditioner

00:25:45.070 --> 00:25:46.668
when it's 110 degrees outside.

00:25:46.668 --> 00:25:51.668
Many families are choosing
to be extremely uncomfortable

00:25:51.750 --> 00:25:55.370
every day in their home
because they cannot afford

00:25:55.370 --> 00:25:58.930
to pay the high rates of energy,

00:25:58.930 --> 00:26:02.380
of actually being
comfortable in their homes.

00:26:02.380 --> 00:26:04.078
And I think that's something
that we have to consider

00:26:04.078 --> 00:26:08.083
as we have these conversations
over the next two days.

00:26:09.540 --> 00:26:12.610
We know that many
families are struggling

00:26:12.610 --> 00:26:13.890
and we know that utility rates

00:26:13.890 --> 00:26:16.940
are more unaffordable than ever.

00:26:16.940 --> 00:26:20.510
We can see this by the
amount of customer utility debt.

00:26:20.510 --> 00:26:24.920
I often think about what
causes utility debt to be so high

00:26:24.920 --> 00:26:27.570
and how it's directly
related to the fact that

00:26:27.570 --> 00:26:31.053
low income families have
higher household energy costs.

00:26:32.280 --> 00:26:34.950
They spend a larger
portion of their income

00:26:34.950 --> 00:26:39.010
on their household energy needs.

00:26:39.010 --> 00:26:41.962
And this is for different reasons.

00:26:41.962 --> 00:26:42.985
A lot of it is due to the fact that

00:26:42.985 --> 00:26:46.671
a lot of the homes are
very inefficient, they're older.

00:26:46.671 --> 00:26:50.483
They have old outdated
inefficient appliances.

00:26:52.210 --> 00:26:56.390
And most disadvantaged,
low income communities,

00:26:56.390 --> 00:27:01.390
lack access to reliable,
renewable energy sources,

00:27:01.670 --> 00:27:04.690
such as roof top solar, community solar,

00:27:04.690 --> 00:27:08.610
and other programs that
reduce the cost of the electricity.

00:27:08.610 --> 00:27:11.560
This issue is one that
I hope we consider

00:27:11.560 --> 00:27:13.164
and talk about over the next two days,

00:27:13.164 --> 00:27:16.260
because we must make renewable energy

00:27:17.300 --> 00:27:18.660
accessible for everyone,

00:27:18.660 --> 00:27:21.207
especially those that
are most vulnerable.

00:27:21.207 --> 00:27:24.240
In addition to the inequity

00:27:24.240 --> 00:27:26.460
of not having access
to renewable energy,

00:27:26.460 --> 00:27:30.640
we know that the effects of
greenhouse gas emissions

00:27:30.640 --> 00:27:33.537
disproportionately impacts
low income communities

00:27:33.537 --> 00:27:35.148
and people of color.

00:27:35.148 --> 00:27:37.730
Specifically here in
the San Joaquin valley,

00:27:37.730 --> 00:27:39.900
which is one of the
most polluted air basins

00:27:39.900 --> 00:27:42.793
for fine particles and smoke,

00:27:43.670 --> 00:27:46.793
this is a huge issue across
the San Joaquin Valley.

00:27:48.900 --> 00:27:51.200
And although the issues are great,

00:27:51.200 --> 00:27:55.050
we know that fewer
disadvantaged community residents

00:27:55.050 --> 00:28:00.050
participate in energy programs
that are available to them.

00:28:01.490 --> 00:28:05.270
And this is really for
a couple of reasons.

00:28:05.270 --> 00:28:07.060
One is lack of awareness.

00:28:07.060 --> 00:28:09.750
They just don't know that
the programs are available.

00:28:09.750 --> 00:28:11.470
And the other is distrust.

00:28:11.470 --> 00:28:13.220
For various reasons,

00:28:13.220 --> 00:28:16.700
residents have trust
issues with programs,

00:28:16.700 --> 00:28:18.310
and we must work together with them

00:28:18.310 --> 00:28:21.663
so that we can overcome those issues.

00:28:23.390 --> 00:28:25.720
In disadvantaged communities,

00:28:25.720 --> 00:28:27.403
we have very little access

00:28:27.403 --> 00:28:29.901
to electric vehicle charging stations,

00:28:29.901 --> 00:28:34.563
making it almost impossible
to own an electric vehicle.

00:28:35.580 --> 00:28:37.158
For many, the nearest charging station

00:28:37.158 --> 00:28:41.830
is five, 10, sometimes 20 miles away.

00:28:41.830 --> 00:28:45.560
So as a result, people decide
not to have electric vehicle

00:28:45.560 --> 00:28:48.140
to use their regular card

00:28:48.140 --> 00:28:53.010
that are forced to pay high gas prices

00:28:54.020 --> 00:28:56.920
and well added to
the already polluted air.

00:28:56.920 --> 00:29:01.410
And this in 2022 is simply unacceptable.

00:29:01.410 --> 00:29:04.040
We must make electric vehicles

00:29:04.040 --> 00:29:06.980
available and access for everyone,

00:29:06.980 --> 00:29:09.130
especially the most
vulnerable communities.

00:29:10.300 --> 00:29:14.010
So, on top of an already
challenging situation,

00:29:14.010 --> 00:29:19.000
we know that COVID-19
has exacerbated the situation.

00:29:19.000 --> 00:29:22.070
Many of our low income
disadvantaged communities

00:29:22.070 --> 00:29:25.960
sore illnesses, experienced job loss,

00:29:25.960 --> 00:29:29.770
many were forced to use
whatever savings they had.

00:29:29.770 --> 00:29:33.740
And while thankfully
many have returned to work,

00:29:33.740 --> 00:29:36.390
some have returned to lower paying jobs

00:29:36.390 --> 00:29:37.978
and others have not
returned to work at all

00:29:37.978 --> 00:29:40.543
because the cost of daycare is so high.

00:29:40.543 --> 00:29:44.070
For some, it just makes
sense to stay home.

00:29:44.070 --> 00:29:45.850
All of these things
need to be considered

00:29:45.850 --> 00:29:48.800
as we think about
rates and affordability

00:29:48.800 --> 00:29:50.053
over the next two days.

00:29:51.600 --> 00:29:54.640
We all know and are proud
that the state of California

00:29:54.640 --> 00:29:57.120
has aggressive clean energy goals,

00:29:57.120 --> 00:30:01.590
especially around electrification
and decarbonization.

00:30:01.590 --> 00:30:03.182
However, as we work
to reach these goals,

00:30:03.182 --> 00:30:08.182
we must ask ourselves where
do low income communities

00:30:08.230 --> 00:30:09.983
fit in this transition?

00:30:11.030 --> 00:30:12.950
If low income families are struggling

00:30:12.950 --> 00:30:15.730
to pay their electric bills today,

00:30:15.730 --> 00:30:18.410
how could we ask them
to decarbonize their home

00:30:18.410 --> 00:30:20.030
through electrification?

00:30:20.030 --> 00:30:24.070
Many are already worry
that their bills will increase,

00:30:24.070 --> 00:30:27.170
and at this point they
cannot make the commitment

00:30:27.170 --> 00:30:31.410
to electrify, until there's assurances

00:30:31.410 --> 00:30:36.080
that they will not see energy cost rise

00:30:36.080 --> 00:30:39.083
and that they will ultimately
see energy cost savings.

00:30:40.960 --> 00:30:43.343
In my community and the
communities around me,

00:30:44.750 --> 00:30:48.520
we have the lowest utilization
rate of renewable energy,

00:30:48.520 --> 00:30:50.170
like I mentioned earlier.

00:30:50.170 --> 00:30:54.340
It is rare to see a home
with solar panels on top of it.

00:30:54.340 --> 00:30:59.160
And when I think about
asking families to electrify,

00:30:59.160 --> 00:31:00.810
I know that we need to change that,

00:31:00.810 --> 00:31:03.460
we need to do more to
make sure that everyone

00:31:03.460 --> 00:31:05.100
has access to renewable energy

00:31:05.100 --> 00:31:09.120
so that they can afford
to electrify their home.

00:31:09.120 --> 00:31:10.721
And although this is a huge issue

00:31:10.721 --> 00:31:15.410
that I know we will be
working on for years to come,

00:31:15.410 --> 00:31:19.290
I am hopeful that we can
develop solutions together

00:31:20.180 --> 00:31:23.960
as we work towards a
more equitable future

00:31:23.960 --> 00:31:27.883
around access to renewable energy.

00:31:29.310 --> 00:31:30.950
So, I do think that

00:31:30.950 --> 00:31:35.350
I should probably provide
a few recommendations

00:31:35.350 --> 00:31:37.210
of how we can do this.

00:31:37.210 --> 00:31:38.440
And I think it all starts

00:31:38.440 --> 00:31:40.983
by prioritizing vulnerable communities.

00:31:40.983 --> 00:31:43.040
We need to create policies

00:31:43.040 --> 00:31:45.660
and programs designed specifically

00:31:45.660 --> 00:31:47.360
for low income communities,

00:31:47.360 --> 00:31:50.763
that will provide real
energy cost savings.

00:31:51.600 --> 00:31:54.500
We must remove all barriers

00:31:54.500 --> 00:31:57.920
to enrollment for existing programs,

00:31:57.920 --> 00:32:01.300
and we can do this by
considering things that are different,

00:32:01.300 --> 00:32:03.000
like automatic enrollment options,

00:32:03.000 --> 00:32:05.700
exploring creative outreach methods.

00:32:05.700 --> 00:32:08.360
And also we need to make sure

00:32:08.360 --> 00:32:10.654
that we explore
various great structures,

00:32:10.654 --> 00:32:13.189
making it more affordable

00:32:13.189 --> 00:32:15.573
for families to pay their monthly bills.

00:32:17.120 --> 00:32:19.810
We must increase access and awareness

00:32:19.810 --> 00:32:22.433
of affordable energy for renters.

00:32:23.270 --> 00:32:26.020
Many times renter are left behind,

00:32:26.020 --> 00:32:27.569
especially low income renters.

00:32:27.569 --> 00:32:30.780
They're overlooked
and often have no idea

00:32:30.780 --> 00:32:32.383
that they're even eligible for programs

00:32:32.383 --> 00:32:35.233
that can help them save
money on their energy bills.

00:32:36.870 --> 00:32:41.860
In order to develop truly
equitable energy program,

00:32:41.860 --> 00:32:45.500
we have to consider non-energy benefits

00:32:45.500 --> 00:32:47.104
and update cost effectiveness tests

00:32:47.104 --> 00:32:49.670
to include things like health, wellness,

00:32:49.670 --> 00:32:53.620
greenhouse gas reductions,

00:32:53.620 --> 00:32:56.503
and most importantly,
we must consider equity.

00:32:58.630 --> 00:33:01.240
So important for us here today

00:33:01.240 --> 00:33:05.050
to consider the importance
of outreach and engagement.

00:33:05.050 --> 00:33:08.110
Community engagement and
education makes it possible

00:33:08.110 --> 00:33:10.382
for residents to understand policies,

00:33:10.382 --> 00:33:12.884
to build trust in programs,

00:33:12.884 --> 00:33:15.305
and ultimately community engagement

00:33:15.305 --> 00:33:20.060
can be the reason why a
resident decides to participate

00:33:20.060 --> 00:33:22.223
in an energy cost savings program.

00:33:23.420 --> 00:33:27.400
We can see this in the
San Jo valley pilot projects

00:33:27.400 --> 00:33:30.580
where the CPUC
authorized the first ever role

00:33:30.580 --> 00:33:33.040
of the community energy navigator.

00:33:33.040 --> 00:33:34.613
In this role, energy navigators

00:33:34.613 --> 00:33:39.100
who are community leaders and
community based organizations

00:33:39.100 --> 00:33:40.300
act as the liaison

00:33:40.300 --> 00:33:43.900
between the San Joaquin
Valley pilot program administrators

00:33:43.900 --> 00:33:45.653
and program participants.

00:33:47.210 --> 00:33:49.080
CNS or energy navigators,

00:33:49.080 --> 00:33:52.330
they provide robust community
engagement, education,

00:33:52.330 --> 00:33:55.180
and support to pilot participants.

00:33:55.180 --> 00:33:56.720
As a result of this,

00:33:56.720 --> 00:33:59.760
we took a very challenging endeavor

00:33:59.760 --> 00:34:04.610
of trying to convince
and test propane users

00:34:04.610 --> 00:34:06.140
to go all electric.

00:34:06.140 --> 00:34:07.680
And as a result of this effort,

00:34:07.680 --> 00:34:10.840
we have enrolled just
under 1000 families

00:34:12.110 --> 00:34:14.520
across 11 pilot communities.

00:34:14.520 --> 00:34:16.112
And I know that this
would not have impossible

00:34:16.112 --> 00:34:21.112
if it wasn't for true community
engagement and education.

00:34:24.450 --> 00:34:27.420
So, I often ask myself what's at stake

00:34:27.420 --> 00:34:29.074
if we don't do these things,

00:34:29.074 --> 00:34:30.625
because we cannot continue

00:34:30.625 --> 00:34:34.620
to leave behind the most
vulnerable communities.

00:34:34.620 --> 00:34:38.690
Leaving them behind will
cause catastrophic effects

00:34:38.690 --> 00:34:40.083
on vulnerable communities.

00:34:41.210 --> 00:34:44.420
And unfortunately, the
people who are most impacted

00:34:44.420 --> 00:34:48.020
by your decisions are
often not in the room

00:34:48.020 --> 00:34:49.770
when decisions are made.

00:34:49.770 --> 00:34:51.280
And I will eventually say

00:34:51.280 --> 00:34:53.743
that they are not online
with us this morning.

00:34:54.680 --> 00:34:58.870
This often means that
their voices go unheard

00:34:58.870 --> 00:35:01.820
that their experiences
are not considered

00:35:01.820 --> 00:35:05.040
and that their perspectives are left out

00:35:05.040 --> 00:35:07.853
and we can no longer leave them out.

00:35:09.030 --> 00:35:10.608
So today I urge you to consider them

00:35:10.608 --> 00:35:14.653
as we strive for a path
towards affordability.

00:35:15.780 --> 00:35:17.159
I hope that you will
spend the next two days

00:35:17.159 --> 00:35:19.680
looking for creative solutions

00:35:19.680 --> 00:35:23.703
to very real problems
around affordability,

00:35:24.600 --> 00:35:26.740
because the reality is

00:35:26.740 --> 00:35:30.100
that the poorest people
in the state of California

00:35:30.100 --> 00:35:35.100
are paying more for their
energy costs, and this is wrong.

00:35:35.350 --> 00:35:39.880
It's inequitable, it's unjust,

00:35:39.880 --> 00:35:42.633
and we must figure
out how to change this.

00:35:43.570 --> 00:35:46.470
Every single day, I think about this

00:35:46.470 --> 00:35:48.079
and I try to change this,

00:35:48.079 --> 00:35:53.079
and I ask you to do the same
with me over the next two days.

00:35:53.720 --> 00:35:57.740
I do think that it's possible
that we change things

00:35:57.740 --> 00:36:02.550
and we make access to renewable
energy and affordable rates

00:36:02.550 --> 00:36:04.058
possible for everyone
in the state of California.

00:36:04.058 --> 00:36:06.637
And I look forward to
working alongside all of you

00:36:06.637 --> 00:36:09.153
as we make that
happen in the near future.

00:36:09.153 --> 00:36:13.183
Thank you for the opportunity
to address you this morning.

00:36:16.930 --> 00:36:19.220
<v ->Thank you very much
for your comments</v>

00:36:19.220 --> 00:36:24.220
and inspiring start to this
En Banc and sets the priority,

00:36:25.580 --> 00:36:28.595
the core priority of what
this discussion is all about.

00:36:28.595 --> 00:36:31.287
So thank you very much
and thank you all everyone

00:36:31.287 --> 00:36:35.170
who has delivered welcoming
and introduction remarks.

00:36:35.170 --> 00:36:39.726
I'm gonna outgoing described
the six proposed criteria

00:36:39.726 --> 00:36:41.750
that we're gonna use
that we propose to use

00:36:41.750 --> 00:36:44.910
to evaluate many of these proposals

00:36:44.910 --> 00:36:47.280
that will be discussed
during this En Banc.

00:36:48.840 --> 00:36:51.640
So thank you for joining this En Banc

00:36:51.640 --> 00:36:54.520
and I am a CPUC analyst

00:36:54.520 --> 00:36:59.090
working with the electric
retail rates team on phase three

00:36:59.090 --> 00:37:01.023
of this affordability proceeding.

00:37:03.320 --> 00:37:04.373
Next slide, please.

00:37:07.730 --> 00:37:11.210
This En Banc builds on
En Banc held last February,

00:37:11.210 --> 00:37:14.040
discussing more than two
dozen proposals to manage it

00:37:14.040 --> 00:37:16.873
and mitigate residential
electricity rates.

00:37:17.900 --> 00:37:18.733
Next slide.

00:37:22.070 --> 00:37:23.660
This En Banc seeks

00:37:23.660 --> 00:37:27.450
to stimulate robust discussion
about these proposals

00:37:27.450 --> 00:37:30.900
and evaluate their
effectiveness and feasibility

00:37:30.900 --> 00:37:33.610
and ultimately help
identify proposals deserve

00:37:33.610 --> 00:37:36.630
the most attention in the
rest of this proceeding.

00:37:36.630 --> 00:37:37.613
Next slide, please.

00:37:39.810 --> 00:37:41.483
This En Banc also as
gas rates discussion

00:37:41.483 --> 00:37:44.003
as directed by an amended scoping ruling

00:37:44.003 --> 00:37:46.563
released in January, 2022.

00:37:46.563 --> 00:37:47.993
Next slide.

00:37:51.950 --> 00:37:53.270
This En Banc lay a foundation

00:37:53.270 --> 00:37:56.270
for the rest of phase
three of this proceeding

00:37:56.270 --> 00:38:00.740
going forward a call for
party affordable approvals

00:38:00.740 --> 00:38:02.860
for customer classes is scheduled

00:38:02.860 --> 00:38:05.791
to be included in the next couple months

00:38:05.791 --> 00:38:09.840
and eventual proposed decision

00:38:09.840 --> 00:38:13.470
on affordable strategies
expected by early next year.

00:38:13.470 --> 00:38:14.493
Next slide please.

00:38:22.204 --> 00:38:24.704
I think we can go, keep going.

00:38:26.245 --> 00:38:27.300
There we go, thank you.

00:38:27.300 --> 00:38:28.960
So I wanted to review here six criteria

00:38:28.960 --> 00:38:31.290
by which we suggested
evaluating each of the proposals

00:38:31.290 --> 00:38:34.360
that will be discussed
throughout over the next days

00:38:34.360 --> 00:38:35.680
and throughout the proceeding.

00:38:35.680 --> 00:38:37.467
We seek your input
on the appropriateness

00:38:37.467 --> 00:38:39.036
of these evaluation criteria,

00:38:39.036 --> 00:38:42.770
any suggested changes
in how they're defined here

00:38:42.770 --> 00:38:44.310
and any other criteria
that should be added.

00:38:44.310 --> 00:38:45.833
Next slide, please.

00:38:48.060 --> 00:38:52.150
The first criteria affordability
is a bottom line metric.

00:38:52.150 --> 00:38:54.940
It measures the
quantitative bill impacts

00:38:54.940 --> 00:38:57.307
of affordability proposal
on all customer bills

00:38:57.307 --> 00:38:59.384
and essential use benefits.

00:38:59.384 --> 00:39:00.334
Next slide, please.

00:39:02.123 --> 00:39:04.657
These impacts or
benefits can be measured

00:39:04.657 --> 00:39:08.640
using the affordability
rate metric or calculator tool

00:39:08.640 --> 00:39:11.730
developed by energy
division in phase one

00:39:11.730 --> 00:39:13.670
and phase two of this proceeding.

00:39:13.670 --> 00:39:14.837
Next slide, phase.

00:39:16.690 --> 00:39:18.870
The second criteria, equity impact

00:39:18.870 --> 00:39:20.830
examines how proposal affects

00:39:20.830 --> 00:39:25.120
Socioeconomic Vulnerability
Index Disadvantaged Communities

00:39:25.120 --> 00:39:26.355
or SEVI-DACs.

00:39:26.355 --> 00:39:28.457
These communities are
defined with components

00:39:28.457 --> 00:39:32.570
from the state's Cal's Enviroscreen 3.02

00:39:32.570 --> 00:39:33.900
and include census tracts,

00:39:33.900 --> 00:39:38.650
the top 25% of Chevy scores
as well as tribal communities.

00:39:38.650 --> 00:39:39.623
Next slide, please.

00:39:42.180 --> 00:39:43.550
After defining these communities,

00:39:43.550 --> 00:39:45.970
utilities could use the
affordability racial calculator

00:39:45.970 --> 00:39:49.150
to determine how much of
household essential income

00:39:50.009 --> 00:39:53.992
is used to pay for income for
energy rates in SEVI-DACs.

00:39:53.992 --> 00:39:54.825
Next slide.

00:39:56.904 --> 00:40:01.370
The next criteria, environmental
and social justice or ESJ,

00:40:01.370 --> 00:40:02.975
measures or rate proposals impacts

00:40:02.975 --> 00:40:06.600
based on two categories in CPUC's,

00:40:06.600 --> 00:40:09.670
Distributed Energy
Resource Societal Cost Tests.

00:40:09.670 --> 00:40:10.553
Next slide.

00:40:13.452 --> 00:40:15.070
This criteria first examines,

00:40:15.070 --> 00:40:17.387
whether a rate proposal will
disproportional impact areas

00:40:17.387 --> 00:40:20.380
are already suffered
from air quality problems.

00:40:20.380 --> 00:40:21.213
Next slide.

00:40:23.330 --> 00:40:25.450
This metric also examines
whether the proposal

00:40:25.450 --> 00:40:28.330
will result increase
greenhouse gas emissions

00:40:28.330 --> 00:40:32.060
possibly by incentivizing
fossil based energy use.

00:40:32.060 --> 00:40:33.010
Next slide, please.

00:40:35.200 --> 00:40:36.990
Finally, this metric looks at

00:40:36.990 --> 00:40:39.860
whether the rate proposal
helps advance the CPUC,

00:40:39.860 --> 00:40:44.220
the ESJ action plan 2.09 goals.

00:40:44.220 --> 00:40:45.170
Next slide, please.

00:40:47.790 --> 00:40:49.080
This is a list of all those

00:40:49.080 --> 00:40:51.620
that I'll just highlight a few of them.

00:40:51.620 --> 00:40:53.171
The goals include increasing investment

00:40:53.171 --> 00:40:57.600
in clean energy resources
to benefit ESJ communities,

00:40:57.600 --> 00:41:00.660
increasing climate resiliency
in those communities

00:41:00.660 --> 00:41:02.970
and enhancing enforcements ensure safety

00:41:02.970 --> 00:41:04.469
and consumer protections for all,

00:41:04.469 --> 00:41:07.061
and especially for ESJ communities.

00:41:07.061 --> 00:41:08.843
Next slide, please.

00:41:11.670 --> 00:41:14.480
The fourth criteria, revenue
requirement and rate impacts

00:41:14.480 --> 00:41:18.090
looks specifically how
a rate proposal impacts

00:41:18.090 --> 00:41:21.450
IOU revenue requirements,

00:41:21.450 --> 00:41:24.930
and whether it contains
cost in a quantifiable way.

00:41:24.930 --> 00:41:26.137
Next slide, please

00:41:31.280 --> 00:41:33.860
Proposals can be
evaluated coin its criteria

00:41:33.860 --> 00:41:36.720
by using the cost
and rate tracking tools

00:41:36.720 --> 00:41:38.380
as well as the affordability metrics

00:41:38.380 --> 00:41:39.800
developed early in proceeding

00:41:39.800 --> 00:41:44.370
to measure cumulative rate
impacts on essential usage bills.

00:41:44.370 --> 00:41:45.670
Next slide, please.

00:41:49.300 --> 00:41:52.270
The next criteria, economic
impact takes a broader look

00:41:52.270 --> 00:41:56.670
at affordability proposals
impact on the larger economy.

00:41:56.670 --> 00:41:58.264
At a basic level higher rates,

00:41:58.264 --> 00:42:00.050
leave rate payers of less wealth

00:42:00.050 --> 00:42:01.729
to spend in the larger economy

00:42:01.729 --> 00:42:04.240
while lower rates
preserve rate payer wealth

00:42:04.240 --> 00:42:05.640
and spending capacity.

00:42:05.640 --> 00:42:06.933
Next slide.

00:42:08.192 --> 00:42:11.650
This criteria could also
complement equity analysis

00:42:11.650 --> 00:42:13.245
by examining whether
good rate proposal results

00:42:13.245 --> 00:42:16.710
in all transfers from one repair class

00:42:16.710 --> 00:42:18.429
to another repair class.

00:42:18.429 --> 00:42:20.113
Next slide, please.

00:42:22.220 --> 00:42:25.700
The final criteria evaluates
whether a rate proposal

00:42:25.700 --> 00:42:28.860
requires regulatory and statutory forms

00:42:28.860 --> 00:42:32.250
and how politically feasible
such reforms might be.

00:42:32.250 --> 00:42:33.083
Next slide.

00:42:34.930 --> 00:42:37.620
This criteria is more
challenging to measure,

00:42:37.620 --> 00:42:41.060
but would contribute
important practical data

00:42:41.060 --> 00:42:43.713
in evaluation of these
affordability proposals.

00:42:45.270 --> 00:42:46.103
Next slide.

00:42:48.210 --> 00:42:49.851
We encourage you to think
about the following panels

00:42:49.851 --> 00:42:54.380
with these six
evaluation criteria in mind.

00:42:54.380 --> 00:42:57.050
We also encourage to
help us refine these criteria

00:42:57.050 --> 00:42:59.453
and sentence for suggestions
for improving them.

00:43:00.600 --> 00:43:05.600
Is now my honor and pleasure
to kick off our first panel.

00:43:05.700 --> 00:43:08.440
And by design that is our,

00:43:08.440 --> 00:43:10.390
environmental and social justice panel.

00:43:11.490 --> 00:43:13.160
This discussion will emphasize

00:43:13.160 --> 00:43:15.310
the core concern of this
En Bank at the proceeding

00:43:15.310 --> 00:43:17.990
protecting households are struggling

00:43:17.990 --> 00:43:19.650
with the impacts of the pandemic

00:43:19.650 --> 00:43:22.603
as well as of larger economic
and social pressures.

00:43:23.520 --> 00:43:28.520
Moderator Kathleen Yip, is an
energy analyst, energy advisor

00:43:28.550 --> 00:43:31.568
in the office of
Commissioner Darcie Houck,

00:43:31.568 --> 00:43:36.360
and previously served as
the CPUC's equity analyst.

00:43:36.360 --> 00:43:38.510
So thank you Kathleen
for joining us today.

00:43:42.040 --> 00:43:43.250
<v ->Thanks very much, Jack.</v>

00:43:43.250 --> 00:43:46.163
I just wanna make sure
all of our panelists are on.

00:43:48.780 --> 00:43:50.400
Okay.

00:43:50.400 --> 00:43:51.820
All right, good morning everyone.

00:43:51.820 --> 00:43:53.630
I'm Kathleen, as Jack mentioned,

00:43:53.630 --> 00:43:56.200
I'm an advisor to Commissioner Houck.

00:43:56.200 --> 00:43:58.100
For panel, welcome to panel one.

00:43:58.100 --> 00:43:59.507
We're gonna be discussing equity,

00:43:59.507 --> 00:44:02.263
environmental justice
and social justice.

00:44:03.170 --> 00:44:06.780
We've got four
panelists joining us today.

00:44:06.780 --> 00:44:10.080
First we've got Justin
Bogda, legal fellow with CEJA,

00:44:10.080 --> 00:44:13.030
the California environmental
Justice Alliance.

00:44:13.030 --> 00:44:14.046
Next we've got Jana Ganion,

00:44:14.046 --> 00:44:17.310
the Director of Sustainability
and Government Affairs

00:44:17.310 --> 00:44:19.193
at the Blue Lake Rancheria.

00:44:20.270 --> 00:44:23.710
We've also got Arjun Makhijani,
President of the Institute

00:44:23.710 --> 00:44:25.310
for Energy Environmental Research

00:44:25.310 --> 00:44:29.840
and energy expert with
the Just Solutions Collective.

00:44:29.840 --> 00:44:31.680
And we've also got Tim O'Connor,

00:44:31.680 --> 00:44:34.020
senior director and attorney with EDF

00:44:34.020 --> 00:44:35.713
the Environmental Defense Fund.

00:44:36.640 --> 00:44:38.154
We're gonna start with a
few presentations today

00:44:38.154 --> 00:44:40.260
and then move into Q&amp;A

00:44:40.260 --> 00:44:42.881
and discussion with the
panelists following that.

00:44:42.881 --> 00:44:44.810
So let's start it off with Tim

00:44:44.810 --> 00:44:47.210
where he'll be presenting an overview

00:44:47.210 --> 00:44:49.020
and high level summary of report,

00:44:49.020 --> 00:44:51.357
aligning gas regulation
and climate goal.

00:44:51.357 --> 00:44:52.373
Tim.

00:44:55.410 --> 00:44:56.460
<v ->Great, thank you.</v>

00:44:56.460 --> 00:44:58.883
And good morning to everyone.

00:45:00.380 --> 00:45:01.810
My name is Tim O'Connor.

00:45:01.810 --> 00:45:04.830
I am a Senior Attorney over

00:45:04.830 --> 00:45:06.810
at the Environmental Defense Fund.

00:45:06.810 --> 00:45:10.060
I've been with EDF for about 15 years.

00:45:10.060 --> 00:45:12.430
And during this time I
have had the pleasure

00:45:12.430 --> 00:45:13.850
to participate before the Commission

00:45:13.850 --> 00:45:16.220
in a number of different venues,

00:45:16.220 --> 00:45:19.590
and really appreciate the
invitation to participate today.

00:45:19.590 --> 00:45:22.480
As Kathleen mentioned,

00:45:22.480 --> 00:45:26.250
we have done some analysis
and developed some reports

00:45:26.250 --> 00:45:29.880
around things that
public utility Commissions

00:45:29.880 --> 00:45:31.454
and policy makers should consider

00:45:31.454 --> 00:45:34.370
in things like natural gas planning,

00:45:34.370 --> 00:45:36.900
but we've also done
this on the electric side,

00:45:36.900 --> 00:45:40.447
on the transportation side
and in other venues as well.

00:45:40.447 --> 00:45:42.210
And so speaking today,

00:45:42.210 --> 00:45:44.947
I'm gonna start with
four different themes.

00:45:44.947 --> 00:45:46.580
Next slide, please.

00:45:46.580 --> 00:45:50.423
The general urge is
going to be to talk about,

00:45:51.625 --> 00:45:53.390
I'll just wait for this
slide to transition here.

00:45:53.390 --> 00:45:56.080
So talk about electricity
sector decarbonization,

00:45:56.080 --> 00:45:57.443
and then into natural gas plan

00:45:57.443 --> 00:45:59.830
to kind of give a high level overview

00:45:59.830 --> 00:46:01.870
and then to talk about the importance

00:46:01.870 --> 00:46:04.090
of sort of drilling down
from the high level

00:46:04.090 --> 00:46:07.830
to the locational and
individual aspects,

00:46:07.830 --> 00:46:12.830
and then bringing in at the
end the importance of looking at

00:46:13.260 --> 00:46:15.370
really sort of the topic of today,

00:46:15.370 --> 00:46:17.767
social justice and environmental issues

00:46:17.767 --> 00:46:19.530
and the non monetary benefits

00:46:19.530 --> 00:46:23.490
and burdens they're from
into these decision making.

00:46:23.490 --> 00:46:25.121
Next slide.

00:46:25.121 --> 00:46:29.530
Environmental Defense Fund
about a year and a half ago,

00:46:29.530 --> 00:46:33.710
started a process to look at
economy-wide decarbonization,

00:46:33.710 --> 00:46:34.880
something of course near and dear

00:46:34.880 --> 00:46:36.533
to most of the folks on the call today.

00:46:36.533 --> 00:46:40.470
And looking at the
opportunity of course,

00:46:40.470 --> 00:46:41.900
that faces California

00:46:41.900 --> 00:46:44.310
in terms of the transition
of our energy sector

00:46:44.310 --> 00:46:46.790
also must come alongside an evaluation

00:46:46.790 --> 00:46:50.540
of the costs and the challenges.

00:46:50.540 --> 00:46:52.280
And so working with partners

00:46:52.280 --> 00:46:55.840
at Princeton and Stanford and
E3 and Clean Air Task Force

00:46:55.840 --> 00:47:00.310
we did an assessment
of what does the transition

00:47:00.310 --> 00:47:02.560
to decarbonize electric grid look like

00:47:02.560 --> 00:47:06.050
if you pursue different strategies?

00:47:06.050 --> 00:47:07.390
Next slide, please.

00:47:07.390 --> 00:47:09.400
And with a focus on costs,

00:47:09.400 --> 00:47:13.450
we evaluated the cost of transitioning

00:47:13.450 --> 00:47:17.520
using nearly all renewable sources

00:47:17.520 --> 00:47:22.520
versus an array of zero
carbon energy solutions

00:47:23.050 --> 00:47:27.500
and evaluating the system
wide costs for doing that.

00:47:27.500 --> 00:47:29.250
And so at a big picture,

00:47:29.250 --> 00:47:31.940
you can see how the
large policy decisions

00:47:31.940 --> 00:47:36.380
that we make in California can
have large system-wide costs

00:47:36.380 --> 00:47:40.480
as it relates to the overall transition.

00:47:40.480 --> 00:47:45.480
And looking at energy
models by the three institutions,

00:47:45.930 --> 00:47:48.170
you can see that there's
general agreement

00:47:48.170 --> 00:47:51.320
that pursuing an all renewables approach

00:47:51.320 --> 00:47:56.060
is a much higher cost
than pursuing a build out

00:47:56.060 --> 00:47:59.130
an array of resource and
utilization of array of resources

00:47:59.130 --> 00:48:01.840
that can provide clean firm power

00:48:01.840 --> 00:48:06.840
to satisfy reliability and
energy customer needs

00:48:07.000 --> 00:48:08.801
while also reducing greenhouse gases.

00:48:08.801 --> 00:48:11.000
So this is a broad theme,

00:48:11.000 --> 00:48:14.590
the idea of how we engage
in the broad transition,

00:48:14.590 --> 00:48:17.890
impacts the overall system-wide costs.

00:48:17.890 --> 00:48:19.370
Next slide, please.

00:48:19.370 --> 00:48:22.500
You could take this forward
to the natural gas sector

00:48:22.500 --> 00:48:25.100
and you could see
how individual decisions

00:48:25.100 --> 00:48:28.310
of course ladder up into
the economy-wide strategy

00:48:28.310 --> 00:48:31.270
and what we decided to do in a document

00:48:31.270 --> 00:48:32.920
sort of looking at the landscape

00:48:32.920 --> 00:48:36.680
of public utility
Commissions across the US,

00:48:36.680 --> 00:48:39.450
try to identify a set of strategies

00:48:39.450 --> 00:48:43.830
that can yield reductions
in the natural gas sector

00:48:43.830 --> 00:48:45.313
through improvements in planning

00:48:45.313 --> 00:48:49.060
and the investments flowing there from.

00:48:49.060 --> 00:48:52.140
And we can up with
three broad strategies

00:48:52.140 --> 00:48:53.688
of which the Commission
here has already,

00:48:53.688 --> 00:48:58.520
really sort of embarked
on these strategies

00:48:58.520 --> 00:49:01.730
and taken them on
with sort of strategy one

00:49:01.730 --> 00:49:03.311
step one being to establish an inclusive

00:49:03.311 --> 00:49:06.480
and transparent decision making process,

00:49:06.480 --> 00:49:08.280
you could see the long
term gas planning cases

00:49:08.280 --> 00:49:10.700
being part and part of that.

00:49:10.700 --> 00:49:11.710
And with step two,

00:49:11.710 --> 00:49:13.269
being sort of the
integration or excuse me,

00:49:13.269 --> 00:49:16.000
the development of long term plans

00:49:16.000 --> 00:49:18.380
that are commensurate
with climate reduction goals

00:49:18.380 --> 00:49:21.160
and step three, being the integration

00:49:21.160 --> 00:49:25.720
of year term decision making
with those long term plans.

00:49:25.720 --> 00:49:27.040
Next slide.

00:49:27.040 --> 00:49:29.840
And you can identify
a series of strategies

00:49:29.840 --> 00:49:33.720
that fit within each
of these various steps.

00:49:33.720 --> 00:49:36.620
I included these on
here, but on the prior slide,

00:49:36.620 --> 00:49:38.482
I included a link to
the report in total,

00:49:38.482 --> 00:49:43.240
and you can see that in a,
in a laddering up process,

00:49:43.240 --> 00:49:47.230
the coordination of near term
decisions to long term goals

00:49:47.230 --> 00:49:48.827
is really where the rubber hits the road

00:49:48.827 --> 00:49:53.827
and identifying things
such as new tariff decisions,

00:49:54.630 --> 00:49:58.360
evaluating cost
allocation and scrutinizing,

00:49:58.360 --> 00:49:59.920
transactions to ensure that

00:49:59.920 --> 00:50:02.280
they're in the best
interest of rate rate payers

00:50:02.280 --> 00:50:07.280
are sort of the core
elements of the integration

00:50:07.290 --> 00:50:10.650
of near term decision
making into long term planning

00:50:10.650 --> 00:50:14.750
that is based in
transparent decision making.

00:50:14.750 --> 00:50:16.191
Next slide.

00:50:16.191 --> 00:50:18.500
And when we look at the
sort of the bringing together,

00:50:18.500 --> 00:50:22.270
of these natural gas initiatives,

00:50:22.270 --> 00:50:24.120
you can see that
they're quite important,

00:50:24.120 --> 00:50:25.750
both in the near term and long term,

00:50:25.750 --> 00:50:29.390
because what they prevent is
us from investing in a system,

00:50:29.390 --> 00:50:30.891
whether it be on the natural gas side

00:50:30.891 --> 00:50:35.290
or really on the electric
side, based on my prior slide,

00:50:35.290 --> 00:50:40.270
that is a higher cost
outcome than is necessary.

00:50:40.270 --> 00:50:43.190
Here, in the transit in the gas side,

00:50:43.190 --> 00:50:45.180
it takes the form of transit assets.

00:50:45.180 --> 00:50:46.790
Of course, in the form
of the electrics side,

00:50:46.790 --> 00:50:50.470
it takes the form of
energy system build outs,

00:50:50.470 --> 00:50:52.123
which are uneconomic or unnecessary.

00:50:52.123 --> 00:50:53.313
Next slide.

00:50:54.620 --> 00:50:57.240
And so when we think about
these economy-wide impacts

00:50:57.240 --> 00:50:59.710
and benefits and opportunities,

00:50:59.710 --> 00:51:02.102
you can also see that we
need to be sort of drilling down

00:51:02.102 --> 00:51:06.390
to really incorporate environment
and social justice issues.

00:51:06.390 --> 00:51:08.320
Appropriately, we be
drilling down of course,

00:51:08.320 --> 00:51:12.332
into the locational and
individual affordability aspects.

00:51:12.332 --> 00:51:15.650
And we identified here on this slide,

00:51:15.650 --> 00:51:18.430
how this plays out in
the transportation space.

00:51:18.430 --> 00:51:19.740
And this is of course,

00:51:19.740 --> 00:51:22.490
something that California's
been very active in

00:51:22.490 --> 00:51:26.210
that the importance of
designing electric rates,

00:51:26.210 --> 00:51:29.790
infrastructure
investment, cost allocation

00:51:29.790 --> 00:51:33.730
that it has obviously
very locationally important

00:51:33.730 --> 00:51:38.730
and class impact differences
based on how it's done.

00:51:39.330 --> 00:51:42.490
And of course the transportation
electrification framework

00:51:42.490 --> 00:51:44.730
that the Commission embarked on

00:51:44.730 --> 00:51:47.660
and now the individual investment plan

00:51:47.660 --> 00:51:49.719
coming up by the
utilities will seek to do this,

00:51:49.719 --> 00:51:52.146
but we can see that
many of this is already,

00:51:52.146 --> 00:51:54.580
of course, in thinking here.

00:51:54.580 --> 00:51:57.240
And we identify, of course,

00:51:57.240 --> 00:52:00.150
that regulators looking
at the policy differences

00:52:00.150 --> 00:52:01.730
between cars and trucks as being,

00:52:01.730 --> 00:52:03.684
and buses being very important.

00:52:03.684 --> 00:52:07.830
Thus we see electric
rates for electric vehicles

00:52:07.830 --> 00:52:10.950
versus being who do
transport, having differences

00:52:10.950 --> 00:52:15.950
and sort of approaching those
differences with fresh eyes,

00:52:16.030 --> 00:52:18.930
to ensure that the rate impacts

00:52:18.930 --> 00:52:21.730
and cost impacts are
distributed appropriately,

00:52:21.730 --> 00:52:26.010
separately we seeing
equity as a primary concern,

00:52:26.010 --> 00:52:29.380
in the planning of easy
infrastructure deployment and rates

00:52:29.380 --> 00:52:31.330
maximizing the benefits of those EVs

00:52:31.330 --> 00:52:32.570
as sort of the callouts.

00:52:32.570 --> 00:52:35.240
You can think about this, of course,

00:52:35.240 --> 00:52:38.970
in the realm of building
electrification too,

00:52:38.970 --> 00:52:41.780
that if you're sort of taking the words,

00:52:41.780 --> 00:52:43.540
electric vehicles in turning this

00:52:43.540 --> 00:52:45.780
into electrified buildings,

00:52:45.780 --> 00:52:48.310
you can see of course that regulators

00:52:48.310 --> 00:52:51.630
should be looking at
the appropriate redesign

00:52:51.630 --> 00:52:53.400
for all electric buildings

00:52:53.400 --> 00:52:55.940
and ensuring that electrified buildings

00:52:56.846 --> 00:52:58.980
and equity concerns are paired together

00:52:58.980 --> 00:53:03.052
and maximizing the benefit
of electrified buildings,

00:53:03.052 --> 00:53:04.960
that are sort of
transitioning off of gas.

00:53:04.960 --> 00:53:07.748
And so these vocational
individual affordability aspects

00:53:07.748 --> 00:53:11.860
sort of run the various topic
that we decide to pursue,

00:53:11.860 --> 00:53:14.760
and that all of these
should be taken into account.

00:53:14.760 --> 00:53:16.169
Next slide.

00:53:16.169 --> 00:53:19.600
And when we think about this as

00:53:19.600 --> 00:53:22.400
where we should be looking
at from the affordability aspect,

00:53:22.400 --> 00:53:25.030
we can also see that
of course affordability,

00:53:25.030 --> 00:53:26.540
isn't just dollars and cents,

00:53:26.540 --> 00:53:30.350
but it's whether people can
afford to live in this economy

00:53:30.350 --> 00:53:33.520
and not have to pay through their lungs

00:53:33.520 --> 00:53:37.240
and through their hospital
visits and incorporating equity

00:53:37.240 --> 00:53:41.780
and the benefits of health
and other non monetary benefits

00:53:41.780 --> 00:53:43.323
associated with electrification,

00:53:43.323 --> 00:53:45.680
it was so something
that we should be striving

00:53:45.680 --> 00:53:48.272
to achieve within our
energy policy here.

00:53:48.272 --> 00:53:50.337
Here we look at transportation

00:53:50.337 --> 00:53:53.360
and this is a study we're
presently conducting.

00:53:53.360 --> 00:53:58.220
You can see in California
through DMV data

00:53:58.220 --> 00:54:01.470
and through federal
motor vehicle safety data,

00:54:01.470 --> 00:54:05.030
where vehicles are indeed
registered up and down the state,

00:54:05.030 --> 00:54:08.790
you can run analyses to see within ports

00:54:08.790 --> 00:54:10.280
and in areas that service ports,

00:54:10.280 --> 00:54:13.130
where vehicles are
registered and located,

00:54:13.130 --> 00:54:14.930
and you can start to identify

00:54:14.930 --> 00:54:17.980
where prioritized deployment
of electrified infrastructure

00:54:17.980 --> 00:54:19.526
can provide some of the most benefits

00:54:19.526 --> 00:54:24.526
on a non monetary basis
as related to air pollution,

00:54:25.470 --> 00:54:30.470
reductions and grid reliability
as you look at integration

00:54:31.360 --> 00:54:32.955
of those vehicles into the system.

00:54:32.955 --> 00:54:34.570
Next slide.

00:54:34.570 --> 00:54:36.930
And if you also think about this

00:54:36.930 --> 00:54:38.608
from the science perspective,

00:54:38.608 --> 00:54:42.580
not just on the transportation
but on the climate side,

00:54:42.580 --> 00:54:44.168
you can see things
such as the incorporation

00:54:44.168 --> 00:54:47.046
of methane reductions
and the social cost of carbon

00:54:47.046 --> 00:54:50.380
and social cost of methane reductions

00:54:50.380 --> 00:54:52.912
from things like natural gas combustion,

00:54:52.912 --> 00:54:57.893
reduction natural gas use,
as well as indoor air pollution

00:54:57.893 --> 00:55:01.830
associated with a transition
from natural gas and buildings,

00:55:01.830 --> 00:55:04.410
that these are all types
of non-monetary benefits

00:55:04.410 --> 00:55:07.370
that should be incorporated
into Commission and policies.

00:55:07.370 --> 00:55:08.956
And if we think about this solely

00:55:08.956 --> 00:55:13.840
from an economic standpoint
of what is going to be

00:55:14.870 --> 00:55:19.780
the sheer dollar figure that
will save rate payers the most,

00:55:19.780 --> 00:55:23.260
as opposed to looking
at an integrated system

00:55:23.260 --> 00:55:25.940
of improvements where
non monetary benefits

00:55:25.940 --> 00:55:28.210
are incorporated into these decisions,

00:55:28.210 --> 00:55:30.030
you tend to fall short
if you're only looking

00:55:30.030 --> 00:55:32.420
of course at the dollars.

00:55:32.420 --> 00:55:33.560
Next slide.

00:55:33.560 --> 00:55:38.540
So in conclusion, we see
that at a high level, of course,

00:55:38.540 --> 00:55:42.570
California has embarked
on this transition

00:55:42.570 --> 00:55:44.093
in a very, in a holistic way.

00:55:44.093 --> 00:55:49.093
And there's many moving
pieces to this challenge,

00:55:49.580 --> 00:55:53.960
however, the incorporation
just of these issues

00:55:53.960 --> 00:55:55.610
at the big picture level,

00:55:55.610 --> 00:55:59.320
the economy-wide level
misses some key factors.

00:55:59.320 --> 00:56:01.900
And of course my colleague
Michael Coleman tomorrow

00:56:01.900 --> 00:56:04.460
will be talking about
really more specifics

00:56:04.460 --> 00:56:07.760
on the natural gas sector side

00:56:07.760 --> 00:56:10.160
and the fellow panelists

00:56:10.160 --> 00:56:11.760
will talk about more
about the specifics there,

00:56:11.760 --> 00:56:13.690
but I think this was meant to provide

00:56:13.690 --> 00:56:17.370
a broad level of context
of the importance of broad,

00:56:17.370 --> 00:56:21.640
long term sector planning
in a corporation of locational

00:56:21.640 --> 00:56:24.750
and societal benefits
into the decisions.

00:56:24.750 --> 00:56:25.750
Thank you very much.

00:56:27.577 --> 00:56:29.533
<v ->Great, thank you
very much, Tim.</v>

00:56:30.500 --> 00:56:33.400
All right, next we will hear from Jana

00:56:33.400 --> 00:56:35.005
who will be sharing the
unique challenges and impacts

00:56:35.005 --> 00:56:37.593
to rural and tribal government.

00:56:38.880 --> 00:56:40.410
Jana.

00:56:40.410 --> 00:56:41.410
<v ->Great thank you, Kathleen.</v>

00:56:41.410 --> 00:56:42.460
Can you hear me okay?

00:56:44.100 --> 00:56:45.700
<v ->Great.</v>
<v ->Yap, I can hear you.</v>

00:56:46.675 --> 00:56:47.508
<v ->Perfect.</v>

00:56:47.508 --> 00:56:51.760
So enormous thanks to the
CPUC for convening this En Banc

00:56:51.760 --> 00:56:53.260
and this important panel

00:56:53.260 --> 00:56:57.010
and starting with it by the
way is much appreciated.

00:56:57.010 --> 00:56:59.560
I'm Jana Ganion, Sustainability
and Government Affairs

00:56:59.560 --> 00:57:01.860
Director for the Blue Lake Rancheria.

00:57:01.860 --> 00:57:03.140
And in addition to that,

00:57:03.140 --> 00:57:05.810
as part of my role with the tribe

00:57:05.810 --> 00:57:07.930
I serve as the tribal representative

00:57:07.930 --> 00:57:11.743
on the California Senate Bill 350,

00:57:12.590 --> 00:57:14.760
disadvantaged communities advisory group

00:57:14.760 --> 00:57:19.260
to the CPUC and CEC, I
also serve on California's

00:57:19.260 --> 00:57:22.370
Integrated Climate Adaptation
and Resiliency Program,

00:57:22.370 --> 00:57:25.880
the technical advisory
count for that work.

00:57:25.880 --> 00:57:30.510
And I'm current co-chair of
the US Department of Energy,

00:57:30.510 --> 00:57:33.310
Indian Country Energy and
Infrastructure Working Group

00:57:33.310 --> 00:57:36.630
or ICEIWG, where I
have the great pleasure

00:57:36.630 --> 00:57:38.226
of working with
hundreds of tribal nations

00:57:38.226 --> 00:57:42.630
across the country on
exactly these kinds of issues.

00:57:42.630 --> 00:57:43.543
Next slide please.

00:57:46.180 --> 00:57:47.790
So when we talk about
affordability, of course,

00:57:47.790 --> 00:57:50.790
we know that climate
change is expensive,

00:57:50.790 --> 00:57:52.710
particularly where the impacts overlap

00:57:52.710 --> 00:57:54.460
with the energy and infrastructure.

00:57:55.680 --> 00:57:58.960
Weather volatility,
extreme heat, extreme cold,

00:57:58.960 --> 00:58:00.770
these are now core considerations

00:58:00.770 --> 00:58:03.950
in our overall affordability calculus,

00:58:03.950 --> 00:58:08.950
and this Noah image summarize
some of the national vagaries.

00:58:10.690 --> 00:58:13.950
Of course, we've
seen all of these things

00:58:13.950 --> 00:58:15.488
downscaled within California as well.

00:58:15.488 --> 00:58:17.223
Next slide, please.

00:58:21.320 --> 00:58:24.360
This is a photo from
September 11th, 2020,

00:58:24.360 --> 00:58:26.752
when large portions of
the Western United States

00:58:26.752 --> 00:58:29.330
were on fire simultaneously,

00:58:29.330 --> 00:58:34.250
and power outages and
hazardous air quality effects

00:58:34.250 --> 00:58:38.360
from the wildfire smoke
affected people for weeks.

00:58:38.360 --> 00:58:41.540
These are the risks and impacts
that are now the new normal

00:58:41.540 --> 00:58:44.600
and are part of our
affordability context.

00:58:44.600 --> 00:58:45.550
Next slide, please.

00:58:48.170 --> 00:58:49.720
On the rural remote coast,

00:58:49.720 --> 00:58:51.500
I think it's important to take

00:58:51.500 --> 00:58:53.460
a little bit of just a moment or two

00:58:53.460 --> 00:58:57.773
to talk about kind of some
specific contextual situations.

00:58:58.770 --> 00:59:00.066
We are powered here primarily

00:59:00.066 --> 00:59:02.540
by a coastal natural gas system

00:59:02.540 --> 00:59:07.540
that fuels our sole anchor
electricity generation plant.

00:59:07.570 --> 00:59:09.580
The orange box there is bracketing

00:59:09.580 --> 00:59:13.820
the one 10 inch natural
gas transmission pipeline

00:59:13.820 --> 00:59:15.330
that serves our region.

00:59:15.330 --> 00:59:18.300
And it's vulnerable to size the risk.

00:59:18.300 --> 00:59:19.879
As we think through how to reduce

00:59:19.879 --> 00:59:22.420
our dependence on fossil fuels

00:59:22.420 --> 00:59:24.850
and pruning the natural gas systems,

00:59:24.850 --> 00:59:27.439
rural areas are likely
candidates for pilot studies

00:59:27.439 --> 00:59:30.370
for complete electrification.

00:59:30.370 --> 00:59:34.530
And crucially by starting
with rural and travel areas,

00:59:34.530 --> 00:59:37.820
we can achieve broader
electrification ecosystems

00:59:37.820 --> 00:59:41.770
in these areas and hopefully achieve

00:59:41.770 --> 00:59:45.360
some related equity metric
improvements as well.

00:59:45.360 --> 00:59:46.373
Next slide, please.

00:59:49.410 --> 00:59:53.090
Our electrical grid here is
connected to the larger grids

00:59:53.090 --> 00:59:54.519
by one transmission line.

00:59:54.519 --> 00:59:56.300
It has one redundant line,

00:59:56.300 --> 00:59:58.800
but they're meant to
be used one at a time.

00:59:58.800 --> 01:00:02.160
We're import restricted
to about 70 megawatts,

01:00:02.160 --> 01:00:04.840
which is about half of our local use.

01:00:04.840 --> 01:00:07.400
So if that natural gas plant,

01:00:07.400 --> 01:00:11.140
the one plant that we have
goes down, we are in the dark,

01:00:11.140 --> 01:00:12.780
the green areas on this image

01:00:12.780 --> 01:00:15.110
are what we call the Humboldt Island

01:00:15.110 --> 01:00:19.577
and thanks to the CPUC, the CEC and PG&amp;E

01:00:20.517 --> 01:00:22.080
combining efforts.

01:00:22.080 --> 01:00:23.670
This area can now stay energized

01:00:23.670 --> 01:00:26.143
when not at risk for wildfire.

01:00:26.143 --> 01:00:28.510
Prior to this Humboldt Island,

01:00:28.510 --> 01:00:30.835
even though we had no
wildfire risk on the coast,

01:00:30.835 --> 01:00:34.760
the entire area grids
needed to be taken down

01:00:34.760 --> 01:00:36.990
during PSPS events.

01:00:36.990 --> 01:00:40.370
So this more surgical
approach to reliability

01:00:40.370 --> 01:00:43.750
has made an enormous
difference in the last years.

01:00:43.750 --> 01:00:47.750
And people here are now
more readily pairing affordability

01:00:47.750 --> 01:00:50.110
with reliability in their thinking.

01:00:50.110 --> 01:00:51.060
Next slide, please.

01:00:54.300 --> 01:00:58.170
So I wanna make
sure to be time sensitive

01:00:58.170 --> 01:01:00.483
in this first overview,

01:01:01.440 --> 01:01:05.720
but I do wanna bring in some
afford ability considerations

01:01:05.720 --> 01:01:07.270
into the greater discussion.

01:01:07.270 --> 01:01:10.890
So what we've heard from our region,

01:01:10.890 --> 01:01:15.890
which is rural and has a
many tribal nations within it,

01:01:17.590 --> 01:01:21.110
that we're all of the
understanding that costs arising.

01:01:21.110 --> 01:01:22.383
So make them count.

01:01:24.010 --> 01:01:26.360
Make sure that we're getting something

01:01:26.360 --> 01:01:29.420
for these increased costs,
climate smart transitions,

01:01:29.420 --> 01:01:34.080
lower greenhouse gas emission
profiles, highest reliability,

01:01:34.080 --> 01:01:36.950
because we know that if
we can clean the climate,

01:01:36.950 --> 01:01:38.870
we will have greater affordability

01:01:38.870 --> 01:01:41.943
for our infrastructure
and equity overall.

01:01:43.400 --> 01:01:46.760
Yes, please continue to factor

01:01:46.760 --> 01:01:49.163
in non-energy cost considerations.

01:01:50.220 --> 01:01:54.110
The human health impact of reliability,

01:01:54.110 --> 01:01:57.080
affordability climate crisis

01:01:57.080 --> 01:02:00.320
is a central consideration for people

01:02:01.620 --> 01:02:04.980
probably alongside an equal importance

01:02:04.980 --> 01:02:06.913
to economic considerations.

01:02:07.780 --> 01:02:10.830
And we don't need to
get too complicated with it.

01:02:10.830 --> 01:02:14.620
We can focus on strong data gatherings

01:02:14.620 --> 01:02:17.640
and reducing emissions
from the energy sector,

01:02:17.640 --> 01:02:20.540
things like methane,
particulates, the NOx,

01:02:20.540 --> 01:02:23.910
and ratchet up the cost of carbon

01:02:23.910 --> 01:02:27.920
build from the distributed
energy societal cost metric

01:02:27.920 --> 01:02:29.580
that we're already using

01:02:29.580 --> 01:02:32.101
and establish a way to make sure that

01:02:32.101 --> 01:02:35.740
we are getting the rates right

01:02:35.740 --> 01:02:40.740
with the non-energy cost
considerations factored in.

01:02:42.130 --> 01:02:44.280
There's lots of people
thinking about this.

01:02:45.634 --> 01:02:48.120
It seems to me like it's
never been more achievable

01:02:48.120 --> 01:02:49.363
to be able to do that.

01:02:51.240 --> 01:02:54.940
I would say that in our
work around microgrids

01:02:54.940 --> 01:02:57.720
and distributed energy resources,

01:02:57.720 --> 01:03:02.720
we have found that desiloing,
resource adequacy, blue sky

01:03:04.180 --> 01:03:05.801
and emergency power

01:03:05.801 --> 01:03:09.120
and quantifying the value on continuity

01:03:09.120 --> 01:03:11.800
of operations and
emergency service delivery

01:03:11.800 --> 01:03:15.903
has been the key to an
affordable investment strategy.

01:03:17.180 --> 01:03:20.940
The PSPS events of the
last few years, as I've said,

01:03:20.940 --> 01:03:25.110
make reliability top of mind for people.

01:03:25.110 --> 01:03:26.778
It certainly matters what the cost is,

01:03:26.778 --> 01:03:29.410
but we don't need to overcomplicate it.

01:03:29.410 --> 01:03:31.896
It can be sort of an economic formula

01:03:31.896 --> 01:03:36.896
that includes a continuity
of operation metric.

01:03:37.300 --> 01:03:40.730
In terms of equity I would say that,

01:03:40.730 --> 01:03:42.840
one of the basic points is that

01:03:42.840 --> 01:03:46.220
business as usual power
and emergency power

01:03:46.220 --> 01:03:49.313
should not increase air
pollution within communities.

01:03:51.240 --> 01:03:54.430
Tribal governments may want

01:03:54.430 --> 01:03:56.670
to exercise jurisdictional authority

01:03:56.670 --> 01:04:00.730
and utility development
and for affordability overall,

01:04:00.730 --> 01:04:03.440
this is an important relationship,

01:04:03.440 --> 01:04:05.793
set of relationships to keep fostering.

01:04:07.810 --> 01:04:09.700
I would say that one

01:04:09.700 --> 01:04:13.510
of the most important
considerations for affordability

01:04:13.510 --> 01:04:17.840
and one of the ways in which I see

01:04:21.500 --> 01:04:25.010
to being necessary to incorporate rural

01:04:25.010 --> 01:04:29.090
and tribal investment and leverage

01:04:29.090 --> 01:04:33.810
into the affordability
conversation and ecosystem

01:04:33.810 --> 01:04:38.810
is to look at technical
assistance partnerships

01:04:38.980 --> 01:04:40.559
and O&amp;M costs.

01:04:40.559 --> 01:04:43.270
One suggestion we have

01:04:43.270 --> 01:04:45.810
to spur scalability and affordability

01:04:45.810 --> 01:04:49.570
is to build a network of
technical assistance hubs

01:04:49.570 --> 01:04:53.823
for the microgrid, grid
segmentation and D&amp;R space.

01:04:53.823 --> 01:04:56.070
As the Blue Lake Rancheria tribe

01:04:56.070 --> 01:04:57.790
has developed its microgrids,

01:04:57.790 --> 01:05:01.580
the project teams, PG&amp;E others

01:05:01.580 --> 01:05:02.992
have worked incredibly well together

01:05:02.992 --> 01:05:05.610
and learned a great
deal from one another.

01:05:05.610 --> 01:05:08.530
And this collaboration has led to front

01:05:08.530 --> 01:05:11.183
of the meter microgrids as one example.

01:05:13.980 --> 01:05:18.000
From my chair, many tribal
governments, city, government,

01:05:18.000 --> 01:05:22.250
other regional community scale entities

01:05:22.250 --> 01:05:23.853
are excited about the possibility

01:05:23.853 --> 01:05:27.520
of blending affordability
with reliability,

01:05:27.520 --> 01:05:31.220
particularly at the community scale.

01:05:31.220 --> 01:05:35.320
So developing technical assistance hubs

01:05:35.320 --> 01:05:40.320
to make sure that we have
an avenue to properly vet

01:05:43.112 --> 01:05:44.667
our designs and plans,

01:05:44.667 --> 01:05:49.620
to be able to leverage the resources

01:05:49.620 --> 01:05:53.290
that tribes in particular have to bring

01:05:53.290 --> 01:05:54.916
to the affordability equation in funding

01:05:54.916 --> 01:05:58.853
that is not other wise
available in these regions.

01:06:00.750 --> 01:06:01.753
All of these,

01:06:03.500 --> 01:06:07.040
we need a way to be able to incorporate

01:06:07.040 --> 01:06:09.750
the excitement and the optimism

01:06:09.750 --> 01:06:13.600
around distributed energy
resources in particular,

01:06:13.600 --> 01:06:17.150
and the rather historic
sources of funding

01:06:17.150 --> 01:06:18.420
at the state and federal

01:06:18.420 --> 01:06:22.400
and tribal levels into these projects.

01:06:22.400 --> 01:06:26.860
And I think a network of
technical assistance hub

01:06:26.860 --> 01:06:31.150
is key to that acceleration
and scalability.

01:06:31.150 --> 01:06:32.200
So I'll leave it there.

01:06:32.200 --> 01:06:34.600
And I look forward to
the discussion, thank you.

01:06:37.870 --> 01:06:40.110
<v ->Great, thanks Jana.</v>

01:06:40.110 --> 01:06:42.180
Next we're gonna hear from Arjun,

01:06:42.180 --> 01:06:45.300
who will be discussing energy burden.

01:06:45.300 --> 01:06:46.133
Arjun.

01:06:48.610 --> 01:06:50.220
<v ->Thank you very much, Kathleen.</v>

01:06:50.220 --> 01:06:52.193
Can you hear me all right?

01:06:52.193 --> 01:06:53.640
<v ->Yap, we can hear you.</v>

01:06:53.640 --> 01:06:55.560
<v ->Okay first slide, please.</v>

01:06:55.560 --> 01:06:57.260
You're gonna run my slides, right?

01:06:58.520 --> 01:07:00.101
<v ->Yes, we'll run
your slides for you.</v>

01:07:00.101 --> 01:07:01.457
<v ->Thank you.</v>

01:07:04.720 --> 01:07:07.260
I'm representing the
Just Solutions Collective

01:07:07.260 --> 01:07:09.000
and also the Institute for Energy

01:07:09.000 --> 01:07:10.373
and Environmental Research.

01:07:11.230 --> 01:07:15.320
My colleague at the Just
Solutions Collective, Julie Walters

01:07:15.320 --> 01:07:19.040
is also preparing a paper on obstacles

01:07:19.040 --> 01:07:20.903
to reaching energy as systems

01:07:20.903 --> 01:07:22.850
that I think will be useful to you.

01:07:22.850 --> 01:07:24.760
It'll be completed next month.

01:07:24.760 --> 01:07:28.060
And I'd be happy to connect you with her

01:07:28.060 --> 01:07:31.500
if you would like to see that work.

01:07:31.500 --> 01:07:32.573
Next slide please.

01:07:35.290 --> 01:07:39.500
So I will go over the
organizational questions.

01:07:39.500 --> 01:07:42.070
I'm going to cover basically,

01:07:42.070 --> 01:07:45.350
how to marry assistance
through a percentage

01:07:45.350 --> 01:07:49.150
of income payment plan with investments

01:07:49.150 --> 01:07:52.700
in the energy transition,
weatherization community, solar,

01:07:52.700 --> 01:07:54.791
discounted rates,
efficient electrification,

01:07:54.791 --> 01:07:56.760
demand response.

01:07:56.760 --> 01:08:01.330
And the reason to approach it this way

01:08:01.330 --> 01:08:04.069
is not only ensure
that bills are affordable,

01:08:04.069 --> 01:08:09.069
but that investment
systemically reduce bills.

01:08:09.520 --> 01:08:11.710
My colleagues at PSE
Healthy Energy and I

01:08:11.710 --> 01:08:13.690
did a study recently,

01:08:13.690 --> 01:08:16.130
for the Colorado State Energy Office

01:08:16.130 --> 01:08:20.493
and some of the details I'll
show you are from that study.

01:08:21.920 --> 01:08:23.541
California, as you know better than me,

01:08:23.541 --> 01:08:28.541
California's high rates mean
that a prior enrollment in PIPP

01:08:29.110 --> 01:08:31.910
is likely in percentage
of income payment plan

01:08:31.910 --> 01:08:35.320
will likely be needed to sure bills

01:08:35.320 --> 01:08:36.888
don't rise on electrification,

01:08:36.888 --> 01:08:41.230
and if there's on bill
financing and so on.

01:08:41.230 --> 01:08:44.063
So next slide, please.

01:08:46.000 --> 01:08:49.500
So I look briefly at energy
burden levels in California,

01:08:49.500 --> 01:08:51.720
just to inform myself,

01:08:51.720 --> 01:08:54.810
there are three quarters
of a million families

01:08:56.530 --> 01:09:01.530
that at income levels of less
than 50% and in 32 counties,

01:09:03.010 --> 01:09:07.340
the average energy burden
is more than 30% of income.

01:09:07.340 --> 01:09:10.070
Of course, with high
housing costs in California,

01:09:10.070 --> 01:09:15.070
this is truly kind, sort
of define unaffordability.

01:09:16.630 --> 01:09:17.900
There are a few counties

01:09:17.900 --> 01:09:20.303
where energy burdens
are even more than 40%

01:09:20.303 --> 01:09:25.303
and of course rising rates
will exacerbate these problems

01:09:26.620 --> 01:09:30.840
even as the cost of discounted rates

01:09:30.840 --> 01:09:32.193
increase along with that.

01:09:34.630 --> 01:09:35.590
Next slide.

01:09:35.590 --> 01:09:37.087
Hence their recommendation,

01:09:37.087 --> 01:09:40.630
so you have quite high
enrollment in your CARE program,

01:09:40.630 --> 01:09:45.330
but I think a percentage
of income payment program

01:09:45.330 --> 01:09:49.010
will assure that energy
burdens are affordable.

01:09:49.010 --> 01:09:53.703
You are already doing
pilots at 4% of of income.

01:09:54.840 --> 01:09:57.810
We did evaluations of
the more or usual 6%,

01:09:57.810 --> 01:09:59.250
but whatever the level is,

01:09:59.250 --> 01:10:03.130
it ensures that burdens are affordable

01:10:03.130 --> 01:10:08.130
whereas with simply discounted
rates, you don't assure that.

01:10:08.264 --> 01:10:13.264
And so I'm very glad that
you're experimenting with that

01:10:14.030 --> 01:10:18.480
and I look forward to
seeing the results of that,

01:10:18.480 --> 01:10:23.250
but let me kind of give
you the overview of how,

01:10:23.250 --> 01:10:26.720
so I think percentage
of income payment plan

01:10:26.720 --> 01:10:28.294
with very high enrollment

01:10:28.294 --> 01:10:32.463
is kind of the foundation
for going forward.

01:10:34.180 --> 01:10:36.720
And one of the questions
that has been raised

01:10:36.720 --> 01:10:40.500
by the Commissioner and
by chairman Garcia and so on,

01:10:40.500 --> 01:10:42.302
is that of course it's essential

01:10:42.302 --> 01:10:45.104
to make sure that the most
vulnerable are protected.

01:10:45.104 --> 01:10:49.960
But one of the things
that I've looked at is,

01:10:49.960 --> 01:10:53.160
what about all the other non low income?

01:10:53.160 --> 01:10:58.160
Are there benefits in it for
them of reducing energy burden

01:10:58.310 --> 01:11:01.130
and fully integrating
low income households

01:11:01.130 --> 01:11:03.130
into the energy transition?

01:11:03.130 --> 01:11:04.620
And I think there are,

01:11:04.620 --> 01:11:07.970
I don't think they've been
thoroughly evaluated,

01:11:07.970 --> 01:11:09.270
but for example,

01:11:09.270 --> 01:11:10.960
as somebody who's done hour by hour

01:11:10.960 --> 01:11:12.730
modeling of the electricity sector,

01:11:12.730 --> 01:11:14.760
I did my doctorate in
electrical engineering

01:11:14.760 --> 01:11:17.110
long ago at UC Berkeley

01:11:17.110 --> 01:11:19.632
and have very fond
memories of that time.

01:11:19.632 --> 01:11:22.140
Also studied energy efficiency

01:11:22.140 --> 01:11:25.030
while I was a student
in the early 70s there.

01:11:25.030 --> 01:11:30.030
And are there benefits for
non low income households?

01:11:30.360 --> 01:11:35.360
And in my modeling of
renewable variable, energy sources,

01:11:35.870 --> 01:11:37.593
demand response and so on,

01:11:38.580 --> 01:11:40.727
I think, as you all know,

01:11:40.727 --> 01:11:42.600
we are going to have to
change the business model

01:11:42.600 --> 01:11:47.600
for utilities, real time
rates are probably coming,

01:11:48.350 --> 01:11:51.960
demand response is going
to be extremely important,

01:11:51.960 --> 01:11:54.180
aggregation is going to be important

01:11:54.180 --> 01:11:55.823
of work issued a rule last year.

01:11:57.140 --> 01:11:58.743
I think if these things happen

01:11:58.743 --> 01:12:03.743
without assuring that
energy burdens are affordable

01:12:03.870 --> 01:12:06.000
for low income households,

01:12:06.000 --> 01:12:09.270
than the conflicts
that are already there

01:12:09.270 --> 01:12:10.760
that have been referred to earlier

01:12:10.760 --> 01:12:13.430
between food and medicines and so on.

01:12:13.430 --> 01:12:15.101
And to give you a
little personal vignette,

01:12:15.101 --> 01:12:19.540
I'm from India, I've worked
among the poorest people

01:12:19.540 --> 01:12:22.100
in India, in rural areas,

01:12:22.100 --> 01:12:24.980
but in studying the
energy burden problem

01:12:24.980 --> 01:12:28.250
and these conflicts
with rent and utility bills,

01:12:28.250 --> 01:12:30.104
I realized over the last decade

01:12:30.104 --> 01:12:35.104
that so much housing insecure
comes from these conflicts.

01:12:36.790 --> 01:12:41.300
And even in the poorest
areas, rural areas of India,

01:12:41.300 --> 01:12:43.010
the housing insecurity,

01:12:43.010 --> 01:12:45.780
I think is less than what
it is in low income areas

01:12:45.780 --> 01:12:48.390
for instance, in Baltimore,
where I've looked at,

01:12:48.390 --> 01:12:49.250
I live in Maryland,

01:12:49.250 --> 01:12:51.284
I've looked at Baltimore
pretty carefully.

01:12:51.284 --> 01:12:56.284
So I think you'd be freer to
design the energy transition

01:13:00.070 --> 01:13:03.650
more efficiently,
economically and technically,

01:13:03.650 --> 01:13:06.180
if we don't have to worry
about making people homeless,

01:13:06.180 --> 01:13:07.769
because we're doing an energy transition

01:13:07.769 --> 01:13:11.613
and they didn't get access to
aggregated demand response.

01:13:12.590 --> 01:13:13.593
Next slide please.

01:13:15.230 --> 01:13:18.270
So if you have high
in enrollment in PIPP,

01:13:18.270 --> 01:13:19.830
it will reduce energy burdens,

01:13:19.830 --> 01:13:24.193
but it will create high costs,

01:13:27.140 --> 01:13:30.550
and then also doesn't do
anything about CO2 emissions

01:13:30.550 --> 01:13:31.950
or greenhouse gas emissions.

01:13:33.120 --> 01:13:36.140
The implications of addressing those two

01:13:36.140 --> 01:13:40.250
is reliance on rates
as you all are realizing

01:13:40.250 --> 01:13:43.030
is not a good idea for assistance,

01:13:43.030 --> 01:13:47.170
especially as the costs will
go up with a PIPP program

01:13:47.170 --> 01:13:50.010
and that full integration of low

01:13:50.010 --> 01:13:53.200
and moderate income
households in the energy transition

01:13:53.200 --> 01:13:54.190
should be designed

01:13:54.190 --> 01:13:57.100
so as to systemically
reduce energy burdens,

01:13:57.100 --> 01:13:58.660
and that will take some design

01:13:58.660 --> 01:14:01.330
because there's considerable difference

01:14:01.330 --> 01:14:04.370
between those who are
say below 50% or 100%,

01:14:04.370 --> 01:14:08.220
and those who say between 125 and 200%

01:14:08.220 --> 01:14:09.347
of federal poverty level,

01:14:09.347 --> 01:14:12.561
and you've done so much work on metrics

01:14:12.561 --> 01:14:15.190
that's very advanced in California.

01:14:15.190 --> 01:14:16.785
So you could apply different metrics,

01:14:16.785 --> 01:14:20.870
but I think the outcome will
be more or less the same.

01:14:20.870 --> 01:14:23.720
So let me turn to what
we found in the study

01:14:23.720 --> 01:14:27.240
we just published last
month, next slide, please,

01:14:27.240 --> 01:14:30.540
for the Colorado Energy Office,

01:14:30.540 --> 01:14:32.600
a state of Colorado Energy Office.

01:14:32.600 --> 01:14:35.260
So PIPP as I said, is the foundation,

01:14:35.260 --> 01:14:36.750
but then there are investments.

01:14:36.750 --> 01:14:40.790
So the investments would be
inefficiency and weatherization

01:14:41.740 --> 01:14:45.450
for the lower income
households through grants,

01:14:45.450 --> 01:14:49.130
discounted community solar,
guaranteed to be discounted

01:14:49.130 --> 01:14:50.728
substantially below utility were rates

01:14:50.728 --> 01:14:53.166
and the cost of solar are declining,

01:14:53.166 --> 01:14:56.920
and utility rates in
California are relatively high.

01:14:56.920 --> 01:15:00.040
This should be less
difficult than it is in

01:15:00.040 --> 01:15:01.637
or relatively more straightforward

01:15:01.637 --> 01:15:03.823
than it is in other
parts of the country.

01:15:05.100 --> 01:15:06.750
At including low income households,

01:15:06.750 --> 01:15:10.566
especially renters into
the demand response,

01:15:10.566 --> 01:15:14.390
I think is very important
because demand response

01:15:14.390 --> 01:15:17.720
for participating households
will be an important source

01:15:17.720 --> 01:15:21.180
of revenue in the new business model.

01:15:21.180 --> 01:15:24.730
And it could systemically
also reduce energy burdens

01:15:24.730 --> 01:15:27.450
much more important as
has been alluded to earlier

01:15:28.500 --> 01:15:30.673
with electrification of vehicles,

01:15:31.580 --> 01:15:35.350
beneficial electrification, of
course, as you all realized,

01:15:35.350 --> 01:15:38.980
and over time, what
happens is you start out

01:15:38.980 --> 01:15:43.110
with high enrollment PIPP
and high costs of assistance,

01:15:43.110 --> 01:15:46.450
but over time assistance costs decline.

01:15:46.450 --> 01:15:47.860
Next slide please.

01:15:47.860 --> 01:15:49.720
So here are some Colorado numbers

01:15:49.720 --> 01:15:53.540
which we did in great
detail by census track model.

01:15:53.540 --> 01:15:58.540
So the energy assistance
needs to reduce burdens to 6%

01:15:58.710 --> 01:16:01.573
or calculated at 280 million a year,

01:16:02.694 --> 01:16:05.880
most of it would go to
households under 100%

01:16:05.880 --> 01:16:09.270
of poverty levels, that
distribution is shown on the right.

01:16:09.270 --> 01:16:12.020
And here's what
happens, next slide please

01:16:12.020 --> 01:16:13.660
when you go to investments.

01:16:13.660 --> 01:16:18.290
So initially this is kind of a
very schematic calculation

01:16:18.290 --> 01:16:22.860
we did assuming immediately
you have 100% enrollment in PIPP

01:16:22.860 --> 01:16:27.860
and that 200 the gray area is
the cost of the PIPP program.

01:16:30.280 --> 01:16:34.930
And so immediately I have
a 280 million a year a cost,

01:16:34.930 --> 01:16:39.770
but you can see that gray
area comes down over time

01:16:39.770 --> 01:16:42.300
because the assistance is going down.

01:16:42.300 --> 01:16:46.560
But 6% energy bills are
maintained throughout the schematic.

01:16:46.560 --> 01:16:48.090
Of course, it's very schematic.

01:16:48.090 --> 01:16:51.530
You assume 100% participation
and enrollment and everything,

01:16:51.530 --> 01:16:55.760
but it's a scenario that
shows you in idealized way,

01:16:55.760 --> 01:16:57.540
what can be accomplished.

01:16:57.540 --> 01:16:59.858
And so at the right end after 20 years,

01:16:59.858 --> 01:17:04.858
you basically have assistance
levels that are less than

01:17:05.410 --> 01:17:08.700
present assistance
requirements in Colorado,

01:17:08.700 --> 01:17:10.460
but universal 6%

01:17:13.560 --> 01:17:15.660
or less energy bills

01:17:15.660 --> 01:17:20.660
and the beige area there are
the grants for weatherization

01:17:21.110 --> 01:17:23.070
to the lower income households

01:17:23.070 --> 01:17:27.070
and the dotted line are the
loans for other households,

01:17:27.070 --> 01:17:28.724
weatherization and electric.

01:17:28.724 --> 01:17:31.270
Now I think this is going
to be probably different

01:17:31.270 --> 01:17:36.200
in California because
electric utility rates

01:17:36.200 --> 01:17:38.720
are for the most part, fairly low.

01:17:38.720 --> 01:17:40.320
Next slide.

01:17:40.320 --> 01:17:44.570
So we examine what happens
when you electrify heating

01:17:45.430 --> 01:17:47.590
and of course, propane
heating and rural areas

01:17:47.590 --> 01:17:51.263
and mostly natural gas
everywhere else in Colorado,

01:17:52.330 --> 01:17:54.340
electrifying propane heating

01:17:55.217 --> 01:17:56.744
is a no-brainer basically
you save money,

01:17:56.744 --> 01:18:01.000
even when electricity
rates are relatively high

01:18:01.000 --> 01:18:03.970
as they are in some rural areas.

01:18:03.970 --> 01:18:07.930
But it's not always a win

01:18:07.930 --> 01:18:11.209
when you're converting from
gas electricity as you know,

01:18:11.209 --> 01:18:16.209
and here I think in California,
since rates are higher,

01:18:16.350 --> 01:18:17.287
the differential is greater than

01:18:17.287 --> 01:18:20.060
in this particular analysis.

01:18:20.060 --> 01:18:22.720
I think grants for electrification

01:18:22.720 --> 01:18:26.280
for the lower income households,
will probably be necessary,

01:18:26.280 --> 01:18:28.310
that's obviously an educated guess,

01:18:28.310 --> 01:18:32.090
but I think a foundational
analysis of electrification

01:18:32.090 --> 01:18:34.477
in terms of which
household it will impact

01:18:34.477 --> 01:18:37.650
and what utility areas

01:18:37.650 --> 01:18:40.100
you need to focus the
grants on and so on,

01:18:40.100 --> 01:18:43.313
is extremely important to maintain,

01:18:45.680 --> 01:18:48.883
to ensure that bills don't
go up upon electrification.

01:18:49.870 --> 01:18:51.113
Next slide please.

01:18:51.960 --> 01:18:54.200
So those are the
implications for California.

01:18:54.200 --> 01:18:59.157
I think I fully integrating with
PIPP and making sure that

01:19:00.280 --> 01:19:05.010
electricity bills, energy bills
go down once your electrify.

01:19:05.010 --> 01:19:06.830
Here are my recommendations.

01:19:06.830 --> 01:19:07.703
Next slide.

01:19:08.790 --> 01:19:10.425
So all households should
have zero emissions

01:19:10.425 --> 01:19:12.824
within the period of
the energy transition.

01:19:12.824 --> 01:19:16.580
<v ->Pardon, sorry, can
you pause for a second.</v>

01:19:16.580 --> 01:19:20.080
Robert, I think we might
be on the wrong slide.

01:19:20.080 --> 01:19:21.210
(indistinct)

01:19:21.210 --> 01:19:24.013
<v ->Slide 13, slide 13.</v>

01:19:28.770 --> 01:19:30.770
I think we're one slide behind, need to-

01:19:33.510 --> 01:19:35.483
<v ->You are running
my slides, right?</v>

01:19:37.340 --> 01:19:38.223
Next slide.

01:19:39.180 --> 01:19:40.383
<v ->I think this is your
recommendation.</v>

01:19:40.383 --> 01:19:42.550
<v ->Yeah, that's yeah.</v>

01:19:42.550 --> 01:19:43.940
So basically,

01:19:43.940 --> 01:19:47.570
my sort of foundational
qualitative recommendation

01:19:47.570 --> 01:19:49.106
is there should be a formal decision

01:19:49.106 --> 01:19:54.106
to fully integrate low grand
moderate income households

01:19:54.470 --> 01:19:55.715
into the energy transition.

01:19:55.715 --> 01:19:57.848
And that full integration

01:19:57.848 --> 01:20:00.880
will mean in the lower income levels,

01:20:00.880 --> 01:20:02.370
of course, there will be more grants,

01:20:02.370 --> 01:20:06.730
but how you turn that
into an economic model

01:20:06.730 --> 01:20:08.770
will be specific to California.

01:20:08.770 --> 01:20:10.220
But that full integration

01:20:10.220 --> 01:20:14.450
should mean monotonically
declining energy burdens

01:20:14.450 --> 01:20:17.330
as you electrify, as
you convert from gas,

01:20:17.330 --> 01:20:20.460
as we go to a different business model,

01:20:20.460 --> 01:20:23.570
as some people will have
loans for weatherization

01:20:23.570 --> 01:20:24.680
others will have grants

01:20:24.680 --> 01:20:27.270
at least that's what
we model for Colorado

01:20:27.270 --> 01:20:30.160
that bills should monotonically decline,

01:20:30.160 --> 01:20:32.050
they should not go up.

01:20:32.050 --> 01:20:34.720
So verification will be very important

01:20:34.720 --> 01:20:36.389
for instance of weatherization.

01:20:36.389 --> 01:20:41.389
And so really, and one
thing we found very difficult is

01:20:41.780 --> 01:20:44.510
because in Colorado
co-ops are not regulated

01:20:45.590 --> 01:20:49.600
by the utility Commission.

01:20:49.600 --> 01:20:51.314
So integrating co-ops into this

01:20:51.314 --> 01:20:56.010
and municipal utilities into
this model is very important.

01:20:56.010 --> 01:20:59.490
If you use non rate-based
revenue sources for PIPP,

01:20:59.490 --> 01:21:02.660
I think it'll be less difficult
to arrive at an agreement

01:21:02.660 --> 01:21:05.340
because you can provide
funds from those sources

01:21:05.340 --> 01:21:08.370
without burdening rate
payers of utilities in the IOUs.

01:21:09.390 --> 01:21:14.390
And so that's another reason
to have non rate-based sources

01:21:14.670 --> 01:21:17.170
for the funds that are progressive

01:21:17.170 --> 01:21:18.685
for the energy assistance.

01:21:18.685 --> 01:21:20.900
Next slide please.

01:21:20.900 --> 01:21:22.488
And so these are my
final recommendations.

01:21:22.488 --> 01:21:25.009
I think there should be some partition

01:21:25.009 --> 01:21:27.440
between grants and low interest loans,

01:21:27.440 --> 01:21:29.670
at least our calculations in indicated

01:21:29.670 --> 01:21:32.150
that you could have
declining energy burdens

01:21:32.150 --> 01:21:36.480
at the higher side of
the low income spectrum

01:21:36.480 --> 01:21:38.071
if there were low interest loans

01:21:38.071 --> 01:21:41.133
who were green bank, for instance.

01:21:42.420 --> 01:21:45.470
And then I think it's important

01:21:45.470 --> 01:21:47.023
to have prior enrollment in PIPPs,

01:21:47.023 --> 01:21:49.580
especially in California

01:21:49.580 --> 01:21:52.111
before you weatherize and electrify.

01:21:52.111 --> 01:21:56.520
And the question of rental
households has been mentioned.

01:21:56.520 --> 01:21:58.910
I think this along with a question

01:21:58.910 --> 01:22:02.420
of how you have PIPPs and
co-ops and municipal utilities

01:22:02.420 --> 01:22:04.750
is among the most difficult

01:22:04.750 --> 01:22:09.630
of sort of institutional
regulatory sort of question.

01:22:09.630 --> 01:22:13.790
I think incentives for landlords
to improve rental housing

01:22:13.790 --> 01:22:17.400
and make them smart grid
ready and demand response ready

01:22:18.490 --> 01:22:21.680
with benefits going
to low income renters

01:22:21.680 --> 01:22:23.361
so they can participate
in demand response

01:22:23.361 --> 01:22:25.875
and electrification and weatherization.

01:22:25.875 --> 01:22:28.328
That's very important.

01:22:28.328 --> 01:22:31.513
This is an extremely
complicated question.

01:22:31.513 --> 01:22:35.090
It's obviously a very
broad recommendation,

01:22:35.090 --> 01:22:40.090
but yeah, this since most low
income households are renters,

01:22:41.250 --> 01:22:43.730
not only in California,
but throughout the country

01:22:43.730 --> 01:22:45.790
and especially important urban areas

01:22:45.790 --> 01:22:48.470
where there are more
renters than rural areas.

01:22:48.470 --> 01:22:49.470
Thank you very much.

01:22:52.090 --> 01:22:54.140
<v ->Thank you very much, Arjun.</v>

01:22:54.140 --> 01:22:59.140
All right, next we are going
to hand it over to Justin,

01:22:59.170 --> 01:23:00.530
who's gonna make some brief remarks

01:23:00.530 --> 01:23:03.680
about the importance of PIPP
and vulnerable communities.

01:23:03.680 --> 01:23:07.403
And Justin does not have any slides.

01:23:08.880 --> 01:23:09.713
Justin.

01:23:10.680 --> 01:23:11.950
<v ->Great, thank you, Kathleen.</v>

01:23:11.950 --> 01:23:14.270
Thanks everybody for having me.

01:23:14.270 --> 01:23:15.650
My name's Justin Bogda,

01:23:15.650 --> 01:23:18.650
I'm a legal fellow with Communities
for a Better Environment

01:23:19.652 --> 01:23:20.920
and we represent

01:23:20.920 --> 01:23:23.080
the California Environmental
Justice Alliance

01:23:23.080 --> 01:23:26.560
in proceedings before the
public utility Commission.

01:23:26.560 --> 01:23:29.700
Today I just would like
to briefly comment a bit

01:23:29.700 --> 01:23:32.990
on Arjun's presentation
and his recommendations

01:23:32.990 --> 01:23:36.900
for a percentage of income payment plan.

01:23:36.900 --> 01:23:39.020
As we respond to the climate emergency,

01:23:39.020 --> 01:23:40.500
it's essential that customers

01:23:40.500 --> 01:23:44.550
are protected from rising
energy bills through programs

01:23:44.550 --> 01:23:46.800
like a percentage of income payment plan

01:23:46.800 --> 01:23:49.860
that caps a households monthly payment

01:23:49.860 --> 01:23:51.730
because guaranteeing affordable energy

01:23:51.730 --> 01:23:54.753
is essential to both
reducing public health costs,

01:23:55.630 --> 01:23:58.660
achieving equity and
addressing historic harms

01:23:58.660 --> 01:24:00.510
as well as enabling households

01:24:00.510 --> 01:24:02.670
to make investments
that will be necessary

01:24:02.670 --> 01:24:05.290
to achieving emissions reductions goals,

01:24:05.290 --> 01:24:07.250
and in order to accrue savings

01:24:07.250 --> 01:24:09.050
within these low income communities.

01:24:10.630 --> 01:24:12.070
Bill assistance programs

01:24:12.070 --> 01:24:14.860
that only provide discounts like CARE

01:24:14.860 --> 01:24:16.310
don't consider communities

01:24:16.310 --> 01:24:19.420
that are most vulnerable
to climate change.

01:24:19.420 --> 01:24:21.007
For example, in the energy Commissions,

01:24:21.007 --> 01:24:24.130
energy equity indicators report,

01:24:24.130 --> 01:24:26.660
the upper range of summer care bills

01:24:26.660 --> 01:24:31.660
is more than $300 in five
of the CC16 climate zones,

01:24:32.010 --> 01:24:33.947
which includes parts
of the Central Valley,

01:24:33.947 --> 01:24:38.623
Los Angeles Basin and the
Coachella Valley for example.

01:24:39.640 --> 01:24:42.560
In these regions with
increasingly extreme weather

01:24:42.560 --> 01:24:44.310
CARE assistance isn't sufficient

01:24:44.310 --> 01:24:46.450
to make the bills affordable.

01:24:46.450 --> 01:24:48.717
These bills must be
capped to ensure affordability

01:24:48.717 --> 01:24:50.230
in the near term

01:24:50.230 --> 01:24:53.200
while investing in
efficiency and weatherization

01:24:53.200 --> 01:24:55.670
to decrease usage in regions

01:24:55.670 --> 01:24:59.173
where electricity is quite
literally a life saving resource.

01:25:00.050 --> 01:25:01.980
From an equity perspective,

01:25:01.980 --> 01:25:03.870
communities that are most impacted

01:25:03.870 --> 01:25:06.450
by increasingly severe extreme weather

01:25:06.450 --> 01:25:10.130
should not so have to suffer
from increased electric bills.

01:25:10.130 --> 01:25:13.470
And as Arjin demonstrated
throughout his presentation,

01:25:13.470 --> 01:25:14.997
maintaining affordability
while investing

01:25:14.997 --> 01:25:19.320
in energy efficiency and
resiliency in these communities

01:25:19.320 --> 01:25:20.690
is the most efficient way

01:25:20.690 --> 01:25:23.430
to respond to the climate emergency,

01:25:23.430 --> 01:25:25.710
both in terms of
public health of benefits

01:25:25.710 --> 01:25:27.103
and real dollar spent.

01:25:28.200 --> 01:25:29.809
These communities shouldn't be penalized

01:25:29.809 --> 01:25:34.130
for utilizing essential
services that are life saving

01:25:34.130 --> 01:25:36.940
and low communities already sacrificed

01:25:36.940 --> 01:25:41.440
much of their energy use
by lowering their energy bills

01:25:41.440 --> 01:25:45.270
and also suffering from
public safety power shutoffs.

01:25:45.270 --> 01:25:47.030
As Abigail also at least pointed out,

01:25:47.030 --> 01:25:48.551
many low income households

01:25:48.551 --> 01:25:53.370
already choose to not utilize
the power that they need

01:25:53.370 --> 01:25:55.160
to be comfortable during,

01:25:55.160 --> 01:25:57.130
especially fluctuating weather patterns

01:25:57.130 --> 01:25:59.886
and increasingly extreme weather events.

01:25:59.886 --> 01:26:02.670
And finally investing in resiliency

01:26:02.670 --> 01:26:05.550
and efficiency in the most
vulnerable communities

01:26:05.550 --> 01:26:07.110
will have the greatest impact

01:26:07.110 --> 01:26:09.620
in terms of lowering energy demand,

01:26:09.620 --> 01:26:13.160
greenhouse gas emissions
and public health costs.

01:26:13.160 --> 01:26:14.847
So an energy affordability guarantee

01:26:14.847 --> 01:26:17.591
really is a necessary first step

01:26:17.591 --> 01:26:20.100
to ensuring that these efforts are truly

01:26:20.100 --> 01:26:21.797
inclusive of low income communities

01:26:21.797 --> 01:26:23.297
and communities' (indistinct).

01:26:24.610 --> 01:26:25.443
Thank you.

01:26:27.100 --> 01:26:28.720
<v ->Great, Thanks
very much, Justin.</v>

01:26:28.720 --> 01:26:31.469
Thanks everyone for your presentations.

01:26:31.469 --> 01:26:33.959
We are super ahead of schedule.

01:26:33.959 --> 01:26:35.520
So we have lots of time for questions.

01:26:35.520 --> 01:26:36.860
So I will start with the few

01:26:36.860 --> 01:26:40.063
and then we'll hand it
over to the Commissioners,

01:26:41.600 --> 01:26:42.730
hand it over to the Commissioners

01:26:42.730 --> 01:26:45.800
and overt for questions following.

01:26:45.800 --> 01:26:47.275
So we have lots of great information,

01:26:47.275 --> 01:26:51.720
lots of technical detailed
information in the presentations,

01:26:51.720 --> 01:26:53.284
but I do just wanna take a step back

01:26:53.284 --> 01:26:56.410
and start our questions this morning,

01:26:56.410 --> 01:26:58.670
highlighting the importance
of the work we are doing

01:26:58.670 --> 01:27:00.450
to create programs that move us

01:27:00.450 --> 01:27:01.710
towards greater equity.

01:27:01.710 --> 01:27:06.570
With that, I wanna discuss
us racial equities specifically.

01:27:06.570 --> 01:27:08.570
So for the panelists, all the panelists,

01:27:09.444 --> 01:27:10.951
it's a little bit of a
three part question.

01:27:10.951 --> 01:27:13.573
First, what historic
barriers have there been

01:27:13.573 --> 01:27:18.350
that have prevented racial
equity to exist in this sector?

01:27:18.350 --> 01:27:20.058
Second, what successful
effort have you seen

01:27:20.058 --> 01:27:23.750
to start dismantling
these systemic barriers?

01:27:23.750 --> 01:27:26.410
And finally, how do we
create programs purposeful

01:27:26.410 --> 01:27:28.233
in moving towards greater equity?

01:27:34.272 --> 01:27:36.355
Does anybody wanna start?

01:27:37.866 --> 01:27:39.860
<v ->This is Jana, I'll start.</v>

01:27:39.860 --> 01:27:44.550
So I think what historic
barriers have there been

01:27:44.550 --> 01:27:48.350
that have prevented
racial equity, tribal nations,

01:27:48.350 --> 01:27:50.343
and particularly rural tribal nations

01:27:50.343 --> 01:27:53.990
from the rural
electrification investments

01:27:53.990 --> 01:27:55.900
of the last century.

01:27:55.900 --> 01:28:00.360
So, to overcome some
of these barriers tribes

01:28:00.360 --> 01:28:01.968
are working with the state,

01:28:01.968 --> 01:28:04.650
working with the federal government

01:28:04.650 --> 01:28:08.123
to exercise jurisdictional control

01:28:08.123 --> 01:28:13.123
and solutions that help them
accelerate their energy access

01:28:15.380 --> 01:28:18.713
and improve reliability and
affordability at the same time.

01:28:20.060 --> 01:28:24.280
I think one of the ways
in which we have seen

01:28:25.321 --> 01:28:28.690
a couple of the state programs
that have been key to this

01:28:28.690 --> 01:28:29.830
in the last few years

01:28:29.830 --> 01:28:34.830
have been the California Energy
Commission's EPIC program

01:28:36.230 --> 01:28:41.230
and the CPC authorized
Self-Generation Incentive Program.

01:28:43.320 --> 01:28:48.320
So, when we look at the
setting aside for one minute,

01:28:49.240 --> 01:28:53.730
how these programs are
funded, where they're funded from,

01:28:53.730 --> 01:28:55.410
I think what we've seen is that

01:28:55.410 --> 01:28:59.480
both programs have
engendered incredible success

01:29:02.193 --> 01:29:05.200
in equity and resilience metrics

01:29:05.200 --> 01:29:10.200
that have also worked to
reduce the cost of energy

01:29:11.290 --> 01:29:15.613
in some of these disadvantaged
rural and travel communities.

01:29:17.070 --> 01:29:22.070
And so we see the continued
need for R&amp;D programs

01:29:24.043 --> 01:29:25.407
R&amp;D funding projects.

01:29:25.407 --> 01:29:27.580
And we'll talk a little bit about

01:29:27.580 --> 01:29:31.370
how to scale and
maintain those in a minute,

01:29:31.370 --> 01:29:36.370
but that's the way we have
seen the state government,

01:29:38.570 --> 01:29:43.160
tribal governments,
leverage federal resources

01:29:43.160 --> 01:29:46.460
to overcome racial equity barriers

01:29:46.460 --> 01:29:50.770
in real terms with
real energy reliability.

01:29:50.770 --> 01:29:51.603
Thanks.

01:29:54.580 --> 01:29:55.423
<v ->Thanks, Jana.</v>

01:29:56.560 --> 01:29:57.497
<v ->Could I say a couple things?</v>

01:29:57.497 --> 01:30:02.497
So first of all, the access to
assistant is very important.

01:30:02.620 --> 01:30:04.573
There are lots of obstacles.

01:30:05.630 --> 01:30:06.890
One of the barriers of course

01:30:06.890 --> 01:30:09.860
is when they're the
question of documentation,

01:30:09.860 --> 01:30:11.500
many households are mixed status,

01:30:11.500 --> 01:30:13.340
some have documents, others don't,

01:30:13.340 --> 01:30:15.900
and they have very hard time accessing.

01:30:15.900 --> 01:30:19.070
I think removing that one barrier

01:30:19.070 --> 01:30:21.820
would do an enormous amount of good,

01:30:21.820 --> 01:30:24.410
then of course there's
historic housing discrimination

01:30:24.410 --> 01:30:25.640
redlining and so on.

01:30:25.640 --> 01:30:29.670
So more African-Americans
for instance are renters

01:30:29.670 --> 01:30:31.710
than would otherwise be the case.

01:30:31.710 --> 01:30:34.850
And one study here
in Baltimore, like I said,

01:30:34.850 --> 01:30:35.731
have studied a lot.

01:30:35.731 --> 01:30:40.731
The number one obstacle
to weatherization in Baltimore

01:30:40.900 --> 01:30:43.890
during a pilot program was refusal

01:30:43.890 --> 01:30:45.410
of landlord access to the property.

01:30:45.410 --> 01:30:46.810
Of course,

01:30:46.810 --> 01:30:49.730
if your landlord doesn't
allow you to do an audit,

01:30:49.730 --> 01:30:50.880
you can't weatherize.

01:30:50.880 --> 01:30:52.640
That's the end of the story right there.

01:30:52.640 --> 01:30:57.640
So you're stuck with
a high energy burden

01:30:57.640 --> 01:31:01.073
before you get started
on an energy transition.

01:31:02.760 --> 01:31:07.760
So I think a systemic
removal of obstacles,

01:31:08.340 --> 01:31:09.705
all of these obstacles, very difficult,

01:31:09.705 --> 01:31:13.800
focusing on the energy side.

01:31:13.800 --> 01:31:18.663
I think there are lots of
obstacles to high PIPP enrollment.

01:31:19.690 --> 01:31:21.817
Colorado for instance
has a PIPP program,

01:31:21.817 --> 01:31:24.730
but only 8% enrollment
than the are aware of it

01:31:24.730 --> 01:31:25.966
of course, they Commissioned a study.

01:31:25.966 --> 01:31:27.510
What's the problem?

01:31:27.510 --> 01:31:28.783
What are the obstacles?

01:31:28.783 --> 01:31:30.730
That's why I mentioned
we're doing a special study

01:31:30.730 --> 01:31:35.000
on my colleague, Julie is
doing a special study on that.

01:31:35.000 --> 01:31:39.240
But I think there are more
obstacles in rural areas

01:31:39.240 --> 01:31:42.440
to actually accessing
the energy transition

01:31:42.440 --> 01:31:45.420
than not many installers,

01:31:45.420 --> 01:31:48.310
if an installer has to
go in their pick up truck

01:31:48.310 --> 01:31:52.130
with their tool for a hundred
miles to do one installation,

01:31:52.130 --> 01:31:54.660
it's going to be very costly.

01:31:54.660 --> 01:31:59.660
So, I think really looking
at the specific obstacles,

01:32:00.600 --> 01:32:01.887
not only for energy assistance,

01:32:01.887 --> 01:32:04.071
which I think are better known,

01:32:04.071 --> 01:32:08.110
but are fully integrating
into the energy transition

01:32:08.110 --> 01:32:08.980
is very important.

01:32:08.980 --> 01:32:10.144
For instance, we looked at this question

01:32:10.144 --> 01:32:14.370
of increasing capacity
for weatherization

01:32:14.370 --> 01:32:17.550
and electrification in rural areas,

01:32:17.550 --> 01:32:20.370
which in Colorado,

01:32:20.370 --> 01:32:24.230
most of the rural areas
are primarily Whites.

01:32:24.230 --> 01:32:26.330
That is not application California.

01:32:26.330 --> 01:32:29.990
So automatically has
an equity component,

01:32:29.990 --> 01:32:31.600
a racial equity component

01:32:31.600 --> 01:32:34.750
when you increase
capacity for weatherization.

01:32:34.750 --> 01:32:37.737
And let me mention mobile homes.

01:32:37.737 --> 01:32:40.480
And there are more in rural areas

01:32:40.480 --> 01:32:45.480
and priority to propane heating
conversion with more common.

01:32:46.830 --> 01:32:50.197
So there are many
obstacles that are specific

01:32:50.197 --> 01:32:55.160
that have racial
explicit or implicit biases.

01:32:55.160 --> 01:32:58.960
And I would call attention
to two specifically.

01:32:58.960 --> 01:33:02.230
One is documentation and
the other is being a renter,

01:33:02.230 --> 01:33:05.610
I think those have very,
very high racial biases

01:33:05.610 --> 01:33:07.110
and they need to be addressed.

01:33:10.040 --> 01:33:11.350
<v ->Thanks Arjun.</v>

01:33:11.350 --> 01:33:15.490
<v ->So this is Tim from EDF.</v>

01:33:15.490 --> 01:33:17.950
I think one of the historic challenges

01:33:17.950 --> 01:33:19.243
that we have faced of course,

01:33:19.243 --> 01:33:23.130
is that the tools that
have been available

01:33:23.130 --> 01:33:25.280
for addressing some of these challenges

01:33:25.280 --> 01:33:30.280
have been somewhat
crude insofar as bill relief

01:33:30.860 --> 01:33:35.130
or sort of generalizable
sort of targeted programs.

01:33:35.130 --> 01:33:36.950
And of course, where California has gone

01:33:36.950 --> 01:33:41.080
is sort of the expansion
of the and Enviroscreen

01:33:41.080 --> 01:33:44.740
and investment
programs to start targeting

01:33:44.740 --> 01:33:49.740
more geographically, where
some of these investments can go,

01:33:49.880 --> 01:33:54.880
but we still have a lack
of data that is quantifiable

01:33:56.170 --> 01:33:59.597
as it relates to the
emissions reductions benefits

01:33:59.597 --> 01:34:02.280
and the value of those benefits

01:34:02.280 --> 01:34:05.430
at the locational and community level.

01:34:05.430 --> 01:34:09.120
As we've done analysis on the impact,

01:34:09.120 --> 01:34:11.506
for example, of the
transportation system,

01:34:11.506 --> 01:34:16.506
in various locations, you
can see in places like Oakland,

01:34:18.150 --> 01:34:23.150
you have really different
benefits or the electrification,

01:34:23.830 --> 01:34:26.520
even almost within the same zip code

01:34:26.520 --> 01:34:31.520
and the targeting of the
improvement in the data

01:34:31.980 --> 01:34:35.890
that can then create quantifiable,

01:34:35.890 --> 01:34:37.730
emissions reductions assessments,

01:34:37.730 --> 01:34:41.660
and then translatable economic benefits

01:34:41.660 --> 01:34:44.650
so that we can sort of have
more prioritized systems

01:34:44.650 --> 01:34:49.100
based on sort of the
actual, the value of those

01:34:49.100 --> 01:34:51.720
is I think one area
where we could improve,

01:34:51.720 --> 01:34:53.257
similarly you look at, for example,

01:34:53.257 --> 01:34:55.184
the building electrification space,

01:34:55.184 --> 01:34:58.930
where we know most of
the research coming out now

01:34:58.930 --> 01:35:03.930
is demonstrating that the
use of natural gas in buildings,

01:35:03.980 --> 01:35:08.980
contributes to localized
indoor air quality impacts

01:35:09.530 --> 01:35:13.100
as well as regional
air quality degradation

01:35:13.100 --> 01:35:15.820
and the use of that new data

01:35:15.820 --> 01:35:18.830
to quantify the locational benefits

01:35:18.830 --> 01:35:21.520
of moving towards electrification

01:35:21.520 --> 01:35:25.640
and then to start to embed
those into the improvements

01:35:25.640 --> 01:35:28.500
in cost benefit analysis

01:35:28.500 --> 01:35:31.437
that goes alongside investment programs

01:35:31.437 --> 01:35:34.530
can start to drive better investment

01:35:34.530 --> 01:35:36.100
in the types of solutions

01:35:36.100 --> 01:35:40.560
that can have more value in communities

01:35:40.560 --> 01:35:43.110
that are traditionally
overburdened with pollution.

01:35:47.040 --> 01:35:47.873
<v ->Thanks, Tim.</v>

01:35:50.197 --> 01:35:53.900
<v ->Yeah, I would add that like,</v>

01:35:53.900 --> 01:35:58.900
at a high level, historic
barriers include all of redlining,

01:35:59.160 --> 01:36:02.090
a history of disinvestment
in communities of color,

01:36:02.090 --> 01:36:05.963
racist land use and zoning
practices that have resulted,

01:36:07.250 --> 01:36:11.070
which has determined
really where communities live

01:36:11.070 --> 01:36:16.070
and the resources that
communities have access to.

01:36:16.530 --> 01:36:17.859
And this determines who suffers

01:36:17.859 --> 01:36:20.170
from poor public health outcomes

01:36:20.170 --> 01:36:22.660
due to proximity to
extractive industries

01:36:22.660 --> 01:36:24.116
who lives in regions most vulnerable

01:36:24.116 --> 01:36:27.650
to extreme weather events
and wildfire damages,

01:36:27.650 --> 01:36:31.580
and who has access to
programs in energy efficiency

01:36:31.580 --> 01:36:35.050
and renewable energy,

01:36:35.050 --> 01:36:38.290
which results in reducing energy bills.

01:36:38.290 --> 01:36:40.690
So, address addressing
the climate situation,

01:36:40.690 --> 01:36:43.160
we're addressing an expensive situation,

01:36:43.160 --> 01:36:44.449
but one that has been subsidized

01:36:44.449 --> 01:36:47.790
by low income communities of color.

01:36:47.790 --> 01:36:49.118
So we really need

01:36:49.118 --> 01:36:54.118
to begin targeted investments
in these communities.

01:36:54.910 --> 01:36:58.210
And I think that those
marching orders are pretty clear.

01:36:58.210 --> 01:37:03.210
But in terms of access and
how that is racial equity issue,

01:37:04.180 --> 01:37:06.400
a lot of these programs
aren't accessible

01:37:06.400 --> 01:37:09.710
to low income communities of color,

01:37:09.710 --> 01:37:11.940
communities that aren't English speaking

01:37:11.940 --> 01:37:13.363
as their first language.

01:37:14.420 --> 01:37:19.420
And so we really recommend
that greater technical assistance

01:37:19.940 --> 01:37:22.140
in terms of creating microgrids

01:37:22.140 --> 01:37:26.530
or in terms of having a one stop shop

01:37:26.530 --> 01:37:31.530
where customers can really
understand what programs

01:37:32.640 --> 01:37:36.000
they're eligible for and
be connected to all other,

01:37:36.000 --> 01:37:39.260
the suite of programs that the CPUC has

01:37:39.260 --> 01:37:42.810
is something that's really
important to reach customers

01:37:42.810 --> 01:37:45.310
that have the least amount of access.

01:37:45.310 --> 01:37:47.620
And I would echo Arjun's points that,

01:37:47.620 --> 01:37:50.770
a lot of the eligibility
criteria in these programs

01:37:50.770 --> 01:37:54.970
are very limiting, especially
to low income communities

01:37:54.970 --> 01:37:56.453
and undocumented community.

01:37:58.930 --> 01:37:59.820
<v ->Thanks, Justin.</v>

01:37:59.820 --> 01:38:02.470
All four of you talked
a little bit about,

01:38:02.470 --> 01:38:04.850
targeting communities,
prioritizing communities.

01:38:04.850 --> 01:38:06.100
I'm wondering if we can kind of draw

01:38:06.100 --> 01:38:08.490
on that a little bit more

01:38:08.490 --> 01:38:13.490
because right now the PUC,
the definition that the PUC

01:38:14.910 --> 01:38:19.620
uses to identify these
priority frontline communities

01:38:19.620 --> 01:38:21.490
kind of encapsulated under the umbrella

01:38:21.490 --> 01:38:23.050
of what we call environmental

01:38:23.050 --> 01:38:26.120
and social justice
communities, ESJ communities,

01:38:26.120 --> 01:38:29.550
which it includes low
income census jobs,

01:38:29.550 --> 01:38:32.010
low income households,
disadvantaged communities,

01:38:32.010 --> 01:38:35.640
tribal communities and
predominantly communities of color.

01:38:35.640 --> 01:38:36.930
It's a great definition to start with.

01:38:36.930 --> 01:38:40.830
However, the challenge
we have Austin is that

01:38:40.830 --> 01:38:43.763
this definition, it includes
the majority of the state.

01:38:44.600 --> 01:38:46.730
And there are times when we need

01:38:46.730 --> 01:38:48.280
to be a little bit more focused

01:38:48.280 --> 01:38:50.503
and targeted in our prioritization.

01:38:51.350 --> 01:38:54.980
And we are thinking
through what sorts of metrics

01:38:54.980 --> 01:38:56.245
and data sources we should be using

01:38:56.245 --> 01:38:59.993
and helping in that prioritization.

01:39:00.830 --> 01:39:02.400
So starting with Arjun,

01:39:02.400 --> 01:39:04.030
I'm wondering, what do you think

01:39:04.030 --> 01:39:06.050
about the affordability metrics

01:39:06.050 --> 01:39:08.640
do you think we should be
using the affordability metrics

01:39:08.640 --> 01:39:11.150
and tools in conjunction with some

01:39:11.150 --> 01:39:12.669
of these other aspects of the definition

01:39:12.669 --> 01:39:14.833
to help us target communities?

01:39:16.010 --> 01:39:19.370
<v ->Yeah, I personally
do think that income</v>

01:39:19.370 --> 01:39:22.657
is the most important
single metric gross income.

01:39:22.657 --> 01:39:26.233
I have taken a look at all the metrics

01:39:26.233 --> 01:39:27.543
that California has developed.

01:39:27.543 --> 01:39:29.510
I can't say I've fully digested them,

01:39:29.510 --> 01:39:31.980
it's really complicated (laughs), but-

01:39:31.980 --> 01:39:34.131
<v ->There's so many of them.</v>

01:39:34.131 --> 01:39:34.964
(laughing)

01:39:34.964 --> 01:39:38.003
<v ->So many, I was actually
surprised how many there were.</v>

01:39:39.530 --> 01:39:43.077
But I think gross income
without taking any of the benefits

01:39:43.077 --> 01:39:47.390
and so on into account
is a very good metric.

01:39:47.390 --> 01:39:50.500
I think California 4% of gross income.

01:39:50.500 --> 01:39:53.970
And then in the analysis
we did in Colorado,

01:39:53.970 --> 01:39:57.540
really a dividing line of
100% of federal poverty low,

01:39:57.540 --> 01:40:00.480
whether you want to use area
median income, I don't know

01:40:00.480 --> 01:40:01.723
some dividing line below

01:40:01.723 --> 01:40:06.683
which you are going to give grants for.

01:40:07.580 --> 01:40:11.960
And you have a self
declaration of income

01:40:11.960 --> 01:40:15.310
in your CARE program
that I think should go over,

01:40:15.310 --> 01:40:18.470
I know there are problems
when a lot of people audited

01:40:18.470 --> 01:40:19.950
and people fall off

01:40:19.950 --> 01:40:24.140
and I don't have a ready
solution for you on that.

01:40:24.140 --> 01:40:27.330
But I think self declaration of income

01:40:27.330 --> 01:40:28.640
is a very good way to start.

01:40:28.640 --> 01:40:31.520
I think, I hesitate to say

01:40:31.520 --> 01:40:33.413
whether you can use your income tax,

01:40:34.575 --> 01:40:39.575
anonymized from income
tax transfer to a PIPP program

01:40:40.500 --> 01:40:43.623
or energy transition programs,

01:40:44.600 --> 01:40:49.600
some way to use that income hook,

01:40:49.660 --> 01:40:53.530
to get people into both
the energy transition

01:40:53.530 --> 01:40:56.210
and a percentage of
income payment program

01:40:56.210 --> 01:40:57.700
would be a very, very good thing.

01:40:57.700 --> 01:40:59.544
Very hard to do, yeah.

01:40:59.544 --> 01:41:03.033
Maybe knocking on doors
as if it were an election.

01:41:03.971 --> 01:41:04.860
(laughing)

01:41:04.860 --> 01:41:06.380
<v ->Yeah I mean, actually
one thing that we have heard</v>

01:41:06.380 --> 01:41:08.610
in some other
discussions around this is,

01:41:08.610 --> 01:41:11.050
how do we use the
income tax without violating

01:41:11.050 --> 01:41:13.130
all of the privacy issues around that?

01:41:13.130 --> 01:41:16.860
So, that's an interesting
perspective there.

01:41:16.860 --> 01:41:19.490
<v ->Yeah, that's why I
hesitated to say that</v>

01:41:19.490 --> 01:41:21.540
so that's obviously a non-lawyer,

01:41:21.540 --> 01:41:22.948
a non-privacy expert perspective.

01:41:22.948 --> 01:41:26.980
I hesitate to say of course
privacy is very important.

01:41:26.980 --> 01:41:28.083
Yeah, very simple.

01:41:28.990 --> 01:41:30.530
<v ->Yeah.</v>

01:41:30.530 --> 01:41:35.020
Next I wanna kind of Jan, you
had mentioned in your slides,

01:41:35.020 --> 01:41:36.960
you're talking about non-energy metrics.

01:41:36.960 --> 01:41:39.850
I'm wondering if you can
talk a little bit more about that.

01:41:39.850 --> 01:41:41.170
If we should be bundling

01:41:41.170 --> 01:41:43.100
some of these definitions we have with

01:41:43.100 --> 01:41:46.120
what you talked about
reliability and access

01:41:46.120 --> 01:41:47.933
and things like food insecurity.

01:41:50.900 --> 01:41:54.503
<v ->Well, we know
that as Arjun and you</v>

01:41:54.503 --> 01:41:55.860
were just talking about,

01:41:55.860 --> 01:41:57.360
we know that some of these metrics

01:41:57.360 --> 01:41:59.000
can get super complicated.

01:41:59.000 --> 01:42:01.200
So we wanna make sure that

01:42:03.600 --> 01:42:08.600
we don't try to do too much
with these quantifications.

01:42:12.060 --> 01:42:16.830
We've really seen
where the clear overlap is

01:42:16.830 --> 01:42:21.830
is in terms of toxic
hot spots and air quality

01:42:23.650 --> 01:42:28.650
as it relates to the
energy generation grids.

01:42:30.740 --> 01:42:35.740
So looking at immediate
pollution in communities,

01:42:37.830 --> 01:42:41.660
which in some ways is already
being done under Envroscreen.

01:42:41.660 --> 01:42:44.460
But I think what Enviroscreen doesn't do

01:42:44.460 --> 01:42:49.460
is solve for sort of toxic hot spots

01:42:51.940 --> 01:42:55.980
downscaled around particular sites

01:42:55.980 --> 01:42:59.640
that are not in urban environments

01:42:59.640 --> 01:43:01.760
or in environments that aren't already

01:43:01.760 --> 01:43:03.767
a part of Enviroscreen.

01:43:05.680 --> 01:43:07.023
So for example,

01:43:08.480 --> 01:43:10.900
there are tribal nations up here

01:43:10.900 --> 01:43:13.290
in the North Coast of California

01:43:13.290 --> 01:43:18.290
that have elementary schools
being run by diesel generators.

01:43:18.500 --> 01:43:20.740
That's all they've ever had (chuckles).

01:43:20.740 --> 01:43:23.340
And without some good work,

01:43:23.340 --> 01:43:25.520
that's all they're ever going to have.

01:43:25.520 --> 01:43:30.520
And so I think cleanliness
access and reliability

01:43:36.343 --> 01:43:37.550
and as Arjun was saying,

01:43:37.550 --> 01:43:40.830
income has a centralized
place in all that,

01:43:40.830 --> 01:43:43.630
but certainly with respect to focusing

01:43:43.630 --> 01:43:45.313
in on the energy sector,

01:43:46.420 --> 01:43:49.170
those are the things that
we think about a lot up here.

01:43:51.150 --> 01:43:53.253
And I think,

01:43:54.720 --> 01:43:57.350
I wanna get to sort of how we do that,

01:43:57.350 --> 01:43:59.360
but I think those are the things

01:43:59.360 --> 01:44:02.430
that if we do a good job
of thinking those through,

01:44:02.430 --> 01:44:05.563
we can take advantage of the motivations

01:44:09.590 --> 01:44:12.200
that people already have in those areas

01:44:12.200 --> 01:44:14.190
to make things more reliable.

01:44:14.190 --> 01:44:19.190
So, I get calls every
day from tribal nations

01:44:20.240 --> 01:44:22.993
wanting to improve their energy sector,

01:44:22.993 --> 01:44:26.420
improve the cleanliness
of their energy sector,

01:44:26.420 --> 01:44:29.450
the reliability of their energy sector,

01:44:29.450 --> 01:44:32.010
hook up areas that don't have access

01:44:32.010 --> 01:44:35.023
where reliability is just so poor.

01:44:36.470 --> 01:44:41.470
And I think that those
are some clear priorities

01:44:43.840 --> 01:44:47.800
that we can use to inform equity

01:44:47.800 --> 01:44:51.773
and affordability
strategies going forward.

01:44:54.240 --> 01:44:55.113
<v ->Thanks, Jana.</v>

01:44:56.575 --> 01:44:58.080
And I think it's a really good point

01:44:58.080 --> 01:45:00.137
that you make of not
trying to overcomplicate it

01:45:00.137 --> 01:45:02.060
and not or try to over quantify

01:45:02.060 --> 01:45:03.365
'cause I think that a lot
of times in government

01:45:03.365 --> 01:45:05.416
we're like these data
nerds and we try to figure out

01:45:05.416 --> 01:45:10.416
how to get it all on just the numbers.

01:45:10.490 --> 01:45:14.653
And Justin, I wanted to ask
you used specifically with,

01:45:15.560 --> 01:45:18.370
many of the tools that we have,

01:45:18.370 --> 01:45:20.520
they're built using census data,

01:45:20.520 --> 01:45:23.500
or kind of these
government data portals.

01:45:23.500 --> 01:45:27.820
And we know a lot of rural
communities, tribal governments,

01:45:27.820 --> 01:45:30.460
they don't necessarily show
up in all those data sets.

01:45:30.460 --> 01:45:33.137
And I'm wondering do you
have any recommendations for us

01:45:33.137 --> 01:45:36.267
and how to target some
of those communities

01:45:36.267 --> 01:45:39.153
get more information
from those communities.

01:45:41.980 --> 01:45:43.152
<v ->Great, thanks Kathleen.</v>

01:45:43.152 --> 01:45:46.940
So first I'll just start
out talking about prior

01:45:46.940 --> 01:45:50.423
by about targeting in general,
say has very important,

01:45:51.451 --> 01:45:53.660
it is very supportive
of Cal Enviroscreen

01:45:53.660 --> 01:45:56.060
believes that it's one of
effective tools that we have

01:45:56.060 --> 01:45:58.950
to identify communities
that are experiencing

01:45:58.950 --> 01:46:02.340
a disproportionate burden
of environmental pollution

01:46:02.340 --> 01:46:05.410
and related health problems
And so it's been very useful

01:46:05.410 --> 01:46:07.653
in targeting clean energy investments.

01:46:08.920 --> 01:46:13.920
But in terms of targeting
investments to communities

01:46:14.940 --> 01:46:18.093
it might not show up
in our current data sets.

01:46:19.660 --> 01:46:23.210
We believe that you
can use additional tools

01:46:23.210 --> 01:46:27.740
that might consider
income in affordability,

01:46:27.740 --> 01:46:30.820
pollution reduction, as
well as resiliency planning

01:46:30.820 --> 01:46:34.230
to add layers of overlapping criteria

01:46:34.230 --> 01:46:37.320
that Cal Enviroscreen
already provides us

01:46:37.320 --> 01:46:39.530
in order to identify
and target communities

01:46:39.530 --> 01:46:42.693
based on the specific
goal of the program.

01:46:44.360 --> 01:46:45.890
And so when we talk about

01:46:47.330 --> 01:46:50.150
trying to include more
rural communities,

01:46:50.150 --> 01:46:52.850
we don't necessarily, I
would agree with Jana

01:46:52.850 --> 01:46:56.140
that we don't wanna
overcomplicate the number of metrics

01:46:56.140 --> 01:46:57.920
that we're bringing in,

01:46:57.920 --> 01:47:00.580
and we don't want to
reinvent the wheel either.

01:47:00.580 --> 01:47:03.660
There are many community
based organizations

01:47:03.660 --> 01:47:06.437
that already have deep ties
within these communities,

01:47:06.437 --> 01:47:10.432
and we know which communities these are,

01:47:10.432 --> 01:47:13.040
that don't show up in the census tracks.

01:47:13.040 --> 01:47:16.206
And we should be better
utilizing these networks,

01:47:16.206 --> 01:47:18.340
these already existing networks

01:47:18.340 --> 01:47:22.710
to ensure better more
proactive and targeted outreach.

01:47:22.710 --> 01:47:25.700
There's no single metrics
that captures communities

01:47:25.700 --> 01:47:26.937
that are traditionally overlooked.

01:47:26.937 --> 01:47:31.360
So CBOs can provide a
more holistic and diverse

01:47:31.360 --> 01:47:35.920
kind of array of connections
that are necessary

01:47:35.920 --> 01:47:38.270
to fill these gaps within our data.

01:47:38.270 --> 01:47:41.520
And we would recommend
as well, a rural carve out

01:47:41.520 --> 01:47:44.680
or tool that specifically
breaks down communities

01:47:44.680 --> 01:47:49.680
based on outreach to CBOs
and feedback in this tool

01:47:50.320 --> 01:47:51.641
with community based organizations

01:47:51.641 --> 01:47:54.663
that are based in
those rural communities.

01:47:57.550 --> 01:47:58.865
<v ->Great, thanks Justin.</v>

01:47:58.865 --> 01:48:01.830
All right, let's just gears a little bit

01:48:01.830 --> 01:48:04.700
and talk about some
of the rate payer subsidy

01:48:04.700 --> 01:48:07.130
and percentage of income
payment plans, PIPP

01:48:07.130 --> 01:48:10.830
that Arjun had mentioned
earlier in his presentation.

01:48:10.830 --> 01:48:13.150
This question, let's start with Tim.

01:48:13.150 --> 01:48:16.890
At the PUC, we have a disconnections

01:48:16.890 --> 01:48:18.259
PIPP percentage of income payment plan,

01:48:18.259 --> 01:48:19.560
and that's just started.

01:48:19.560 --> 01:48:23.020
So, we don't have a lot of
good data on that quite yet,

01:48:23.020 --> 01:48:27.210
but we do have the arrearage
management program,

01:48:27.210 --> 01:48:29.840
which is in response to COVID.

01:48:29.840 --> 01:48:32.470
And we are seeing that even
with the high amount of subsidy

01:48:32.470 --> 01:48:33.853
that comes with the AMP,

01:48:34.920 --> 01:48:38.510
many customers are unable
to make their AMP payments.

01:48:38.510 --> 01:48:40.040
Just for a little bit of background

01:48:40.040 --> 01:48:42.600
in the arrearage
management program, the AMP

01:48:42.600 --> 01:48:44.573
customers are entitled to,

01:48:45.700 --> 01:48:50.700
if they pay one month of
their bill on time than one 12,

01:48:52.546 --> 01:48:54.933
so part of their bill
over time is forgiven.

01:48:56.600 --> 01:48:57.910
So I guess the question is,

01:48:57.910 --> 01:49:00.078
how do we design
programs that are better able

01:49:00.078 --> 01:49:03.170
to help folks particularly
low income rate payers

01:49:04.100 --> 01:49:05.970
since we're seeing in the AMP example

01:49:05.970 --> 01:49:07.400
that a lot of people aren't even able

01:49:07.400 --> 01:49:08.643
to make those payments?

01:49:11.228 --> 01:49:15.300
<v ->Yeah, I think that it's
obviously important to note</v>

01:49:15.300 --> 01:49:17.200
that a number of states

01:49:17.200 --> 01:49:20.070
through the the federal
(indistinct) efforts

01:49:20.070 --> 01:49:23.680
have developed assistance programs,

01:49:23.680 --> 01:49:28.680
you can look at Illinois
or Wisconsin or Missouri,

01:49:29.190 --> 01:49:31.010
through the Midwest Europe, Ohio,

01:49:31.010 --> 01:49:34.919
they're doing things while like this.

01:49:34.919 --> 01:49:39.160
Specifically with Ohio and
Illinois having PIPP programs,

01:49:39.160 --> 01:49:42.123
I think Ohio dates
back to the early 1980s.

01:49:43.030 --> 01:49:46.221
And you can see Pennsylvania
having a assistance program

01:49:46.221 --> 01:49:47.804
that's like a PIPP.

01:49:49.501 --> 01:49:50.334
It's common that,

01:49:50.334 --> 01:49:54.450
and I think what we've
heard already is that the data

01:49:54.450 --> 01:49:58.080
about the effectiveness
of these programs,

01:49:58.080 --> 01:50:02.050
is really mixed on a
state by state basis.

01:50:02.050 --> 01:50:05.123
And especially when it
comes to PIPP performance,

01:50:06.380 --> 01:50:10.263
it's challenging to find
data that's out there

01:50:10.263 --> 01:50:14.070
that you don't have to
go generate yourself.

01:50:14.070 --> 01:50:17.810
But there are some
strategies like in Illinois

01:50:17.810 --> 01:50:22.540
where they have an
Arrearage forgiveness program,

01:50:22.540 --> 01:50:24.850
up to $5,000 per family.

01:50:24.850 --> 01:50:27.660
And so in some case,

01:50:27.660 --> 01:50:31.560
it may be just that we
need to be putting more

01:50:31.560 --> 01:50:36.460
towards families
that are in dire straits

01:50:36.460 --> 01:50:39.270
to help them with their arrearages

01:50:39.270 --> 01:50:42.800
so that we're not putting
them out on the streets,

01:50:42.800 --> 01:50:44.870
as it relates to sort of being unable

01:50:44.870 --> 01:50:46.330
to sort of pay their bills.

01:50:46.330 --> 01:50:47.390
And so I think that there's certainly

01:50:47.390 --> 01:50:48.690
is just gonna have to be

01:50:48.690 --> 01:50:53.320
more that is put into
programs and direct assistance

01:50:53.320 --> 01:50:56.250
to families that can't afford it.

01:50:56.250 --> 01:51:00.810
Second is, I do think that
there is some important,

01:51:00.810 --> 01:51:04.640
additional lenses that we can put on,

01:51:04.640 --> 01:51:07.040
so the broad scale
investments that can help

01:51:07.040 --> 01:51:11.580
to reduce the energy burden
of some of these families.

01:51:11.580 --> 01:51:15.970
And, you can see the
data that is being generated.

01:51:15.970 --> 01:51:18.650
And I think the affordability
metrics are important

01:51:18.650 --> 01:51:21.520
for identifying sort of the
cost of the overall program.

01:51:21.520 --> 01:51:25.140
But if you were to try to go online

01:51:25.140 --> 01:51:27.188
or to try to evaluate the effectiveness

01:51:27.188 --> 01:51:32.188
of individual utility
programs in communities

01:51:33.230 --> 01:51:37.320
where they are going, where
electrification is happening

01:51:38.690 --> 01:51:43.520
with specificity, you
would have a hard time,

01:51:43.520 --> 01:51:47.953
looking at the California
data and seeing much usability

01:51:48.890 --> 01:51:51.430
from a perspective of identifying

01:51:51.430 --> 01:51:55.323
sort of as an external,
like non-expert advocate,

01:51:55.323 --> 01:51:58.940
sort of generalizable sort
of transparency initiative

01:51:58.940 --> 01:52:00.352
that looks at the level of investment

01:52:00.352 --> 01:52:05.352
that's going into these
communities on a census track basis

01:52:06.440 --> 01:52:11.420
could be helpful for targeting
this at the community level.

01:52:11.420 --> 01:52:13.640
And so I think that there's
more that can be done

01:52:13.640 --> 01:52:15.370
in terms of data
transparency to help this out.

01:52:15.370 --> 01:52:17.270
But I think at its core,

01:52:17.270 --> 01:52:19.090
we look at some of these other states

01:52:19.090 --> 01:52:21.950
where they're providing
large pots of money

01:52:21.950 --> 01:52:24.710
specifically for overcoming arrearages,

01:52:24.710 --> 01:52:29.710
and it may be necessary to
add a higher amount of dollars

01:52:30.810 --> 01:52:32.713
to the arrears forgiveness pot.

01:52:34.889 --> 01:52:35.960
<v ->Thanks, Tim.</v>

01:52:35.960 --> 01:52:37.725
That was very insightful.

01:52:37.725 --> 01:52:38.877
I have some more questions,

01:52:38.877 --> 01:52:40.550
but maybe let's open it up first

01:52:40.550 --> 01:52:42.170
to see if any of the Commissioners

01:52:42.170 --> 01:52:46.393
or anybody else wants to
ask a question to our panel.

01:52:50.673 --> 01:52:51.506
(laughing)

01:52:51.506 --> 01:52:52.339
No takers.

01:52:54.600 --> 01:52:56.740
Commissioner Rechtschaffen.

01:52:56.740 --> 01:52:59.040
<v ->Well, I'm gonna yield
to Commissioner Houck,</v>

01:53:00.864 --> 01:53:02.214
and then I'll go after her.

01:53:03.900 --> 01:53:06.060
<v ->I just wanted to
thank all of the panelists</v>

01:53:06.060 --> 01:53:08.610
for the information and the slides

01:53:08.610 --> 01:53:11.820
and your thoughtful consideration
of these important issues,

01:53:11.820 --> 01:53:12.730
as we're thinking through

01:53:12.730 --> 01:53:15.210
how to deal with the
affordability issues.

01:53:15.210 --> 01:53:19.160
And then I will turn this over
to Commissioner Reynolds

01:53:19.160 --> 01:53:20.810
who I just wanted to mention was,

01:53:22.460 --> 01:53:24.743
one of the Commissioners
that really felt strongly

01:53:24.743 --> 01:53:26.900
about own opening this
proceeding on affordability,

01:53:26.900 --> 01:53:29.660
given all of the issues
that we're dealing with.

01:53:29.660 --> 01:53:33.453
And so I will now turn this over to him.

01:53:35.710 --> 01:53:37.960
<v ->Thank you and
Commissioner Houck and I</v>

01:53:37.960 --> 01:53:42.960
were having a exchange on our own

01:53:43.271 --> 01:53:47.810
and I just to reset the stage,

01:53:47.810 --> 01:53:50.183
I think a lot of what was said here,

01:53:51.550 --> 01:53:53.910
underscores why we did this,

01:53:53.910 --> 01:53:56.940
why we opened up the
affordability proceedings.

01:53:56.940 --> 01:53:59.850
We know that low modern
income consumers spend

01:53:59.850 --> 01:54:03.630
a disproportionate share
of their income on utilities

01:54:03.630 --> 01:54:06.900
and this is particularly
challenging in California,

01:54:06.900 --> 01:54:10.170
given housing costs
or high poverty rate,

01:54:10.170 --> 01:54:12.600
subsidies do not
equate with affordability.

01:54:12.600 --> 01:54:16.080
I think that's very clear
and very well stated.

01:54:16.080 --> 01:54:17.378
The real world experience of consumers

01:54:17.378 --> 01:54:19.523
is not one utility bill at a time,

01:54:19.523 --> 01:54:22.210
but it's the whole
package of utility bills

01:54:22.210 --> 01:54:24.860
along with housing costs that they face,

01:54:24.860 --> 01:54:29.490
rate pressure is extraordinary
in getting more extreme.

01:54:29.490 --> 01:54:32.080
And at the same time, we
face increasing pressures

01:54:32.080 --> 01:54:33.290
to deal with climate change.

01:54:33.290 --> 01:54:36.380
And we also felt like we were making

01:54:36.380 --> 01:54:37.630
a lot of individual decisions

01:54:37.630 --> 01:54:41.430
that had a cumulative effect on rates,

01:54:41.430 --> 01:54:42.683
but we weren't taking a holistic view

01:54:42.683 --> 01:54:46.430
at what we can do to
tamp down those rates.

01:54:46.430 --> 01:54:50.520
So, those were some
of the motivating forces

01:54:50.520 --> 01:54:54.030
behind opening this up in 2019,

01:54:54.030 --> 01:54:56.170
or 2018 I believe we opened it up

01:54:57.310 --> 01:55:01.480
and they're all present
in greater force right now,

01:55:01.480 --> 01:55:04.030
as many of the speakers mentioned.

01:55:04.030 --> 01:55:06.483
I had a question for Jana.

01:55:08.710 --> 01:55:10.008
You mentioned,

01:55:10.008 --> 01:55:13.000
you thought that rural
areas and tribal areas

01:55:13.000 --> 01:55:16.023
are very good candidates
for electrification.

01:55:17.020 --> 01:55:19.890
And as we'll hear about tomorrow

01:55:19.890 --> 01:55:22.640
and as Tim mentioned
in his presentation,

01:55:22.640 --> 01:55:25.170
one of the issues confronting us

01:55:25.170 --> 01:55:27.950
is we transition to a
clean energy future

01:55:27.950 --> 01:55:31.770
is how to select prune
our infrastructure system

01:55:31.770 --> 01:55:33.970
and how to do that in an affordable way.

01:55:33.970 --> 01:55:35.520
So my question for you is,

01:55:35.520 --> 01:55:37.180
could you elaborate a little bit more

01:55:37.180 --> 01:55:38.491
on why you think rural and tribal areas

01:55:38.491 --> 01:55:42.390
are good candidates for electrification?

01:55:42.390 --> 01:55:46.423
And if I could ask a second
question, I was gonna ask,

01:55:47.330 --> 01:55:52.240
Tim, if you have any data
that you can share with us,

01:55:52.240 --> 01:55:55.080
even emerging data that quantifies

01:55:56.010 --> 01:55:57.553
the pollution reduction benefits,

01:55:57.553 --> 01:56:00.500
the other non monetary benefits

01:56:00.500 --> 01:56:02.553
of replacing gas with electrical.

01:56:04.306 --> 01:56:08.217
So how's that a speech
and two questions.

01:56:10.920 --> 01:56:12.234
<v ->I like it.</v>

01:56:12.234 --> 01:56:14.361
(laughing)

01:56:14.361 --> 01:56:16.640
Yeah, I'm happy to expand on that.

01:56:16.640 --> 01:56:21.000
So, just as a practical matter,

01:56:21.000 --> 01:56:26.000
when I look at that natural
gas transmission ecosystem,

01:56:27.530 --> 01:56:31.910
and you see that transmission pipeline

01:56:31.910 --> 01:56:35.000
stretching out to the
coast over rough terrain,

01:56:35.000 --> 01:56:36.363
it's gotta be pretty
expensive to maintain,

01:56:36.363 --> 01:56:40.350
it's at risk from seismic rupture,

01:56:40.350 --> 01:56:43.843
and it's serving 140,000
people here on the coast,

01:56:45.080 --> 01:56:47.693
just as a practical
matter, that seems like,

01:56:51.235 --> 01:56:54.300
the cost of benefits
might come into view there

01:56:54.300 --> 01:56:57.960
for pruning that limb.

01:56:57.960 --> 01:57:00.680
No one's talking about that directly,

01:57:00.680 --> 01:57:04.830
but there's number of
natural gas transmission line

01:57:04.830 --> 01:57:05.741
that go off into rural areas

01:57:05.741 --> 01:57:10.443
that are serving a relatively
small populated areas

01:57:12.580 --> 01:57:15.240
and that might be good places

01:57:15.240 --> 01:57:18.850
to start this full
electrification strategy.

01:57:18.850 --> 01:57:22.280
I'm not advocating for abrupt

01:57:26.320 --> 01:57:28.350
removal of natural gas systems,

01:57:28.350 --> 01:57:29.780
but like on the coast out here,

01:57:29.780 --> 01:57:31.970
our natural gas power plants

01:57:31.970 --> 01:57:33.252
is also vulnerable to sea level rise

01:57:33.252 --> 01:57:37.280
and that's gonna happen
in the next three decades.

01:57:37.280 --> 01:57:40.530
So, it seems to me

01:57:40.530 --> 01:57:45.530
that we can help bridge the equity issue

01:57:45.680 --> 01:57:49.060
around the deployment
divide in rural areas

01:57:49.910 --> 01:57:52.570
by also starting with rural areas

01:57:52.570 --> 01:57:57.570
to really support a managed
transition to electrification.

01:57:59.290 --> 01:58:00.874
And I think there's a
couple of key elements

01:58:00.874 --> 01:58:03.430
that are important to that.

01:58:03.430 --> 01:58:05.403
One is as I mentioned before,

01:58:08.917 --> 01:58:11.493
rural areas, tribal areas
need technical assistance.

01:58:12.380 --> 01:58:16.530
We have seen this work
very well project by project

01:58:16.530 --> 01:58:19.140
in our microgrid projects as an example.

01:58:19.140 --> 01:58:21.390
So we've been able
to AMAP this incredible

01:58:21.390 --> 01:58:23.290
sort of technical team.

01:58:23.290 --> 01:58:28.290
And this gets into
the for pilot projects,

01:58:28.430 --> 01:58:32.203
the need for analysis and
learning from those projects.

01:58:33.820 --> 01:58:35.470
But if we had

01:58:35.470 --> 01:58:38.220
strategically located
technical assistance hubs

01:58:38.220 --> 01:58:42.500
for microgrids distributed
energy resources

01:58:42.500 --> 01:58:46.123
and this natural gas to
electrification transition,

01:58:48.040 --> 01:58:53.040
it would help us learn from one another,

01:58:53.060 --> 01:58:58.060
it would build on the
eagerness to include more solar,

01:58:58.250 --> 01:59:01.300
include more
electrification of buildings

01:59:01.300 --> 01:59:04.403
for greater efficiency
and lower pollution.

01:59:06.010 --> 01:59:09.000
It would help us implement
the upcoming investments

01:59:09.000 --> 01:59:10.614
and funding that's coming
down from the federal government

01:59:10.614 --> 01:59:13.123
and the state government and climate.

01:59:14.970 --> 01:59:18.730
It provides a vetting space for design

01:59:18.730 --> 01:59:22.833
and consultant choice and
tech and economic strategies.

01:59:23.720 --> 01:59:27.330
And importantly, like these
systems are now very smart,

01:59:27.330 --> 01:59:30.540
so we can collect and use the data.

01:59:30.540 --> 01:59:32.165
There's so much data available,

01:59:32.165 --> 01:59:35.940
but there's no structural
resources to analyze it,

01:59:35.940 --> 01:59:38.760
to improve efficiency and affordability.

01:59:38.760 --> 01:59:43.150
So technical assistance
hubs that blend research,

01:59:43.150 --> 01:59:46.150
deployment, utility ecosystems

01:59:46.150 --> 01:59:49.080
and regional governments
and communities,

01:59:49.080 --> 01:59:51.010
we can leverage each other's strengths

01:59:51.010 --> 01:59:52.121
and investment willingness

01:59:52.121 --> 01:59:55.093
to improve this reliability affordably.

01:59:56.680 --> 01:59:58.663
And if done in a coordinated way,

01:59:59.510 --> 02:00:01.430
we'll make good use of these investments

02:00:01.430 --> 02:00:04.570
that crucially avoid
(indistinct) of the market.

02:00:04.570 --> 02:00:06.143
And lastly, I'll just say that,

02:00:07.620 --> 02:00:10.837
I think there's a need as
we've been talking about,

02:00:10.837 --> 02:00:12.773
and other panelists have said,

02:00:13.920 --> 02:00:18.267
we need to support the
contractor installer warranty

02:00:18.267 --> 02:00:22.603
and O&amp;M technician ecosystem,
particularly in rural areas,

02:00:23.510 --> 02:00:27.320
by increasing product knowledge
and training opportunities,

02:00:27.320 --> 02:00:30.263
technical assistance hubs
could have that as well.

02:00:31.290 --> 02:00:32.935
We need it in rural and tribal areas,

02:00:32.935 --> 02:00:35.611
particularly due to
that deployment divide.

02:00:35.611 --> 02:00:38.010
Scalability and affordability,

02:00:38.010 --> 02:00:40.430
particularly in rural tribal regions,

02:00:40.430 --> 02:00:42.563
depends on this piece.

02:00:45.530 --> 02:00:49.380
When the first SJ incentive
as an example came out

02:00:49.380 --> 02:00:52.090
for residential battery storage,

02:00:52.090 --> 02:00:56.530
this region had no access to
either the batteries themselves

02:00:56.530 --> 02:00:58.117
or certified installers.

02:00:58.117 --> 02:01:03.117
So there was a willingness
to adopt and implement,

02:01:03.320 --> 02:01:04.957
but there's as a practical matter,

02:01:04.957 --> 02:01:07.592
no contractor ecosystem
to be able to do that,

02:01:07.592 --> 02:01:10.188
nor was there a sales
channel to be able to do that,

02:01:10.188 --> 02:01:12.630
that's changing,

02:01:12.630 --> 02:01:16.800
but rural environments,
tribal environments

02:01:16.800 --> 02:01:19.140
are often the last to take advantage

02:01:20.140 --> 02:01:21.700
of these kinds of programs,

02:01:21.700 --> 02:01:24.350
because the ecosystem isn't built.

02:01:24.350 --> 02:01:25.954
We right now are struggling

02:01:25.954 --> 02:01:30.954
with implementing heat pump HVAC systems

02:01:30.960 --> 02:01:33.903
because of the lack of
product knowledge in our areas.

02:01:35.072 --> 02:01:39.620
We're fighting this really

02:01:39.620 --> 02:01:42.610
like incredible amount of expertise,

02:01:42.610 --> 02:01:46.400
but for that's limited
to outdated systems

02:01:46.400 --> 02:01:49.683
and more inefficient systems
and fossil based systems.

02:01:50.581 --> 02:01:55.270
So when we think about the ways

02:01:55.270 --> 02:01:58.940
in which we need to transition,

02:01:58.940 --> 02:02:00.780
there's a lot of optimism,

02:02:00.780 --> 02:02:01.763
there's a lot of motivation out here

02:02:01.763 --> 02:02:06.763
to improve our utility infrastructure.

02:02:07.245 --> 02:02:12.245
And by focusing on these
kinds of structural supports,

02:02:15.200 --> 02:02:20.200
we can meet in the middle
and we can leverage real dollars,

02:02:20.950 --> 02:02:24.370
real motivation, real expertise out here

02:02:25.438 --> 02:02:29.963
to create affordability in
places that need it most.

02:02:32.471 --> 02:02:37.471
<v ->If I could respond just
quickly before answering</v>

02:02:39.440 --> 02:02:42.800
or asking Tim to respond
to my second question,

02:02:42.800 --> 02:02:47.800
we will take it at the PUC
to follow up on your idea

02:02:47.970 --> 02:02:51.640
of these regional hubs
of technical assistance,

02:02:51.640 --> 02:02:54.623
because it cuts across
our various proceedings.

02:02:55.480 --> 02:02:59.610
I know we heard from Angelina east list

02:02:59.610 --> 02:03:01.830
on last week at our Commission meeting

02:03:01.830 --> 02:03:06.320
when the disadvantaged
community's advisory group reported

02:03:06.320 --> 02:03:09.030
on current priorities,
that this is a priority

02:03:09.910 --> 02:03:12.303
for that group as well.

02:03:13.330 --> 02:03:14.948
And I don't know if you're part,

02:03:14.948 --> 02:03:17.279
this is an advertisement,

02:03:17.279 --> 02:03:18.120
I don't know if you're part

02:03:18.120 --> 02:03:21.210
of our long term gas OIR proceeding

02:03:21.210 --> 02:03:22.877
where we are trying different approaches

02:03:22.877 --> 02:03:25.700
and really seeking
the broader set of input

02:03:25.700 --> 02:03:28.700
about how to get communities involved

02:03:28.700 --> 02:03:30.270
in these very, very difficult

02:03:30.270 --> 02:03:32.760
and highly technical questions.

02:03:32.760 --> 02:03:36.000
This is very germane to that discussion.

02:03:36.000 --> 02:03:38.240
So thank you for those insights

02:03:38.240 --> 02:03:41.130
and we're working on our end,

02:03:41.130 --> 02:03:43.870
and I would encourage you to help us

02:03:43.870 --> 02:03:47.650
by continue to flesh out
what that might look like,

02:03:47.650 --> 02:03:49.653
instead of these regional hubs.

02:03:51.520 --> 02:03:55.737
and Kathleen if it's okay to
ask Tim answer my questions.

02:03:56.950 --> 02:03:57.783
<v ->Excellent.</v>

02:03:57.783 --> 02:04:00.910
Yes, there's a number
of streams of data,

02:04:00.910 --> 02:04:02.827
of course that exist today,

02:04:02.827 --> 02:04:04.600
and that are sort of increasingly

02:04:04.600 --> 02:04:07.130
becoming an area of focus.

02:04:07.130 --> 02:04:12.130
The range non monetary benefits

02:04:12.200 --> 02:04:14.040
associated with the transition,

02:04:14.040 --> 02:04:17.560
off of gas or off of a
heavy reliance on gas

02:04:17.560 --> 02:04:20.340
in a building sector,
of course take the form

02:04:20.340 --> 02:04:23.320
of a couple of different pots.

02:04:23.320 --> 02:04:25.770
One being of course,
the climate concerns.

02:04:25.770 --> 02:04:28.900
And I think that the
data is pretty clear

02:04:28.900 --> 02:04:33.200
in terms of the size and
scope of the climate impact,

02:04:33.200 --> 02:04:38.200
from utilizing natural gas
in homes and businesses.

02:04:39.260 --> 02:04:43.180
One of the various pieces
that we often overlook of course,

02:04:43.180 --> 02:04:47.820
is not just the emissions
of leakage associated,

02:04:47.820 --> 02:04:51.360
at the home or at the direct combustion,

02:04:51.360 --> 02:04:53.240
but also in the whole value chain

02:04:53.240 --> 02:04:55.740
that's associated with bringing the gas

02:04:55.740 --> 02:05:00.740
from the oil field or from
the gas field to the end use.

02:05:00.930 --> 02:05:05.280
The EDF data from
our scientific assessment

02:05:05.280 --> 02:05:08.730
showed that roughly
about 2.3% of the gas

02:05:08.730 --> 02:05:10.490
is lost from the point of production

02:05:10.490 --> 02:05:11.810
to the point of end use.

02:05:11.810 --> 02:05:14.520
California actually
did some quantification

02:05:14.520 --> 02:05:15.910
of what that looks like

02:05:15.910 --> 02:05:19.247
in terms of the gas that
we utilize in California.

02:05:19.247 --> 02:05:23.620
And that's about adding an
extra 25 million metric tons

02:05:23.620 --> 02:05:25.860
of carbon dioxide equivalent gases

02:05:25.860 --> 02:05:30.580
on top of the direct combustion
and in-state emissions

02:05:30.580 --> 02:05:32.710
associated with all
that gas that we import.

02:05:32.710 --> 02:05:36.680
So, if we look at the
transition off of gas

02:05:36.680 --> 02:05:39.430
in the built environment
here in California,

02:05:39.430 --> 02:05:41.280
we certainly should be looking

02:05:41.280 --> 02:05:44.370
at a reduction in the associated leakage

02:05:45.380 --> 02:05:50.380
that is accompanied by a
reduction in gas imports,

02:05:50.850 --> 02:05:55.850
because it will indeed reduce
the overall demand for gas,

02:05:56.900 --> 02:06:00.110
which should have a
commensurate reduction

02:06:00.110 --> 02:06:02.490
in the amount of production needed

02:06:02.490 --> 02:06:04.890
to meet the California demand.

02:06:04.890 --> 02:06:08.860
Second is of course that
the in basin and instate,

02:06:09.830 --> 02:06:12.180
emissions associated with combustion

02:06:13.170 --> 02:06:16.250
localized NOx emissions,

02:06:16.250 --> 02:06:18.340
carbon monoxide emissions and others,

02:06:18.340 --> 02:06:21.350
there is an increasing amount of data.

02:06:21.350 --> 02:06:22.940
In fact, the studies that have come out

02:06:22.940 --> 02:06:24.330
just in the last month or so,

02:06:24.330 --> 02:06:28.160
they get clear about the
contribution of this data,

02:06:28.160 --> 02:06:33.060
of these emissions to
degraded health endpoints.

02:06:33.060 --> 02:06:38.060
I'd say that we know just
like in the transportation sector

02:06:38.630 --> 02:06:43.533
that reducing gasoline and diesel use,

02:06:44.460 --> 02:06:46.740
doesn't impact everybody the same,

02:06:46.740 --> 02:06:49.830
just like reducing
natural gas use in homes,

02:06:49.830 --> 02:06:52.200
buildings doesn't impact
everybody the same

02:06:52.200 --> 02:06:54.530
if you already have
preexisting health conditions,

02:06:54.530 --> 02:06:57.920
or you a home which has less ventilation

02:06:57.920 --> 02:07:01.100
or a higher amount or
less efficient combustion,

02:07:01.100 --> 02:07:04.720
you're gonna have higher
impact in those places,

02:07:04.720 --> 02:07:07.200
just like you are gonna
have in a neighborhood

02:07:07.200 --> 02:07:09.460
that is on a major
transportation artery.

02:07:09.460 --> 02:07:10.940
And I don't think yet we have

02:07:10.940 --> 02:07:13.700
the kind of granularity that exists

02:07:13.700 --> 02:07:17.400
to differentiate the types
of homes and businesses

02:07:17.400 --> 02:07:21.170
that are going to experience
the highest impacts

02:07:21.170 --> 02:07:24.520
and the ability to
quantify those impacts

02:07:24.520 --> 02:07:29.520
but we do know that there
are communities and individuals

02:07:31.890 --> 02:07:34.990
that have higher impacts than others,

02:07:34.990 --> 02:07:39.700
and that we need to be
focusing on those individuals

02:07:39.700 --> 02:07:42.410
alongside the broad scale transition

02:07:42.410 --> 02:07:44.303
so that we can focus our efforts

02:07:44.303 --> 02:07:48.350
that deliver the highest benefits first.

02:07:48.350 --> 02:07:49.183
And then finally,

02:07:49.183 --> 02:07:51.500
if there's of course a
whole body of literature

02:07:51.500 --> 02:07:54.737
that talks about the
non-economic benefits,

02:07:54.737 --> 02:07:57.370
the non quantifiable sort
of direct payer benefits

02:07:57.370 --> 02:08:00.161
associated with the
broad scale transition

02:08:00.161 --> 02:08:03.290
that emerges from things
such as improvements

02:08:03.290 --> 02:08:08.290
in infrastructure deployment
and development of industries,

02:08:09.370 --> 02:08:12.050
In California we've seen, of course

02:08:12.050 --> 02:08:15.330
labor market and job generation benefits

02:08:15.330 --> 02:08:17.880
associated with the
investment in clean energy

02:08:17.880 --> 02:08:21.320
and intermission
reduction activities for years.

02:08:21.320 --> 02:08:22.710
And we would be remiss

02:08:22.710 --> 02:08:27.150
to lose out on the
quantification of those benefits

02:08:27.150 --> 02:08:29.240
alongside this transition,

02:08:29.240 --> 02:08:30.870
because of course they are real

02:08:30.870 --> 02:08:34.380
and they impact communities
where they're located.

02:08:34.380 --> 02:08:37.610
So in short, I would say
there's multiple categories.

02:08:37.610 --> 02:08:39.340
Some we have better data than others.

02:08:39.340 --> 02:08:41.950
And the emerging data does demonstrate

02:08:41.950 --> 02:08:44.520
that there are
communities and individuals

02:08:44.520 --> 02:08:47.610
on the health benefit
side that are experiencing

02:08:47.610 --> 02:08:50.140
these benefits first and worst.

02:08:50.140 --> 02:08:52.670
And I think that we should
be prioritizing investments

02:08:52.670 --> 02:08:54.490
in those communities
and those individuals

02:08:54.490 --> 02:08:56.140
so that we can deliver those benefits

02:08:56.140 --> 02:08:57.290
as quickly as possible.

02:09:01.530 --> 02:09:02.840
<v ->Thanks, Tim.</v>

02:09:02.840 --> 02:09:04.760
Any other Commissioners have a question?

02:09:04.760 --> 02:09:08.040
I can ask one final one,
oh, Commissioner McAlister.

02:09:08.040 --> 02:09:08.929
<v ->And I think
Commissioner Monahan</v>

02:09:08.929 --> 02:09:11.323
<v ->Oh, by Commission
Monahan (laughs).</v>

02:09:11.323 --> 02:09:13.156
<v ->Also has a question.</v>

02:09:14.890 --> 02:09:16.090
<v ->Okay, can you hear me?</v>

02:09:18.010 --> 02:09:22.200
Great, well, there are so many
great themes brought up here,

02:09:22.200 --> 02:09:23.510
I just wanna congratulate you

02:09:23.510 --> 02:09:26.070
both putting the staff
that put it together,

02:09:26.070 --> 02:09:28.510
very complimentary
all your presentations,

02:09:28.510 --> 02:09:32.780
and also just way too many
themes to ask questions about.

02:09:32.780 --> 02:09:35.140
But I do have a very quick comment

02:09:36.300 --> 02:09:41.984
just about come of
overarching and really I think,

02:09:41.984 --> 02:09:46.984
we have these sort of
complimentary goals,

02:09:47.790 --> 02:09:49.750
maybe conflicting in some ways, right?

02:09:49.750 --> 02:09:54.683
We really want to optimize
the use of all the funds

02:09:54.683 --> 02:09:57.210
that we have access to,
whether that's rate payer funds,

02:09:57.210 --> 02:09:59.620
general funds, federal funds,

02:09:59.620 --> 02:10:02.750
we really need to make sure
that we utilize those funds

02:10:02.750 --> 02:10:05.240
to do many of the things
that you're talking about,

02:10:05.240 --> 02:10:08.352
most effectively in a
targeted way, right?

02:10:08.352 --> 02:10:11.287
Where we go and where the
greenhouse gas reductions

02:10:11.287 --> 02:10:15.333
and the bill savings
and all the other benefits

02:10:15.333 --> 02:10:17.020
that Tim just talked about,

02:10:17.020 --> 02:10:19.230
where those are gonna be most,

02:10:19.230 --> 02:10:20.690
where those funds are
gonna be most effective

02:10:20.690 --> 02:10:22.090
and have the biggest impact.

02:10:25.120 --> 02:10:29.580
And we also know, that
there's a lot of new technology

02:10:30.780 --> 02:10:33.900
that needs investment, that
needs market development,

02:10:33.900 --> 02:10:37.210
and many of the things
you've brought up as well.

02:10:37.210 --> 02:10:41.680
So I just, in particular, I think
Arjun and Jana's comments

02:10:41.680 --> 02:10:45.060
sort of along a lot of these
lines, thanks for those.

02:10:45.060 --> 02:10:50.060
So, and I completely agree
that efficiency, demand response,

02:10:51.050 --> 02:10:55.660
smartness in our building and
load management standards,

02:10:55.660 --> 02:10:58.470
sort of rates that incentivize behavior,

02:10:58.470 --> 02:11:00.660
all of those are key
tools in our toolbox

02:11:00.660 --> 02:11:03.480
that we have to bring
to this across the board,

02:11:03.480 --> 02:11:04.370
across the marketplace,

02:11:04.370 --> 02:11:08.260
not just with frontline
disadvantaged communities

02:11:08.260 --> 02:11:09.910
under resource communities.

02:11:09.910 --> 02:11:13.120
So kind of with that background,

02:11:13.120 --> 02:11:14.693
I have a couple of questions.

02:11:17.887 --> 02:11:22.887
We now have access to data,
a couple of you brought that up.

02:11:23.860 --> 02:11:28.860
We have amazing access
to data that including,

02:11:29.570 --> 02:11:33.480
interval data and
very, very granular data

02:11:34.470 --> 02:11:37.750
that we are increasingly able to use

02:11:37.750 --> 02:11:41.410
to determine where
those savings actually are,

02:11:41.410 --> 02:11:43.770
where those positive
impacts are feasible.

02:11:43.770 --> 02:11:45.250
Even if you have identical,

02:11:45.250 --> 02:11:46.140
if you have a community,

02:11:46.140 --> 02:11:48.620
it's got a whole bunch of
different customers in it,

02:11:48.620 --> 02:11:50.160
actually looking at the load shapes

02:11:50.160 --> 02:11:54.560
the sort of patterns of
use to, to be able to say,

02:11:54.560 --> 02:11:56.520
hey, here's where we should be targeted,

02:11:56.520 --> 02:11:59.330
here's where the savings are
and here's where they're not.

02:11:59.330 --> 02:12:03.560
And so I think those
questions we can ask

02:12:03.560 --> 02:12:05.310
from a technical perspective,

02:12:05.310 --> 02:12:07.800
okay, well, this family, this house

02:12:07.800 --> 02:12:09.630
actually has a huge seasonal load,

02:12:09.630 --> 02:12:10.463
it looks like they have

02:12:10.463 --> 02:12:11.760
a very inefficient mechanical system,

02:12:11.760 --> 02:12:13.430
it looks like there's massive benefits

02:12:13.430 --> 02:12:15.823
to insulating and
replacement of the mechanical,

02:12:16.710 --> 02:12:18.360
we should go to there.

02:12:18.360 --> 02:12:20.633
And there are other people
in that same community,

02:12:21.493 --> 02:12:24.860
maybe it's smaller loads,
one person in a home,

02:12:24.860 --> 02:12:26.690
it might be identical homes.

02:12:26.690 --> 02:12:30.970
So I guess I'm wondering,
sort of this can be pretty touchy

02:12:30.970 --> 02:12:32.580
when you're talking about equity,

02:12:32.580 --> 02:12:36.120
because you don't wanna go
maybe too far down this road,

02:12:36.120 --> 02:12:37.890
but I want to just ask you,

02:12:37.890 --> 02:12:40.343
ask whoever wants to respond,

02:12:41.250 --> 02:12:45.150
do you see kind of equity
concerns with such an approach?

02:12:45.150 --> 02:12:47.720
We've gotta take care of our money,

02:12:47.720 --> 02:12:50.880
there's just not enough to
go around for the whole state,

02:12:50.880 --> 02:12:53.890
and so we really need
to, to optimize that.

02:12:53.890 --> 02:12:55.113
So that's one question.

02:12:56.045 --> 02:12:56.945
And second one is,

02:12:57.860 --> 02:12:59.760
so along the lines of keeping it real,

02:13:04.052 --> 02:13:06.300
and several of you have
commented on the need

02:13:06.300 --> 02:13:08.270
for effective community engagement.

02:13:08.270 --> 02:13:11.100
And I just wanna
command Abigail and Jana,

02:13:11.100 --> 02:13:13.490
you're doing this every day
and you've got really think

02:13:13.490 --> 02:13:15.140
on the pulse of your communities.

02:13:16.160 --> 02:13:20.960
What models exist for the state

02:13:20.960 --> 02:13:24.290
to really effectively cultivate
community relationships,

02:13:24.290 --> 02:13:26.693
relationships with actual,

02:13:28.370 --> 02:13:32.440
relatively smallish communities
likely across the state?

02:13:32.440 --> 02:13:34.040
There are often thought leaders,

02:13:35.910 --> 02:13:38.833
say the schools or in the
community, elected officials,

02:13:40.920 --> 02:13:42.540
and that requires real resources, right?

02:13:42.540 --> 02:13:44.220
And independent from project resources

02:13:44.220 --> 02:13:45.560
and mechanical and all that,

02:13:45.560 --> 02:13:47.210
like actual building investments.

02:13:50.920 --> 02:13:52.477
Going from the state

02:13:52.477 --> 02:13:53.760
down to the local down to the community,

02:13:53.760 --> 02:13:57.290
those are key aspects
of this sort of supply chain

02:13:57.290 --> 02:13:59.010
for services that we need to provide

02:13:59.010 --> 02:14:01.463
to move our buildings
into the carbonized future.

02:14:03.170 --> 02:14:05.220
I get nervous when we talk
about sort of communities

02:14:05.220 --> 02:14:07.880
in the generic sense, because
I feel like these are actual,

02:14:07.880 --> 02:14:09.510
incredibly diverse
communities in the state.

02:14:09.510 --> 02:14:14.510
And I just wanna throw that
out there as a kind of a problem

02:14:14.650 --> 02:14:15.770
that I still not that

02:14:15.770 --> 02:14:18.880
I don't think we've really
cracked at the state level.

02:14:18.880 --> 02:14:21.720
And so, what are the
channels we can work

02:14:21.720 --> 02:14:24.130
to get resources really
where they need to be

02:14:24.130 --> 02:14:25.073
in a way that they're effective

02:14:25.073 --> 02:14:27.093
and the community actually buys into?

02:14:28.040 --> 02:14:29.640
So two very different questions.

02:14:36.780 --> 02:14:40.490
<v ->Well, I'll speak from what
we're doing on the North Coast.</v>

02:14:40.490 --> 02:14:45.490
So there is a new community convening,

02:14:46.320 --> 02:14:48.640
climate and community resilience hub

02:14:48.640 --> 02:14:52.110
that formed a few years ago

02:14:53.770 --> 02:14:58.770
that is attempting to bring
the thought leaders together

02:14:59.710 --> 02:15:02.263
from various constituencies,

02:15:03.900 --> 02:15:06.900
with inequity lens and desiloing

02:15:06.900 --> 02:15:11.900
between local government,
tribal government,

02:15:11.950 --> 02:15:16.950
and then building and
strengthening relationships

02:15:17.190 --> 02:15:19.760
with state and federal counterparts.

02:15:19.760 --> 02:15:24.760
So in our region, I've
been a part of this effort.

02:15:25.050 --> 02:15:27.170
It's the Redwood Region Climate

02:15:28.090 --> 02:15:29.713
and Community Resilience Hub,

02:15:31.090 --> 02:15:32.653
or the CORE Hub as we call it.

02:15:35.760 --> 02:15:40.760
And it's been effective
in really catalyzing

02:15:41.480 --> 02:15:43.280
and accelerating the conversation

02:15:43.280 --> 02:15:44.730
around climate resilience

02:15:45.692 --> 02:15:47.640
and particularly around natural

02:15:47.640 --> 02:15:50.183
and built infrastructure resilience.

02:15:51.690 --> 02:15:55.230
So we need, I think
the simple answer is,

02:15:55.230 --> 02:15:59.620
we need dedicated forums
for this on a regional basis

02:15:59.620 --> 02:16:03.680
that are desiloed, that
are working to desilo

02:16:03.680 --> 02:16:05.860
and bring voices to the table

02:16:05.860 --> 02:16:09.633
that have been left out of
the decision making to date.

02:16:11.810 --> 02:16:13.797
We've heard people talk about that today

02:16:13.797 --> 02:16:17.740
and that cannot be overstated
in terms of its importance.

02:16:17.740 --> 02:16:19.390
I'll say that in the short time

02:16:19.390 --> 02:16:20.460
that we've been up and running,

02:16:20.460 --> 02:16:22.520
the thing that we run up against

02:16:22.520 --> 02:16:26.570
is we need that trusted
data and analysis.

02:16:26.570 --> 02:16:30.450
So that's where these that's
where the technical assistance

02:16:30.450 --> 02:16:33.423
and research hubs come in.

02:16:36.060 --> 02:16:39.000
In the best light, it works scaled up

02:16:39.000 --> 02:16:41.900
from how we've seen it
work in our microgrid projects,

02:16:41.900 --> 02:16:46.900
which is we have our state
energy infrastructure ecosystem,

02:16:47.307 --> 02:16:51.253
the CPUC, the CEC, our utilities,

02:16:53.560 --> 02:16:58.303
the regulatory and research
and deployment bodies

02:16:58.303 --> 02:17:00.033
that are working together.

02:17:00.890 --> 02:17:02.130
And then in the community,

02:17:02.130 --> 02:17:06.860
you have a bunch of capacity
building that's going on,

02:17:06.860 --> 02:17:10.540
people who understand how
to do these kinds of systems,

02:17:10.540 --> 02:17:13.170
but that are working on the leading edge

02:17:13.170 --> 02:17:15.103
of deployment and making them better.

02:17:16.950 --> 02:17:20.880
We think that that model is replicable

02:17:21.800 --> 02:17:26.390
and that, that technical
assistance support

02:17:26.390 --> 02:17:29.760
within the region has
made all the difference,

02:17:29.760 --> 02:17:33.490
both in terms of regional
resiliency and affordability,

02:17:33.490 --> 02:17:37.780
but also the just general learning

02:17:37.780 --> 02:17:40.130
that's happening across the state.

02:17:40.130 --> 02:17:43.303
So, the microgrids that were
developed up in Humboldt County

02:17:43.303 --> 02:17:44.770
were some of the first

02:17:44.770 --> 02:17:49.770
sort of clean energy
microgrids in California,

02:17:49.860 --> 02:17:52.030
and now there's dozens of projects

02:17:52.030 --> 02:17:54.707
and hundreds more in the queue (laughs).

02:17:56.170 --> 02:17:58.400
That's the way that
this is supposed to work.

02:17:58.400 --> 02:18:00.560
And that's happened
in the last seven years

02:18:00.560 --> 02:18:02.710
that hasn't been like a 20 year effort.

02:18:02.710 --> 02:18:05.780
Microgrids launched
by thought leadership

02:18:05.780 --> 02:18:08.450
at the CPUC and the CEC

02:18:08.450 --> 02:18:10.870
with appropriate amount
of pilot scale funding,

02:18:10.870 --> 02:18:13.233
and now we're scaled
up across the state.

02:18:14.270 --> 02:18:19.270
We can do this with our
energy sector more broadly

02:18:20.170 --> 02:18:23.670
and improve equity in the process.

02:18:23.670 --> 02:18:25.974
But I can't overstate the importance

02:18:25.974 --> 02:18:30.974
of these technical assistance
and data analysis hubs.

02:18:31.450 --> 02:18:36.140
We also need to make sure
that we are gathering data,

02:18:36.140 --> 02:18:38.840
not just on, as you were saying,

02:18:38.840 --> 02:18:43.400
what the electrical grid is doing
nanosecond by nanosecond,

02:18:43.400 --> 02:18:45.393
but what our emissions are.

02:18:46.370 --> 02:18:48.110
So we've seen a lot of improvement

02:18:48.110 --> 02:18:53.110
in the methane emission
quantification in carbon monoxide,

02:18:53.440 --> 02:18:56.170
in NOx and other emissions.

02:18:56.170 --> 02:18:57.480
We need to make sure that

02:18:57.480 --> 02:19:02.480
that is a source of data
gathering that is not jeopardized.

02:19:05.810 --> 02:19:08.410
That is in our view,

02:19:08.410 --> 02:19:09.937
the tribal government's responsibility,

02:19:09.937 --> 02:19:11.810
the state government's responsibility,

02:19:11.810 --> 02:19:15.890
agency responsibility, we
need to really protect that

02:19:15.890 --> 02:19:19.650
because that gives us, of
course, this underlying data

02:19:19.650 --> 02:19:21.800
for all of our decisions
that we're making.

02:19:27.050 --> 02:19:28.680
<v ->Hi, I'd also like to respond</v>

02:19:28.680 --> 02:19:31.940
to the Commissioner
McAllister's question

02:19:31.940 --> 02:19:35.540
about how we realistically

02:19:35.540 --> 02:19:38.950
can reach all of these
small communities.

02:19:38.950 --> 02:19:43.340
I know it seems like an unbearable task,

02:19:43.340 --> 02:19:46.880
but what is comforting to know that,

02:19:46.880 --> 02:19:50.310
there are community based organizations

02:19:50.310 --> 02:19:54.190
that have been working with
these communities for decades.

02:19:54.190 --> 02:19:57.630
For example, our organization
stop help enterprises

02:19:57.630 --> 02:20:01.360
that's been in the
communities for over 60 years.

02:20:01.360 --> 02:20:04.530
And when you work
with the CBO like this,

02:20:04.530 --> 02:20:07.460
which you have is already
established relationship

02:20:07.460 --> 02:20:10.390
with these communities, you
have previous work history,

02:20:10.390 --> 02:20:14.420
previous projects that
have been worked on

02:20:14.420 --> 02:20:17.420
together with the CBO
and with the communities.

02:20:17.420 --> 02:20:20.520
So, one thing that might be helpful is

02:20:20.520 --> 02:20:23.467
for the CPUC and the Energy Commission

02:20:23.467 --> 02:20:25.330
to begin to gather a
list of who these trusted

02:20:25.330 --> 02:20:28.690
community based organizations
are a across the state,

02:20:28.690 --> 02:20:33.270
perhaps on a regional level,

02:20:33.270 --> 02:20:35.490
because what I can envision happening

02:20:35.490 --> 02:20:39.890
is similar to what happened
in the drinking water world,

02:20:39.890 --> 02:20:43.140
when the state water
resource control board decided,

02:20:43.140 --> 02:20:46.410
to figure out how we can help
these thousands of communities

02:20:46.410 --> 02:20:48.850
that we're dealing
with contaminated water

02:20:48.850 --> 02:20:51.130
and how we could provide
technical assistance,

02:20:51.130 --> 02:20:51.970
they needed to create

02:20:51.970 --> 02:20:54.050
a list of technical assistance providers

02:20:54.050 --> 02:20:57.110
that can provide this resource
to these small communities

02:20:57.110 --> 02:21:00.130
with the criteria was, do you
have existing relationships?

02:21:00.130 --> 02:21:02.930
Do you have the staff
capacity to do this work?

02:21:02.930 --> 02:21:05.490
So, I can envision
something like that happening

02:21:05.490 --> 02:21:09.480
for the work that is in
front of us here today,

02:21:09.480 --> 02:21:14.153
around equitable access to
energy, to affordable energy.

02:21:16.550 --> 02:21:19.130
So that is one thing that we need to do,

02:21:19.130 --> 02:21:21.590
and to your other question,

02:21:21.590 --> 02:21:24.303
the first part of your
question was about,

02:21:25.400 --> 02:21:28.630
funding and how to get that,

02:21:28.630 --> 02:21:30.410
I believe is how do you get that out?

02:21:30.410 --> 02:21:33.653
One thing that worries me a lot is,

02:21:36.012 --> 02:21:38.930
the state does have a lot
of money available for this

02:21:38.930 --> 02:21:40.300
it's not unlimited.

02:21:40.300 --> 02:21:41.710
But I often worry about

02:21:41.710 --> 02:21:44.150
how those most vulnerable communities

02:21:44.150 --> 02:21:46.460
will really get to access that funding,

02:21:46.460 --> 02:21:49.560
because there is still a huge disconnect

02:21:49.560 --> 02:21:52.460
between the communities
that need the money the most,

02:21:52.460 --> 02:21:55.670
and their ability to
apply for this funding

02:21:55.670 --> 02:21:58.320
or to get to have it actually
come down to them, right?

02:21:58.320 --> 02:21:59.570
So again,

02:21:59.570 --> 02:22:02.480
if you have the right
technical assistance providers,

02:22:02.480 --> 02:22:04.370
you can make that connection.

02:22:04.370 --> 02:22:07.190
But the reality is that most
of these small communities

02:22:07.190 --> 02:22:09.230
will never get these resources,

02:22:09.230 --> 02:22:13.120
unless someone's to help
them make the connection, right?

02:22:13.120 --> 02:22:17.080
Because we're talking about
rural unincorporated communities

02:22:17.080 --> 02:22:21.910
and unfortunately, they
are not the first priority

02:22:21.910 --> 02:22:26.910
for the county elected
officials who represent them,

02:22:27.190 --> 02:22:31.840
they don't have a mayor
or city council that thinks

02:22:31.840 --> 02:22:33.640
about these rules from
all communities, right?

02:22:33.640 --> 02:22:35.900
So they're essentially left alone.

02:22:35.900 --> 02:22:37.850
But if you can find
the right organization

02:22:37.850 --> 02:22:41.050
whose job it is or whose mission it is

02:22:41.050 --> 02:22:43.350
to help tho these types of communities,

02:22:43.350 --> 02:22:45.240
that's where you'll make the connection,

02:22:45.240 --> 02:22:47.610
is not what will ends up happening is

02:22:47.610 --> 02:22:50.820
the resources are gonna
go out to the same cities

02:22:50.820 --> 02:22:53.460
or communities that have
been helped in the past.

02:22:53.460 --> 02:22:55.480
And we're not actually
going to reach those

02:22:55.480 --> 02:22:59.300
that have not been able
to participate previously.

02:22:59.300 --> 02:23:04.150
So again, I think
starting to actively identify

02:23:04.150 --> 02:23:05.910
who will partner can be,

02:23:05.910 --> 02:23:08.960
who can partner with the CPUC
and the Energy Commission

02:23:08.960 --> 02:23:10.270
to help you reach those

02:23:10.270 --> 02:23:14.100
that are just historically hard to reach

02:23:14.100 --> 02:23:17.260
and think about a way that makes sense

02:23:17.260 --> 02:23:20.130
for these community based organizations,

02:23:20.130 --> 02:23:24.600
where usually nonprofits,
have it make sense for them

02:23:24.600 --> 02:23:25.790
to help you do this, right?

02:23:25.790 --> 02:23:28.080
Because we all know that a lot of times

02:23:30.500 --> 02:23:32.940
nonprofit organizations are underpaid

02:23:32.940 --> 02:23:36.210
and often don't have
their resources to do this,

02:23:36.210 --> 02:23:40.003
but they can be a huge resource
to you if you the right way.

02:23:41.910 --> 02:23:43.600
<v ->Thanks you Jana.</v>

02:23:43.600 --> 02:23:44.930
<v ->Can I jump in?</v>

02:23:44.930 --> 02:23:46.140
<v ->Address the first part</v>

02:23:46.140 --> 02:23:48.643
of Commissioner McAllister's
question about efficient-

02:23:48.643 --> 02:23:50.413
<v ->It will be brief I
want give give-</v>

02:23:50.413 --> 02:23:52.030
<v ->No, go ahead.
(indistinct)</v>

02:23:52.030 --> 02:23:52.870
<v ->No, go ahead.</v>

02:23:52.870 --> 02:23:55.200
But just, if you could
be brief (indistinct).

02:23:55.200 --> 02:23:57.100
<v ->Yeah, one thing I
was going to suggest</v>

02:23:57.100 --> 02:24:01.290
on the technical side
complimenting what has just been said

02:24:01.290 --> 02:24:05.200
is to target the metric
of energy use intensity

02:24:05.200 --> 02:24:07.640
for gas and electricity.

02:24:07.640 --> 02:24:09.220
So then you don't have to worry

02:24:09.220 --> 02:24:11.720
about how many people there
are on the house and so on,

02:24:11.720 --> 02:24:14.680
and you can infer energy use intensity

02:24:14.680 --> 02:24:16.900
through American community service,

02:24:16.900 --> 02:24:19.330
you know all that you have all the tools

02:24:19.330 --> 02:24:24.330
and that might be
overlaid with the racial

02:24:25.310 --> 02:24:28.670
and rental property
owning characteristics

02:24:28.670 --> 02:24:32.533
might provide a very
powerful way to make priorities.

02:24:38.630 --> 02:24:40.510
<v ->Kathleen, I think Commissioner-</v>

02:24:40.510 --> 02:24:41.343
<v ->The question.</v>

02:24:42.340 --> 02:24:43.940
<v ->Go ahead Commissioner Monahan.</v>

02:24:45.300 --> 02:24:46.890
<v ->Thanks Commissioner Houck.</v>

02:24:46.890 --> 02:24:49.610
I'm curious about this issue
about data transparency.

02:24:49.610 --> 02:24:50.750
And I was also struck

02:24:50.750 --> 02:24:53.470
by something Jana said around schools

02:24:53.470 --> 02:24:56.940
using diesel generators for electricity,

02:24:56.940 --> 02:25:00.200
which is so disturbing on
so many different levels.

02:25:00.200 --> 02:25:03.940
And I'm just curious if
there are any best practices

02:25:03.940 --> 02:25:08.180
on data transparency when it
comes to environmental justice

02:25:08.180 --> 02:25:10.073
or environmental equity.

02:25:18.760 --> 02:25:20.810
<v ->I would leave it to
my fellow panelists</v>

02:25:20.810 --> 02:25:23.770
to talk about maybe best
practices that they're aware of,

02:25:23.770 --> 02:25:28.770
but the ways in which I've
seen data be really effective

02:25:28.800 --> 02:25:32.470
and what we get requests
for data about all the time

02:25:32.470 --> 02:25:36.610
is just kind of the bare
bones about, okay,

02:25:36.610 --> 02:25:41.610
so you have this fancy
microgrid with solar and batteries

02:25:42.610 --> 02:25:45.250
and you're dispatching
these things all around

02:25:45.250 --> 02:25:48.903
and trying to make sort of
optimized use of everything.

02:25:51.260 --> 02:25:55.340
What percentage of
your annual electrical use

02:25:55.340 --> 02:25:59.460
is actually solar while
you're connected to the grid

02:25:59.460 --> 02:26:01.650
or in cases where you're disconnected

02:26:01.650 --> 02:26:03.840
from the grid, then how much is?

02:26:03.840 --> 02:26:06.720
So we're getting asked
for sort of analysis

02:26:06.720 --> 02:26:09.577
around the cleanliness of these systems,

02:26:09.577 --> 02:26:13.293
the cost effectiveness of
them, the affordability of them.

02:26:15.009 --> 02:26:20.009
And that is something
that we try very hard

02:26:20.900 --> 02:26:25.858
to respond to these
information requests, but it is

02:26:25.858 --> 02:26:30.113
for a very small tribal government
and a very small system,

02:26:31.420 --> 02:26:36.420
it's difficult to sort of feel
the volume of requests.

02:26:36.610 --> 02:26:41.610
If we were able to provide data feeds

02:26:42.630 --> 02:26:46.560
and we've been working
on sort of telemetry pilots

02:26:46.560 --> 02:26:48.563
to be able to see how we might do that,

02:26:49.440 --> 02:26:52.050
but we know that we have the data

02:26:52.050 --> 02:26:54.410
that can be very instructional

02:26:54.410 --> 02:26:59.350
to figuring out how to
do grid segmentation,

02:26:59.350 --> 02:27:01.760
to build sort of these
connected communities

02:27:01.760 --> 02:27:05.180
that at the end of the
day may help affordability

02:27:05.180 --> 02:27:07.530
by avoiding altogether

02:27:07.530 --> 02:27:11.280
or at least delaying large
transmission upgrades

02:27:11.280 --> 02:27:16.280
if we can get hyper efficient
on a segmented level,

02:27:16.860 --> 02:27:20.593
maybe we can avoid some of
these big transmission upgrades.

02:27:22.400 --> 02:27:24.480
But we see the need for

02:27:26.980 --> 02:27:29.680
basically an R&amp;D
technical assistance hub

02:27:29.680 --> 02:27:31.530
to be the repository of that,

02:27:31.530 --> 02:27:34.880
to have people sort of
working on the data analysis

02:27:34.880 --> 02:27:39.140
and the reports out that we need to do

02:27:39.140 --> 02:27:42.803
to guide these efforts
into the near future.

02:27:44.690 --> 02:27:47.170
<v ->And I wasn't very trying about</v>

02:27:47.170 --> 02:27:49.130
what I was thinking about
with data transparency,

02:27:49.130 --> 02:27:52.743
which was actually more in terms of say,

02:27:53.990 --> 02:27:56.080
number and placement of schools

02:27:56.080 --> 02:27:58.190
that are still using
diesel default generators,

02:27:58.190 --> 02:28:00.370
or how many homes they're using propane

02:28:01.677 --> 02:28:04.550
for meeting their basic needs.

02:28:04.550 --> 02:28:07.603
So there's like a basic
needs cut, which I think right,

02:28:08.440 --> 02:28:11.700
would be helpful to have
sort of statewide data on that

02:28:11.700 --> 02:28:13.360
so that then we can track,

02:28:13.360 --> 02:28:17.140
are we making progress
in meeting basic needs

02:28:17.140 --> 02:28:20.793
and also cleaning up the
electric or energy supply.

02:28:24.168 --> 02:28:25.160
<v ->Some of that data's being done</v>

02:28:25.160 --> 02:28:26.900
on a project by project basis,

02:28:26.900 --> 02:28:29.290
we're working with a
number of the tribes

02:28:29.290 --> 02:28:33.390
on the North Coast to
tease out the exact data sets

02:28:33.390 --> 02:28:34.543
you're talking about.

02:28:35.581 --> 02:28:37.020
So it's really, in tribal nations,

02:28:37.020 --> 02:28:40.653
I've seen that best handled
through self-reporting.

02:28:42.130 --> 02:28:47.130
And when it's in the context
of reliability improvement,

02:28:47.720 --> 02:28:51.610
generally, tribal governments

02:28:51.610 --> 02:28:53.410
are motivated to provide that data

02:28:54.950 --> 02:28:56.480
and I'll turn it to my fellow panelists

02:28:56.480 --> 02:28:58.833
for other other ideas on this one.

02:29:07.750 --> 02:29:08.850
<v ->Well, in terms of your question</v>

02:29:08.850 --> 02:29:11.863
about data for propane users,

02:29:12.770 --> 02:29:15.240
I agree it is being
done project by projects

02:29:15.240 --> 02:29:20.240
that work started in
the SJ pilots proceeding

02:29:21.840 --> 02:29:24.360
or the proceeding that
led to the SUV pilots,

02:29:24.360 --> 02:29:29.360
where we identified
about 170 communities,

02:29:29.610 --> 02:29:33.520
some are partial that are disadvantaged

02:29:33.520 --> 02:29:35.100
and are in the San Joaquin valley

02:29:35.100 --> 02:29:37.200
and do not have access to natural gas.

02:29:37.200 --> 02:29:39.830
So the list is already starting,

02:29:39.830 --> 02:29:43.040
but we would need to
collect that information

02:29:43.040 --> 02:29:44.690
for the other parts of the state.

02:29:53.539 --> 02:29:57.920
<v ->Is there any other other
panelists wanna respond?</v>

02:29:57.920 --> 02:29:59.760
Right, maybe we'll just turn
it to Commissioner Gunda

02:29:59.760 --> 02:30:01.770
for one quick comment.

02:30:01.770 --> 02:30:05.120
<v ->One thing that came
up in regard to propane,</v>

02:30:05.120 --> 02:30:07.280
particularly of course,
more common rural areas,

02:30:07.280 --> 02:30:11.400
but mobile homes, I
think the type of home

02:30:11.400 --> 02:30:14.210
is more easily identifiable perhaps,

02:30:14.210 --> 02:30:17.323
and mobile homes will
tend to have more propane.

02:30:19.748 --> 02:30:22.160
And of course there's
a sense of tract analysis

02:30:22.160 --> 02:30:26.170
that's also available
to try to hone in on,

02:30:26.170 --> 02:30:29.373
which are the areas with great
density of propane heating.

02:30:32.980 --> 02:30:34.560
<v ->Yeah, thank you, Kathleen.</v>

02:30:34.560 --> 02:30:36.409
I just wanted to first
just say thank you

02:30:36.409 --> 02:30:39.100
to this amazing panel
and Kathleen to you

02:30:39.100 --> 02:30:41.090
for moderating this group

02:30:41.090 --> 02:30:44.423
and just the CPUC leadership
Commissioner Houck

02:30:44.423 --> 02:30:47.950
and the entire of this CPUC's
that and the Commission

02:30:47.950 --> 02:30:50.890
for really having this extremely
important conversation.

02:30:50.890 --> 02:30:53.630
I mean, every time we
come on the late thing,

02:30:53.630 --> 02:30:56.020
or you go to the reliability
or resource planning,

02:30:56.020 --> 02:30:59.300
it's all field so integrated
and so hammered,

02:30:59.300 --> 02:31:01.970
we have the latest IPCC report today

02:31:01.970 --> 02:31:05.060
and the urgency of this,
the climate change impact

02:31:05.060 --> 02:31:06.710
is also upon us.

02:31:06.710 --> 02:31:11.710
So I just wanted to make
a quick comment in kind of

02:31:11.950 --> 02:31:14.411
Abigail kinda mentioned early on today,

02:31:14.411 --> 02:31:17.314
that a couple of key
things that she's looking at

02:31:17.314 --> 02:31:21.881
is really the ability to have
trust with the communities,

02:31:21.881 --> 02:31:24.058
that's something that
she sees as a barrier.

02:31:24.058 --> 02:31:25.812
And I think so much of
the conversation today

02:31:25.812 --> 02:31:29.088
was around that awareness trust building

02:31:29.088 --> 02:31:32.140
and ability for all of us to
collectively move forward

02:31:32.140 --> 02:31:36.250
with a clear solution step.

02:31:36.250 --> 02:31:39.760
And I think, I want to end
with Jana's us kind of call

02:31:39.760 --> 02:31:41.770
for these technical assistance hubs.

02:31:41.770 --> 02:31:43.080
I think we've heard,

02:31:43.080 --> 02:31:45.340
there's a need for technical assistance,

02:31:45.340 --> 02:31:47.960
historically Backer kinda mentioned

02:31:47.960 --> 02:31:50.600
the need for resiliency
and the reliability hubs.

02:31:50.600 --> 02:31:52.350
And we've also talked today

02:31:52.350 --> 02:31:56.030
about the facilitative
need for dsiloing.

02:31:56.030 --> 02:31:58.987
So I really like that
Commissioner Rechtschaffen

02:31:58.987 --> 02:32:00.500
and requested Jana to you to

02:32:00.500 --> 02:32:03.380
kind of explore that idea
and flesh that out better,

02:32:03.380 --> 02:32:07.090
and just wanted to kind of ask
you and the rest of the panel

02:32:07.090 --> 02:32:10.530
to really consider that idea of a hub,

02:32:10.530 --> 02:32:13.720
whatever that is that is
required for regional integration,

02:32:13.720 --> 02:32:18.370
really thinking to regional
clusters of kind of leadership

02:32:18.370 --> 02:32:20.970
and input improve both procedure equity,

02:32:20.970 --> 02:32:24.363
but also helping us take the thoughts

02:32:24.363 --> 02:32:27.300
that we have today into actions.

02:32:27.300 --> 02:32:29.880
So if we can help with that again,

02:32:29.880 --> 02:32:34.880
thank you to each of you and
all the wavering commitment

02:32:35.230 --> 02:32:36.635
to solve this climate issue

02:32:36.635 --> 02:32:38.620
and do it in an equitable fashion.

02:32:38.620 --> 02:32:39.640
So I just wanna thank all of you

02:32:39.640 --> 02:32:41.943
and she had my gratitude for that team.

02:32:44.627 --> 02:32:47.250
<v ->All right, thank you
very much everyone.</v>

02:32:47.250 --> 02:32:48.100
For the great panelists,

02:32:48.100 --> 02:32:49.645
thank our panelists for
the great discussion today

02:32:49.645 --> 02:32:52.470
and I hope that that sets up well

02:32:52.470 --> 02:32:53.774
for the rest of the workshop.

02:32:53.774 --> 02:32:55.753
We'll pass it back to Jack.

02:32:56.940 --> 02:32:57.773
<v ->Thank you.</v>

02:32:57.773 --> 02:33:00.983
That was a great start a great
morning through this En Banc.

02:33:02.060 --> 02:33:03.300
We will break for lunch.

02:33:03.300 --> 02:33:04.380
Come back at 1:00,

02:33:04.380 --> 02:33:08.860
we have a stop provoking
amazing two panels

02:33:08.860 --> 02:33:11.400
on non paper sources of funding at 1:00

02:33:11.400 --> 02:33:13.270
and electric rate making at 2:30

02:33:13.270 --> 02:33:16.010
and public comments following that,

02:33:16.010 --> 02:33:16.980
and then closing comments.

02:33:16.980 --> 02:33:21.380
So, thank you again, we'll
see you at one o'clock here.

02:33:23.810 --> 02:33:25.116
<v Announcer>The feed
for this streaming event</v>

02:33:25.116 --> 02:33:27.693
brought to you by adminmonitor.com,

02:33:27.693 --> 02:33:31.337
will begin momentarily,
thank you for your patience.

02:33:31.337 --> 02:33:33.403
Brought to you by adminmonitor.com.

02:33:33.403 --> 02:33:35.315
<v Operator>By today's
conference has resume,</v>

02:33:35.315 --> 02:33:38.220
you may (indistinct).

02:33:38.220 --> 02:33:39.060
<v ->Thank you.</v>

02:33:39.060 --> 02:33:43.660
Welcome back to CPUC
Affordability En Banc,

02:33:43.660 --> 02:33:47.340
I'm Jack Chang analyst,
working with the retail rates team

02:33:47.340 --> 02:33:48.597
to help organize this En Banc.

02:33:48.597 --> 02:33:51.877
We just heard a great morning session

02:33:51.877 --> 02:33:55.430
and we have two excellent panels

02:33:55.430 --> 02:33:56.390
scheduled for the afternoon.

02:33:56.390 --> 02:33:58.670
One on non rate payer resources funding,

02:33:58.670 --> 02:34:02.490
another on electric rate making reforms.

02:34:02.490 --> 02:34:05.900
So now I would like
introduce Grant Mack,

02:34:05.900 --> 02:34:08.280
Director of CPUC Governmental Affairs

02:34:08.280 --> 02:34:12.220
who will moderate our non rate
payer resource funding panel.

02:34:12.220 --> 02:34:13.053
Welcome Grant.

02:34:13.890 --> 02:34:14.850
<v ->Great, thanks Jack.</v>

02:34:14.850 --> 02:34:16.400
And good afternoon Commissioners.

02:34:16.400 --> 02:34:17.930
Thank you for giving me the opportunity

02:34:17.930 --> 02:34:20.020
to serve as a moderator for this panel.

02:34:20.020 --> 02:34:21.890
I'm really excited about the topic

02:34:21.890 --> 02:34:25.200
of identifying and utilizing
non rate payer funding sources

02:34:25.200 --> 02:34:26.850
to advance our clean energy efforts

02:34:26.850 --> 02:34:30.290
while mitigating increases
in electric and gas rates.

02:34:30.290 --> 02:34:32.570
This discussion comes
at an opportune time

02:34:32.570 --> 02:34:34.860
when the general fund, the
state general fund, excuse me,

02:34:34.860 --> 02:34:37.470
is experiencing a large one time surplus

02:34:37.470 --> 02:34:39.940
in the tens of billions of dollars.

02:34:39.940 --> 02:34:41.610
Specifically last year,

02:34:41.610 --> 02:34:45.620
there was roughly 76 billion
identified in surplus funding

02:34:45.620 --> 02:34:47.090
for this current fiscal year,

02:34:47.090 --> 02:34:50.690
and it estimated 46 billion
in surplus funding available

02:34:50.690 --> 02:34:52.950
for this upcoming fiscal year.

02:34:52.950 --> 02:34:56.360
In addition, the state has
received about 25 billion

02:34:56.360 --> 02:34:58.970
for this current fiscal
year and one time funding

02:34:58.970 --> 02:35:01.520
from the federal
American Rescue Plan Act.

02:35:01.520 --> 02:35:02.530
Not only that,

02:35:02.530 --> 02:35:05.720
but there was around $58
billion appropriated last year

02:35:05.720 --> 02:35:08.500
under the federal Infrastructure
Investment and Jobs Act

02:35:08.500 --> 02:35:09.811
for clean energy development,

02:35:09.811 --> 02:35:13.570
energy efficiency, and
weatherization retrofits for homes,

02:35:13.570 --> 02:35:14.800
buildings, and communities,

02:35:14.800 --> 02:35:16.400
and for clean energy manufacturing

02:35:16.400 --> 02:35:17.743
and workforce development.

02:35:18.620 --> 02:35:19.926
In recognition of the significant amount

02:35:19.926 --> 02:35:22.040
of available public monies,

02:35:22.040 --> 02:35:24.230
it is great to see that Governor Newsom

02:35:24.230 --> 02:35:27.090
has proposed to allocate
a little over 2 billion

02:35:27.090 --> 02:35:28.401
in state general fund monies this year

02:35:28.401 --> 02:35:30.560
towards clean energy development

02:35:30.560 --> 02:35:32.930
and equitable building decarbonization.

02:35:32.930 --> 02:35:35.040
This includes everything
from long duration,

02:35:35.040 --> 02:35:37.350
energy storage, demonstration projects,

02:35:37.350 --> 02:35:38.688
and green hydrogen per reduction

02:35:38.688 --> 02:35:41.180
to the electrification
of existing buildings

02:35:41.180 --> 02:35:43.050
and industrial processes.

02:35:43.050 --> 02:35:44.100
With that introduction,

02:35:44.100 --> 02:35:46.510
I'd like to now turn it over
to our esteem panelists,

02:35:46.510 --> 02:35:47.383
to discuss their ideas

02:35:47.383 --> 02:35:50.790
for accessing non repair
funding opportunities,

02:35:50.790 --> 02:35:53.450
as well as discuss
policy trade offs, barriers,

02:35:53.450 --> 02:35:55.450
and challenges to these approaches

02:35:55.450 --> 02:35:58.630
that could ultimately help
offset the incremental increase

02:35:58.630 --> 02:36:00.533
in electric and gas IOU rates.

02:36:00.533 --> 02:36:03.250
With that, I'm gonna turn
over to Mark Tony from TURN.

02:36:03.250 --> 02:36:04.500
Mark, the floor is yours.

02:36:06.292 --> 02:36:07.558
<v ->Thank you.</v>

02:36:07.558 --> 02:36:09.643
TURN appreciate the attendance

02:36:09.643 --> 02:36:12.913
of CPUC Commissioners and their staff

02:36:12.913 --> 02:36:17.913
at today's part two of the
energy affordability En Benc.

02:36:18.010 --> 02:36:20.240
I'd like to start off by reminding you,

02:36:20.240 --> 02:36:22.600
that the Commission for
affordability proceeding

02:36:22.600 --> 02:36:26.170
is not limited to energy services.

02:36:26.170 --> 02:36:29.280
TURN and other
organizations across California,

02:36:29.280 --> 02:36:32.800
eagerly await part one of the broadband

02:36:32.800 --> 02:36:35.350
and water affordability En Banc

02:36:35.350 --> 02:36:36.735
and stand ready to offer input

02:36:36.735 --> 02:36:39.840
on the affordability of those services,

02:36:39.840 --> 02:36:42.733
including disconnections,
the arrearages,

02:36:42.733 --> 02:36:44.323
safety and reliability.

02:36:47.050 --> 02:36:48.950
What rate payer want,

02:36:48.950 --> 02:36:52.320
is the most green for the least green.

02:36:52.320 --> 02:36:53.160
The cost greening,

02:36:53.160 --> 02:36:57.660
the grid should not cutting
off black brown, indigenous,

02:36:57.660 --> 02:37:00.561
or any low income
community from the grid

02:37:00.561 --> 02:37:03.800
because the places our two do gone high.

02:37:03.800 --> 02:37:08.800
Today, I offer two rate
payer free revenue (indistinct)

02:37:09.340 --> 02:37:13.810
to meet climate gold
and I sound the alarm

02:37:13.810 --> 02:37:18.060
for the CPUC to stop
talking about cost containment

02:37:18.060 --> 02:37:19.843
and start containing cost.

02:37:21.809 --> 02:37:25.750
When it comes to
transportation electrification,

02:37:25.750 --> 02:37:29.110
it is time to replace rate payer revenue

02:37:29.110 --> 02:37:31.350
with points of sale revenue.

02:37:31.350 --> 02:37:34.540
Let me tell you how
the term proposal works.

02:37:34.540 --> 02:37:39.530
Now the other type of a new
car is about $50,000 these days.

02:37:39.530 --> 02:37:41.143
Now, if you have a 2% car rate fee,

02:37:42.252 --> 02:37:46.640
that's a average of about a
thousand dollars per vehicle.

02:37:46.640 --> 02:37:50.070
Now there's 1.5 million gas vehicle

02:37:50.070 --> 02:37:52.130
sold in California each year.

02:37:52.130 --> 02:37:53.784
Times by the 1000,

02:37:53.784 --> 02:37:57.480
you get approximately
$1.5 billion annually

02:37:58.340 --> 02:38:02.240
to buy down the cost of Evs, okay?

02:38:02.240 --> 02:38:07.240
But you could also car
dealers will at the point of sale,

02:38:08.530 --> 02:38:13.530
get to direct customers to
EVs with lower sticker price

02:38:13.920 --> 02:38:17.450
than the comparable gas high hour car

02:38:17.450 --> 02:38:18.833
that they're looking at.

02:38:18.833 --> 02:38:21.900
Now, there will be enough funds

02:38:21.900 --> 02:38:26.340
to also allocate the charging
station, light duty trucks,

02:38:26.340 --> 02:38:28.500
public transportation relocation,

02:38:30.300 --> 02:38:32.798
and the proposal I'm talking about

02:38:32.798 --> 02:38:37.040
does exempt Tesla
vehicles from the subsidies.

02:38:37.040 --> 02:38:38.980
Couple of reasons one is,

02:38:38.980 --> 02:38:43.980
Tesla already represents
80% of all increase sales.

02:38:44.330 --> 02:38:45.682
The proposal I am talking about

02:38:45.682 --> 02:38:50.210
focuses on out of dealership,
where people come in

02:38:50.210 --> 02:38:53.880
and have a variety
of cars to choose from.

02:38:55.110 --> 02:38:57.530
On such a proposal,

02:38:57.530 --> 02:39:00.570
when it comes to
building electrification,

02:39:00.570 --> 02:39:03.370
it's time to replace rate payer revenue

02:39:03.370 --> 02:39:05.223
with point of sales revenue.

02:39:06.950 --> 02:39:10.050
14 million homes in California

02:39:10.050 --> 02:39:13.443
account for 7% of all carbon emissions.

02:39:15.130 --> 02:39:16.436
Now another way of saying this,

02:39:16.436 --> 02:39:21.040
you need to electrify 2 million homes

02:39:21.040 --> 02:39:26.038
to achieve a 1% reduction
in carbon emission.

02:39:26.038 --> 02:39:29.260
So that's why when it comes
to building electrification,

02:39:29.260 --> 02:39:33.260
I say go big or go home.

02:39:33.260 --> 02:39:36.083
There's just no point to,

02:39:37.410 --> 02:39:41.630
spending hundreds of million
of dollars a red payer of money

02:39:41.630 --> 02:39:44.363
on 10,000 homes here and there.

02:39:46.614 --> 02:39:51.090
So here's a number,
there's about 400,000

02:39:51.090 --> 02:39:52.380
existing single family homes

02:39:52.380 --> 02:39:55.890
that are sold annually in California.

02:39:55.890 --> 02:39:57.670
Now many okay,

02:40:00.070 --> 02:40:03.980
so the proposal, the
TURN don't be proposal

02:40:03.980 --> 02:40:08.692
is to require the hot
water, cooking and feeding

02:40:08.692 --> 02:40:12.700
deconverged to electricity
for all single family homes

02:40:13.840 --> 02:40:18.410
as a condition of
closing at growth, okay?

02:40:18.410 --> 02:40:20.047
As I said, the big proposal,

02:40:20.047 --> 02:40:24.120
'cause we're talking about
400,000 homes annually.

02:40:24.120 --> 02:40:29.120
Now, many cities encounters
already require electrical

02:40:29.479 --> 02:40:32.380
and earthquake inspections and upgrades

02:40:32.380 --> 02:40:33.990
as a condition to
close that (indistinct).

02:40:33.990 --> 02:40:36.413
So this is not a brand new idea.

02:40:37.460 --> 02:40:40.610
Now the convergence to
electricity can be financed

02:40:40.610 --> 02:40:44.570
by at low mortgage interest rates

02:40:44.570 --> 02:40:47.390
and be paid as part of closing costs

02:40:47.390 --> 02:40:49.923
without out of pocket expense.

02:40:52.250 --> 02:40:56.073
So these two part of sale revenue,

02:40:56.073 --> 02:40:59.530
point of sales proposals,
revenue proposal

02:40:59.530 --> 02:41:02.473
for transportation and
building electrification,

02:41:03.390 --> 02:41:05.280
that two such and similarities.

02:41:05.280 --> 02:41:09.510
One, they rely on zero rate paid dollars

02:41:09.510 --> 02:41:12.530
and zero taxpayer dollars.

02:41:12.530 --> 02:41:15.630
Yes we have a surplus
last year and this year,

02:41:15.630 --> 02:41:19.280
I guarantee we will not
have a state budget surplus

02:41:19.280 --> 02:41:21.087
year in and year out.

02:41:21.970 --> 02:41:26.190
So that's what's attractive
about these proposals.

02:41:26.190 --> 02:41:31.190
The other similarities,
they are long, long shots,

02:41:31.530 --> 02:41:36.530
unless the CPUC shows it is
serious about containing costs.

02:41:39.700 --> 02:41:44.490
(indistinct) is here today to
declare a state of emergency

02:41:44.490 --> 02:41:47.510
and affordability state of emergencies,

02:41:47.510 --> 02:41:50.130
residential customers
that the afford big utility

02:41:50.130 --> 02:41:53.810
have rear exist right
now nearly 2 billion

02:41:53.810 --> 02:41:57.620
and hundreds of thousand
of black (indistinct) indigenous

02:41:57.620 --> 02:42:01.460
and other low income families
are in danger of being set off

02:42:01.460 --> 02:42:02.623
in the next few months.

02:42:03.800 --> 02:42:08.010
The Commission has
lack, Edison customers

02:42:08.010 --> 02:42:12.270
with a 20% increase
in the last 12 months

02:42:12.270 --> 02:42:16.403
by approving $2.1
billion in rate increase.

02:42:18.041 --> 02:42:20.210
TURN profoundly disappoint

02:42:21.170 --> 02:42:26.170
that Commission overruled a
recent ALJ proposed decision

02:42:26.630 --> 02:42:31.520
and gave medicine an extra
1 billion for carbon conductors

02:42:31.520 --> 02:42:36.340
to reduce wildfire risks
by only an additional 2%.

02:42:36.340 --> 02:42:39.100
The Commission mission
land, PGD customers

02:42:40.003 --> 02:42:41.957
with the 20% rate increase

02:42:41.957 --> 02:42:45.890
in the first three months of 2022 alone

02:42:45.890 --> 02:42:50.223
on top of double digit
increases in 2021.

02:42:51.130 --> 02:42:53.960
This 20% increase of
just tip of the iceberg.

02:42:53.960 --> 02:42:58.960
It does not include the
30% 2023 GRC increase.

02:42:59.570 --> 02:43:04.310
The $5.5 billion already
spent on welfare mitigation

02:43:04.310 --> 02:43:09.230
and yet to be approved or
the $10.5 billion proposed

02:43:09.230 --> 02:43:12.113
for 3,600 miles of underground.

02:43:14.170 --> 02:43:16.760
If it sounds like I'm
using strong language,

02:43:16.760 --> 02:43:18.960
you're absolutely correct.

02:43:18.960 --> 02:43:23.470
Sky rocketing rates just
don't happen by themselves.

02:43:23.470 --> 02:43:25.990
Sky rocketing rates happen

02:43:25.990 --> 02:43:29.243
because they are approved
by the Commission.

02:43:30.120 --> 02:43:34.280
Now, lemme talk about
innovative cost payment proposals

02:43:34.280 --> 02:43:37.980
that the CPUC has
the power to implement.

02:43:37.980 --> 02:43:40.040
One is that the impact on affordability

02:43:40.040 --> 02:43:43.080
and the impact on
environmental and social justice

02:43:44.230 --> 02:43:45.840
should be required as a component

02:43:45.840 --> 02:43:48.330
of every breaking proceeding,

02:43:48.330 --> 02:43:49.720
advice letter, memos (indistinct)

02:43:49.720 --> 02:43:53.530
or any other utility
request to raise rate.

02:43:54.516 --> 02:43:59.516
Two, allocate zero rate payer dollars

02:43:59.649 --> 02:44:03.194
for the Edison proposal
to electrify 10,000 homes,

02:44:03.194 --> 02:44:05.846
zero rate payer dollars for the PG&amp;E,

02:44:05.846 --> 02:44:09.130
charge (indistinct) EV proposal
and zero rate payer dollars

02:44:09.130 --> 02:44:10.680
for so count gas proposals

02:44:10.680 --> 02:44:13.233
for allegedly green hydrogen pipeline.

02:44:14.170 --> 02:44:16.670
Directing utilities to seek funding

02:44:16.670 --> 02:44:21.233
from non rate payer
sources for these proposals.

02:44:22.240 --> 02:44:27.240
Invite them to go to the
legislature, to go to the Governor,

02:44:27.963 --> 02:44:30.063
to speak with the president,

02:44:30.063 --> 02:44:33.963
to find some angel investors
or each divine intervention.

02:44:35.720 --> 02:44:39.210
Another idea is to hire
an independent auditor,

02:44:39.210 --> 02:44:41.680
to refuse to review management,

02:44:41.680 --> 02:44:45.180
staffing ratios and expenses,

02:44:45.180 --> 02:44:49.630
or I serve with the Commission
would apply the same scrutiny

02:44:49.630 --> 02:44:52.600
to utility management and legal expenses

02:44:52.600 --> 02:44:57.423
that you apply to interveners
requesting compensation.

02:44:59.470 --> 02:45:04.470
Another idea is to adopt an
inflation cap on great increases

02:45:05.700 --> 02:45:08.370
as a solution for affordability.

02:45:08.370 --> 02:45:11.974
Commissioners, you have
to power to moderate inflation

02:45:11.974 --> 02:45:14.650
by containing energy costs.

02:45:14.650 --> 02:45:18.428
According to the
bureau of labor statistics

02:45:18.428 --> 02:45:23.428
before 0.2% electricity
cost in January, 2022

02:45:25.060 --> 02:45:29.700
was the second largest
contributor after fuel oil

02:45:29.700 --> 02:45:34.400
to the 7.5% consumer
price in that increase.

02:45:34.400 --> 02:45:37.440
Remember, that increases in energy costs

02:45:37.440 --> 02:45:41.230
also hit the same consumers
with increased food,

02:45:41.230 --> 02:45:44.627
commodities and other CTI elements.

02:45:47.436 --> 02:45:52.057
Time out, we need a
time out on rich increases

02:45:54.350 --> 02:45:56.630
the Commission just to all the time out

02:45:56.630 --> 02:46:00.630
on the biggest rate
relief proposal in years

02:46:00.630 --> 02:46:03.960
because of political
pressure, but guess what?

02:46:03.960 --> 02:46:07.630
It's time to call it time
out our rate increases,

02:46:07.630 --> 02:46:11.480
we cannot continue
to let God be the limit

02:46:11.480 --> 02:46:13.760
on how many times a year

02:46:13.760 --> 02:46:17.080
that utilities can
request rate increases

02:46:17.080 --> 02:46:22.080
and how much utilities
send request in increases

02:46:23.750 --> 02:46:25.560
each single time.

02:46:25.560 --> 02:46:29.220
We can't continue
to let the sky the limit

02:46:29.220 --> 02:46:31.930
on how many times in a year

02:46:31.930 --> 02:46:36.704
and how much the Commission
can grant in rate increases.

02:46:36.704 --> 02:46:39.840
Take a time out to implement

02:46:39.840 --> 02:46:42.303
an inflation cap on rate increases,

02:46:42.303 --> 02:46:45.738
nobody, but nobody is going to pay allow

02:46:45.738 --> 02:46:47.700
to fee fee year fee.

02:46:47.700 --> 02:46:49.990
Not legislation, not the Governor,

02:46:49.990 --> 02:46:52.760
not anybody else until you get serious

02:46:52.760 --> 02:46:55.563
about holding the
lie on rates increases.

02:46:56.910 --> 02:46:57.906
President Reynolds,
Commissioner Rechtschaffen,

02:46:57.906 --> 02:47:02.753
Commissioner Shiroma,

02:47:02.753 --> 02:47:05.810
Commissioner Houck,
Commissioner Reynolds,

02:47:05.810 --> 02:47:09.840
we are in a state of emergency

02:47:09.840 --> 02:47:12.410
when it comes to affordability.

02:47:12.410 --> 02:47:16.300
Right here, depend on you for leadership

02:47:16.300 --> 02:47:19.350
to make the hard decision to stand up

02:47:19.350 --> 02:47:21.720
and set limits on rate increases

02:47:21.720 --> 02:47:25.290
so they can continue
to keep their lights on.

02:47:25.290 --> 02:47:29.170
It's time to stop talking
about cost containment

02:47:29.170 --> 02:47:33.623
and trying start taking
action to contain costs.

02:47:36.640 --> 02:47:37.610
<v ->Great, thank you, Mark,</v>

02:47:37.610 --> 02:47:39.780
executive director of
Utility Reform Network.

02:47:39.780 --> 02:47:41.790
I'm really looking
forward to questions later,

02:47:41.790 --> 02:47:42.830
but before we go there,

02:47:42.830 --> 02:47:46.390
I'd like to turn it over next
to our panelist Michael Wara,

02:47:46.390 --> 02:47:49.370
who serves as Director of the
Climate Energy Policy Program

02:47:49.370 --> 02:47:51.010
at the Woods Institute for Environment

02:47:51.010 --> 02:47:52.360
at Stanford University.

02:47:52.360 --> 02:47:53.760
Michael, the floor of yours.

02:47:54.840 --> 02:47:56.370
<v ->Thanks so much.</v>

02:47:56.370 --> 02:47:59.840
And I'd just say thank
you to the Commission

02:47:59.840 --> 02:48:02.220
and also the energy Commission

02:48:02.220 --> 02:48:04.250
for welcoming me on this panel.

02:48:04.250 --> 02:48:05.390
It's a pleasure.

02:48:05.390 --> 02:48:08.740
I'm gonna speak today
in my personal capacity

02:48:08.740 --> 02:48:11.500
and not as a representative of Stanford,

02:48:11.500 --> 02:48:16.500
or I also sit on the Marin
wildfire management protection

02:48:19.255 --> 02:48:21.924
anyway, the Marin WMPA

02:48:21.924 --> 02:48:24.900
and as a citizen
oversight council member,

02:48:24.900 --> 02:48:27.500
and I'm speaking my
personal capacity there as well.

02:48:28.760 --> 02:48:31.900
So I think I've been asked to talk

02:48:31.900 --> 02:48:34.520
about non rate payer sources of funding

02:48:34.520 --> 02:48:36.170
in the wildfire space.

02:48:36.170 --> 02:48:39.100
And I think it's important to recognize

02:48:40.040 --> 02:48:41.510
in the first instance,

02:48:41.510 --> 02:48:44.360
where wildfire risk comes
from in a holistic sense,

02:48:44.360 --> 02:48:48.340
because we don't generally
do that at the utility Commission

02:48:48.340 --> 02:48:51.770
in order to then have
a conversation around,

02:48:51.770 --> 02:48:55.470
how to ideally reduce
the rate payer costs

02:48:55.470 --> 02:48:58.483
associated with that effort.

02:48:59.420 --> 02:49:03.200
Obviously, wildfire risk
comes from ignitions,

02:49:03.200 --> 02:49:06.720
particularly ignitions during
dangerous moments in time.

02:49:06.720 --> 02:49:11.460
And we've all lived
through the last five years

02:49:11.460 --> 02:49:13.633
of terrible fire seasons.

02:49:14.590 --> 02:49:17.460
Many of which have been utility caused,

02:49:17.460 --> 02:49:20.420
but also in other years have been caused

02:49:20.420 --> 02:49:22.070
by other factors, natural forces,

02:49:22.070 --> 02:49:24.190
but ignitions certainly matters,

02:49:24.190 --> 02:49:27.713
especially ignitions that occur
during dry fall wind events.

02:49:28.600 --> 02:49:32.240
Reducing ignition risk is
therefore an important strategy,

02:49:32.240 --> 02:49:34.030
especially if we can reduce ignitions

02:49:34.030 --> 02:49:36.493
that occur at the most
dangerous moments.

02:49:38.960 --> 02:49:43.430
However, wildfire risk also comes

02:49:44.340 --> 02:49:49.340
from spread how wildfire
and that's an important factor.

02:49:49.610 --> 02:49:50.900
It's been an important factor

02:49:50.900 --> 02:49:53.890
in many of the utility cause fires.

02:49:53.890 --> 02:49:55.730
For one example,

02:49:55.730 --> 02:49:59.720
the rapid spread of the
campfire post ignition

02:49:59.720 --> 02:50:00.923
toward paradise.

02:50:01.820 --> 02:50:03.800
Another example this summer,

02:50:03.800 --> 02:50:05.430
the spread at various times,

02:50:05.430 --> 02:50:10.150
quite rapid of the Dixie
fire fire after ignition

02:50:10.150 --> 02:50:12.230
followed by periods
where the Dixie fire burned

02:50:12.230 --> 02:50:15.280
at low to moderate intensity
backing down slopes,

02:50:15.280 --> 02:50:17.230
not causing much harm.

02:50:17.230 --> 02:50:20.750
And so how we manage fire spread.

02:50:20.750 --> 02:50:22.320
And if there are
interventions we can take

02:50:22.320 --> 02:50:25.800
to reduce the dangerous
spread of wildfires

02:50:25.800 --> 02:50:29.120
can be extremely important
as well in reducing risk.

02:50:29.120 --> 02:50:34.120
Similarly, issues in terms of
the consequences of wildfires,

02:50:34.370 --> 02:50:38.120
as we think about investment
around communities,

02:50:38.120 --> 02:50:40.910
and these are things
like shaded fuel breaks

02:50:40.910 --> 02:50:44.770
that are going in and lots of
places in the state right now,

02:50:44.770 --> 02:50:48.340
in addition investments
that are targeted

02:50:48.340 --> 02:50:51.440
at reducing the chances
of structure ignition

02:50:51.440 --> 02:50:55.340
are very important to reducing
the consequences of wildfire

02:50:55.340 --> 02:50:57.160
that we care most about, right?

02:50:57.160 --> 02:51:02.160
People's lives being destroyed
by these catastrophic fires.

02:51:02.850 --> 02:51:05.040
And lastly, I just add another element

02:51:05.040 --> 02:51:07.410
of the wildfire risk picture
that we need to think about

02:51:07.410 --> 02:51:09.170
is public health impacts.

02:51:09.170 --> 02:51:14.170
And, PG&amp;E is in court right
now on a claim from the DA,

02:51:14.750 --> 02:51:17.370
the Sonoma county DA
around smoke impacts

02:51:17.370 --> 02:51:22.280
from the Kincade fire, whether
or not that claim holds up

02:51:22.280 --> 02:51:25.220
I think there's broad
agreement that wildfire

02:51:25.220 --> 02:51:28.440
has become a major air
pollution problem in California.

02:51:28.440 --> 02:51:30.770
It's a public health
crisis, the smoke impacts,

02:51:30.770 --> 02:51:32.810
and we need to figure
out how to address them.

02:51:32.810 --> 02:51:35.000
And those may or may not be well managed

02:51:35.000 --> 02:51:37.710
by reducing utility ignition.

02:51:37.710 --> 02:51:39.440
So how do we manage it today?

02:51:39.440 --> 02:51:43.100
We basically have a utility
ignition prevention program.

02:51:43.100 --> 02:51:45.180
That's very significant in scale.

02:51:45.180 --> 02:51:48.550
We spend on the last set
of wildfire mitigation plans.

02:51:48.550 --> 02:51:51.680
I haven't looked and tried
add to the current ones up,

02:51:51.680 --> 02:51:54.460
but last year it was eight
and a half billion dollars

02:51:54.460 --> 02:51:57.130
in wildfire mitigation plan expenditures

02:51:57.130 --> 02:51:59.220
across the investor owned utilities

02:51:59.220 --> 02:52:01.250
that are regulated by the PUC.

02:52:01.250 --> 02:52:05.560
My assumption is that the
non CPC regulated utilities

02:52:05.560 --> 02:52:08.170
are also investing significant resources

02:52:08.170 --> 02:52:10.283
in wildfire mitigation as well.

02:52:11.660 --> 02:52:16.660
In addition, we spend
1.5 billion in taxpayer funds

02:52:17.370 --> 02:52:20.190
on fuels management
and community protection.

02:52:20.190 --> 02:52:22.320
So that those other, how does the fire,

02:52:22.320 --> 02:52:24.880
can we do things
that affect fire spread?

02:52:24.880 --> 02:52:27.760
And can we do things
that reduce the chances

02:52:27.760 --> 02:52:29.250
that a community as a whole

02:52:29.250 --> 02:52:32.880
or individual homes in particular

02:52:32.880 --> 02:52:36.113
will be impacted by a
wildfire if it does ignite?

02:52:38.730 --> 02:52:40.820
And lastly, we spend four to 5 billion

02:52:40.820 --> 02:52:44.370
in state and federal
dollars on fire suppression,

02:52:44.370 --> 02:52:48.000
mostly in California,
that's a state expenditure,

02:52:48.000 --> 02:52:49.403
but and it's a little
bit hard to tease out

02:52:49.403 --> 02:52:51.770
what the California share of the federal

02:52:51.770 --> 02:52:53.850
fire suppression expenditures are,

02:52:53.850 --> 02:52:56.680
but it's on the order of
$5 billion for the state

02:52:57.730 --> 02:52:59.840
close to four of which comes

02:52:59.840 --> 02:53:01.603
directly from the Cal fire budget.

02:53:03.425 --> 02:53:06.720
So that's an interesting outcome, right?

02:53:06.720 --> 02:53:08.670
We're spending eight and a half billion

02:53:08.670 --> 02:53:10.940
to prevent a particular
kind of ignition,

02:53:10.940 --> 02:53:14.240
one and a half billion
to prevent the spread

02:53:14.240 --> 02:53:17.510
of that ignition to form
a catastrophic wildfire

02:53:17.510 --> 02:53:21.260
and then 4 billion
or so of state dollars

02:53:21.260 --> 02:53:22.460
to try to put fires out.

02:53:24.580 --> 02:53:26.070
That's not a huge surprise for folks

02:53:26.070 --> 02:53:28.660
that work in the area
of utility wildfire partly

02:53:28.660 --> 02:53:31.300
because of the liability regime issue,

02:53:31.300 --> 02:53:34.050
you know that we all
know have thought at times

02:53:34.050 --> 02:53:36.290
about the inverse kind of nation regime

02:53:36.290 --> 02:53:37.123
that applies to investor in utilities,

02:53:37.123 --> 02:53:41.160
I think is not gonna change
at any point in the future,

02:53:41.160 --> 02:53:46.140
but that would be a way to
potentially modify the pressures

02:53:46.140 --> 02:53:47.223
to spend ends money.

02:53:50.030 --> 02:53:51.100
It's also not a surprise

02:53:51.100 --> 02:53:54.653
because it's much easier to
raise rates than to raise taxes.

02:53:55.770 --> 02:54:00.770
And it's a less, perhaps less visible,

02:54:01.480 --> 02:54:04.390
although no less real and
certainly more regressive form

02:54:04.390 --> 02:54:07.303
of raising revenue for public objective.

02:54:08.826 --> 02:54:11.310
So I guess I have two ideas

02:54:11.310 --> 02:54:13.360
that I think are worth considering.

02:54:13.360 --> 02:54:18.360
One is to take a look at the
basic issue of cost causation.

02:54:19.630 --> 02:54:20.580
And I want to just,

02:54:21.490 --> 02:54:23.290
I think it's important to be careful

02:54:23.290 --> 02:54:24.800
when we speak about this idea,

02:54:24.800 --> 02:54:28.220
but it is certainly the case
that it is more expense

02:54:28.220 --> 02:54:32.460
to serve customers that live
in high wildfire threat areas

02:54:32.460 --> 02:54:33.840
than it is to serve customers

02:54:33.840 --> 02:54:36.640
that live in low wildfire threat areas.

02:54:36.640 --> 02:54:41.640
We cannot feasibly
charge the high threat areas

02:54:42.530 --> 02:54:45.350
for the full cost of
their service right now,

02:54:45.350 --> 02:54:46.980
part of that has to
do with the fact that

02:54:46.980 --> 02:54:49.893
we should have invested
more in earlier times,

02:54:51.870 --> 02:54:53.330
and we didn't,

02:54:53.330 --> 02:54:57.160
but I think it's also raises
fundamental questions

02:54:57.160 --> 02:54:59.169
around affordability and access

02:54:59.169 --> 02:55:02.075
that would preclude fully charging

02:55:02.075 --> 02:55:06.170
for the cost of wildfire
hardening of the grid.

02:55:06.170 --> 02:55:08.940
However, I think it is
possible to conceive

02:55:08.940 --> 02:55:11.570
of some sort of a fixed bill charge

02:55:11.570 --> 02:55:14.700
that would defray some of the costs.

02:55:14.700 --> 02:55:16.160
And I would just reference

02:55:16.160 --> 02:55:18.660
as a potential precedent for this,

02:55:18.660 --> 02:55:23.170
the state responsibility
area, fire suppression fee.

02:55:23.170 --> 02:55:27.620
It was about $130 that was
in effect for several years,

02:55:27.620 --> 02:55:30.110
leading up to 2017,

02:55:30.110 --> 02:55:33.760
just prior to the Napa Sonoma firestorm

02:55:33.760 --> 02:55:38.760
and the Thomas fire,

02:55:40.350 --> 02:55:42.280
the legislature and the Governor's team

02:55:42.280 --> 02:55:44.490
reached a deal to stem cap and trade,

02:55:44.490 --> 02:55:48.630
part of that deal was
repeal of this SRA fee.

02:55:48.630 --> 02:55:51.060
And it was a necessary compromise

02:55:51.060 --> 02:55:53.191
to get the Republican
votes that were needed

02:55:53.191 --> 02:55:54.500
to get the two thirds majority.

02:55:54.500 --> 02:55:56.230
But I think it points out

02:55:56.230 --> 02:56:01.020
that there is an aspect
of firefighting costs

02:56:01.020 --> 02:56:02.730
that's associated with having people

02:56:02.730 --> 02:56:06.690
living in these rural
areas that is different than,

02:56:06.690 --> 02:56:08.840
and I think it's a potential model,

02:56:08.840 --> 02:56:10.531
there was no way that $117

02:56:10.531 --> 02:56:13.120
was gonna pay the full
cost of Cal fires budget,

02:56:13.120 --> 02:56:14.700
that wasn't the expectation.

02:56:14.700 --> 02:56:17.860
The expectation was
some form of cost share.

02:56:17.860 --> 02:56:19.090
And I think a similar approach

02:56:19.090 --> 02:56:21.140
might be taken in the utility context

02:56:21.140 --> 02:56:24.015
to at least reduce the
impact to some degree

02:56:24.015 --> 02:56:29.015
of the cost of utility wildfire,

02:56:31.070 --> 02:56:32.980
particularly on low income residents

02:56:32.980 --> 02:56:35.640
that do not live in the
high risk areas, right?

02:56:35.640 --> 02:56:37.510
And that's a set of people
that I'm most concerned

02:56:37.510 --> 02:56:39.860
about in terms of rate
impacts from this issue.

02:56:42.090 --> 02:56:43.510
Another approach,

02:56:43.510 --> 02:56:48.510
which I think is frankly urgent
for the state of California,

02:56:49.230 --> 02:56:52.620
is to make sure that the allocations

02:56:52.620 --> 02:56:56.620
into the taxpayer funded
silos of our wildfire response

02:56:56.620 --> 02:56:59.890
and the rate payer funded
silos of our wildfire response,

02:56:59.890 --> 02:57:03.123
maximize risk reduction
and cost effectiveness.

02:57:08.517 --> 02:57:10.150
I'm forgetting fascinating say,

02:57:10.150 --> 02:57:12.300
the office of electricity
infrastructure safety,

02:57:12.300 --> 02:57:13.560
which used to have a different name,

02:57:13.560 --> 02:57:16.190
the Wildfire Safety Division at the PC

02:57:16.190 --> 02:57:18.730
before it moved to CNRA

02:57:18.730 --> 02:57:22.020
has become, one of the real experts,

02:57:22.020 --> 02:57:24.390
certainly expert within state government

02:57:24.390 --> 02:57:29.390
of doing quantified risk
assessment of wildfire expenditure.

02:57:29.960 --> 02:57:31.860
They use and the utilities

02:57:31.860 --> 02:57:34.390
that submit wildfire mitigation plans

02:57:34.390 --> 02:57:37.360
for review and approval by the OEIS,

02:57:37.360 --> 02:57:40.410
use the technosylva model

02:57:40.410 --> 02:57:43.220
which is the same
model that Cal fire uses

02:57:43.220 --> 02:57:45.740
when it tries to
estimate wildfire spread

02:57:45.740 --> 02:57:47.590
and it's planning operationally.

02:57:47.590 --> 02:57:51.440
So everyone, the state
government and the utilities

02:57:51.440 --> 02:57:54.840
are using the same
quantification approach

02:57:54.840 --> 02:57:56.710
to wildfire risk at this point.

02:57:56.710 --> 02:57:59.310
What's not happening is that,

02:57:59.310 --> 02:58:02.463
the state is not thinking
about its expenditures,

02:58:03.990 --> 02:58:06.280
using a quantified approach
to risk management,

02:58:06.280 --> 02:58:08.280
where they set a baseline level of risk,

02:58:09.610 --> 02:58:10.720
present a set of actions,

02:58:10.720 --> 02:58:13.140
and then estimate how much
those actions will reduce risk

02:58:13.140 --> 02:58:14.970
and what the residual risk might be.

02:58:14.970 --> 02:58:17.140
And then also quantify the cost

02:58:17.140 --> 02:58:18.527
of the risk reduction, right?

02:58:18.527 --> 02:58:20.750
The state is not doing that.

02:58:20.750 --> 02:58:24.950
And that also means
that utility expenditure

02:58:24.950 --> 02:58:27.800
and state expenditure
are not coordinated, right?

02:58:27.800 --> 02:58:30.360
So we might be doing
lots in a particular area

02:58:30.360 --> 02:58:31.480
at the state level,

02:58:31.480 --> 02:58:34.672
and also doing a
lot in the utility space

02:58:34.672 --> 02:58:36.740
that maybe is duplicative.

02:58:36.740 --> 02:58:39.810
We might be doing
too little in both areas

02:58:39.810 --> 02:58:42.420
in other parts of state, we don't know.

02:58:42.420 --> 02:58:44.810
And the current framework
for distributing state funds

02:58:44.810 --> 02:58:46.770
is largely grants that are driven

02:58:46.770 --> 02:58:48.780
by who comes in the
door asking for money

02:58:48.780 --> 02:58:51.800
more than who needs to be spending money

02:58:51.800 --> 02:58:55.940
to maximize the safety of
communities within the state

02:58:55.940 --> 02:58:58.980
and especially a vulnerable
populations within the state.

02:58:58.980 --> 02:59:01.500
So I think there's broad agreement

02:59:01.500 --> 02:59:03.600
of about how to assess this risk

02:59:03.600 --> 02:59:04.768
within state government
and within the utilities

02:59:04.768 --> 02:59:09.768
and at the PUC, but we're
not doing it, where we might.

02:59:10.780 --> 02:59:13.620
And that I think is probably
has the greatest potential

02:59:13.620 --> 02:59:16.410
to generate resources and a reduced need

02:59:16.410 --> 02:59:18.280
to spend on the utility side.

02:59:18.280 --> 02:59:19.980
The reason is that,

02:59:19.980 --> 02:59:24.980
it's very expensive to
reduce utility ignitions to zero.

02:59:25.820 --> 02:59:29.530
To do that, we need to do
things like bury all the lines

02:59:29.530 --> 02:59:31.430
as Mark and Tony just mentioned,

02:59:31.430 --> 02:59:33.900
spend large amounts of
money on covered conductor.

02:59:33.900 --> 02:59:36.420
We can only do that so quickly,
and so we, in the meantime,

02:59:36.420 --> 02:59:38.620
we're also spending
money on all the other steps

02:59:38.620 --> 02:59:41.640
we have to take in
order to reduce wildfire.

02:59:41.640 --> 02:59:45.320
But if we could get to a place

02:59:45.320 --> 02:59:50.320
where we can tolerate
ignitions safely, right?

02:59:50.630 --> 02:59:53.283
Which we're not in now
to be clearbut we could be,

02:59:54.280 --> 02:59:56.140
it might mean that we don't have to make

02:59:56.140 --> 02:59:58.350
some of these incredibly costly

02:59:58.350 --> 03:00:00.450
long run infrastructure investments

03:00:00.450 --> 03:00:01.790
because we're managing the landscape

03:00:01.790 --> 03:00:03.240
in a way that creates safety.

03:00:05.270 --> 03:00:08.400
So I guess my argument would be that,

03:00:08.400 --> 03:00:10.360
actually there is a solution

03:00:10.360 --> 03:00:12.240
to reducing rate payer expenditures

03:00:12.240 --> 03:00:15.420
that involves better
planning than is occurring now

03:00:15.420 --> 03:00:17.030
that in order to effectuate that

03:00:17.030 --> 03:00:19.720
I think we would have to
probably have legislation

03:00:19.720 --> 03:00:21.100
that would create a mechanism

03:00:21.100 --> 03:00:23.690
to create this sort of state planning,

03:00:23.690 --> 03:00:26.120
similar to what goes
on at OEIS right now

03:00:26.120 --> 03:00:28.400
in review of the
wildfire mitigation plans,

03:00:28.400 --> 03:00:30.260
but it is possible.

03:00:30.260 --> 03:00:31.557
And I think it's something that the PUC

03:00:31.557 --> 03:00:32.640
and the Energy Commission

03:00:32.640 --> 03:00:35.970
should be thinking about
as they seek to reduce risk,

03:00:35.970 --> 03:00:39.103
because as we're all discussing today,

03:00:39.970 --> 03:00:43.470
reducing the cost of
adapting to climate change

03:00:43.470 --> 03:00:47.870
is key to affording the cost
of mitigating climate change

03:00:47.870 --> 03:00:50.260
to affording the cost
of the energy transition

03:00:50.260 --> 03:00:52.793
and keeping our covenant
with all of California,

03:00:52.793 --> 03:00:57.253
that energy access will be
plentiful and affordable for all.

03:00:58.802 --> 03:01:01.740
I think that means working across silos,

03:01:01.740 --> 03:01:06.190
that means getting out of
the utility energy wildfire silo,

03:01:06.190 --> 03:01:09.350
and starting to have a
much broader conversation

03:01:09.350 --> 03:01:12.480
about how to create
community resilience and safety

03:01:12.480 --> 03:01:13.840
from this growing threat.

03:01:13.840 --> 03:01:16.480
And I think looking outside the window

03:01:16.480 --> 03:01:18.170
this February day, right?

03:01:18.170 --> 03:01:22.110
As we see a wildfire season
developing in front of our eyes,

03:01:22.110 --> 03:01:25.840
that is going to have tremendous risk,

03:01:25.840 --> 03:01:28.070
potentially of a scale

03:01:28.070 --> 03:01:33.070
as the 2019/2020 bushfire
season in Australia, right?

03:01:33.730 --> 03:01:36.060
Where there really
hasn't been a rain season.

03:01:36.060 --> 03:01:38.490
I think this kind of
planning and thinking

03:01:38.490 --> 03:01:39.723
is even more urgent.

03:01:40.980 --> 03:01:42.840
So I'm happy to take questions

03:01:42.840 --> 03:01:46.860
and I hope that that
inter objection was helpful.

03:01:46.860 --> 03:01:48.275
Thank you.

03:01:48.275 --> 03:01:49.180
<v ->Great, thank you, Michael.</v>

03:01:49.180 --> 03:01:50.240
And we're definitely gonna unpack

03:01:50.240 --> 03:01:52.920
a little bit more of that
later on in this panel.

03:01:52.920 --> 03:01:54.000
But next I'd like to turn

03:01:54.000 --> 03:01:56.070
to our third panelist, Melissa Brandt.

03:01:56.070 --> 03:01:58.740
She serves as the vice
president of public policy,

03:01:58.740 --> 03:02:00.240
and it's the deputy to general council

03:02:00.240 --> 03:02:02.350
for the East Bay Community Energy.

03:02:02.350 --> 03:02:03.183
Melissa welcome,

03:02:03.183 --> 03:02:05.890
and I believe you have a slide
deck to share with us today.

03:02:05.890 --> 03:02:07.890
Robert, could you bring that up?

03:02:07.890 --> 03:02:09.690
Perfect, hey Melissa go right ahead.

03:02:10.530 --> 03:02:11.460
<v ->All right.</v>

03:02:11.460 --> 03:02:13.140
Well, thank you very
much for inviting me

03:02:13.140 --> 03:02:15.010
to take part on this panel today.

03:02:15.010 --> 03:02:18.750
I would like to introduce the
East Bay Community Energy.

03:02:18.750 --> 03:02:20.360
We are a CTA serving

03:02:20.360 --> 03:02:24.240
approximately 1.5 million
residents in businesses

03:02:24.240 --> 03:02:26.800
throughout Alameda
county and the city of Tracy

03:02:26.800 --> 03:02:28.590
in San Joaquin county.

03:02:28.590 --> 03:02:31.280
We have a very diverse customer base.

03:02:31.280 --> 03:02:34.540
Over 20% of our customers
are enrolled in CARE.

03:02:34.540 --> 03:02:36.830
And we have a number of
disadvantaged communities

03:02:36.830 --> 03:02:38.790
as defined by Cal Enviro screen

03:02:38.790 --> 03:02:41.470
in our service territory as well.

03:02:41.470 --> 03:02:45.080
And I think it was both this
concern for our customers

03:02:45.080 --> 03:02:48.260
who are very much
struggling to pay their bills

03:02:48.260 --> 03:02:49.490
as well as our desire

03:02:49.490 --> 03:02:52.630
to support our communities and the state

03:02:52.630 --> 03:02:55.030
on the transition to electrification

03:02:55.030 --> 03:02:57.760
that had led us to develop the proposal

03:02:57.760 --> 03:03:01.120
that I wanted to talk
with you today about

03:03:01.120 --> 03:03:05.520
which we have named
Equitably Electrifying California.

03:03:05.520 --> 03:03:07.090
Now I'll start by saying,

03:03:07.090 --> 03:03:09.450
it's a very simple concept
with those words, right?

03:03:09.450 --> 03:03:13.460
Who doesn't love equitably
electrifying California.

03:03:13.460 --> 03:03:15.300
Of course, it becomes
much more difficult

03:03:15.300 --> 03:03:17.550
when you dig down into the details.

03:03:17.550 --> 03:03:19.123
So today I'm gonna walk you through

03:03:19.123 --> 03:03:21.260
kind of the what and the why

03:03:21.260 --> 03:03:23.490
along with some of the
challenges that we've seen

03:03:23.490 --> 03:03:26.120
and discussed some possibilities.

03:03:26.120 --> 03:03:27.970
I'm also very much looking forward

03:03:27.970 --> 03:03:29.840
to the question section of the panel,

03:03:29.840 --> 03:03:32.340
so that we'll be able
to dive a little bit deeper

03:03:32.340 --> 03:03:35.000
into what we're doing
and what we're thinking.

03:03:35.000 --> 03:03:36.690
So with that next slide, please.

03:03:38.150 --> 03:03:41.774
So what is this proposal
that we're discussing,

03:03:41.774 --> 03:03:44.360
it's essentially a
proposal to fund the costs

03:03:44.360 --> 03:03:48.070
of public purpose programs
with state tax revenues

03:03:48.070 --> 03:03:50.083
instead of electric utility rates.

03:03:51.650 --> 03:03:55.330
And I will refer perhaps
throughout this presentation

03:03:55.330 --> 03:03:57.770
to some of the public purpose programs

03:03:57.770 --> 03:04:00.310
as social policy programs,

03:04:00.310 --> 03:04:04.450
that's typically how we've
been describing them at EBCE

03:04:04.450 --> 03:04:07.030
as they are really
programs that are meant

03:04:07.030 --> 03:04:09.733
to further social policy of the state.

03:04:10.780 --> 03:04:13.360
So what would this proposal accomplish?

03:04:13.360 --> 03:04:15.420
Well, a couple key points.

03:04:15.420 --> 03:04:18.060
It supports our electrification goals

03:04:18.060 --> 03:04:21.770
by reducing the rate
of utility bill increases

03:04:21.770 --> 03:04:24.780
and notice, I didn't say
reducing utility rates,

03:04:24.780 --> 03:04:26.010
it doesn't go that far

03:04:26.010 --> 03:04:29.510
just because the rate
increases are so dramatic,

03:04:29.510 --> 03:04:33.240
but we would hopefully reduce
the rate of those increases

03:04:33.240 --> 03:04:35.490
essentially to prevent it
reaching up thresholds

03:04:35.490 --> 03:04:39.390
where electrification
become disincentivized.

03:04:39.390 --> 03:04:42.170
It also pays for social policy costs

03:04:42.170 --> 03:04:43.910
in a more progressive way,

03:04:43.910 --> 03:04:47.010
reducing the burden on
our lower income customers.

03:04:47.010 --> 03:04:49.670
It's been talked about
several times today

03:04:49.670 --> 03:04:54.410
about the mass of arrearages
that our customers have faced

03:04:54.410 --> 03:04:56.270
with COVID particularly,

03:04:56.270 --> 03:04:59.030
we have gotten some from the legislature

03:04:59.030 --> 03:05:00.670
in last year's budget.

03:05:00.670 --> 03:05:03.300
However, this continues to be a problem

03:05:03.300 --> 03:05:06.470
to the extent that you can
shift how these costs are paid.

03:05:06.470 --> 03:05:09.063
You can also potentially
reduce disconnections.

03:05:10.500 --> 03:05:12.640
And then, so what is this cost?

03:05:12.640 --> 03:05:15.863
Our backup, the
envelope estimate is that

03:05:15.863 --> 03:05:18.830
the programs in public per this program

03:05:18.830 --> 03:05:20.780
for the three utilities including CARE

03:05:20.780 --> 03:05:23.390
is about 2.7 billion a year.

03:05:23.390 --> 03:05:25.920
So that's the dollars
that we're talking about.

03:05:25.920 --> 03:05:27.033
Next slide, please.

03:05:28.970 --> 03:05:30.563
So why is it important?

03:05:31.430 --> 03:05:33.150
As we've been talking a lot about today,

03:05:33.150 --> 03:05:37.740
equity, utility rates
today are not equitable.

03:05:37.740 --> 03:05:39.470
We also have an number of customers

03:05:39.470 --> 03:05:41.840
who are not CARE or FERA eligible,

03:05:41.840 --> 03:05:44.120
but they're nevertheless lower income.

03:05:44.120 --> 03:05:46.830
And we see that a lot in
places like the Bay area,

03:05:46.830 --> 03:05:51.200
where the cost of housing,
the cost of living is very high.

03:05:51.200 --> 03:05:55.000
And so our lower income
customers who are not CARE

03:05:55.000 --> 03:05:57.170
or FERA eligible are paying
just as much as customers

03:05:57.170 --> 03:05:59.670
who have much higher income.

03:05:59.670 --> 03:06:02.760
So this regressive rate
structure is really at odd

03:06:02.760 --> 03:06:05.060
with the state policy,

03:06:05.060 --> 03:06:07.713
which is to have a
progressive tax system.

03:06:08.610 --> 03:06:12.440
We also have looked at
our own customer programs

03:06:12.440 --> 03:06:15.450
and expanding eligibility
for those programs

03:06:15.450 --> 03:06:18.240
using area median income AMI,

03:06:18.240 --> 03:06:21.640
instead of federal poverty level or FPL,

03:06:21.640 --> 03:06:25.670
which has increased the
eligibility for our customers.

03:06:25.670 --> 03:06:27.283
And again, these are the customers

03:06:27.283 --> 03:06:29.010
that are really struggling the most

03:06:29.010 --> 03:06:31.730
to bear the cost of the public
purpose programs today

03:06:31.730 --> 03:06:33.203
because they get no release.

03:06:34.230 --> 03:06:35.433
Next slide, please.

03:06:38.690 --> 03:06:40.440
And again, why is it important?

03:06:40.440 --> 03:06:45.440
Electrification, we've had a
vision of putting up billboards

03:06:46.000 --> 03:06:48.930
near our publicly
available charging stations

03:06:48.930 --> 03:06:51.380
in the East Bay on
the side of the freeway

03:06:51.380 --> 03:06:55.010
that look very much like
what you see for the gas,

03:06:55.010 --> 03:06:57.400
only it shows kind of
an electric equivalent

03:06:57.400 --> 03:06:59.260
of filling up your tank.

03:06:59.260 --> 03:07:01.400
I found a little photo
here from Australia

03:07:01.400 --> 03:07:02.233
because I don't think

03:07:02.233 --> 03:07:05.390
that we have these
billboards yet in California,

03:07:05.390 --> 03:07:08.487
but this has been our
vision folks drive by every day

03:07:08.487 --> 03:07:09.620
and they say, oh wow,

03:07:09.620 --> 03:07:11.900
if I switched to an electric vehicle,

03:07:11.900 --> 03:07:14.120
I can fill my tank for much less

03:07:14.120 --> 03:07:16.330
than what I'm seeing as a gas pump.

03:07:16.330 --> 03:07:18.510
That's not going to be the case.

03:07:18.510 --> 03:07:22.020
If electric rates continue
to rise the way they are.

03:07:22.020 --> 03:07:25.440
In fact, my nightmare
of this vision is that

03:07:25.440 --> 03:07:26.980
customers drive down the freeway

03:07:26.980 --> 03:07:28.700
and they notice the electric rate

03:07:28.700 --> 03:07:31.250
is higher than the prices gas.

03:07:31.250 --> 03:07:33.090
So it's really vitally important

03:07:33.090 --> 03:07:35.850
that we keep electric
rates with threshold

03:07:35.850 --> 03:07:38.483
to incentivize the fuel
switching to electric.

03:07:39.720 --> 03:07:42.030
I will point out that this proposal

03:07:42.030 --> 03:07:45.380
is certainly by no means comprehensive.

03:07:45.380 --> 03:07:49.720
It's just a smaller piece of a
larger multifaceted solution,

03:07:49.720 --> 03:07:51.500
but to really address rates,

03:07:51.500 --> 03:07:54.740
we're going to have to look
at many different solutions

03:07:54.740 --> 03:07:57.560
to these problem and combine them.

03:07:57.560 --> 03:08:01.770
So again, we think that electrification

03:08:01.770 --> 03:08:02.790
could be really harmed

03:08:02.790 --> 03:08:05.660
if we can't get a hold
of our electric rates.

03:08:05.660 --> 03:08:06.773
Next slide please.

03:08:08.300 --> 03:08:09.843
So some of the challenges.

03:08:10.990 --> 03:08:13.850
Obviously, we would
need some legislative action

03:08:13.850 --> 03:08:16.170
and it's very important too,

03:08:16.170 --> 03:08:18.020
that we have a long term funding source

03:08:18.020 --> 03:08:19.680
if we're gonna try to switch

03:08:19.680 --> 03:08:21.370
some of these programmatic funding

03:08:21.370 --> 03:08:26.370
out of utility rates
and into state funds.

03:08:27.350 --> 03:08:29.520
The legislative action
clearly would be needed

03:08:29.520 --> 03:08:33.270
because the legislature
would have to decide

03:08:33.270 --> 03:08:36.300
how to fund these programs.

03:08:36.300 --> 03:08:39.400
Longterm funding is
particularly important for CARE.

03:08:39.400 --> 03:08:42.080
We wouldn't want to see
a solution implemented

03:08:42.080 --> 03:08:44.760
that somehow eroded
care for our customers.

03:08:44.760 --> 03:08:46.030
It's vitally important

03:08:46.030 --> 03:08:48.110
for some of our lowest income customers,

03:08:48.110 --> 03:08:50.163
and we need to make
sure that that stays.

03:08:51.250 --> 03:08:55.020
And so, we have a couple options.

03:08:55.020 --> 03:08:57.140
There's the state
general fund, certainly,

03:08:57.140 --> 03:08:59.830
we've been talking today
about surplus dollars.

03:08:59.830 --> 03:09:02.410
Surplus dollars aren't
as easy as it sounds

03:09:02.410 --> 03:09:06.270
because they have to
be used in certain ways,

03:09:06.270 --> 03:09:10.250
such as infrastructure
education, which we are not,

03:09:10.250 --> 03:09:15.090
or even tax refunds when you
have too large of the surplus.

03:09:15.090 --> 03:09:16.820
So it hasn't really been easy

03:09:16.820 --> 03:09:18.970
to find surplus dollars available

03:09:18.970 --> 03:09:22.510
to fund these kinds of
programs that we're talking about

03:09:22.510 --> 03:09:25.233
as these energy kind of
social policy programs.

03:09:26.120 --> 03:09:29.550
And then I think the
other challenge is ensuring

03:09:29.550 --> 03:09:33.250
that long term budget
availability especially for CARE

03:09:33.250 --> 03:09:35.410
since the legislature
can change its mind

03:09:35.410 --> 03:09:36.933
about the budget year to year.

03:09:38.010 --> 03:09:40.830
The other potential source
that we've been talking about

03:09:40.830 --> 03:09:43.330
is the greenhouse gas reduction funds.

03:09:43.330 --> 03:09:46.320
And that too may have
some additional funds

03:09:46.320 --> 03:09:48.170
in the near term,

03:09:48.170 --> 03:09:51.590
but those funds are
also largely accounted for.

03:09:51.590 --> 03:09:54.690
And the state has yet to
make some policy decisions

03:09:54.690 --> 03:09:57.680
about how some of the
remainder is to be spent.

03:09:57.680 --> 03:09:59.423
So I think those are the areas

03:09:59.423 --> 03:10:02.860
that we have been
examining and targeting,

03:10:02.860 --> 03:10:04.557
but I wouldn't say at this point,

03:10:04.557 --> 03:10:08.003
the funding source and the
funding solution is obvious.

03:10:09.130 --> 03:10:11.700
So again, just to emphasize that

03:10:11.700 --> 03:10:13.340
this concept of doesn't really solve

03:10:13.340 --> 03:10:15.100
our problem in its entirety,

03:10:15.100 --> 03:10:18.442
it merely alleviates
some of the right pressure

03:10:18.442 --> 03:10:22.533
that we desperately need
many solutions to solve for.

03:10:23.540 --> 03:10:24.693
Next slide, please.

03:10:26.570 --> 03:10:28.310
So we also just tried to think,

03:10:28.310 --> 03:10:31.780
okay, we have the
challenges that we discussed

03:10:31.780 --> 03:10:34.330
with finding the funding for EEC,

03:10:34.330 --> 03:10:38.320
what else could we do to
try to address affordability?

03:10:38.320 --> 03:10:41.600
And so some of the things that
we've been thinking about are

03:10:42.520 --> 03:10:45.490
more effective use of incentive dollars.

03:10:45.490 --> 03:10:47.680
And what I mean by that is that

03:10:47.680 --> 03:10:50.350
in certain instances incentive levels

03:10:50.350 --> 03:10:53.210
are not necessarily
match to market demand

03:10:53.210 --> 03:10:57.740
and so we see incentives
being scooped up

03:10:57.740 --> 03:11:00.160
very, very quickly once offered,

03:11:00.160 --> 03:11:02.970
can we lower incentives
when they are offered

03:11:02.970 --> 03:11:06.860
in order to provide those
funds to more recipients

03:11:06.860 --> 03:11:09.893
and therefore get more
private sector investment.

03:11:10.980 --> 03:11:13.010
So that is one idea of how we could make

03:11:13.010 --> 03:11:14.790
more effective use of those dollars,

03:11:14.790 --> 03:11:16.780
make those dollars go farther.

03:11:16.780 --> 03:11:20.660
Another idea is the cap
trade customer rebates.

03:11:20.660 --> 03:11:24.955
Today, we could change
how those are distributed

03:11:24.955 --> 03:11:27.160
when we're thinking
about affordability in a way

03:11:27.160 --> 03:11:30.600
to make rates less regressive

03:11:30.600 --> 03:11:32.110
could we distribute those rebates

03:11:32.110 --> 03:11:35.560
to our lower income
customers and a higher portion

03:11:35.560 --> 03:11:39.170
to help alleviate the
regressive nature of rates.

03:11:39.170 --> 03:11:43.770
And then finally looking
at qualification criteria

03:11:43.770 --> 03:11:47.920
for programs that benefit
lower income customers

03:11:47.920 --> 03:11:51.830
and moving from the
federal poverty level

03:11:51.830 --> 03:11:54.360
that is used today to qualify for CARE

03:11:54.360 --> 03:11:57.160
to an area median income metric,

03:11:57.160 --> 03:11:59.610
which then enables customers

03:11:59.610 --> 03:12:02.900
who are living in high cost areas,

03:12:02.900 --> 03:12:04.890
but still have a very small budget

03:12:04.890 --> 03:12:07.950
after you've taken
rent out of the equation

03:12:07.950 --> 03:12:11.630
to also benefit as they are
very much struggling today.

03:12:11.630 --> 03:12:14.040
So this is all I have
for you at the moment,

03:12:14.040 --> 03:12:16.713
but happy to engage
further conversation.

03:12:18.760 --> 03:12:19.670
<v ->Great, thank you, Melissa.</v>

03:12:19.670 --> 03:12:21.460
Appreciate the ideas and looking forward

03:12:21.460 --> 03:12:24.150
to tackling some of
these later on in the panel.

03:12:24.150 --> 03:12:26.720
We're gonna move to our
next panelist Scott Crider,

03:12:26.720 --> 03:12:29.450
who is the senior vice
president of customer services

03:12:29.450 --> 03:12:32.110
and external affairs at
San Diego gas and electric.

03:12:32.110 --> 03:12:33.300
Scott, thank you for joining us.

03:12:33.300 --> 03:12:34.430
Go ahead.

03:12:34.430 --> 03:12:36.167
<v ->Great, and thank you Grant</v>

03:12:36.167 --> 03:12:40.660
and thank you Commissioners
for the invitation today.

03:12:40.660 --> 03:12:42.880
This is a really important discussion

03:12:44.170 --> 03:12:45.280
rates and affordability,

03:12:45.280 --> 03:12:47.800
this could not come at a better time

03:12:47.800 --> 03:12:49.180
because quite frankly,

03:12:49.180 --> 03:12:52.503
our customers are
demanding action and solutions.

03:12:53.570 --> 03:12:56.850
Recently we've seen
pretty significant increases

03:12:56.850 --> 03:13:00.410
in natural gas prices
a across the country,

03:13:00.410 --> 03:13:02.920
coupled with some unusually cold,

03:13:02.920 --> 03:13:05.060
at least by San Diego standards,

03:13:05.060 --> 03:13:09.253
weather contributed
significantly to high bills recently.

03:13:10.130 --> 03:13:11.810
In really while natural gas

03:13:11.810 --> 03:13:16.060
hasn't been a driver
of higher SDG&amp;E bills,

03:13:16.060 --> 03:13:19.367
customers are understandably
frustrated with rising gas

03:13:19.367 --> 03:13:21.423
and electricity costs overall,

03:13:23.730 --> 03:13:26.710
and SDG&amp;E is not the only
utility facing this challenges.

03:13:26.710 --> 03:13:28.410
And that's why we're all here today.

03:13:28.410 --> 03:13:30.820
And maintaining affordability,

03:13:30.820 --> 03:13:33.783
while investing in clean
energy infrastructure,

03:13:34.970 --> 03:13:36.797
to improve wildfire safety

03:13:36.797 --> 03:13:39.870
and to reach the state's
clean energy goals,

03:13:39.870 --> 03:13:42.540
all while preserving
reliability by the way

03:13:42.540 --> 03:13:44.100
is really a statewide challenge

03:13:44.100 --> 03:13:46.800
that's gonna require a lot of statewide

03:13:46.800 --> 03:13:49.130
creative problem solving
and funding sources

03:13:49.130 --> 03:13:51.733
and that's ultimately
why we're all here today.

03:13:53.050 --> 03:13:56.480
To us though at SDG&amp;E
one thing that's very clear

03:13:56.480 --> 03:13:58.210
and that's that we are gonna need

03:13:58.210 --> 03:14:00.600
more state and federal resources

03:14:00.600 --> 03:14:04.460
to be able to reliably support
the clean energy transition.

03:14:04.460 --> 03:14:08.570
We simply cannot do it on the
backs of our customers alone

03:14:08.570 --> 03:14:10.850
using only the gas and electric bill

03:14:10.850 --> 03:14:13.130
to fund all required programs,

03:14:13.130 --> 03:14:15.810
the mandates, the subsidies, the fees,

03:14:15.810 --> 03:14:18.780
the infrastructure
investments in the state.

03:14:18.780 --> 03:14:22.210
So, what are I ideas?

03:14:22.210 --> 03:14:26.620
And Melissa, we did not
coordinate this obviously,

03:14:26.620 --> 03:14:29.539
but Melissa, stole a
little bit of my thunder.

03:14:29.539 --> 03:14:33.110
So, but I think it's
because this is such an idea

03:14:33.110 --> 03:14:35.200
that you've got a CCE
Northern California

03:14:35.200 --> 03:14:37.870
and a utility from Southern California

03:14:37.870 --> 03:14:40.450
with precisely the same idea.

03:14:40.450 --> 03:14:43.160
And that is we're calling
on the state legislature

03:14:43.160 --> 03:14:45.513
to immediately pass legislation,

03:14:45.513 --> 03:14:49.130
to remove the cost of state
mandated public purpose programs

03:14:49.130 --> 03:14:50.560
from electric rates.

03:14:50.560 --> 03:14:53.250
And instead finance
those important programs

03:14:53.250 --> 03:14:55.420
through the state's general fund.

03:14:55.420 --> 03:14:57.960
We actually believe this
is a common sense idea

03:14:57.960 --> 03:15:01.590
that can provide near
term bill relief for customers.

03:15:01.590 --> 03:15:05.020
And this was a real
surprising fact to me.

03:15:05.020 --> 03:15:08.020
The revenue requirement for PPP

03:15:08.020 --> 03:15:13.020
has increased 140% over
the past decade for SDG&amp;E

03:15:13.230 --> 03:15:14.967
or about 9% a year.

03:15:14.967 --> 03:15:17.470
And we estimate that
by taking this action,

03:15:17.470 --> 03:15:21.760
we could remove more than
350 million in annual costs

03:15:21.760 --> 03:15:25.550
and reduce our system
average rate by about 6%.

03:15:25.550 --> 03:15:26.630
And so what does that mean

03:15:26.630 --> 03:15:30.840
for the average family
here in San Diego,

03:15:30.840 --> 03:15:35.040
we could actually save
about $90 a year in bill savings.

03:15:35.040 --> 03:15:38.950
And, we've heard many
San Diego area legislators

03:15:38.950 --> 03:15:40.280
in recent weeks

03:15:40.280 --> 03:15:44.110
raising concerns about
higher SDG&amp;E energy bills.

03:15:44.110 --> 03:15:47.610
So we think this is a fantastic chance

03:15:47.610 --> 03:15:50.710
to stand with our customers
and their constituents

03:15:50.710 --> 03:15:53.640
to do the right thing
and help support again,

03:15:53.640 --> 03:15:54.950
this common sense idea.

03:15:54.950 --> 03:15:59.950
And again, having a
CCA Northern California

03:15:59.967 --> 03:16:03.630
and a utility in Southern
California with the same idea,

03:16:03.630 --> 03:16:05.830
I think that there must
be some merit to it.

03:16:06.840 --> 03:16:10.570
And then number two too,
is we look at other ideas,

03:16:10.570 --> 03:16:12.470
like other utilities,

03:16:12.470 --> 03:16:15.900
we're gonna be aggressively
pursuing federal funds

03:16:15.900 --> 03:16:18.750
from the recently past
infrastructure package,

03:16:18.750 --> 03:16:21.130
an infusion of federal support

03:16:21.130 --> 03:16:22.700
for infrastructure improvements,

03:16:22.700 --> 03:16:26.750
such as EV infrastructure
clean hydrogen.

03:16:26.750 --> 03:16:29.510
It's certainly gonna help
relieve some rate pressure,

03:16:29.510 --> 03:16:31.630
but we're gonna need more help.

03:16:31.630 --> 03:16:33.500
And it's amazing to say

03:16:33.500 --> 03:16:36.730
that a trillion dollar
federal infrastructure bill

03:16:36.730 --> 03:16:39.680
is just a down payment
for what not only California,

03:16:39.680 --> 03:16:41.570
but the country's gonna need,

03:16:41.570 --> 03:16:43.710
but that really is the case

03:16:43.710 --> 03:16:48.060
as we look at the scale
of change and transition,

03:16:48.060 --> 03:16:50.020
just in the energy sector alone,

03:16:50.020 --> 03:16:51.620
that's gonna need to take place

03:16:51.620 --> 03:16:53.223
over the next couple of decades.

03:16:54.080 --> 03:16:55.323
And then finally,

03:16:56.440 --> 03:16:59.823
we need comprehensive
electric rate reform in California.

03:17:01.070 --> 03:17:03.950
I recognize that the next
panel is gonna discuss this topic,

03:17:03.950 --> 03:17:06.010
but I wanna highlight it because

03:17:06.010 --> 03:17:08.920
it is the most consequential
action that must be taken

03:17:08.920 --> 03:17:11.490
to encourage electrification

03:17:11.490 --> 03:17:14.690
and enable more investment
in climate resiliency

03:17:14.690 --> 03:17:17.280
while preserving affordability.

03:17:17.280 --> 03:17:20.101
The general rate design philosophy

03:17:20.101 --> 03:17:22.930
that's in place now,
which is volumetric rates

03:17:22.930 --> 03:17:25.250
simply doesn't reflect the energy needs

03:17:25.250 --> 03:17:29.320
or challenges of today
and certainly not tomorrow.

03:17:29.320 --> 03:17:32.720
Customers are gonna
hesitant to add more EVs

03:17:32.720 --> 03:17:35.080
or electric and space heating.

03:17:35.080 --> 03:17:37.400
If they're punished with higher bills

03:17:37.400 --> 03:17:40.190
after they were encouraged
to use more electricity

03:17:40.190 --> 03:17:42.200
for appliances and transportation.

03:17:42.200 --> 03:17:43.060
Now don't get me wrong,

03:17:43.060 --> 03:17:45.480
efficiency is gonna still be important.

03:17:45.480 --> 03:17:47.950
But when we are asking customers

03:17:47.950 --> 03:17:51.170
to really adopt more electrification

03:17:51.170 --> 03:17:54.322
for buildings in their homes,

03:17:54.322 --> 03:17:57.670
the current structure
is just not sustainable.

03:17:57.670 --> 03:18:00.460
And really instead we
agree with sever Bernstein

03:18:00.460 --> 03:18:02.570
and as colleagues from UC Berkeley,

03:18:02.570 --> 03:18:03.900
that California should move

03:18:03.900 --> 03:18:06.830
to a cost based fixed charge rate model

03:18:06.830 --> 03:18:10.200
that could be designed
to address equity concerns

03:18:10.200 --> 03:18:11.790
could help to stabilize bill

03:18:11.790 --> 03:18:14.430
and enable to move
toward electrification,

03:18:14.430 --> 03:18:16.050
but maintaining the status quo

03:18:16.050 --> 03:18:19.580
is simply not practical nor
affordable for customers.

03:18:19.580 --> 03:18:24.580
Now let me briefly turn to
one eye idea that we oppose.

03:18:25.120 --> 03:18:28.300
And I know my colleague
on the panel, Michael,

03:18:28.300 --> 03:18:30.070
where I just just raised this issue

03:18:30.070 --> 03:18:32.550
and he makes a lot of
very, very good points,

03:18:32.550 --> 03:18:35.650
but we'd have a lot of concerns
about adding a surcharge

03:18:35.650 --> 03:18:39.080
to customers who live in
the high fire threat district

03:18:39.080 --> 03:18:41.790
for tier three to help pay
for wildfire safety measures.

03:18:41.790 --> 03:18:44.350
And there's a couple of reasons why.

03:18:44.350 --> 03:18:45.620
Number one, at least,

03:18:45.620 --> 03:18:49.120
and I'm gonna speak just
for the SDG&amp;E territory.

03:18:49.120 --> 03:18:52.490
Wildfire safety is a regional asset.

03:18:52.490 --> 03:18:55.970
All of our customers and our
territory substantially benefit

03:18:55.970 --> 03:18:59.250
from wildfire safety in
the form of cleaner air

03:18:59.250 --> 03:19:02.330
and fewer greenhouse gas
emissions released by wildfires.

03:19:02.330 --> 03:19:05.620
And we've touched on that today already.

03:19:05.620 --> 03:19:07.580
But also residents on the edge

03:19:07.580 --> 03:19:09.930
of the urban wildlife interface,

03:19:09.930 --> 03:19:12.547
benefit from wildfire
safety improvements.

03:19:12.547 --> 03:19:14.630
And this includes my own neighborhood

03:19:16.156 --> 03:19:18.540
in the city of San Diego
that was devastated in 2003

03:19:18.540 --> 03:19:21.770
from a fire that started
25 miles to the east

03:19:21.770 --> 03:19:24.000
and the HFTD tier three.

03:19:24.000 --> 03:19:27.540
And I just don't think that
it's fair for me and neighbors,

03:19:27.540 --> 03:19:31.670
to benefit from wildfire safety
while more inland customers

03:19:31.670 --> 03:19:35.040
are ultimately paying more fees.

03:19:35.040 --> 03:19:37.530
Number two, a lot of our customers

03:19:37.530 --> 03:19:41.070
in the tier three HFTD are lower income,

03:19:41.070 --> 03:19:44.210
and they would be
disproportionately harmed

03:19:44.210 --> 03:19:46.400
by yet another fee on their bill.

03:19:46.400 --> 03:19:49.440
And then finally, and
again, this may not apply

03:19:49.440 --> 03:19:51.570
to the other electric
utilities in the state,

03:19:51.570 --> 03:19:54.800
but we have very few
customers in tier three,

03:19:54.800 --> 03:19:55.633
matter of fact,

03:19:55.633 --> 03:20:00.290
only about 32,000 of our
1.4 million electric customers

03:20:00.290 --> 03:20:01.290
live in these areas.

03:20:01.290 --> 03:20:03.870
And so the amount of
revenue from a surcharge

03:20:03.870 --> 03:20:05.740
would be so small

03:20:05.740 --> 03:20:09.740
and do so little to
off-state rate increases

03:20:09.740 --> 03:20:12.440
stemming from wildfire
safety improvements

03:20:12.440 --> 03:20:14.230
that it just wouldn't
really make a lot of sense,

03:20:14.230 --> 03:20:17.200
again, at least for
our service territory.

03:20:17.200 --> 03:20:19.930
So with that, again,

03:20:19.930 --> 03:20:21.630
looking forward to the discussion today,

03:20:21.630 --> 03:20:23.580
really thank you for the invitation

03:20:23.580 --> 03:20:24.680
and look forward to hearing

03:20:24.680 --> 03:20:26.090
from the remainder of my colleagues.

03:20:26.090 --> 03:20:28.010
Thank you, back to you Grant.

03:20:28.010 --> 03:20:29.957
<v ->Great, thanks Scott appreciate
your comments on that.</v>

03:20:29.957 --> 03:20:32.620
And we'll definitely dive
into that a little bit more.

03:20:32.620 --> 03:20:34.020
Last and certainly not least

03:20:34.020 --> 03:20:35.570
I'd like to turn to Catherine Yap

03:20:35.570 --> 03:20:37.620
she's a Principal with Barkovich &amp; Yap,

03:20:37.620 --> 03:20:38.650
and she represents

03:20:38.650 --> 03:20:41.040
the California Large Energy
Consumers Association.

03:20:41.040 --> 03:20:42.320
Catherine, thanks for joining us

03:20:42.320 --> 03:20:43.760
and I believe you have a slide deck

03:20:43.760 --> 03:20:45.680
to share with us today too.

03:20:45.680 --> 03:20:46.530
Perfect, and there it is.

03:20:46.530 --> 03:20:48.120
Go right ahead.

03:20:48.120 --> 03:20:49.104
<v ->Yes, I do.</v>

03:20:49.104 --> 03:20:53.370
Thank you, President
Reynolds and Commissioners

03:20:53.370 --> 03:20:57.613
for giving me the
opportunity to speak today.

03:20:59.020 --> 03:21:00.110
I represent

03:21:00.110 --> 03:21:04.130
the California Large Energy
Consumers Association

03:21:04.130 --> 03:21:06.953
and we should probably
move to the slide deck.

03:21:08.400 --> 03:21:13.040
I prepared a few
bullets and a few graphs

03:21:13.040 --> 03:21:17.980
I hope to help illustrate
some of the issues.

03:21:17.980 --> 03:21:19.853
So next slide, please.

03:21:21.830 --> 03:21:26.830
So the question is who
is CLECA as we refer to it.

03:21:26.920 --> 03:21:31.920
And it's a group of
large high load factor

03:21:31.950 --> 03:21:35.710
industrial electric consumers.

03:21:35.710 --> 03:21:40.030
And they can be bundled,
they can be CCA customers

03:21:40.030 --> 03:21:43.100
and they can be direct access customers.

03:21:43.100 --> 03:21:46.043
And they're located
throughout the state.

03:21:46.910 --> 03:21:51.910
These companies are steel,
cement, industrial gas, pipeline,

03:21:53.820 --> 03:21:58.820
minerals, processing, cold
storage, beverage industries,

03:21:59.190 --> 03:22:04.190
and also, well, the pipeline
is transportation industries.

03:22:07.690 --> 03:22:12.690
And they share a common factor

03:22:13.320 --> 03:22:16.120
that electricity constitutes

03:22:16.120 --> 03:22:20.530
a very significant portion
of their cost of production.

03:22:20.530 --> 03:22:25.530
So these customers are in what
would be termed euphemistic

03:22:25.770 --> 03:22:29.370
as manufacturing or industry,

03:22:29.370 --> 03:22:33.160
and they have to
watch their bottom line.

03:22:33.160 --> 03:22:36.760
They're also very
large users of electricity.

03:22:36.760 --> 03:22:38.793
They're very large consumers.

03:22:40.480 --> 03:22:45.480
The CLECA members
also are PIP customers,

03:22:45.630 --> 03:22:48.900
they in the base interruptable program

03:22:48.900 --> 03:22:53.900
and they constitute a very
large fraction of the load

03:22:54.280 --> 03:22:58.810
that was interrupted
during 2020 and 2021

03:23:00.470 --> 03:23:05.073
in order to keep the
grid stable in California.

03:23:06.290 --> 03:23:09.380
So these cut customers have for decades

03:23:09.380 --> 03:23:14.380
participated in this program,
they're reliable participants,

03:23:14.420 --> 03:23:18.720
and they've done this both
to promote grid stability,

03:23:18.720 --> 03:23:21.380
and also help mitigate the high cost

03:23:21.380 --> 03:23:23.880
of electricity in California,

03:23:23.880 --> 03:23:25.880
because it has an impact

03:23:25.880 --> 03:23:29.890
on the competitiveness of manufacturing.

03:23:29.890 --> 03:23:31.410
Next slide, please.

03:23:34.810 --> 03:23:37.520
So we were asked today to talk about

03:23:37.520 --> 03:23:40.610
non-rate payer sources of funding,

03:23:40.610 --> 03:23:44.850
and we see them as being critical

03:23:44.850 --> 03:23:49.470
to keep electricity rates
affordable for all rate payers.

03:23:49.470 --> 03:23:54.470
And they are to the survival
of manufacturing in California.

03:23:56.560 --> 03:23:59.250
And we think non rate
payer sources funding

03:23:59.250 --> 03:24:01.540
are completely reasonable

03:24:01.540 --> 03:24:05.073
since Californians will understand,

03:24:06.040 --> 03:24:08.540
they'll understand
that reducing emissions

03:24:08.540 --> 03:24:12.830
from transportation it's
something it's a trans issue,

03:24:12.830 --> 03:24:15.173
it's not an electric utility issue.

03:24:16.420 --> 03:24:20.910
And that converting homes
to electricity is a housing issue.

03:24:20.910 --> 03:24:23.453
It's not an electric utility issue.

03:24:24.290 --> 03:24:27.060
We've hidden a lot of these issues

03:24:27.060 --> 03:24:30.880
within the utility
industry for a long time,

03:24:30.880 --> 03:24:35.843
but Californians smart and
they understand how important,

03:24:37.210 --> 03:24:40.410
alleviating climate, the
impact of climate change

03:24:40.410 --> 03:24:43.320
of trying to reverse as
much of it as possible,

03:24:43.320 --> 03:24:48.320
they do understand, and
we be able to educate them

03:24:49.530 --> 03:24:53.140
that it doesn't have to
be swept under the rug

03:24:53.140 --> 03:24:56.150
it's hidden in
people's electricity bill,

03:24:56.150 --> 03:24:58.220
not that it's being well hidden anymore

03:24:58.220 --> 03:25:00.350
given the kind of changes

03:25:00.350 --> 03:25:03.350
in electricity costs that we've seen,

03:25:03.350 --> 03:25:06.070
but by informing Californians

03:25:06.070 --> 03:25:08.380
and letting them, reminding them

03:25:08.380 --> 03:25:12.360
that when they make a
decision as Mark Tony pointed out

03:25:12.360 --> 03:25:15.900
at the point of sale for a new car,

03:25:15.900 --> 03:25:17.880
that they're making a choice

03:25:17.880 --> 03:25:21.980
and by making a petroleum
based car more expensive

03:25:21.980 --> 03:25:25.820
with a climate change charge,

03:25:25.820 --> 03:25:30.820
it helps balance out
their decision to purchase.

03:25:33.460 --> 03:25:37.960
I also like that particular model,

03:25:37.960 --> 03:25:40.420
because it's not regressive.

03:25:40.420 --> 03:25:44.140
If it's a percentage
of the cost of the car,

03:25:44.140 --> 03:25:48.030
you pay more as the
car gets more expensive,

03:25:48.030 --> 03:25:53.030
it's not a regressive tax,
it tends to be the reverse

03:25:53.050 --> 03:25:55.630
and it actually could be designed

03:25:55.630 --> 03:25:59.373
so that it was even less regressive.

03:26:00.400 --> 03:26:01.513
Next slide, please.

03:26:05.180 --> 03:26:07.700
Okay, so now we're in the pictures.

03:26:07.700 --> 03:26:10.690
And this is just a reminder
to the Commission

03:26:10.690 --> 03:26:14.113
that we we've done pretty well,

03:26:14.970 --> 03:26:19.970
this has started in 20,
the graph starts in 2016,

03:26:20.340 --> 03:26:23.280
But the last three years,

03:26:23.280 --> 03:26:25.853
we've seen just an extraordinary rate.

03:26:27.040 --> 03:26:29.400
So compared to inflation,

03:26:29.400 --> 03:26:32.330
you can see that the
electricity increases

03:26:32.330 --> 03:26:34.550
are in fact accelerating,

03:26:34.550 --> 03:26:38.090
even though inflation
itself has increased

03:26:40.060 --> 03:26:41.490
the electricity increases

03:26:41.490 --> 03:26:44.073
are just their blasting
off like a rocket.

03:26:45.111 --> 03:26:46.543
Next slide, please.

03:26:50.840 --> 03:26:54.080
Okay, this is the same
kind of graph for PG&amp;E,

03:26:54.080 --> 03:26:58.100
the first graph was for
Edison, and this is for PG&amp;E.

03:26:58.100 --> 03:27:00.660
So both Northern and Southern California

03:27:00.660 --> 03:27:05.660
are experiencing the same
kind of acceleration in costs,

03:27:06.890 --> 03:27:11.154
the last three years
and we're looking forword

03:27:11.154 --> 03:27:15.380
as Mark recited in his presentation,

03:27:15.380 --> 03:27:17.040
we're looking at more

03:27:17.040 --> 03:27:22.040
even greater extraordinary
increases in cost potentially.

03:27:22.670 --> 03:27:23.863
Next slide, please.

03:27:26.300 --> 03:27:28.970
Well, why does manufacturing care?

03:27:28.970 --> 03:27:33.463
Well, you pay big bills and,

03:27:35.470 --> 03:27:40.470
electricity costs in California
are twice the average

03:27:40.790 --> 03:27:42.740
in the surrounding states.

03:27:42.740 --> 03:27:45.800
And these are states that are not far,

03:27:45.800 --> 03:27:49.840
we're talking about
all the immediate states

03:27:49.840 --> 03:27:53.840
and states that are
one or two states away.

03:27:53.840 --> 03:27:58.580
So increasing already
high electricity prices,

03:27:58.580 --> 03:28:03.203
just compounds and a bad
situation for manufacturing.

03:28:04.550 --> 03:28:05.713
Next slide, please.

03:28:11.120 --> 03:28:12.970
Industrial customers in California,

03:28:12.970 --> 03:28:15.920
they have to compete to survive,

03:28:15.920 --> 03:28:20.000
and they compete in national
and international markets.

03:28:20.000 --> 03:28:22.120
So you can't just assume
that they can turn around

03:28:22.120 --> 03:28:26.993
and pass those costs on it
depends on what's going on,

03:28:26.993 --> 03:28:28.913
what their competitors are doing.

03:28:30.580 --> 03:28:33.830
Electricity costs make up a large share

03:28:33.830 --> 03:28:35.750
of industrial costs.

03:28:35.750 --> 03:28:37.620
For our members,

03:28:37.620 --> 03:28:41.720
the electricity is in one
of the two highest costs,

03:28:41.720 --> 03:28:44.820
labor being the other high cost.

03:28:44.820 --> 03:28:49.200
And in some of our members
it's by far the highest cost

03:28:49.200 --> 03:28:53.380
just depends on the
manufacturing industry

03:28:53.380 --> 03:28:54.733
that we're talking about.

03:28:56.040 --> 03:28:59.480
Keeping the production
of cement and steel

03:28:59.480 --> 03:29:01.620
and minerals and industrial gases

03:29:01.620 --> 03:29:04.480
and beverages in California,

03:29:04.480 --> 03:29:09.123
keeps the manufacturing
where the energy is the cleanest.

03:29:10.210 --> 03:29:15.210
If the customers do leave
the state, not only do you leave,

03:29:16.320 --> 03:29:21.260
they'll no longer make their
contribution to fixed cost.

03:29:21.260 --> 03:29:25.560
They won't be there paying
the fixed cost for the utilities.

03:29:25.560 --> 03:29:29.013
Those fixed costs will
flow to other customers.

03:29:29.013 --> 03:29:33.590
And if these companies
locate outside the state,

03:29:33.590 --> 03:29:37.460
you also lose jobs, you lose tax space

03:29:37.460 --> 03:29:40.170
and their product is produced

03:29:40.170 --> 03:29:43.410
using dirtier sources of electricity,

03:29:43.410 --> 03:29:46.940
and you compound your emissions problem

03:29:46.940 --> 03:29:50.943
because the product's gonna
be trucked back into California.

03:29:52.060 --> 03:29:54.540
So you really shoot yourself in the foot

03:29:54.540 --> 03:29:57.070
if you drive these customers out

03:29:57.070 --> 03:29:59.500
because electricity rises to the extent

03:29:59.500 --> 03:30:01.980
that they just can't compete.

03:30:01.980 --> 03:30:06.323
And we are losing customers
to high electricity cost.

03:30:10.040 --> 03:30:13.193
Thank you, that's the
end of my presentation.

03:30:14.660 --> 03:30:15.493
<v ->Great, thanks you.</v>

03:30:15.493 --> 03:30:17.057
Thank you, Catherine appreciate that.

03:30:17.057 --> 03:30:19.330
And I think that covers
all of our panelists.

03:30:19.330 --> 03:30:21.300
So we have a little over 30 minutes left

03:30:21.300 --> 03:30:22.790
before we move into our next panel.

03:30:22.790 --> 03:30:26.210
So this is the fun part,
this is the Q&amp;A portion.

03:30:26.210 --> 03:30:28.510
I have a few questions
that I'd like to dive in.

03:30:28.510 --> 03:30:30.140
Some of them I'm gonna ask generally

03:30:30.140 --> 03:30:30.973
for all the panelists

03:30:30.973 --> 03:30:33.240
and then I have more
individualized questions

03:30:33.240 --> 03:30:34.670
for some of the panelists.

03:30:34.670 --> 03:30:36.590
Then from there, I'll turn over
to our esteem Commissioners

03:30:36.590 --> 03:30:38.280
to ask whatever
questions they would like.

03:30:38.280 --> 03:30:41.460
So first question, and
this is for all the panelists,

03:30:41.460 --> 03:30:45.540
how can the CPUC further
leverage and target payer funding

03:30:45.540 --> 03:30:48.990
to attract non-pay funding
such as private capital?

03:30:48.990 --> 03:30:51.790
And I'll leave that open to
anybody that like to answer.

03:31:02.670 --> 03:31:05.270
(indistinct)
(laughing)

03:31:05.270 --> 03:31:06.170
Go a head Melissa.

03:31:07.293 --> 03:31:09.540
<v ->All right, I'll just
reiterate the point</v>

03:31:09.540 --> 03:31:11.520
that I think I made
earlier that it's important

03:31:11.520 --> 03:31:14.340
to align incentive levels
with market demand,

03:31:14.340 --> 03:31:16.330
to prevent providing incentives

03:31:16.330 --> 03:31:17.940
that are richer than required

03:31:17.940 --> 03:31:20.240
to meet the targets
that's being incentivized.

03:31:22.458 --> 03:31:23.291
<v ->Great, appreciate that.</v>

03:31:23.291 --> 03:31:25.270
Michael, did you have
anything to add there or Mark,

03:31:25.270 --> 03:31:26.103
go ahead.

03:31:29.490 --> 03:31:30.690
Oh, Mark you're on mute.

03:31:43.160 --> 03:31:43.993
<v ->Thank you.</v>

03:31:45.000 --> 03:31:48.170
The problem with private capital is that

03:31:48.170 --> 03:31:50.733
it effects of profit, okay?

03:31:52.450 --> 03:31:56.093
And so you gotta be very
careful bringing private capital

03:31:57.140 --> 03:32:01.827
because you can end up
increasing costs for the customers

03:32:03.840 --> 03:32:06.570
that take advantage
of the private capital.

03:32:06.570 --> 03:32:10.420
This is part of why TURN is
recommending the point of sale

03:32:10.420 --> 03:32:15.420
that is in fact, a form
of consumer, if you will,

03:32:16.300 --> 03:32:20.810
that is not great payer
money, but it fines the cost,

03:32:20.810 --> 03:32:23.080
the whole cost causation principle,

03:32:23.080 --> 03:32:25.680
people like to talk
about, well, guess what

03:32:25.680 --> 03:32:30.110
the costs are absolutely
fine to the people

03:32:30.110 --> 03:32:35.110
who are tubing to increase the emission

03:32:35.490 --> 03:32:37.670
buying gas power vehicles.

03:32:37.670 --> 03:32:39.280
We're not having them from doing it,

03:32:39.280 --> 03:32:43.227
but we're saying, hey, you
got pay price for it, okay?

03:32:43.227 --> 03:32:45.353
So I I'd rather go that way

03:32:45.353 --> 03:32:48.370
than look to bring these
wall street investors in

03:32:49.298 --> 03:32:51.173
who are looking to make huge process.

03:32:51.173 --> 03:32:53.323
I don't think that solves anything.

03:32:57.020 --> 03:32:59.100
<v ->Michael, go ahead.</v>
<v ->After you.</v>

03:32:59.100 --> 03:33:00.550
Okay, I was just gonna say,

03:33:00.550 --> 03:33:03.090
this is not really within the
purview of this conversation,

03:33:03.090 --> 03:33:06.313
but because it involves
issues related to folks,

03:33:07.340 --> 03:33:10.993
but I think the greatest
opportunities for improving,

03:33:12.490 --> 03:33:15.980
or potentially reducing rates
by including private capital

03:33:16.940 --> 03:33:19.840
come from greater
competitive procurement

03:33:19.840 --> 03:33:21.190
in the transmission system.

03:33:22.110 --> 03:33:25.260
And there, I think
there are opportunities.

03:33:25.260 --> 03:33:26.450
There are very good reasons

03:33:26.450 --> 03:33:29.490
why utilities sometimes are opposed

03:33:29.490 --> 03:33:32.850
to competitive procurement
process and transmission

03:33:32.850 --> 03:33:34.353
but I think it's something

03:33:34.353 --> 03:33:36.220
that we need to look for opportunities

03:33:36.220 --> 03:33:37.110
where we can do more of that.

03:33:37.110 --> 03:33:40.143
It can't be everywhere, but it
could be more than we do now.

03:33:42.050 --> 03:33:42.883
<v ->Great, thank you, Michael</v>

03:33:42.883 --> 03:33:44.230
and Catherine your hand up.

03:33:45.520 --> 03:33:49.534
<v ->Yeah, I just wanted to
follow Mark's comments</v>

03:33:49.534 --> 03:33:53.440
and point out that when
you're thinking about

03:33:53.440 --> 03:33:55.070
behind the meter issues,

03:33:55.070 --> 03:33:59.097
which come up in the
building electrification context

03:34:00.210 --> 03:34:04.523
and also in the
transportation electric context,

03:34:05.360 --> 03:34:08.120
I think it's fundamentally unfair

03:34:08.120 --> 03:34:09.930
to be requiring rate payers,

03:34:09.930 --> 03:34:14.790
to be paying for utility
programs behind the meter,

03:34:14.790 --> 03:34:19.097
that is inherently not a
natural monopoly context

03:34:21.600 --> 03:34:23.640
or a market context.

03:34:23.640 --> 03:34:26.880
You don't need a utility involvement

03:34:26.880 --> 03:34:30.030
in selling heaters for customers

03:34:30.030 --> 03:34:35.030
or selling electric cars
versus gas fired cars.

03:34:35.400 --> 03:34:39.090
Those are competitive
industries that drive that

03:34:39.090 --> 03:34:43.300
and the utilities should
stay the hell out of it,

03:34:43.300 --> 03:34:46.140
in my opinion, they just stay out of it.

03:34:46.140 --> 03:34:51.140
The Commission should not
be approving these proposals

03:34:52.210 --> 03:34:55.600
for the utilities to get
involved behind the meter.

03:34:55.600 --> 03:34:58.480
It's not a natural monopoly.

03:34:58.480 --> 03:35:02.210
When you talk about the
TND system, it's very clear.

03:35:02.210 --> 03:35:04.150
That's a natural monopoly.

03:35:04.150 --> 03:35:07.190
It's inefficient to have
more than one provider.

03:35:07.190 --> 03:35:09.300
That's why you want one set of wires

03:35:09.300 --> 03:35:12.090
running down the street
or running under the street,

03:35:12.090 --> 03:35:13.423
one set of pipes.

03:35:14.860 --> 03:35:17.100
So of course you want a utility

03:35:17.100 --> 03:35:19.150
and you regulate that utility,

03:35:19.150 --> 03:35:22.630
but when it comes to the electricity,

03:35:22.630 --> 03:35:24.040
you've gotta market.

03:35:24.040 --> 03:35:26.420
And when it comes to buying it

03:35:26.420 --> 03:35:30.530
and having the appliances or the car,

03:35:30.530 --> 03:35:33.900
which is effectively now
becoming another appliance,

03:35:33.900 --> 03:35:36.690
that's not a natural monopoly.

03:35:36.690 --> 03:35:38.710
That's a competitive market.

03:35:38.710 --> 03:35:42.173
Utilities should not be in that market.

03:35:44.700 --> 03:35:46.210
<v ->That's actually a perfect segue</v>

03:35:46.210 --> 03:35:47.480
to my next set of questions.

03:35:47.480 --> 03:35:48.750
And Mark, I think I'm gonna go back

03:35:48.750 --> 03:35:50.740
to the kind of point
of sale idea you had

03:35:50.740 --> 03:35:53.370
regarding building and
transportation electrification.

03:35:53.370 --> 03:35:55.420
So the point of sale idea,

03:35:55.420 --> 03:35:57.940
I know is not necessarily
a novel concept,

03:35:57.940 --> 03:36:00.050
especially in the context
of energy efficiency.

03:36:00.050 --> 03:36:03.500
And one of the barriers that's
been debated in the past is,

03:36:03.500 --> 03:36:05.850
how do you address the concern of

03:36:05.850 --> 03:36:08.790
whether it's energy efficiency
or cost of electrification

03:36:08.790 --> 03:36:09.920
and home sales price,

03:36:09.920 --> 03:36:11.670
especially in a state like California,

03:36:11.670 --> 03:36:12.560
where we're experiencing

03:36:12.560 --> 03:36:15.910
incredibly high sales prices for homes,

03:36:15.910 --> 03:36:18.250
going up exponentially,
even in the last couple years,

03:36:18.250 --> 03:36:21.730
are there other types
of policy mechanisms

03:36:21.730 --> 03:36:23.640
we can be looking at
maybe like cost sharing

03:36:23.640 --> 03:36:25.660
between seller and buyer of homes

03:36:25.660 --> 03:36:27.620
rate payer and private financing,

03:36:27.620 --> 03:36:30.330
what are some options that
kind of effectuate that change,

03:36:30.330 --> 03:36:33.313
regarding point of sale
for building electrification?

03:36:35.690 --> 03:36:40.220
<v ->Well, the idea is not new.</v>

03:36:40.220 --> 03:36:42.580
I talk to a lot of people and
a lot of people have said,

03:36:42.580 --> 03:36:44.860
yeah, this interesting
about that for years,

03:36:44.860 --> 03:36:46.610
it's not easy to figure out

03:36:46.610 --> 03:36:49.650
and I don't pretend to
have all the answers.

03:36:49.650 --> 03:36:54.520
To me, if there are a lot of
details like that I can work.

03:36:54.520 --> 03:36:59.520
First of all, I would echo
my colleague Cathy Yap point

03:37:01.570 --> 03:37:05.980
that the right number
for rate payer dollars

03:37:05.980 --> 03:37:09.370
for building electrification
is zero, okay?

03:37:09.370 --> 03:37:10.970
That's the right number.

03:37:10.970 --> 03:37:14.250
So that's the starting point.

03:37:14.250 --> 03:37:16.750
Now, is there the opportunity

03:37:16.750 --> 03:37:21.750
for some money from the tax payer sure,

03:37:23.390 --> 03:37:26.343
but I just don't see
that that's sustainable.

03:37:27.220 --> 03:37:32.220
You remember 10 years ago
or so we were in the dark day

03:37:32.377 --> 03:37:34.750
of the California state budget

03:37:34.750 --> 03:37:39.750
year after year of
deficit, it was brutal.

03:37:39.830 --> 03:37:42.857
I mean, public
education took such a hit,

03:37:44.220 --> 03:37:49.220
housing development took
such a hit, it was awful, awful.

03:37:50.520 --> 03:37:55.520
And so, that's why I'm
looking for sustainable models

03:37:56.380 --> 03:37:58.230
that don't require.

03:37:58.230 --> 03:38:03.230
Now, is there an opportunity
for private investments,

03:38:04.140 --> 03:38:08.210
I'm skeptical, but maybe,
but here's my point,

03:38:08.210 --> 03:38:10.450
right now when I bought
my house (indistinct)

03:38:10.450 --> 03:38:13.223
and this is part of how I
independently came up

03:38:13.223 --> 03:38:16.000
with the same idea other
people had years ago.

03:38:16.000 --> 03:38:18.740
But when I bought my house in Oakland,

03:38:18.740 --> 03:38:21.020
in order to close escrow,

03:38:21.020 --> 03:38:26.020
we had to have our electrical
upgraded to 200 a third, okay?

03:38:26.990 --> 03:38:31.360
A house is built 1941
had original wiring, okay?

03:38:31.360 --> 03:38:33.790
And we had to get an
earthquake inspection

03:38:33.790 --> 03:38:37.690
and we had to install shearer
walling in our (indistinct),

03:38:37.690 --> 03:38:41.813
underneath the living room in
order for the escrow to close.

03:38:42.694 --> 03:38:46.940
So this concept is not a
new concept by any stretch.

03:38:46.940 --> 03:38:50.940
I'm only suggesting that we expanded

03:38:50.940 --> 03:38:55.940
to electrification of
cooking, hot water and heat,

03:38:56.070 --> 03:39:01.070
and to say, wrap up the cost in escrow

03:39:01.230 --> 03:39:06.230
so that the contractors
get paid when escrow,

03:39:06.700 --> 03:39:09.330
when the home closes,
so it's part of the escrow,

03:39:09.330 --> 03:39:11.730
they know they're guaranteed to get paid

03:39:11.730 --> 03:39:15.220
that's why contractors
will work for the money

03:39:15.220 --> 03:39:19.340
because they know that the
escrow officer have the money

03:39:19.340 --> 03:39:21.200
and they will pay it,

03:39:21.200 --> 03:39:23.740
before it can be recorded they get paid.

03:39:23.740 --> 03:39:27.910
So there's a certainty to
that lot of other obstacles.

03:39:27.910 --> 03:39:30.723
I know, but that's the
essence of the concept.

03:39:32.800 --> 03:39:33.633
<v ->Great, thank you Mark.</v>

03:39:33.633 --> 03:39:35.670
And I'm gonna bounce
over to a different topic

03:39:35.670 --> 03:39:36.750
'cause it came up quite a bit

03:39:36.750 --> 03:39:39.790
in many of the opening
remarks you talked about taxes.

03:39:39.790 --> 03:39:42.270
And Melissa, I think
this question is for you.

03:39:42.270 --> 03:39:44.820
So given the procedural
and political barriers

03:39:44.820 --> 03:39:47.970
that come with passing taxes,
especially at the state level,

03:39:47.970 --> 03:39:49.860
couldn't one decision making pathway

03:39:49.860 --> 03:39:51.440
for moving costs of programs,

03:39:51.440 --> 03:39:53.860
Let's just say like the
public purpose programs

03:39:53.860 --> 03:39:56.640
be through like direct
democracy instruments,

03:39:56.640 --> 03:39:59.040
such as state and
local ballot initiatives.

03:39:59.040 --> 03:39:59.873
And the reason I mentioned this

03:39:59.873 --> 03:40:03.400
is that we did see something
very similar in 2012,

03:40:03.400 --> 03:40:05.560
with the Prop 39 Clean Energy Jobs Act

03:40:05.560 --> 03:40:08.550
that did suggest
collecting billions of dollars

03:40:08.550 --> 03:40:11.620
what was then a corporate
tax loophole so it was claimed

03:40:11.620 --> 03:40:12.970
and then divert some of that money,

03:40:12.970 --> 03:40:15.390
to a K through 12 schools
and community colleges

03:40:15.390 --> 03:40:18.590
for distributed generation
energy efficiency upgrades.

03:40:18.590 --> 03:40:20.920
I mean, are these other
types of mechanisms

03:40:20.920 --> 03:40:22.680
either the legislature
should be exploring

03:40:22.680 --> 03:40:25.100
or kind of local stakeholder groups

03:40:25.100 --> 03:40:26.350
should be exploring to find

03:40:26.350 --> 03:40:28.300
these kind of alternative tax pathways?

03:40:30.260 --> 03:40:33.470
<v ->Yeah, I would say
that I think all options</v>

03:40:33.470 --> 03:40:34.530
should be on the table.

03:40:34.530 --> 03:40:36.850
And certainly that
could be a great option.

03:40:36.850 --> 03:40:38.890
I think it would be
wonderful if legislators

03:40:38.890 --> 03:40:41.917
take the initiative
to lay out that option

03:40:41.917 --> 03:40:43.210
and what it could look like,

03:40:43.210 --> 03:40:45.740
and that could perhaps
provide the longevity

03:40:45.740 --> 03:40:48.540
that we need in the budget.

03:40:48.540 --> 03:40:52.060
I think valid initiatives are expenses.

03:40:52.060 --> 03:40:53.170
They're tough to get passed.

03:40:53.170 --> 03:40:56.870
It's tough force stakeholders
to come together to run one.

03:40:56.870 --> 03:41:01.220
It's not gonna get off the
table without a broad coalition

03:41:01.220 --> 03:41:03.160
and that would need to finance this.

03:41:03.160 --> 03:41:05.870
And personally, I haven't heard support

03:41:05.870 --> 03:41:10.220
among kind of grassroot
stakeholder groups

03:41:10.220 --> 03:41:13.080
for a valid initiative on this topic.

03:41:13.080 --> 03:41:14.300
So am I opposed?

03:41:14.300 --> 03:41:15.800
Absolutely not.

03:41:15.800 --> 03:41:17.860
Is EBC gonna be the one to run it?

03:41:17.860 --> 03:41:20.510
No, I'm afraid not.

03:41:20.510 --> 03:41:24.850
I do think that there are some
risks though to be aware of,

03:41:24.850 --> 03:41:26.920
which is, for example,

03:41:26.920 --> 03:41:28.930
you could have special interest funding

03:41:28.930 --> 03:41:32.130
and corporate lobbying starts to erode

03:41:32.130 --> 03:41:35.070
at some of the benefits
to lower income customers

03:41:35.070 --> 03:41:37.903
in the ballot initiative
depending on how it's designed.

03:41:38.850 --> 03:41:40.877
And of course our vulnerable communities

03:41:40.877 --> 03:41:43.140
are the ones that stand to benefit

03:41:43.140 --> 03:41:45.730
the most far from these initiatives.

03:41:45.730 --> 03:41:48.263
So we'd have to guard against that.

03:41:48.263 --> 03:41:51.160
And then I think we just
have to be really prescriptive

03:41:52.090 --> 03:41:55.210
so that where the funding
is allocated is very clear

03:41:55.210 --> 03:41:57.193
and laid out for the long term.

03:41:59.570 --> 03:42:02.060
<v ->Great, and Melissa, just to
kind of follow up on that too,</v>

03:42:02.060 --> 03:42:05.870
since EBCE and other
CCAs are public agencies,

03:42:05.870 --> 03:42:08.900
how has EBCE kind
of leveraged that status

03:42:08.900 --> 03:42:11.350
either buy down or reduce
power procurement cost

03:42:11.350 --> 03:42:12.423
for your customers?

03:42:13.740 --> 03:42:17.180
<v ->Yeah, so one of the things
that we read recently did</v>

03:42:17.180 --> 03:42:20.690
was undertake our first
energy prepaid transaction

03:42:20.690 --> 03:42:23.960
to lower our power
procurement costs for customers.

03:42:23.960 --> 03:42:27.920
So essentially we had
tax exempt bonds issued

03:42:27.920 --> 03:42:31.560
to raise revenues to P prepay for PPAs

03:42:31.560 --> 03:42:33.720
and our tax exempt status

03:42:33.720 --> 03:42:36.450
gets us lower interest
rates on the bonds.

03:42:36.450 --> 03:42:38.880
So then working with a prepay supplier,

03:42:38.880 --> 03:42:41.313
we received a discount on our PPAs.

03:42:42.360 --> 03:42:45.070
And I think with our
initial transaction,

03:42:45.070 --> 03:42:49.870
we're looking at a 1.2 to
$1.6 million annual savings

03:42:49.870 --> 03:42:51.620
for our cost customers.

03:42:51.620 --> 03:42:53.220
So that is an example

03:42:53.220 --> 03:42:55.690
of how we've been able
to leverage that status.

03:42:55.690 --> 03:42:59.210
We also achieved an
FMP credit rating recently,

03:42:59.210 --> 03:43:02.510
which enables us to
lower our borrowing costs

03:43:02.510 --> 03:43:03.790
since our counterpart see

03:43:03.790 --> 03:43:06.853
that we're on solid financial
footing and we're lower risk.

03:43:08.120 --> 03:43:09.480
And then we're constantly pursuing

03:43:09.480 --> 03:43:10.727
non-pay resources of funding,

03:43:10.727 --> 03:43:12.750
such as state and federal grants

03:43:12.750 --> 03:43:15.180
to fund our program offerings.

03:43:15.180 --> 03:43:18.810
We received a few hundred
thousand dollars from the USEPA

03:43:18.810 --> 03:43:21.460
and a Brownfield Grant for looking

03:43:21.460 --> 03:43:24.730
at converting brownfield
to EB charging hubs.

03:43:24.730 --> 03:43:28.500
We received 14 million from Cal EVIP.

03:43:28.500 --> 03:43:32.920
We are very engaged in
looking at money it is available

03:43:32.920 --> 03:43:35.080
from the federal
government at the moment.

03:43:35.080 --> 03:43:38.190
And so we're really looking
for any and all opportunities

03:43:38.190 --> 03:43:40.250
to fund programs for our customers

03:43:40.250 --> 03:43:43.583
without needing to do
that on the rate payer bill.

03:43:45.090 --> 03:43:46.032
<v ->Great, thanks Melissa.</v>

03:43:46.032 --> 03:43:46.865
And Scott,

03:43:46.865 --> 03:43:48.633
I didn't wonder to leave
you out of this conversation.

03:43:48.633 --> 03:43:50.750
So I'm gonna kind of pun
over to you really quick.

03:43:50.750 --> 03:43:53.180
What are the items that you
had mentioned it's fixed charge

03:43:53.180 --> 03:43:55.950
and I'm hoping you could
talk a little bit more about that

03:43:55.950 --> 03:43:58.630
and maybe discuss some
of the statutory barriers

03:43:58.630 --> 03:44:01.160
to the extent that there are
some regarding fixed charges.

03:44:01.160 --> 03:44:03.290
What is then kind of
the concerns in the past

03:44:03.290 --> 03:44:05.690
and what are the
benefits of a fixed charge?

03:44:05.690 --> 03:44:07.663
<v ->Yeah, no, thanks to that Grant.</v>

03:44:08.880 --> 03:44:13.880
Look like, statutorily,
any mandatory rate

03:44:15.140 --> 03:44:16.310
that we would file

03:44:16.310 --> 03:44:19.860
there is a statutory limit
of a $10 fixed charge.

03:44:19.860 --> 03:44:22.130
So we were to look beyond that,

03:44:22.130 --> 03:44:23.820
that would be something
that the legislature

03:44:23.820 --> 03:44:28.200
would have to pass a
bill in order to lift that cap.

03:44:28.200 --> 03:44:33.200
But putting that aside, we
do have some voluntary rate.

03:44:33.410 --> 03:44:36.708
It's like an EV rate that does
have a higher a fixed charge.

03:44:36.708 --> 03:44:39.847
We have an EV rate, the
$16 fixed charge for instance,

03:44:39.847 --> 03:44:43.580
but what the benefit of a
higher fixed charge does is that

03:44:43.580 --> 03:44:45.990
we can lower the volume metric rate.

03:44:45.990 --> 03:44:49.580
And why that's so
important for us is that

03:44:49.580 --> 03:44:53.080
as we begin to add more and more EVs,

03:44:53.080 --> 03:44:55.113
more space heating, more water heating,

03:44:56.300 --> 03:44:59.730
having a volumetric
paradigm here in the state

03:44:59.730 --> 03:45:02.681
it is just not compatible

03:45:02.681 --> 03:45:05.300
with adding that much electrical load

03:45:05.300 --> 03:45:07.410
customers just simply can't afford it.

03:45:07.410 --> 03:45:12.410
And so, by putting the
fixed costs into a fixed charge

03:45:12.610 --> 03:45:17.610
and you could take into
consideration equity, income levels,

03:45:18.680 --> 03:45:21.860
there's all kinds of ways
that you could slice this up,

03:45:21.860 --> 03:45:25.480
but to put those fixed
costs into a fixed charge.

03:45:25.480 --> 03:45:27.500
And the question I
always get first, though,

03:45:27.500 --> 03:45:29.110
is what about energy efficiency?

03:45:29.110 --> 03:45:30.780
Don't we need a price signal

03:45:30.780 --> 03:45:34.710
in order to encourage conservation.

03:45:34.710 --> 03:45:37.190
And the fact is that in California

03:45:37.190 --> 03:45:39.800
as the CCAs continue to grow and expand,

03:45:39.800 --> 03:45:44.060
and in our service
territory, probably by 2023,

03:45:44.060 --> 03:45:47.510
we're gonna have more than
80% of our customers departed.

03:45:47.510 --> 03:45:51.330
So we're gonna be
almost a full CCA region

03:45:51.330 --> 03:45:54.930
and the CCA still have a
price signal in the commodity.

03:45:54.930 --> 03:45:58.120
So you could look at
the utility fixed costs

03:45:58.120 --> 03:45:59.808
into a fixed charge and
then you're still getting

03:45:59.808 --> 03:46:03.110
that benefit of a price
signal from the CCA

03:46:03.110 --> 03:46:04.373
on the commodity piece.

03:46:05.347 --> 03:46:07.380
So we really think the experience

03:46:07.380 --> 03:46:10.490
that our customers have
had with higher fix charges

03:46:10.490 --> 03:46:14.270
again, for EV charging,
it's wildly successful.

03:46:14.270 --> 03:46:17.420
Our customers love it
because it's more predictable.

03:46:17.420 --> 03:46:19.640
You get less volatility in your bill

03:46:19.640 --> 03:46:22.943
and the customer reaction
has been really, really strong.

03:46:25.250 --> 03:46:26.190
<v ->Great, thanks Scott.</v>

03:46:26.190 --> 03:46:27.890
And I'm gonna ask one more question,

03:46:27.890 --> 03:46:29.342
I think this will be for Michael.

03:46:29.342 --> 03:46:31.570
Then I'm gonna turn over
to our Commissioners.

03:46:31.570 --> 03:46:33.993
Michael, this has come up quite a bit,

03:46:33.993 --> 03:46:35.690
undergrounding electric infrastructure,

03:46:35.690 --> 03:46:38.120
though it may be incredibly
expensive in the near term.

03:46:38.120 --> 03:46:40.260
Is it really the only long term option

03:46:40.260 --> 03:46:43.020
for addressing utility
wildfire risk in these areas?

03:46:43.020 --> 03:46:45.370
I'd like to hear kind of
your thoughts on that.

03:46:48.900 --> 03:46:50.650
Oh, I think you're on mute Michael.

03:46:52.770 --> 03:46:57.040
<v ->I think undergrounding may
be an tool in certain places,</v>

03:46:57.040 --> 03:47:00.340
but what's really critical
is evaluating the cost

03:47:00.340 --> 03:47:02.150
and benefits of undergrounding

03:47:02.150 --> 03:47:05.330
as compared to a suite
of other alternatives, right?

03:47:05.330 --> 03:47:07.750
And until we have a really
thorough going analysis,

03:47:07.750 --> 03:47:10.140
we can't answer the question,

03:47:10.140 --> 03:47:12.470
is undergrounding the right way to go

03:47:12.470 --> 03:47:15.203
at pick your mileage per year.

03:47:16.580 --> 03:47:20.070
And I think that part of that analysis

03:47:20.070 --> 03:47:24.130
needs to be evaluating interventions

03:47:24.130 --> 03:47:26.690
outside of the utility space,

03:47:26.690 --> 03:47:29.220
because when you go
into the wildfire community,

03:47:29.220 --> 03:47:31.960
the fire science community,
the forest ecology community,

03:47:31.960 --> 03:47:36.250
and this is not so much
Scott's jurisdiction in San Diego,

03:47:36.250 --> 03:47:39.570
but as we go to Northern
California certainly,

03:47:39.570 --> 03:47:40.610
and into the Sierra

03:47:40.610 --> 03:47:44.450
where so much of the
really high risk terrain is

03:47:44.450 --> 03:47:49.450
there are alternative
approaches that foresters can take

03:47:50.270 --> 03:47:53.560
that require a lot less
skill, a lot less coordination

03:47:53.560 --> 03:47:56.890
with other pieces of
infrastructure like owns the street,

03:47:56.890 --> 03:47:59.990
and when was it last paved
and what else is in the street

03:48:01.060 --> 03:48:03.420
and who else is on
the power line, right?

03:48:03.420 --> 03:48:04.700
That's no longer gonna be there,

03:48:04.700 --> 03:48:06.863
the poles that aren't
gonna be there anymore.

03:48:07.850 --> 03:48:09.240
All of that coordination,

03:48:09.240 --> 03:48:12.660
doesn't have to happen if we
have better fuels management,

03:48:12.660 --> 03:48:14.000
like the fuels management

03:48:14.000 --> 03:48:16.170
and I highlight this
in my conversations,

03:48:16.170 --> 03:48:19.010
the fuels management that
Southern California Edison does

03:48:19.010 --> 03:48:22.730
and has done on a
routine basis on its its land

03:48:22.730 --> 03:48:24.490
in the Southern Sierra, right?

03:48:24.490 --> 03:48:27.940
That's a model for what needs
to happen in many places.

03:48:27.940 --> 03:48:32.940
That model per acre is cheap
in comparison to undergrounding

03:48:33.970 --> 03:48:38.060
it's cheap, maybe even in
comparison to cover conductor,

03:48:38.060 --> 03:48:39.600
but that doesn't mean
that undergrounding

03:48:39.600 --> 03:48:41.710
won't have an appropriate
role in certain places.

03:48:41.710 --> 03:48:44.313
They're gonna be places
where we need to do it.

03:48:45.370 --> 03:48:49.630
But I think until we have a
much more fullsome conversation

03:48:49.630 --> 03:48:52.600
around risk management for the state,

03:48:52.600 --> 03:48:56.370
it might be premature to commit

03:48:56.370 --> 03:48:59.340
to a large amount of underground.

03:48:59.340 --> 03:49:04.170
Now, this is not to weigh
in on any particular proposal

03:49:04.170 --> 03:49:09.170
'cause I don't have the
expertise to really say,

03:49:10.320 --> 03:49:13.240
but I think what I can say is,

03:49:13.240 --> 03:49:15.990
we need to have that
broad risk assessment.

03:49:15.990 --> 03:49:19.610
OEIS is the agency
within state government

03:49:19.610 --> 03:49:22.050
that has the expertise
to start to do that

03:49:22.930 --> 03:49:25.470
but they don't really have
the authority right now.

03:49:25.470 --> 03:49:29.130
And I think it could be highly
cost effective for the state

03:49:29.130 --> 03:49:31.510
and more than being cost effective

03:49:31.510 --> 03:49:33.910
is gonna create the kind of safety

03:49:33.910 --> 03:49:36.393
that we all really want and need.

03:49:37.470 --> 03:49:39.580
We need to avoid more green bills

03:49:40.625 --> 03:49:44.210
and doing that is gonna require

03:49:44.210 --> 03:49:46.440
both reducing utility ignition,

03:49:46.440 --> 03:49:48.030
but also making sure that

03:49:48.030 --> 03:49:51.010
when utility ignitions inevitably occur,

03:49:51.010 --> 03:49:53.010
that the environment in which they occur

03:49:53.010 --> 03:49:55.370
is much less dangerous.

03:49:55.370 --> 03:49:58.410
And right now, we have a
very dangerous environment

03:49:58.410 --> 03:50:00.070
in many parts of the state.

03:50:00.070 --> 03:50:02.210
And so the question is how much of one

03:50:02.210 --> 03:50:03.230
versus how much of the other,

03:50:03.230 --> 03:50:04.800
what's the optimal spend?

03:50:04.800 --> 03:50:05.633
We don't know.

03:50:05.633 --> 03:50:07.427
And I think we need to figure it out.

03:50:09.270 --> 03:50:10.130
<v ->Great, thank you, Michael.</v>

03:50:10.130 --> 03:50:11.420
Appreciate your comments on that.

03:50:11.420 --> 03:50:13.420
I'm now gonna open it
up to our Commissioners.

03:50:13.420 --> 03:50:15.920
Commissioners, any
questions for a panelist today?

03:50:24.129 --> 03:50:26.680
Commissioner Rechtschaffen?

03:50:26.680 --> 03:50:29.865
<v ->So Michael, to follow
up on what you just said</v>

03:50:29.865 --> 03:50:33.343
in an ideal world,

03:50:34.330 --> 03:50:37.900
you would have one
state agency may be OEISs

03:50:37.900 --> 03:50:39.660
or some agency like that

03:50:39.660 --> 03:50:42.850
doing a comprehensive comparative risk

03:50:42.850 --> 03:50:44.830
or risk spend de efficiency analysis

03:50:44.830 --> 03:50:49.830
of both utility investment
and land use investments

03:50:50.540 --> 03:50:52.990
or as management practices
and so forth to decide,

03:50:52.990 --> 03:50:55.370
which is most cost effective.

03:50:55.370 --> 03:50:58.403
Is that the gist of it?

03:50:59.510 --> 03:51:00.553
<v ->Yeah, Commission Rechtschaffen,</v>

03:51:00.553 --> 03:51:03.000
I think that's exactly the gist of it.

03:51:03.000 --> 03:51:07.380
It's applying the models that
have been developed by the PUC

03:51:07.380 --> 03:51:11.070
to evaluate utility wildfire mitigation,

03:51:11.070 --> 03:51:12.730
to a broader scope of activities

03:51:12.730 --> 03:51:15.230
that are also important
to reducing wildfire risk.

03:51:21.442 --> 03:51:25.170
<v ->Great,any other questions
from our Commissioners?</v>

03:51:25.170 --> 03:51:27.833
If not, I have a couple
more I can throw out there.

03:51:28.880 --> 03:51:30.130
Oh, Commissioner Monahan.

03:51:34.730 --> 03:51:37.143
Oh, Commissioner I think you're on mute.

03:51:38.620 --> 03:51:41.340
<v ->I sure am on mute
(laughs), thank you.</v>

03:51:41.340 --> 03:51:43.363
I'm curious about,

03:51:44.400 --> 03:51:46.760
I mean, I've heard
FERA amount of concern

03:51:46.760 --> 03:51:49.020
around utilities investing

03:51:49.020 --> 03:51:51.440
in electric vehicle
charging infrastructure

03:51:51.440 --> 03:51:54.910
and what the appropriate
role is of utilities vis-a-vis

03:51:54.910 --> 03:51:58.530
the state goals of veering out polluting

03:51:58.530 --> 03:52:00.660
from our transportation system.

03:52:00.660 --> 03:52:05.660
I'm curious about the
focus on low income families

03:52:06.280 --> 03:52:09.010
and families that live
and apartment buildings.

03:52:09.010 --> 03:52:14.010
And whether this panel
sees a role in utilities,

03:52:14.720 --> 03:52:18.590
supporting communities that otherwise

03:52:18.590 --> 03:52:20.540
would have a difficult
time getting access

03:52:20.540 --> 03:52:22.113
to charging infrastructure.

03:52:22.970 --> 03:52:25.590
That really specific focused on people,

03:52:25.590 --> 03:52:27.853
mostly who live in rental units,

03:52:29.310 --> 03:52:30.880
whether there's any thoughts

03:52:30.880 --> 03:52:33.330
about what the appropriate
utility role would be.

03:52:37.850 --> 03:52:39.823
<v ->Commission I appreciate
you bringing that up</v>

03:52:39.823 --> 03:52:44.140
because it is so important
when we talk about access

03:52:44.140 --> 03:52:48.590
to look at people particularly
in multiunit apartments

03:52:50.309 --> 03:52:54.504
who can't put a charter
station in their garage

03:52:54.504 --> 03:52:56.454
'cause they don't have a garage, right?

03:52:57.540 --> 03:53:02.540
And I will say that that
has been the one exception

03:53:02.860 --> 03:53:06.970
that TURN has made in
terms of our electric vehicle

03:53:08.710 --> 03:53:10.430
charging station policy.

03:53:10.430 --> 03:53:15.430
We have seen a (indistinct) for a focus,

03:53:17.420 --> 03:53:20.800
not on the individual homeowners

03:53:20.800 --> 03:53:22.860
who live in single family residents.

03:53:22.860 --> 03:53:24.730
We think it's their responsibility

03:53:24.730 --> 03:53:29.340
to put in a charging station
in their garage, okay?

03:53:29.340 --> 03:53:31.250
Charging port, it's
actually pretty cheap,

03:53:31.250 --> 03:53:34.000
I've done it myself, 300 bucks, okay?

03:53:34.000 --> 03:53:35.460
A licensed electrician.

03:53:35.460 --> 03:53:37.050
I don't know where people come up

03:53:37.050 --> 03:53:39.260
with these thousands
of dollars estimate.

03:53:39.260 --> 03:53:43.902
But people who are in
the apartment building

03:53:43.902 --> 03:53:45.330
don't have that option.

03:53:45.330 --> 03:53:50.330
I still believe that there
are other revenue sources

03:53:50.440 --> 03:53:54.053
and that that's exactly
what part of the point of sale.

03:53:56.592 --> 03:54:00.010
the proposal I have some
of the money should go

03:54:00.010 --> 03:54:03.210
to exactly the multiunit (indistinct),

03:54:03.210 --> 03:54:05.870
but that is the one area in which TURN

03:54:05.870 --> 03:54:10.063
has selectively been in supportive.

03:54:14.008 --> 03:54:15.973
<v ->Right, thank you.</v>

03:54:15.973 --> 03:54:17.550
Just to follow up,

03:54:17.550 --> 03:54:22.550
I would urge the strong
consideration of other approaches

03:54:25.830 --> 03:54:29.523
to incenting landlords
to make an investment,

03:54:30.466 --> 03:54:33.283
I mean, if your target
is apartment building,

03:54:34.150 --> 03:54:38.110
then tax incentives for landlords,

03:54:38.110 --> 03:54:42.100
for adding EV stations in
their apartment buildings

03:54:42.100 --> 03:54:44.490
that's the appropriate approach,

03:54:44.490 --> 03:54:47.730
leave the utilities out of the equation

03:54:47.730 --> 03:54:51.740
and the state can put
some of that surplus funding

03:54:51.740 --> 03:54:56.740
toward incentivizing the
construction of EV stations

03:54:57.850 --> 03:54:59.948
in apartment buildings.

03:54:59.948 --> 03:55:04.948
I mean, landlords are
sensitive to opportunities

03:55:05.010 --> 03:55:08.480
to get money, to help them do things

03:55:08.480 --> 03:55:11.820
that will make their
apartments more appealing.

03:55:11.820 --> 03:55:15.850
And having EV charges is something

03:55:15.850 --> 03:55:19.710
that might make their
apartment building more attractive

03:55:19.710 --> 03:55:22.010
than the one down the street.

03:55:22.010 --> 03:55:26.610
So again, it's not a
natural monopoly situation,

03:55:26.610 --> 03:55:28.200
we're in a market.

03:55:28.200 --> 03:55:30.420
There's no reason that the utility

03:55:30.420 --> 03:55:34.010
should be involved in
this, no reason whatsoever.

03:55:34.010 --> 03:55:37.610
The state absolutely provide incentives,

03:55:37.610 --> 03:55:40.170
provide tax breaks or whatever.

03:55:40.170 --> 03:55:43.910
I mean, there are different
ways things can be fashioned,

03:55:43.910 --> 03:55:47.213
but it's not a public utility issue.

03:55:52.050 --> 03:55:52.883
<v ->Scott, go ahead</v>

03:55:52.883 --> 03:55:55.340
and then we'll go to
Michael and then Melissa.

03:55:55.340 --> 03:55:56.760
<v ->Yeah, so Commissioner,</v>

03:55:56.760 --> 03:56:00.310
obviously gets a lot of
response from this question.

03:56:00.310 --> 03:56:03.660
So yeah, look, it's
always a delicate balance.

03:56:03.660 --> 03:56:08.430
And so, we're obviously
concerned about affordability

03:56:08.430 --> 03:56:10.670
and continue rate increases.

03:56:10.670 --> 03:56:13.050
The other thing though, that
we're equally concerned about,

03:56:13.050 --> 03:56:16.030
I think both the energy
Commission and the PUC

03:56:16.030 --> 03:56:18.140
is as we go through this transition,

03:56:18.140 --> 03:56:20.510
that there is a serious equity issue.

03:56:20.510 --> 03:56:23.070
We're seeing it in solar today.

03:56:23.070 --> 03:56:24.000
We're gonna see it.

03:56:24.000 --> 03:56:26.250
We see it in EV infrastructure.

03:56:26.250 --> 03:56:29.090
We see it in EV vehicle purchases.

03:56:29.090 --> 03:56:31.910
We're gonna see it probably
as we start to transition

03:56:31.910 --> 03:56:36.170
from gas more to
electrification of homes,

03:56:36.170 --> 03:56:39.200
it's those customers who can afford it,

03:56:39.200 --> 03:56:40.367
are going to pay for it.

03:56:40.367 --> 03:56:42.610
And those who can't are gonna struggle,

03:56:42.610 --> 03:56:44.040
and a lot of them are
gonna get left behind.

03:56:44.040 --> 03:56:45.690
That's a long way of saying that,

03:56:45.690 --> 03:56:47.820
I do you think that there
is a role for the utility

03:56:47.820 --> 03:56:52.553
especially in supporting
underserved communities

03:56:52.553 --> 03:56:54.410
and it's something that
we've had great success on

03:56:54.410 --> 03:56:55.763
with our EV programs today.

03:56:57.620 --> 03:56:58.950
<v ->Great, we'll go
Michael and Melissa,</v>

03:56:58.950 --> 03:57:01.030
and then question from
Commissioner McAllister.

03:57:01.030 --> 03:57:02.550
Go ahead, Michael.

03:57:02.550 --> 03:57:04.560
<v ->I'll just know quickly, I
think it's really important</v>

03:57:04.560 --> 03:57:07.020
to consider when EVs are charging.

03:57:07.020 --> 03:57:10.680
And I think about the need to invest

03:57:10.680 --> 03:57:13.250
in charging networks
that are where people work

03:57:13.250 --> 03:57:15.230
or at least where
they are during the day

03:57:15.230 --> 03:57:17.420
and being very systematic about that

03:57:17.420 --> 03:57:22.090
and making sure that folks
who are low income in California

03:57:22.090 --> 03:57:25.570
have a place to charge
at work if they drive to work

03:57:25.570 --> 03:57:28.220
so that we can reduce system loads

03:57:28.220 --> 03:57:30.150
and better manage the solar peak,

03:57:30.150 --> 03:57:32.633
'cause it's better if we
want to achieve our goals,

03:57:32.633 --> 03:57:34.370
what we really want people to do

03:57:34.370 --> 03:57:36.130
is charge their car during the day.

03:57:36.130 --> 03:57:38.700
And most people in California,

03:57:38.700 --> 03:57:40.113
were barely affording to live here

03:57:40.113 --> 03:57:41.750
because it's so expensive

03:57:41.750 --> 03:57:43.960
are out working their
tails off during the day,

03:57:43.960 --> 03:57:45.040
they're not at home.

03:57:45.040 --> 03:57:47.690
And so I think it's really important

03:57:47.690 --> 03:57:49.473
to emphasize that goal as well.

03:57:50.500 --> 03:57:51.333
Thank you.

03:57:52.230 --> 03:57:53.063
<v ->Thanks Michael.</v>

03:57:53.063 --> 03:57:54.590
Melissa.

03:57:54.590 --> 03:57:57.350
<v ->Yes, so I just
wanted to mention that</v>

03:57:57.350 --> 03:58:00.440
in coordination with the CEC,

03:58:00.440 --> 03:58:03.690
we gave out 17.3 million in incentives

03:58:03.690 --> 03:58:06.730
as part of the Cal EVIP program.

03:58:06.730 --> 03:58:09.690
A minimum of 50% of the funding

03:58:09.690 --> 03:58:13.250
is invested in disadvantage
and low income communities.

03:58:13.250 --> 03:58:15.600
We are installing a
number of fast chargers

03:58:15.600 --> 03:58:17.490
and half of those incentives

03:58:17.490 --> 03:58:19.640
have been allocated for projects

03:58:19.640 --> 03:58:21.980
that are being built near
dense concentrations

03:58:21.980 --> 03:58:24.730
of multifamily housing to help renters

03:58:24.730 --> 03:58:26.960
who don't have access to home charging,

03:58:26.960 --> 03:58:28.820
make the transition to EVs.

03:58:28.820 --> 03:58:33.040
So there are options in
addition to workplace charging

03:58:33.040 --> 03:58:37.050
for renters that we are
exploring in our territory.

03:58:37.050 --> 03:58:40.680
I would agree with the sentiment
that's been expressed here

03:58:40.680 --> 03:58:44.870
that this doesn't have to
be on the utility bill, right?

03:58:44.870 --> 03:58:46.480
So we're using Cal EVIP,

03:58:46.480 --> 03:58:48.390
we're looking for other funding streams,

03:58:48.390 --> 03:58:52.922
there's more EV and
transportation electrification money

03:58:52.922 --> 03:58:55.333
being made available
through the state budget.

03:58:57.710 --> 03:59:01.553
If funding is made available
through the utility bills,

03:59:01.553 --> 03:59:04.610
then that's something that
EBCE would like to share

03:59:04.610 --> 03:59:06.700
with all of the other
load serving entities

03:59:06.700 --> 03:59:08.420
that are doing building

03:59:08.420 --> 03:59:11.220
or transportation
electrification program.

03:59:11.220 --> 03:59:13.670
But isn't it better to
just not put it there,

03:59:13.670 --> 03:59:15.310
to begin with for all of the reasons

03:59:15.310 --> 03:59:17.630
that we've mentioned
utility rates going up,

03:59:17.630 --> 03:59:19.620
trying to find a more equitable solution

03:59:19.620 --> 03:59:22.183
is much better if we can
keep it at the state level.

03:59:23.460 --> 03:59:24.435
<v ->Great, thank you, Melissa.</v>

03:59:24.435 --> 03:59:26.263
Commission McAlister you had a question?

03:59:28.290 --> 03:59:30.350
<v ->Yes, well, I actually
just kind of wanted</v>

03:59:30.350 --> 03:59:32.710
to inject a thought
into this conversation

03:59:32.710 --> 03:59:33.860
that we've been having.

03:59:34.720 --> 03:59:39.653
And this idea that behind
the meter investments,

03:59:41.210 --> 03:59:43.550
the utility just should keep out of it.

03:59:43.550 --> 03:59:46.967
And I just think that's a
little bit of a false economy,

03:59:46.967 --> 03:59:49.535
the rate making is in it.

03:59:49.535 --> 03:59:52.750
And so the the incentive

03:59:52.750 --> 03:59:55.110
that a customer may or may not feel,

03:59:55.110 --> 03:59:56.673
to electrify and whether they want,

03:59:56.673 --> 03:59:58.200
whether they have the capital

03:59:58.200 --> 04:00:00.660
or whether they're
gonna go from financing

04:00:00.660 --> 04:00:02.790
that value proposition
fundamentally revolves

04:00:02.790 --> 04:00:06.460
around the rate structure
that apply to that customer

04:00:06.460 --> 04:00:09.850
and the relative cost gas
that they would be displacing.

04:00:09.850 --> 04:00:11.690
And so I guess I'm kind of wanting

04:00:11.690 --> 04:00:15.270
a more integrated conversation here

04:00:15.270 --> 04:00:18.010
as we are really looking
at this more intimate.

04:00:18.010 --> 04:00:19.490
I know tomorrow is the gas piece,

04:00:19.490 --> 04:00:21.470
but at this more intimate relationship

04:00:21.470 --> 04:00:23.920
between electricity and gas

04:00:23.920 --> 04:00:28.650
and Mark Tony you mentioned,

04:00:28.650 --> 04:00:31.580
private capital isn't part of the mix.

04:00:31.580 --> 04:00:34.130
Well, I also kind
would push back on that

04:00:34.130 --> 04:00:36.330
because yes, we have a budget surplus

04:00:36.330 --> 04:00:39.610
and yes, we're gonna have
some number of billions of dollar,

04:00:39.610 --> 04:00:41.150
likely from federal state,

04:00:41.150 --> 04:00:44.360
funds in the near term
invest in building decap.

04:00:44.360 --> 04:00:46.860
I agree with Michael,
that load flexibility

04:00:46.860 --> 04:00:51.803
is equally important on the
building side as on the EV side,

04:00:53.750 --> 04:00:55.297
but that's just a drop in the bucket

04:00:55.297 --> 04:00:56.630
in terms of the overall investment

04:00:56.630 --> 04:00:57.463
that's gonna have to be made

04:00:57.463 --> 04:00:59.670
and our building's going
forward for next up with decades.

04:00:59.670 --> 04:01:02.600
And so private capital's
gonna have to come in

04:01:02.600 --> 04:01:03.593
at some level.

04:01:04.520 --> 04:01:06.910
And so again, the value proposition

04:01:06.910 --> 04:01:08.137
for the customers gotta be there.

04:01:08.137 --> 04:01:09.670
And so I guess I'm kind of just wanting

04:01:09.670 --> 04:01:13.260
a little more integrated
conversation here about

04:01:13.260 --> 04:01:17.670
the customer's view and
how we make it going forward

04:01:17.670 --> 04:01:20.950
with rate design and all
the other tools in our toolbox

04:01:20.950 --> 04:01:21.963
valuable for the customer

04:01:21.963 --> 04:01:26.873
to make the climate
solution type of decision.

04:01:29.479 --> 04:01:31.967
<v ->Mark or Catherine, would
you like to respond (indistinct)?</v>

04:01:33.020 --> 04:01:35.991
<v ->A quick response, thank
you Commissioner McAlister.</v>

04:01:35.991 --> 04:01:40.580
So, my problem is friends tell me that

04:01:40.580 --> 04:01:43.890
when you want people
to use a new product,

04:01:43.890 --> 04:01:47.610
to shift their use to
a different product

04:01:47.610 --> 04:01:48.934
from what they're using now,

04:01:48.934 --> 04:01:52.940
that you should reduce
the cost and not increase it.

04:01:52.940 --> 04:01:57.070
And that increasing the cost
is absolutely the worst thing.

04:01:57.070 --> 04:01:59.723
So I will lead with what is question,

04:02:01.262 --> 04:02:02.687
a granddaughter and I watched

04:02:02.687 --> 04:02:04.000
"The Stinky &amp; Dirty Show" with her.

04:02:04.000 --> 04:02:07.440
And if you haven't
seen it, great learning,

04:02:07.440 --> 04:02:09.770
great problem solving show.

04:02:09.770 --> 04:02:12.900
And they always ask what if we were able

04:02:12.900 --> 04:02:16.970
to cut the price of electricity by half?

04:02:16.970 --> 04:02:20.552
What if I guarantee
that cutting the price

04:02:20.552 --> 04:02:22.330
of electricity by half

04:02:22.330 --> 04:02:27.200
would do more to
generate people's interest

04:02:27.200 --> 04:02:28.520
more electrifying everything

04:02:28.520 --> 04:02:32.040
faster than anything else on the table.

04:02:32.040 --> 04:02:36.200
So I'd like to leave this
panel with that question.

04:02:36.200 --> 04:02:41.200
What if and what could we
to cut electricity crisis in half?

04:02:46.300 --> 04:02:47.180
<v ->Great, thank you, Mark.</v>

04:02:47.180 --> 04:02:49.560
And that actually brings us
to the conclusion of the panel.

04:02:49.560 --> 04:02:51.340
So you get the last word.

04:02:51.340 --> 04:02:53.580
Jack, I think that
concludes it for this panel.

04:02:53.580 --> 04:02:55.450
I appreciate all the
panelists for joining,

04:02:55.450 --> 04:02:57.450
a lot of sensitivity in this,

04:02:57.450 --> 04:02:58.790
I had a lot more other questions talked

04:02:58.790 --> 04:03:00.590
to about underperforming programs

04:03:00.590 --> 04:03:02.500
and things like that that
we may should focus on,

04:03:02.500 --> 04:03:05.150
but this is a great conversation,

04:03:05.150 --> 04:03:06.600
I think there's a lot to unbundle here.

04:03:06.600 --> 04:03:09.060
I'm really excited to see the
tremendous amount of state

04:03:09.060 --> 04:03:11.870
and federal funding
flowing either to California,

04:03:11.870 --> 04:03:14.390
directly to the state or
to end use customers.

04:03:14.390 --> 04:03:15.800
And so a lot of opportunity here,

04:03:15.800 --> 04:03:17.490
but obviously there's
a lot more to look at

04:03:17.490 --> 04:03:19.560
in terms of long term, more sustainable,

04:03:19.560 --> 04:03:20.960
non rate payer funding sources.

04:03:20.960 --> 04:03:21.990
So thank you for your time

04:03:21.990 --> 04:03:23.990
and Jack, I'm gonna hand it back to you.

04:03:24.850 --> 04:03:27.920
<v ->Thank you, Grant, and
thank you all the panelists.</v>

04:03:27.920 --> 04:03:28.753
I don't know about you,

04:03:28.753 --> 04:03:29.650
I feel able to do that for another hour

04:03:29.650 --> 04:03:33.173
and there's so much
discussion there we had.

04:03:34.270 --> 04:03:36.370
We have another amazing panel here,

04:03:36.370 --> 04:03:40.300
I know it's gonna
be a lot of discussion,

04:03:40.300 --> 04:03:45.300
but our next panel is electric
rate making reform proposals

04:03:46.690 --> 04:03:48.580
in considerations.

04:03:48.580 --> 04:03:52.100
We have I'll bring on Paul Phillips,

04:03:52.100 --> 04:03:55.604
who is the supervisor of
CPUC Retail Rates team.

04:03:55.604 --> 04:03:56.842
Achintya Madduri,

04:03:56.842 --> 04:04:00.010
also the Retail Rates
team to lead this panel.

04:04:00.010 --> 04:04:02.403
So welcome Paul, and Achintya.

04:04:05.720 --> 04:04:07.733
<v ->Good afternoon, hopefully
everyone can hear me.</v>

04:04:09.630 --> 04:04:10.892
Good.

04:04:10.892 --> 04:04:12.560
Well, let's get started here

04:04:12.560 --> 04:04:13.393
and hopefully we'll have time to take

04:04:13.393 --> 04:04:15.320
a little bit of a five
minute health break

04:04:15.320 --> 04:04:18.170
somewhere in the middle
of this very long panel.

04:04:18.170 --> 04:04:21.350
I wanted to start with a few remarks

04:04:21.350 --> 04:04:23.960
and then begin turning
it over to our panelists,

04:04:23.960 --> 04:04:25.760
which we will introduce in a moment.

04:04:28.020 --> 04:04:29.473
Just one moment here.

04:04:32.380 --> 04:04:37.380
And so first, my co-moderator
of the day is Achintya Madduri

04:04:37.720 --> 04:04:39.023
as a senior analyst with energy division

04:04:39.023 --> 04:04:41.470
of a Retail Rates group,

04:04:41.470 --> 04:04:45.010
and will be helpful to ask
some provocative questions

04:04:45.010 --> 04:04:47.560
when we get to that part
of the program here today.

04:04:48.500 --> 04:04:49.950
But before we get there,

04:04:49.950 --> 04:04:52.320
I wanted to thank
everyone for participating

04:04:52.320 --> 04:04:53.540
in this great event.

04:04:53.540 --> 04:04:54.932
It's been a lot of
planning and a lot of time

04:04:54.932 --> 04:04:59.679
put into interviewing folks
and getting people ready for it.

04:04:59.679 --> 04:05:01.380
And in particular wanted
to thank our leaders

04:05:01.380 --> 04:05:03.880
from the CCPUC, Energy Commission,

04:05:03.880 --> 04:05:06.960
ARB legislators and their staff,

04:05:06.960 --> 04:05:09.070
and everyone else
that's listening in today.

04:05:09.070 --> 04:05:10.743
So thank you for being here.

04:05:11.610 --> 04:05:14.100
Secondly, let me just
take a quick moment

04:05:14.100 --> 04:05:15.478
to acknowledge the
tremendous amount of work

04:05:15.478 --> 04:05:17.720
that Jack Chang has put into this event

04:05:18.828 --> 04:05:21.600
to not have done that been
amazing amounts of work

04:05:21.600 --> 04:05:24.377
and time and extra hours
and (indistinct) efforts.

04:05:24.377 --> 04:05:26.850
And so, just a big kudos to Jack

04:05:26.850 --> 04:05:30.483
for an incredibly well
done job on all of this.

04:05:32.700 --> 04:05:35.100
So in reality, we could spend
probably a whole day or two

04:05:35.100 --> 04:05:36.630
talking about rates and costs

04:05:36.630 --> 04:05:38.380
and all the affordability challenges

04:05:38.380 --> 04:05:41.240
that are stemming from this area

04:05:41.240 --> 04:05:42.760
and all the challenges that are facing

04:05:42.760 --> 04:05:44.800
our customers and our constituents.

04:05:44.800 --> 04:05:46.330
But unfortunately we
only have two hours here,

04:05:46.330 --> 04:05:47.660
which seems like long enough,

04:05:47.660 --> 04:05:51.130
but just wanted to say
this is a pretty serious time

04:05:51.130 --> 04:05:53.640
for many of our low income
and vulnerable customers.

04:05:53.640 --> 04:05:57.330
We are on the heels of
an unpredictable pandemic,

04:05:57.330 --> 04:05:59.580
a lot of inflationary
concerns on our economy

04:06:00.490 --> 04:06:03.000
rising customer rear just
as Mark Tony pointed out

04:06:03.000 --> 04:06:04.125
to the tune of almost $2 billion

04:06:04.125 --> 04:06:06.693
before cap funding was distributed.

04:06:08.580 --> 04:06:09.960
Higher rates,

04:06:09.960 --> 04:06:13.200
large rate increases coming
in here in the first quarter,

04:06:13.200 --> 04:06:15.640
deepening housing
crisis for our customers

04:06:15.640 --> 04:06:18.890
and ever widening
inequality in California.

04:06:18.890 --> 04:06:20.770
So these issues are funding center,

04:06:20.770 --> 04:06:24.160
they exacerbate the urgency
for discussing affordability

04:06:24.160 --> 04:06:27.580
while we also discuss
investments in electrification,

04:06:27.580 --> 04:06:31.380
while our mitigation
gas and safety matters

04:06:31.380 --> 04:06:33.590
and transition costs,
which are an essential part

04:06:33.590 --> 04:06:35.590
of our climate strategies going forward.

04:06:36.740 --> 04:06:39.440
So areas of affordability
concern in the Central Valley,

04:06:39.440 --> 04:06:41.660
mainly through the spine of California

04:06:41.660 --> 04:06:43.060
are growing in size and severity.

04:06:43.060 --> 04:06:45.079
We know this from the
excellent measurements

04:06:45.079 --> 04:06:46.800
that we've been putting into place

04:06:46.800 --> 04:06:49.840
in the affordability proceeding
phases one and two,

04:06:49.840 --> 04:06:52.350
while our IOU rate
increases are accelerating

04:06:52.350 --> 04:06:56.050
as was well noted in
Grant's panel just now.

04:06:56.050 --> 04:06:58.340
So IOU revenue recovery and rates models

04:06:58.340 --> 04:07:00.579
will always be biased
towards rate-based growth

04:07:00.579 --> 04:07:02.740
via capital expenditures.

04:07:02.740 --> 04:07:03.740
And we have to look out for that.

04:07:03.740 --> 04:07:05.086
We have to be thinking out of the box

04:07:05.086 --> 04:07:07.106
about how we can mitigate some of this.

04:07:07.106 --> 04:07:10.080
Every policy choice that
we make closes the tradeoff,

04:07:10.080 --> 04:07:11.395
every program budget and rate design

04:07:11.395 --> 04:07:13.750
has a range of affordability impacts.

04:07:13.750 --> 04:07:16.480
And that's what we're
here to explore today.

04:07:16.480 --> 04:07:17.755
So all this conversation
might get a little bit wonky

04:07:17.755 --> 04:07:19.863
and maybe a little bit
controversial or heated at times

04:07:19.863 --> 04:07:21.925
I think the objectives and our mission

04:07:21.925 --> 04:07:25.430
couldn't be more straightforward
or clear at this point.

04:07:25.430 --> 04:07:26.850
We are trying to create
some alignment here,

04:07:26.850 --> 04:07:28.165
I think between industry leaders,

04:07:28.165 --> 04:07:30.637
decision makers about
the innovative cost

04:07:30.637 --> 04:07:33.320
and great solutions
that will be required of us.

04:07:33.320 --> 04:07:35.200
And that will hopefully
in some measure stem

04:07:35.200 --> 04:07:37.080
the tide of rising inequality,

04:07:37.080 --> 04:07:40.170
and protect essential
services for California.

04:07:40.170 --> 04:07:43.160
We have an excellent panel of speakers

04:07:43.160 --> 04:07:44.380
from our utility and solar industry,

04:07:44.380 --> 04:07:46.434
our consumer and
environmental advocacy groups

04:07:46.434 --> 04:07:49.033
and from Academia as well.

04:07:49.920 --> 04:07:51.263
So if we could advance to the next slide

04:07:51.263 --> 04:07:53.163
and we'll introduce these folks.

04:07:54.140 --> 04:07:55.440
I've broken up the panel,

04:07:55.440 --> 04:07:57.220
we have a number of
people to hear from today,

04:07:57.220 --> 04:07:59.720
but with our nine folks
that are on this panel,

04:07:59.720 --> 04:08:01.544
I thought it made sense to break it up

04:08:01.544 --> 04:08:05.340
into a series of panelists
with short presentations,

04:08:05.340 --> 04:08:08.710
to give each followed
by some discussions

04:08:08.710 --> 04:08:12.650
that are gonna be responding
with five minutes piece

04:08:12.650 --> 04:08:14.660
over a 20 minute period hopefully

04:08:14.660 --> 04:08:16.440
to those folks with slides.

04:08:16.440 --> 04:08:19.830
And so we have Mohit Chhabra

04:08:19.830 --> 04:08:22.540
who will kick us off
with a larger presentation

04:08:22.540 --> 04:08:24.619
on some great work that NRDC has done

04:08:24.619 --> 04:08:27.720
with (indistinct) consulting on looking

04:08:27.720 --> 04:08:28.900
at a number of these proposals

04:08:28.900 --> 04:08:29.787
in combination with each other

04:08:29.787 --> 04:08:33.080
and how they impact rates
and build over the long haul.

04:08:33.080 --> 04:08:34.590
We'll be eager to
kind of hear about that,

04:08:34.590 --> 04:08:36.370
how that sets the table
for the conversation

04:08:36.370 --> 04:08:38.000
for the rest of our panel.

04:08:38.000 --> 04:08:38.970
We have Jennifer Dowdell,

04:08:38.970 --> 04:08:41.340
as a senior policy expert
from the Utility Reform Network

04:08:41.340 --> 04:08:42.560
who will be talking a little bit about

04:08:42.560 --> 04:08:45.050
some rate case reforms
that she has in mind.

04:08:45.050 --> 04:08:47.920
Mark LeBel, an associate with
Regulatory Assistance Project.

04:08:47.920 --> 04:08:51.850
Glad to have him here to
speak to import export charges,

04:08:51.850 --> 04:08:55.000
what's fair for compensation
in the future of rates.

04:08:55.000 --> 04:08:56.470
Meredith Fowlie will be joining us

04:08:56.470 --> 04:08:58.810
as director of the Energy
Institute of Haas, Berkeley

04:08:58.810 --> 04:09:02.050
to speak to income-based fixed charges.

04:09:02.050 --> 04:09:03.354
Long in the making lots
of research done here

04:09:03.354 --> 04:09:05.760
and we're eager to hear more about that.

04:09:05.760 --> 04:09:07.250
And Frank Wolak, director of the Program

04:09:07.250 --> 04:09:10.060
on Energy and Sustainable
Development at Stanford,

04:09:10.060 --> 04:09:11.297
an economics professor.

04:09:11.297 --> 04:09:13.400
And will be joining to speak
on some of the same issues

04:09:13.400 --> 04:09:16.930
that Meredith and Mark
LeBel will be discussing around.

04:09:16.930 --> 04:09:18.970
What's fair with regard
to fixed cost recovery

04:09:18.970 --> 04:09:20.070
in the system going forward,

04:09:20.070 --> 04:09:22.470
and how can we protect
low income customers

04:09:22.470 --> 04:09:24.153
through better rate designs?

04:09:25.070 --> 04:09:26.485
And so our discussions will be,

04:09:26.485 --> 04:09:28.300
after these presentations are made,

04:09:28.300 --> 04:09:30.630
our discussions will be Brad
Heavner, our policy director

04:09:30.630 --> 04:09:33.060
of California Solar and
Storage Associated.

04:09:33.060 --> 04:09:34.570
He will have a few slides to present

04:09:34.570 --> 04:09:36.464
in his response to our panelists.

04:09:36.464 --> 04:09:40.080
Mike Campbell, from program
manager from Cal Advocates,

04:09:40.080 --> 04:09:41.170
will be here as well.

04:09:41.170 --> 04:09:42.003
Robert Thomas,

04:09:42.003 --> 04:09:44.610
director of pricing strategy
for Southern California Edison

04:09:44.610 --> 04:09:46.210
and Robert Kenny, senior vice president

04:09:46.210 --> 04:09:48.450
of regulatory and
external affairs for PG&amp;E.

04:09:48.450 --> 04:09:49.680
Glad to have all these guys.

04:09:49.680 --> 04:09:50.850
We had many more that were interested

04:09:50.850 --> 04:09:51.770
in speaking on this panel.

04:09:51.770 --> 04:09:55.290
We had the turn away,
it's an interesting group

04:09:55.290 --> 04:09:57.290
and let's move to the next slide please.

04:09:59.530 --> 04:10:01.760
And so this is really just
kind of a quick illustration

04:10:01.760 --> 04:10:03.970
of the four pieces that we're looking at

04:10:03.970 --> 04:10:04.803
through the two days

04:10:04.803 --> 04:10:06.259
that we are together
here in the En Banc.

04:10:06.259 --> 04:10:10.030
And right now we're focused
on electric rates, reforms

04:10:10.030 --> 04:10:11.963
and other considerations around that.

04:10:12.840 --> 04:10:15.050
Quite clearly, we have some broad topics

04:10:15.050 --> 04:10:18.023
within the electric rate
making strategies area,

04:10:18.023 --> 04:10:20.600
note the least of what
to be general rate case

04:10:20.600 --> 04:10:23.270
administration revenue
management improvements,

04:10:23.270 --> 04:10:24.568
progressive fixed cost
recovery mechanisms,

04:10:24.568 --> 04:10:26.530
as we just mentioned,

04:10:26.530 --> 04:10:29.650
and advance rate designs
and improve grid utilization.

04:10:29.650 --> 04:10:31.630
So we wanna probe that a bit more,

04:10:31.630 --> 04:10:34.160
all of these directed toward
enhancing affordability

04:10:34.160 --> 04:10:36.930
for our most vulnerable
customers in California.

04:10:36.930 --> 04:10:37.880
Next slide, please.

04:10:40.169 --> 04:10:41.443
And so we have some
key themes and questions

04:10:41.443 --> 04:10:44.237
that we wanna kind of probe
into and answer here today.

04:10:44.237 --> 04:10:45.987
And the two hours will be together.

04:10:47.060 --> 04:10:48.010
You can read them here,

04:10:48.010 --> 04:10:50.810
but generally just to summarize
what are the net impacts

04:10:50.810 --> 04:10:53.420
of our revenue management
rate design proposals

04:10:53.420 --> 04:10:54.253
for low income customers

04:10:54.253 --> 04:10:55.749
and areas of affordability concern?

04:10:55.749 --> 04:10:57.650
How feasible are these proposals?

04:10:57.650 --> 04:10:59.750
I mean, what are the
implementation barriers and timelines?

04:10:59.750 --> 04:11:01.670
What procedural or statutory changes

04:11:01.670 --> 04:11:03.290
might be required of us?

04:11:03.290 --> 04:11:05.480
What tradeoffs exist between say,

04:11:05.480 --> 04:11:07.290
securitization is a strategy

04:11:07.290 --> 04:11:09.420
versus a more deliberate
look at revenue budgeting

04:11:09.420 --> 04:11:11.463
or cost team in portability strategies?

04:11:12.860 --> 04:11:15.060
And then how might
these rate making proposals

04:11:15.060 --> 04:11:16.160
by themselves independently

04:11:16.160 --> 04:11:18.980
or in combo with non rate
payer funding strategies

04:11:20.310 --> 04:11:21.677
work together to impact IOU earnings

04:11:21.677 --> 04:11:23.811
and/or their risk profile up or down,

04:11:23.811 --> 04:11:25.470
we should kind of talk about that,

04:11:25.470 --> 04:11:27.398
that's something we don't
really get into very often.

04:11:27.398 --> 04:11:29.730
And then finally, what
other rate making reforms

04:11:29.730 --> 04:11:31.737
and legislative
interventions do you think

04:11:31.737 --> 04:11:33.030
will improve equity

04:11:33.030 --> 04:11:35.170
without making other
customer segments force off,

04:11:35.170 --> 04:11:36.350
particularly the customer segment

04:11:36.350 --> 04:11:40.670
that right above the CARE
line in terms of vulnerability

04:11:40.670 --> 04:11:43.540
and increasingly vulnerable
in this economy that we're in.

04:11:43.540 --> 04:11:46.630
So we'll be really
eager to hear from you

04:11:46.630 --> 04:11:48.760
as you think through and present

04:11:48.760 --> 04:11:50.167
and react to presentations.

04:11:50.167 --> 04:11:54.290
And for now, so we will start with Mohit

04:11:54.290 --> 04:11:57.280
wanna get Mohit Chhabra
started from NRDC

04:11:57.280 --> 04:12:01.333
on his presentation on
synapse scenario analysis.

04:12:06.870 --> 04:12:08.420
<v ->Good afternoon.</v>

04:12:08.420 --> 04:12:11.130
I have a presentation that
you're gonna pull up right now,

04:12:11.130 --> 04:12:13.530
I'll introduce myself in the meantime.

04:12:13.530 --> 04:12:17.580
I'm Mohit Chhabra, I'm a
senior scientist with NRDC,

04:12:17.580 --> 04:12:20.850
and I'm gonna be presenting
on an empirical analysis

04:12:20.850 --> 04:12:25.380
on the impact of some policy levers

04:12:25.380 --> 04:12:30.000
many of which are being
discussed today on rates and bills.

04:12:30.000 --> 04:12:30.950
Next slide, please.

04:12:34.560 --> 04:12:35.782
Affordable decarbonization,

04:12:35.782 --> 04:12:39.130
it's important to manage
both, bills and rates,

04:12:39.130 --> 04:12:42.280
bills impact total households budget,

04:12:42.280 --> 04:12:45.110
and are a particular concern
for low income households

04:12:45.110 --> 04:12:48.480
as customers electrify electricity bills

04:12:50.500 --> 04:12:53.817
are closer and closer to
total household energy bills.

04:12:53.817 --> 04:12:56.667
Rate on the other hand need
to provide the correct signal

04:12:57.610 --> 04:13:00.600
for marginal choices, how much
to consume, when to consume,

04:13:00.600 --> 04:13:02.593
what do you choose and so on.

04:13:03.660 --> 04:13:04.610
Next slide, please.

04:13:06.610 --> 04:13:09.200
What we did here was
examining the impact

04:13:09.200 --> 04:13:12.180
of three different
types of policy options.

04:13:12.180 --> 04:13:15.173
First was reducing total
revenue requirement.

04:13:16.310 --> 04:13:18.220
Second modifying rate design.

04:13:18.220 --> 04:13:20.890
So once the revenue requirements set,

04:13:20.890 --> 04:13:23.420
how do you best collect it

04:13:23.420 --> 04:13:26.930
to make revenue collection progressive

04:13:26.930 --> 04:13:29.060
and give the right rate signals

04:13:29.060 --> 04:13:31.410
aligned with our policy
goals and equity goals.

04:13:32.350 --> 04:13:36.790
Finally, increase grid
utilization as we electrify more,

04:13:36.790 --> 04:13:39.910
what are the impact of
getting the most out of our grid

04:13:39.910 --> 04:13:43.503
while minimizing infrastructure
investments on grid?

04:13:44.930 --> 04:13:47.990
This presentation aims
to describe each approach

04:13:47.990 --> 04:13:49.308
and estimates impact.

04:13:49.308 --> 04:13:51.863
We don't prescribe recommendations here.

04:13:52.870 --> 04:13:56.153
The hope is this will make
the discussion more targeted.

04:13:57.150 --> 04:14:00.060
Folks can analyze is the effort required

04:14:00.060 --> 04:14:04.580
for each policy proposal
against the expected impact.

04:14:04.580 --> 04:14:05.530
Next slide, please.

04:14:09.090 --> 04:14:10.520
This is limited to PG&amp;E,

04:14:13.180 --> 04:14:15.320
to be able to finish this work on time

04:14:15.320 --> 04:14:19.260
and on budget, we went
with one utility PG&amp;E's rates

04:14:19.260 --> 04:14:22.453
are somewhat in the middle
of three IOUs in California.

04:14:23.510 --> 04:14:24.867
The results from this analysis

04:14:24.867 --> 04:14:28.250
may not directly port
over to the other IOUs

04:14:28.250 --> 04:14:31.180
but provide an indication
of the directional

04:14:31.180 --> 04:14:34.780
kinda of order of magnitude
different policy proposals

04:14:34.780 --> 04:14:36.380
will have for other IOUs

04:14:36.380 --> 04:14:38.419
is a screening level analysis

04:14:38.419 --> 04:14:41.520
to understand order
of magnitude of impact.

04:14:41.520 --> 04:14:44.460
So take it as percentage decreases

04:14:44.460 --> 04:14:47.400
on the order of magnitude
of two to 3 cents,

04:14:47.400 --> 04:14:50.433
as opposed to 2.70 cents
or something like that.

04:14:51.290 --> 04:14:53.240
Analysis was conducted by synapse

04:14:54.170 --> 04:14:57.880
and used best publicly available data

04:14:57.880 --> 04:14:59.336
to develop this analysis

04:14:59.336 --> 04:15:03.670
and did get it checked ground truth,

04:15:03.670 --> 04:15:05.605
to make sure that the
results are reasonable.

04:15:05.605 --> 04:15:07.163
Next slide, please.

04:15:10.610 --> 04:15:11.650
This is an introduction

04:15:11.650 --> 04:15:15.580
to PG&amp;E's bundled
revenue requirement today,

04:15:15.580 --> 04:15:19.190
it's around 7 billion and bundled sales

04:15:19.190 --> 04:15:21.163
of around 27 tailored hours.

04:15:22.320 --> 04:15:26.920
That translates to a 25
cents per total hour rate

04:15:26.920 --> 04:15:28.603
across all customer classes,

04:15:29.620 --> 04:15:32.670
27 for residential only on average.

04:15:32.670 --> 04:15:35.580
And then you par that out
among CARE and non-CARE

04:15:35.580 --> 04:15:39.240
you get 31 cents and
19 cents approximately.

04:15:39.240 --> 04:15:42.020
The figure on the left is one way

04:15:42.020 --> 04:15:44.461
to categorize this bundle
revenue requirement.

04:15:44.461 --> 04:15:45.751
There are quite a few ways to do so,

04:15:45.751 --> 04:15:49.280
but gives you an idea how
much of the revenue requirement

04:15:49.280 --> 04:15:54.280
stems from purchase power
O&amp;M depreciation of assets,

04:15:54.440 --> 04:15:56.113
shareholder returns and so on.

04:15:57.090 --> 04:15:59.710
The percentages on the left add to 100%

04:15:59.710 --> 04:16:02.660
as any percentages on
the good graph should.

04:16:02.660 --> 04:16:05.160
And the cents value on the right

04:16:05.160 --> 04:16:08.900
add up to the total average
bundle rate of 25 cents.

04:16:08.900 --> 04:16:10.740
So gives you an idea
of how much of the rate

04:16:10.740 --> 04:16:12.830
is going towards what?

04:16:14.190 --> 04:16:15.140
Next slide, please.

04:16:17.220 --> 04:16:21.010
The first category of
policies we investigated,

04:16:21.010 --> 04:16:22.311
reduced revenue requirement.

04:16:22.311 --> 04:16:27.070
The idea is to decrease
the full amount of money

04:16:27.070 --> 04:16:29.470
that's collected across all bills

04:16:29.470 --> 04:16:30.772
through different policy actions

04:16:30.772 --> 04:16:34.880
and understand the
impact on rates and bills

04:16:34.880 --> 04:16:36.161
for residential customers.

04:16:36.161 --> 04:16:37.663
Next slide, please.

04:16:39.780 --> 04:16:42.270
The first policy we looked at was,

04:16:42.270 --> 04:16:44.660
how about we fund social policy costs

04:16:44.660 --> 04:16:46.930
from outside the rate-base.

04:16:46.930 --> 04:16:49.320
There are costs in electric bills

04:16:49.320 --> 04:16:51.890
that aren't directly
caused by consumption,

04:16:51.890 --> 04:16:54.880
but we collect them on
the basis of consumption.

04:16:54.880 --> 04:16:58.480
Most of these are under
the non-viable charges,

04:16:58.480 --> 04:17:03.330
include public purpose program
charges, CARE, and so on.

04:17:03.330 --> 04:17:06.140
So we separately analyze the impact

04:17:06.140 --> 04:17:11.140
of the wildfire, fund charge,
CARE and FERA programs,

04:17:11.830 --> 04:17:14.440
and then all other non-(indistinct).

04:17:14.440 --> 04:17:15.273
Next slide please.

04:17:15.273 --> 04:17:19.940
So you see if you're able to fund them

04:17:19.940 --> 04:17:23.113
from an outside source, but
still maintain these programs,

04:17:24.060 --> 04:17:27.480
you'll see around a 7% total decrease

04:17:27.480 --> 04:17:30.380
in the residential rates and
bills for non-CARE customers.

04:17:31.670 --> 04:17:36.180
So around $140 per year
for all of them put together

04:17:36.180 --> 04:17:38.100
and a two cent decrease.

04:17:38.100 --> 04:17:43.100
Most of these aren't
levied on CARE customers.

04:17:43.530 --> 04:17:48.530
So CARE customers see a
very tiny benefit from the shift.

04:17:49.310 --> 04:17:51.280
They don't pay for their own
CARE program and such.

04:17:51.280 --> 04:17:53.993
So they'll see a much smaller benefit.

04:17:55.440 --> 04:17:56.390
Next slide, please.

04:17:58.760 --> 04:18:01.085
The second policy in this category was

04:18:01.085 --> 04:18:03.184
what if the transmission system

04:18:03.184 --> 04:18:07.730
was owned by a public
entity, not ministry-owned utility.

04:18:07.730 --> 04:18:10.990
So what that does is it reduces costs

04:18:10.990 --> 04:18:12.321
in exchange for risk
that gets transferred

04:18:12.321 --> 04:18:15.210
from shareholders to the public.

04:18:15.210 --> 04:18:18.830
And this requires changing
PG&amp;E capital structure,

04:18:18.830 --> 04:18:19.742
no mean fit,

04:18:19.742 --> 04:18:22.697
but you have to buy out
the transmission system,

04:18:22.697 --> 04:18:27.030
$11 billion or so, and
get it funded through bond.

04:18:27.030 --> 04:18:30.250
And we've estimated that
those bonds would be at 3%

04:18:32.130 --> 04:18:34.750
sort of an average rate
for long term state bond.

04:18:34.750 --> 04:18:38.360
And because this entity is
nonprofit or governmental,

04:18:38.360 --> 04:18:40.393
their savings on tax as well.

04:18:41.320 --> 04:18:42.233
Next slide please.

04:18:43.940 --> 04:18:45.120
And the impact of doing this,

04:18:45.120 --> 04:18:48.450
you see around a 4%
reduction in rates and bills

04:18:48.450 --> 04:18:50.086
slightly higher for CARE customers,

04:18:50.086 --> 04:18:54.540
because that way discount
works for CARE customers.

04:18:54.540 --> 04:18:58.230
And the graph below,

04:18:58.230 --> 04:19:01.110
this slight presentation
is there for your records,

04:19:01.110 --> 04:19:05.380
it shows you the economically
what categories of costs

04:19:05.380 --> 04:19:08.030
are getting reduced
and getting transferred,

04:19:08.030 --> 04:19:13.030
especially return to shareholders,
to debt cover and bonds.

04:19:15.380 --> 04:19:16.330
Next slide, please.

04:19:18.434 --> 04:19:23.434
The third policy we
investigated in this category is,

04:19:25.080 --> 04:19:27.573
what if you decrease
the return on equity, ROE?

04:19:29.080 --> 04:19:33.210
Currently PG&amp;E and ROE
exceeds national average,

04:19:33.210 --> 04:19:37.933
but the percentage of equity
they own is average or higher,

04:19:39.460 --> 04:19:42.070
and the lower rate of return
would reduce both profits

04:19:42.070 --> 04:19:43.473
and associated taxes.

04:19:45.350 --> 04:19:48.600
The current ROE is around 10.25%

04:19:48.600 --> 04:19:51.930
and equity is 52%
of the total rate-base.

04:19:51.930 --> 04:19:53.420
I analyze two scenarios.

04:19:53.420 --> 04:19:57.340
One is reducing the ROE
to nine and a half percent,

04:19:57.340 --> 04:19:58.685
which is the national average

04:19:58.685 --> 04:20:02.320
while maintaining the
totaL amount of equity

04:20:02.320 --> 04:20:03.870
on the rate-base.

04:20:03.870 --> 04:20:05.810
Second scenario was what if you were

04:20:05.810 --> 04:20:08.340
to reduce the ROE even more

04:20:08.340 --> 04:20:11.760
but compensate by increasing the amount

04:20:11.760 --> 04:20:13.840
of equity share holders own?

04:20:13.840 --> 04:20:17.210
So the total flow of monies
to shareholders in the year

04:20:17.210 --> 04:20:18.390
would be the same,

04:20:18.390 --> 04:20:21.653
but the per unit earnings on
a share would decrease here.

04:20:23.110 --> 04:20:24.317
Next slide please.

04:20:26.420 --> 04:20:31.420
And we see that just reducing
ROE to national average

04:20:31.680 --> 04:20:36.680
has a pretty small impact
around 1% to 2% impact

04:20:36.700 --> 04:20:37.860
on rates and bills.

04:20:37.860 --> 04:20:41.300
But if you were to reduce it to 7%,

04:20:41.300 --> 04:20:43.590
which would be a much bigger change,

04:20:43.590 --> 04:20:46.020
even though you increase
the percentage of equity,

04:20:46.020 --> 04:20:50.097
you see a much larger
savings on rates and bills.

04:20:52.850 --> 04:20:53.800
Next slide, please.

04:20:55.750 --> 04:20:57.490
The second set of
categories we looked at

04:20:57.490 --> 04:20:58.920
was modifying rate designs.

04:20:58.920 --> 04:21:03.920
So, once you've made the
changes you need to make

04:21:03.940 --> 04:21:05.930
on total revenue requirement,

04:21:05.930 --> 04:21:08.380
how do you collect
it in a better fashion?

04:21:08.380 --> 04:21:11.950
So it doesn't increase
the total amount of bills

04:21:11.950 --> 04:21:16.360
in some customers pay, but
how you recoup that changes.

04:21:16.360 --> 04:21:17.303
Next slide please.

04:21:20.460 --> 04:21:23.830
And the theory is that
if part of the revenue

04:21:23.830 --> 04:21:25.900
is raised through a fixed charge

04:21:25.900 --> 04:21:27.233
could be demand based or otherwise,

04:21:27.233 --> 04:21:31.120
then less needs to come
from variable charge.

04:21:31.120 --> 04:21:34.570
So the amount to charge
for consumption is lower.

04:21:34.570 --> 04:21:36.113
Lower volumetric charges

04:21:36.113 --> 04:21:39.520
are more in line with
social marginal costs,

04:21:39.520 --> 04:21:40.897
which means how much does it cost

04:21:40.897 --> 04:21:44.450
to generate this electricity
and the environmental

04:21:44.450 --> 04:21:46.960
and other externalities
associated with it

04:21:46.960 --> 04:21:49.560
than rates currently.

04:21:49.560 --> 04:21:51.843
So it would be
economically more efficient.

04:21:54.090 --> 04:21:57.040
The one challenge with
having fixed charges is

04:21:57.040 --> 04:21:58.327
how do you make them more progressive?

04:21:58.327 --> 04:22:03.327
How do you structure them
such that lower income rate payers

04:22:05.180 --> 04:22:07.880
or customers that use less electricity

04:22:07.880 --> 04:22:10.633
don't settled with
fixed monthly charges?

04:22:13.500 --> 04:22:16.230
One more point I'll note here is

04:22:16.230 --> 04:22:17.580
when you make electricity cheaper,

04:22:17.580 --> 04:22:20.850
you encourage people
to better utilize the grid

04:22:20.850 --> 04:22:24.440
through managed electrification.

04:22:24.440 --> 04:22:27.950
So the idea is if this were to be,

04:22:27.950 --> 04:22:30.440
then people would use more electricity,

04:22:30.440 --> 04:22:31.742
and if you provide
them the right signals

04:22:31.742 --> 04:22:35.880
in a well managed way without
making more investments

04:22:35.880 --> 04:22:39.290
to the infrastructure thereby
increasing per unit utility.

04:22:39.290 --> 04:22:40.193
Next slide please.

04:22:41.440 --> 04:22:45.423
So we modeled three possible
approaches to fix charges.

04:22:46.500 --> 04:22:47.860
Low, medium, high.

04:22:47.860 --> 04:22:50.750
The low is around $11 a month.

04:22:50.750 --> 04:22:55.750
And this comes from PG&amp;E's
general rate case cost of service

04:22:56.490 --> 04:23:00.230
filing it's marginal cost
to connect the customer

04:23:00.230 --> 04:23:01.584
and to serve them on a monthly basis

04:23:01.584 --> 04:23:05.370
through meter readings,
account setup and so on.

04:23:05.370 --> 04:23:07.763
The medium case around $20 a month,

04:23:08.900 --> 04:23:11.623
replaces a marginal
cost to serve a customer

04:23:11.623 --> 04:23:15.770
with the average edge
cost to serve all customers.

04:23:15.770 --> 04:23:20.770
And then we had a high case,
which is around $74 a month.

04:23:22.190 --> 04:23:26.580
We back into this amount of
fixed charge by assuming that

04:23:26.580 --> 04:23:30.890
only the avoided costs or
the social marginal costs

04:23:30.890 --> 04:23:34.870
are variable and the rest is all fixed.

04:23:34.870 --> 04:23:37.550
And this estimate was taken directly

04:23:37.550 --> 04:23:40.870
from Next 10 research
conducted last year

04:23:40.870 --> 04:23:44.180
on designing rates for an
equitable energy transition.

04:23:44.180 --> 04:23:46.450
So think of this as a high (indistinct).

04:23:46.450 --> 04:23:47.383
Next slide please.

04:23:48.720 --> 04:23:52.520
So the impact on rates
'cause bills on average,

04:23:52.520 --> 04:23:54.920
if folks, people don't
consume our electricity

04:23:54.920 --> 04:23:57.117
would remain the same
are presented here.

04:23:57.117 --> 04:24:01.010
You see a pretty
hefty decrease in rates,

04:24:01.010 --> 04:24:03.120
the higher the fixed charge gets.

04:24:03.120 --> 04:24:06.150
But gives you an idea for $11 a month

04:24:06.150 --> 04:24:10.563
you'll see around a 7% decrease,
$20 a month, 13% decrease.

04:24:11.520 --> 04:24:15.900
And for $74 a month
between 46 and 55% decrease

04:24:15.900 --> 04:24:17.343
depending on customer types.

04:24:19.300 --> 04:24:20.283
Next slide please.

04:24:21.970 --> 04:24:24.490
And you can stack
these policies together

04:24:24.490 --> 04:24:26.840
to see what the cumulative impacted me.

04:24:26.840 --> 04:24:28.260
And this is an example,

04:24:28.260 --> 04:24:30.680
and of course we could analyze

04:24:33.810 --> 04:24:37.531
other examples for these
same policy categories.

04:24:37.531 --> 04:24:39.903
And this just shows
that you could stack.

04:24:40.940 --> 04:24:43.110
The first four policies discussed

04:24:43.110 --> 04:24:45.110
we looked at the $20 per month

04:24:45.110 --> 04:24:48.590
and decrease average
blended residential rate

04:24:48.590 --> 04:24:53.590
from 27 cents to less than
20 cents if you were to do so.

04:24:55.810 --> 04:24:56.927
Next slide please.

04:24:59.680 --> 04:25:02.770
We analyze the impact of
making fixed charges progressive

04:25:03.880 --> 04:25:05.990
because fixed charges can be regressive

04:25:05.990 --> 04:25:07.527
as they could increase the bills

04:25:07.527 --> 04:25:10.010
for lower consumption customers.

04:25:10.010 --> 04:25:12.780
We try to overcome it by again,

04:25:12.780 --> 04:25:16.360
following this logic was
laid out in the Next 10 report

04:25:16.360 --> 04:25:21.360
using income tax based categories

04:25:22.290 --> 04:25:23.940
and income tax based scaler

04:25:23.940 --> 04:25:26.750
to redistribute the fixed
charges more progressively

04:25:26.750 --> 04:25:30.570
across five household income categories.

04:25:30.570 --> 04:25:31.693
So next slide please.

04:25:33.610 --> 04:25:35.780
And this shows the impact and aggregate.

04:25:35.780 --> 04:25:38.533
What you see is that,

04:25:39.800 --> 04:25:43.710
the bottom three income Quintiles phase,

04:25:43.710 --> 04:25:46.920
in all instances, the top two pay more,

04:25:46.920 --> 04:25:50.120
but specifically it's the
highest income Quintiles

04:25:50.120 --> 04:25:51.363
that pays the most.

04:25:53.010 --> 04:25:57.040
So that's usually what the
impact gets concentrated.

04:25:57.040 --> 04:25:58.680
And this shows you,

04:25:58.680 --> 04:26:01.450
if you take the low,
medium or high case,

04:26:01.450 --> 04:26:04.220
what is the monthly fixed
charge on a customer

04:26:04.220 --> 04:26:07.610
in each income Quintile and
then their annual bill change?

04:26:07.610 --> 04:26:10.560
So lower income customers
would see depending on the case

04:26:10.560 --> 04:26:14.467
between $100 and in
the most extreme case,

04:26:14.467 --> 04:26:18.060
$660 a year in bill savings

04:26:18.060 --> 04:26:20.020
and the highest income customers,

04:26:20.020 --> 04:26:23.660
those who earn more
than $150,000 or more

04:26:23.660 --> 04:26:26.713
see upwards of $200 a year in bills.

04:26:28.850 --> 04:26:29.823
Next slide, please.

04:26:32.060 --> 04:26:33.560
We also looked at the impact

04:26:33.560 --> 04:26:35.468
of setting up electricity burden limit.

04:26:35.468 --> 04:26:37.510
So what if for CARE customers,

04:26:37.510 --> 04:26:40.660
you set a limit on how
much they pay via bills

04:26:40.660 --> 04:26:43.510
at 5% of total income.

04:26:43.510 --> 04:26:47.440
The way this was modeled was
CARE customers pay a CARE rate

04:26:47.440 --> 04:26:50.781
until they reach 5% of
their energy burden limit

04:26:50.781 --> 04:26:53.823
in their bills, and then they
don't pay anything additional.

04:26:55.010 --> 04:26:58.940
And this on average
would require 300 million

04:26:58.940 --> 04:27:02.059
in additional support
assuming that consumption

04:27:02.059 --> 04:27:03.880
across CARE customers on average

04:27:03.880 --> 04:27:06.120
stays the same as it is today.

04:27:06.120 --> 04:27:09.496
So currently around 800
million is the CARE budget,

04:27:09.496 --> 04:27:12.940
and this will increase it by 35% or so.

04:27:12.940 --> 04:27:13.840
Next slide please.

04:27:15.780 --> 04:27:18.320
And you see that on average
CARE customers save

04:27:18.320 --> 04:27:20.020
around 20% on their bills.

04:27:20.020 --> 04:27:22.840
Keep in mind that depending on the ratio

04:27:22.840 --> 04:27:26.150
of a customer's bill
to household income,

04:27:26.150 --> 04:27:28.070
a lot of customers see a decrease,

04:27:28.070 --> 04:27:29.970
some customers may not see the benefit

04:27:29.970 --> 04:27:32.160
because they just
never hit their threshold

04:27:32.160 --> 04:27:33.492
depending on what their energy use is

04:27:33.492 --> 04:27:35.380
and what their income is.

04:27:35.380 --> 04:27:37.200
So there are some
distributional impacts here,

04:27:37.200 --> 04:27:40.500
but on average, a 20% decrease.

04:27:40.500 --> 04:27:41.793
Non-CARE customers,

04:27:42.870 --> 04:27:45.890
if you spread the cost only
amongst residential class,

04:27:45.890 --> 04:27:48.297
see a 5% increase in rates and bills,

04:27:48.297 --> 04:27:53.080
but if you were to spread it
among all non-CARE customers

04:27:53.080 --> 04:27:54.950
include rates and non-rates,

04:27:54.950 --> 04:27:56.650
then the impact gets a lot smaller

04:27:57.490 --> 04:27:59.713
to less than half percent kilowatt hour.

04:28:01.040 --> 04:28:01.983
Next slide please.

04:28:03.840 --> 04:28:06.060
The final policy academy
we looked at was

04:28:06.060 --> 04:28:09.970
increasing the utilization
of electricity infrastructure.

04:28:09.970 --> 04:28:11.643
So next slide.

04:28:13.610 --> 04:28:16.040
Get the most out of the current grid

04:28:16.040 --> 04:28:18.160
by manage electrification

04:28:19.300 --> 04:28:23.970
is spread out the cost of the
grid over more kilowatt hours,

04:28:23.970 --> 04:28:28.970
but you don't make proportional
infrastructure investments

04:28:29.100 --> 04:28:30.890
on the grid because you're managing

04:28:30.890 --> 04:28:33.587
how the electricity is consumed.

04:28:34.875 --> 04:28:38.380
To do this, looked at
a hypothetical scenario

04:28:38.380 --> 04:28:41.440
where we compared a
low electricity use case

04:28:41.440 --> 04:28:43.340
and a high electricity use case

04:28:43.340 --> 04:28:45.043
from the CEC demand forecast.

04:28:46.360 --> 04:28:50.850
And assume that you are able to manage

04:28:50.850 --> 04:28:52.220
the high electricity use case

04:28:52.220 --> 04:28:54.920
in a manner that you don't
need to make infrastructure

04:28:56.320 --> 04:29:01.150
additions for higher load and remodel,

04:29:01.150 --> 04:29:05.203
just the non generation
portion of the rates here,

04:29:06.102 --> 04:29:08.010
this is the TND portion.

04:29:08.010 --> 04:29:08.843
Next slide.

04:29:10.440 --> 04:29:14.230
And we saw that if you
hypothetically are able to do this,

04:29:14.230 --> 04:29:16.920
then by 2030, you'd
see a one and a half cent

04:29:16.920 --> 04:29:20.290
per kilowatt hour decrease in rates,

04:29:20.290 --> 04:29:23.290
which translates to
$100 a year in savings

04:29:23.290 --> 04:29:24.740
if usage is the same,

04:29:24.740 --> 04:29:29.700
but do note that the idea is
that you're increasing usage.

04:29:29.700 --> 04:29:32.630
So the total benefit that customers get

04:29:32.630 --> 04:29:33.463
would be higher than that

04:29:33.463 --> 04:29:35.260
because they're getting more utility

04:29:37.561 --> 04:29:41.363
out of their electricity
spending on rates and bills.

04:29:42.630 --> 04:29:43.463
Next slide.

04:29:43.463 --> 04:29:47.620
To sum up, most of these
track strategies require

04:29:47.620 --> 04:29:50.750
both legislative and regulatory action.

04:29:50.750 --> 04:29:52.923
You need legislative
action to raise money,

04:29:54.750 --> 04:29:57.970
to fund social policy goals
from outside their rate-base.

04:29:57.970 --> 04:30:02.920
You need legislative action
to rule the cap on fix charges.

04:30:02.920 --> 04:30:04.240
Then you need regulatory action

04:30:04.240 --> 04:30:06.260
to actually structure redesign,

04:30:06.260 --> 04:30:09.777
structure fixed charges
more progressively and so on.

04:30:09.777 --> 04:30:12.640
And to spread costs with electrification

04:30:13.560 --> 04:30:15.890
requires action by the regulator,

04:30:15.890 --> 04:30:19.170
but also responsiveness from LSEs

04:30:19.170 --> 04:30:20.473
and then customers.

04:30:20.473 --> 04:30:24.100
And that would include
customer education,

04:30:24.100 --> 04:30:25.500
making sure they have the equipment

04:30:25.500 --> 04:30:27.723
to avail these benefits and so on.

04:30:28.610 --> 04:30:33.320
And final slide just has
our contact information

04:30:33.320 --> 04:30:35.770
in case you have additional
questions, thank you.

04:30:42.070 --> 04:30:43.743
<v ->All right, thank you Mohit,
I really appreciate that.</v>

04:30:43.743 --> 04:30:47.920
It's a great presentation
on multiple interventions,

04:30:47.920 --> 04:30:49.010
multiple leverage to pull,

04:30:49.010 --> 04:30:51.000
to try to look at rate and bill impacts.

04:30:51.000 --> 04:30:54.200
And so now we're gonna
turn to Jennifer Dowdell turn

04:30:54.200 --> 04:30:57.400
to lean into some of the GRC related

04:30:57.400 --> 04:30:59.422
and revenue management reforms.

04:30:59.422 --> 04:31:01.839
(indistinct)

04:31:04.309 --> 04:31:05.569
<v ->Okay.</v>

04:31:05.569 --> 04:31:07.629
Good afternoon.

04:31:07.629 --> 04:31:09.720
I wanna thank the Commissioners

04:31:09.720 --> 04:31:11.689
and staff for putting
together this program

04:31:11.689 --> 04:31:13.744
and allowing so much time for it

04:31:13.744 --> 04:31:15.789
and for inviting me to speak today.

04:31:15.789 --> 04:31:17.193
First slide, please.

04:31:20.110 --> 04:31:22.110
A lot of the heavy lifting has been done

04:31:22.110 --> 04:31:24.190
by panelists who came before me.

04:31:24.190 --> 04:31:28.290
I think Cathy Yap
made this point very well,

04:31:28.290 --> 04:31:32.472
but I think the upshot of this slide is

04:31:32.472 --> 04:31:35.270
that it's not just low income customers

04:31:35.270 --> 04:31:38.260
that are facing an
affordability gap right now,

04:31:38.260 --> 04:31:39.559
and there's more to come.

04:31:39.559 --> 04:31:43.130
So when we look forward
over the next two years,

04:31:43.130 --> 04:31:45.910
we see something in the
neighborhood of pending requests

04:31:45.910 --> 04:31:48.600
of about 4.8 billion from PG&amp;E,

04:31:48.600 --> 04:31:52.320
about 1.8 billion from Edison

04:31:52.320 --> 04:31:55.880
and about 400 million from
San Diego gas and electric.

04:31:55.880 --> 04:31:58.770
So I think the
affordability crisis is here

04:31:58.770 --> 04:32:00.270
for many Californians.

04:32:00.270 --> 04:32:01.220
Next slide, please.

04:32:06.260 --> 04:32:10.940
Melissa, Brad said it
very well in the prior panel,

04:32:10.940 --> 04:32:15.940
we are gonna need everything
in the toolbox to address this.

04:32:15.970 --> 04:32:20.830
And on this slide, I just
wanna speak to a few points.

04:32:20.830 --> 04:32:22.530
The first being,

04:32:22.530 --> 04:32:26.970
TURN has not been a strong
advocate for securitization

04:32:28.995 --> 04:32:31.473
and we still aren't,

04:32:32.450 --> 04:32:34.050
but it's something in the toolbox

04:32:34.050 --> 04:32:35.650
and we're gonna need everything.

04:32:37.630 --> 04:32:38.463
Additionally,

04:32:38.463 --> 04:32:42.990
I want to point about the
percent of income pilot program

04:32:42.990 --> 04:32:44.880
recently approved for the Commission,

04:32:44.880 --> 04:32:47.430
which I think is gonna
be extremely important

04:32:47.430 --> 04:32:51.031
in understanding more about
how these programs can work.

04:32:51.031 --> 04:32:55.110
And I think other earlier
panelists have talked about this,

04:32:55.110 --> 04:32:56.609
but I just wanted to highlight it.

04:32:56.609 --> 04:33:01.609
And the next thing
I'd like to say is that,

04:33:01.915 --> 04:33:06.915
next slide I'm gonna
talk about in my remarks,

04:33:08.150 --> 04:33:12.250
basically two old ideas, which
is what you're seeing here.

04:33:12.250 --> 04:33:14.513
These are immediate no regret actions

04:33:14.513 --> 04:33:16.913
that the Commission can take now.

04:33:18.600 --> 04:33:19.860
That TURN believes

04:33:19.860 --> 04:33:23.320
and I believe will enhance and inform

04:33:23.320 --> 04:33:25.180
the affordability discussion.

04:33:25.180 --> 04:33:28.970
The first is the Commission
has spent 10 years

04:33:28.970 --> 04:33:32.990
developing robust risk
spend deficiency models.

04:33:32.990 --> 04:33:35.240
I think Michael Wara talked about,

04:33:35.240 --> 04:33:39.590
how they could be integrated,
but it's very important

04:33:39.590 --> 04:33:43.650
that we start leveraging
them more and more

04:33:43.650 --> 04:33:48.620
because we are dealing in a
budget constrained environment.

04:33:48.620 --> 04:33:50.990
And it's important to know

04:33:50.990 --> 04:33:53.130
how we're gonna get the biggest bang

04:33:53.130 --> 04:33:56.143
for rate payer bucks
in that environment.

04:33:57.080 --> 04:34:00.280
The next point is the Commission has,

04:34:00.280 --> 04:34:02.904
not next slide, back thank you.

04:34:02.904 --> 04:34:07.290
The Commission has
developed affordability metrics

04:34:07.290 --> 04:34:12.290
and the best thing that we
can do in terms of learning

04:34:13.270 --> 04:34:15.437
about affordability and
learning where we are

04:34:15.437 --> 04:34:19.680
and developing a baseline
is to begin using them widely.

04:34:19.680 --> 04:34:23.320
We cannot hope to impact
what we do not measure,

04:34:23.320 --> 04:34:26.520
and we need to start
measuring affordability

04:34:26.520 --> 04:34:29.327
in order to create a timeline
and know where we are now.

04:34:31.544 --> 04:34:32.461
Next slide.

04:34:35.050 --> 04:34:38.280
So this isn't a new idea,

04:34:38.280 --> 04:34:42.050
and I wanna spend most
of my time talking about

04:34:42.050 --> 04:34:44.113
what this idea is and what it isn't?

04:34:45.140 --> 04:34:50.140
TURN proposes that we
look at in the GRC process,

04:34:50.930 --> 04:34:54.650
an inflation constrained
alternative proposal.

04:34:54.650 --> 04:34:58.700
Traditionally, utility,
advances their wishlists.

04:34:58.700 --> 04:35:00.170
And I've talked about it before,

04:35:00.170 --> 04:35:02.601
I think others have
talked about it before,

04:35:02.601 --> 04:35:07.601
there's a single data point
that creates an anchor bias.

04:35:07.620 --> 04:35:11.160
And I think it would be beneficial

04:35:11.160 --> 04:35:16.160
if we created a linkage

04:35:16.880 --> 04:35:21.513
between consumer budgets
and utility rate requests.

04:35:24.210 --> 04:35:26.680
And so TURN proposes that we look

04:35:26.680 --> 04:35:31.680
at a CPI constrained proposal.

04:35:32.310 --> 04:35:37.130
Now, what we're not proposing
is a cap on utility spending.

04:35:37.130 --> 04:35:39.870
What we're proposing is a context

04:35:39.870 --> 04:35:43.900
for what is re reasonable
for rate payers to fund

04:35:43.900 --> 04:35:47.770
and we are encouraging, in fact,

04:35:47.770 --> 04:35:51.410
we would support the
Commission requiring

04:35:51.410 --> 04:35:54.550
the risk spend efficiency,
being brought to bear,

04:35:54.550 --> 04:35:56.880
to inform such a proposal,

04:35:56.880 --> 04:36:00.720
because then we've got a ranking

04:36:00.720 --> 04:36:03.277
of what provides the greatest safety

04:36:03.277 --> 04:36:06.420
and reliability benefit for each dollar.

04:36:06.420 --> 04:36:08.333
And we can look at funding,

04:36:10.000 --> 04:36:12.883
lower priority work outside of break.

04:36:14.030 --> 04:36:14.863
Next slide.

04:36:19.350 --> 04:36:22.420
The last thing I'd
like to say about this,

04:36:22.420 --> 04:36:24.060
I'm not gonna read this slide,

04:36:24.060 --> 04:36:29.060
but I am gonna reference what
Jack put forward, excuse me,

04:36:34.960 --> 04:36:37.110
I gotta telemarketer,
I'm sorry about that.

04:36:38.250 --> 04:36:41.010
I'm gonna reference
what Jack put forward

04:36:41.010 --> 04:36:43.563
at the beginning of
this program which is,

04:36:44.530 --> 04:36:46.300
we need to look at these proposals

04:36:46.300 --> 04:36:51.200
in the context of the
CPUC six point criteria

04:36:51.200 --> 04:36:53.130
for evaluating them.

04:36:53.130 --> 04:36:57.870
And the point I would make is that,

04:36:57.870 --> 04:37:02.870
by creating an alternative
that is inflation constrained

04:37:02.960 --> 04:37:06.870
in addition to what
the utility proposes,

04:37:06.870 --> 04:37:11.390
we promote affordability by
book ending, utility requests

04:37:13.180 --> 04:37:18.180
as I've said before, connect
requests to the increases

04:37:18.230 --> 04:37:20.960
that we're seeing in household budgets.

04:37:20.960 --> 04:37:24.290
So everybody's gotta
stay within a budget.

04:37:24.290 --> 04:37:29.290
And this simply brings that
reality into the GRC process.

04:37:31.970 --> 04:37:36.360
Finally, I think that
this proposal addresses

04:37:36.360 --> 04:37:38.600
equity and economic impact.

04:37:38.600 --> 04:37:43.060
Equity because rates are
essentially a regressive tax,

04:37:43.060 --> 04:37:47.570
and if you reduce the
volume of a regressive tax,

04:37:47.570 --> 04:37:50.550
it is less harmful to the people

04:37:50.550 --> 04:37:52.990
at the bottom of the economic pyramid.

04:37:52.990 --> 04:37:55.840
And economic impact

04:37:55.840 --> 04:38:00.840
because it makes sure that
rate payers get the highest value

04:38:01.090 --> 04:38:03.840
for the dollars that
they are contributing.

04:38:03.840 --> 04:38:06.510
Finally, in terms of feasibility,

04:38:06.510 --> 04:38:08.790
this is something the
Commission can require

04:38:08.790 --> 04:38:12.430
as supplemental
information in filings right now.

04:38:12.430 --> 04:38:16.000
So it could be a unilateral action

04:38:16.000 --> 04:38:20.120
that basically increases
the quality of the record.

04:38:20.120 --> 04:38:21.073
Next slide.

04:38:22.970 --> 04:38:24.813
Okay, final thoughts.

04:38:26.950 --> 04:38:29.900
We have a lot in California ahead of us.

04:38:29.900 --> 04:38:32.160
We have climate change goals.

04:38:32.160 --> 04:38:36.000
We have wildfire mitigation,

04:38:36.000 --> 04:38:38.880
we have additional infrastructure

04:38:39.720 --> 04:38:44.683
and all of that with the
framework of affordability,

04:38:45.800 --> 04:38:47.340
layered over it.

04:38:47.340 --> 04:38:51.350
Consequently, we're gonna
need everything available

04:38:51.350 --> 04:38:54.060
and probably some things
we haven't thought yet,

04:38:54.060 --> 04:38:58.880
but We have some tools
that are available to us now

04:38:58.880 --> 04:39:01.633
and we should leverage
and maximize them.

04:39:03.050 --> 04:39:06.343
And so we should
leverage risks and efficiency,

04:39:07.460 --> 04:39:09.890
in rate setting proceedings.

04:39:09.890 --> 04:39:12.160
We should measure affordability

04:39:12.160 --> 04:39:15.860
and use those metrics wisely and widely

04:39:15.860 --> 04:39:18.420
to help us understand
precisely where we are

04:39:18.420 --> 04:39:20.430
and what we're facing.

04:39:20.430 --> 04:39:24.613
And we should introduce supplemental

04:39:26.140 --> 04:39:31.140
alternate proposals in GRCs that show

04:39:31.670 --> 04:39:36.670
what work would be done if
here was an inflation constraint

04:39:37.410 --> 04:39:39.403
on the growth of revenue?

04:39:41.640 --> 04:39:42.930
That's what I've got today.

04:39:42.930 --> 04:39:44.280
Thanks for the opportunity.

04:39:48.880 --> 04:39:49.820
<v ->All right, thank you, Jennifer.</v>

04:39:49.820 --> 04:39:51.800
Appreciate that very much.

04:39:51.800 --> 04:39:54.380
We're now gonna turn to Mark LeBel

04:39:54.380 --> 04:39:55.810
from the Regulatory Assistance Project

04:39:55.810 --> 04:39:58.380
to speak to his proposal.

04:39:58.380 --> 04:39:59.413
Thank you, Mark.

04:40:01.330 --> 04:40:02.368
<v ->Thank you, Paul</v>

04:40:02.368 --> 04:40:05.400
and thank you for Commissioners
for the invitation today.

04:40:05.400 --> 04:40:07.903
This has been a great event
so far and a lot of great ideas

04:40:07.903 --> 04:40:09.943
it's very valuable to do this.

04:40:11.170 --> 04:40:12.880
As I said, my name is Mark LeBell.

04:40:12.880 --> 04:40:15.430
I'm an associate with the
Regulatory Assistance Project.

04:40:15.430 --> 04:40:17.870
Rap is a national
international nonprofit

04:40:17.870 --> 04:40:20.770
that among other things
works with regulators deal

04:40:20.770 --> 04:40:22.220
with thorny regulatory issues,

04:40:22.220 --> 04:40:25.040
just like these that
we're discussing today.

04:40:25.040 --> 04:40:26.650
Many of our senior leaders

04:40:26.650 --> 04:40:28.340
or former state utility Commissioners

04:40:28.340 --> 04:40:30.440
or other energy and
environment officials.

04:40:31.620 --> 04:40:34.203
So we can go to the next slide, please.

04:40:36.700 --> 04:40:37.934
So just to start off with

04:40:37.934 --> 04:40:40.980
some higher level
regulatory level setting,

04:40:40.980 --> 04:40:42.290
what are we trying to accomplish

04:40:42.290 --> 04:40:45.220
when we're doing rate making,

04:40:45.220 --> 04:40:47.500
particularly for electric utilities,

04:40:47.500 --> 04:40:49.430
there are a lot of different
ways to put this all together.

04:40:49.430 --> 04:40:50.850
This is my best shot at it.

04:40:50.850 --> 04:40:53.390
We have higher level
public policy goals,

04:40:53.390 --> 04:40:56.060
efficient competition, and
control of monopoly behavior.

04:40:56.060 --> 04:40:58.950
We have all of our environmental
public health requirements.

04:40:58.950 --> 04:41:00.851
Societal equity has always been there,

04:41:00.851 --> 04:41:02.830
and that's a focus today.

04:41:02.830 --> 04:41:05.330
Historically, that was
things like universal access,

04:41:05.330 --> 04:41:06.800
rural electrification.

04:41:06.800 --> 04:41:08.930
Affordability's been a longstanding

04:41:08.930 --> 04:41:10.890
utility rate making goal,

04:41:10.890 --> 04:41:14.430
but as we evolve into
a quite different future

04:41:14.430 --> 04:41:16.550
there's new societal equity metrics

04:41:16.550 --> 04:41:18.322
that we're looking at as we well.

04:41:18.322 --> 04:41:20.050
And then we get into
the detailed setting

04:41:20.050 --> 04:41:23.230
utility prices lead to recover
the revenue requirement,

04:41:23.230 --> 04:41:25.700
revenue availability,
customer understanding,

04:41:25.700 --> 04:41:27.220
equitable allocation of costs,

04:41:27.220 --> 04:41:29.610
efficient forward looking price signals.

04:41:29.610 --> 04:41:31.251
All of these do put in the blender

04:41:31.251 --> 04:41:36.251
to create one set of
waste for all customers.

04:41:36.680 --> 04:41:37.580
Next slide please.

04:41:39.690 --> 04:41:41.570
So if the previous list
was sort of like motherhood

04:41:41.570 --> 04:41:43.810
and apple pie, everyone sort of loves it

04:41:44.660 --> 04:41:47.050
and can't rely against it.

04:41:47.050 --> 04:41:50.020
These are a few more
perhaps guiding principles

04:41:50.020 --> 04:41:52.793
that might engender debate
with my fellow panelists.

04:41:53.640 --> 04:41:55.218
I believe that long run marginal costs

04:41:55.218 --> 04:41:57.090
are an important part of the picture.

04:41:57.090 --> 04:41:58.100
As a practical matter,

04:41:58.100 --> 04:41:59.850
when we're doing electricity regulation

04:41:59.850 --> 04:42:01.330
and wholesale markets,

04:42:01.330 --> 04:42:03.580
we don't really let
short run marginal costs,

04:42:04.640 --> 04:42:09.033
go that high to do what the
other might be able to do.

04:42:09.884 --> 04:42:12.546
So the practical at
including long marginal costs,

04:42:12.546 --> 04:42:14.270
which is the way we plan the grid

04:42:14.270 --> 04:42:17.440
is a very important feature.

04:42:17.440 --> 04:42:18.660
Time-varying rates are important.

04:42:18.660 --> 04:42:20.470
California has default
time bearing rates

04:42:20.470 --> 04:42:22.160
already for all customers,

04:42:22.160 --> 04:42:24.250
but it makes these
comparisons very tricky.

04:42:24.250 --> 04:42:27.280
So talking about an average
rate can be misleading.

04:42:27.280 --> 04:42:28.820
There is no one average customer.

04:42:28.820 --> 04:42:30.790
All customers are
different low profiles,

04:42:30.790 --> 04:42:33.523
and will pay a different effective rate.

04:42:35.130 --> 04:42:37.500
One of the primary policy
purposes of utility regulation

04:42:37.500 --> 04:42:39.860
is to protect customers
from price discrimination,

04:42:39.860 --> 04:42:42.790
if they don't have other choices.

04:42:42.790 --> 04:42:45.250
And that makes looking at
things like willingness to pay

04:42:45.250 --> 04:42:46.800
a little bit tricky.

04:42:46.800 --> 04:42:49.910
You wanna make sure you're
not inadvertently violating

04:42:49.910 --> 04:42:52.120
some key public policy principles.

04:42:52.120 --> 04:42:55.710
Gradualism is a key principle
across all these scenarios

04:42:55.710 --> 04:42:58.000
and then every option
involves tradeoffs.

04:42:58.000 --> 04:43:01.590
My ideas have downsides
everyone's ideas have downsides.

04:43:01.590 --> 04:43:04.279
It's important to vet those seriously,

04:43:04.279 --> 04:43:06.830
putting forward an
ideas a lot like first date,

04:43:06.830 --> 04:43:09.240
everyone's gonna
emphasize their best qualities,

04:43:09.240 --> 04:43:11.640
but what you're thinking
about adopting a proposal,

04:43:11.640 --> 04:43:13.810
that's like a marriage and
you really wanna understand

04:43:13.810 --> 04:43:15.590
what they're getting into.

04:43:15.590 --> 04:43:18.000
Maybe you can have a divorce,
but it could be a little ugly.

04:43:18.000 --> 04:43:19.673
So next slide, please.

04:43:22.060 --> 04:43:24.220
Look, there's a lot of
things that are happening

04:43:24.220 --> 04:43:27.510
in the electric sector and
the energy sector right now

04:43:27.510 --> 04:43:28.540
across the country

04:43:28.540 --> 04:43:31.830
and California is the epicenter
are a lot of these changes.

04:43:31.830 --> 04:43:34.900
When solar storage,
everyone knows that that solar

04:43:34.900 --> 04:43:37.000
has a high penetration
rate in California,

04:43:37.860 --> 04:43:40.900
particularly customer side
solar demand response

04:43:40.900 --> 04:43:44.110
is a much more important
feature of the grid going forward.

04:43:44.110 --> 04:43:46.010
We have a smarter
grid with a lot more data

04:43:46.010 --> 04:43:47.760
that we can use for
all sorts of purposes.

04:43:47.760 --> 04:43:49.280
And then we have electrification

04:43:49.280 --> 04:43:51.240
of transportation and heating.

04:43:51.240 --> 04:43:54.240
So we just think about all of
these things at the same time.

04:43:54.240 --> 04:43:55.073
Next slide.

04:43:57.000 --> 04:43:58.227
And then the so-called duck curve,

04:43:58.227 --> 04:44:00.580
this is a very mild example of that,

04:44:00.580 --> 04:44:01.940
but this is just an important feature

04:44:01.940 --> 04:44:03.740
of the modern grading California.

04:44:03.740 --> 04:44:06.430
And we'll get to my particular reason

04:44:06.430 --> 04:44:08.430
for bringing this up in a minute.

04:44:08.430 --> 04:44:09.330
Next slide please.

04:44:11.820 --> 04:44:14.060
So here are my proposals.

04:44:14.060 --> 04:44:17.020
We have three cost
based reforms for California

04:44:17.020 --> 04:44:18.820
that we would recommend.

04:44:18.820 --> 04:44:20.460
The first two are slam dunks

04:44:20.460 --> 04:44:23.040
and the third one is the one
that gets a little more tricky.

04:44:23.040 --> 04:44:25.870
So first is the daytime
hours and time of use rates

04:44:25.870 --> 04:44:27.800
should be off peak or super off peak

04:44:27.800 --> 04:44:29.600
with the lowest kilowat hour prices.

04:44:30.727 --> 04:44:32.640
A site infrastructure
charge for line transformer

04:44:32.640 --> 04:44:34.920
and secondary voltage network costs,

04:44:34.920 --> 04:44:37.080
we can get into more details of that.

04:44:37.080 --> 04:44:38.790
And then a distribution flow charge

04:44:38.790 --> 04:44:41.140
that would be a charge in
both imports and exports

04:44:41.140 --> 04:44:44.160
to cover what I call
distribution backbone costs.

04:44:44.160 --> 04:44:45.060
Next slide please.

04:44:47.480 --> 04:44:51.000
So, one thing that seems
clear going forward in California,

04:44:51.000 --> 04:44:52.860
as you keep adding
more solar to the grid,

04:44:52.860 --> 04:44:55.910
we have a distinctive cost
pattern that's emerging,

04:44:55.910 --> 04:44:59.280
and that shows up in the
E3 avoided cost calculator.

04:44:59.280 --> 04:45:01.660
The daytime hours have
the lowest avoided cost,

04:45:01.660 --> 04:45:03.010
and you need to start reflecting that

04:45:03.010 --> 04:45:06.140
in your time of use rates
sooner rather than later.

04:45:06.140 --> 04:45:09.073
Hawaii is already doing that,
and several time of use rate,

04:45:09.073 --> 04:45:12.430
and that's just illustrated
in the bottom right here.

04:45:12.430 --> 04:45:13.750
You'll see the lowest rate

04:45:13.750 --> 04:45:16.030
is approximately from nine to five.

04:45:16.030 --> 04:45:17.860
Doesn't have to be exactly those hours.

04:45:17.860 --> 04:45:20.400
And then the overnight
hours and the evening hours

04:45:20.400 --> 04:45:22.470
have a much higher time of use rate.

04:45:22.470 --> 04:45:23.420
Next slide, please.

04:45:26.180 --> 04:45:28.247
The idea behind the
site structure charge,

04:45:28.247 --> 04:45:30.080
but there's much overload diversity

04:45:30.080 --> 04:45:32.900
at the customer end of
the distribution system.

04:45:32.900 --> 04:45:35.750
The service drop the secondary networks,

04:45:35.750 --> 04:45:38.080
and then the line transformers

04:45:38.080 --> 04:45:40.270
that only serve either one customer

04:45:40.270 --> 04:45:42.030
or a large handful of customers,

04:45:42.030 --> 04:45:43.330
sometimes a transformer bank

04:45:43.330 --> 04:45:44.750
to serve an entire apartment building,

04:45:44.750 --> 04:45:46.300
which can have a lot of customers

04:45:46.300 --> 04:45:48.610
or an office building, which
can have a lot of customers.

04:45:48.610 --> 04:45:49.640
But for the most part,

04:45:49.640 --> 04:45:52.760
this infrastructure at the
end of the distribution system

04:45:52.760 --> 04:45:54.250
has much lower diversity

04:45:54.250 --> 04:45:57.520
and only has a much lower
number of customers that use it.

04:45:57.520 --> 04:46:01.050
That justifies a different
kind of a rate structure.

04:46:01.050 --> 04:46:05.740
And this name site infrastructure
charge does come from SMU,

04:46:05.740 --> 04:46:06.920
originally their CNI rate

04:46:06.920 --> 04:46:09.320
had to prepare of a small demand charge

04:46:09.320 --> 04:46:10.530
to cover these costs.

04:46:10.530 --> 04:46:11.710
It's gotten a lot bigger over the years.

04:46:11.710 --> 04:46:12.543
I think it's straight

04:46:12.543 --> 04:46:14.060
a little bit from its original purpose,

04:46:14.060 --> 04:46:15.187
but you could do it as a demand charge

04:46:15.187 --> 04:46:17.540
you could do it like we show
in the next couple slides.

04:46:17.540 --> 04:46:18.490
Next slide, please.

04:46:20.540 --> 04:46:22.650
At the Burbank visible electric utility,

04:46:22.650 --> 04:46:24.410
they have a service size charge

04:46:24.410 --> 04:46:26.710
where they have a basic customer charge

04:46:26.710 --> 04:46:28.893
where all customers
pay about $9 a month.

04:46:28.893 --> 04:46:30.680
And then there's a
tiered service size charge.

04:46:30.680 --> 04:46:33.070
If you're a multifamily,
you have a small Atter,

04:46:33.070 --> 04:46:35.770
if you're a single family
home with a 200 a panel,

04:46:35.770 --> 04:46:37.370
you have a medium size atter.

04:46:37.370 --> 04:46:40.000
And if you're a big
house with a big panel,

04:46:40.000 --> 04:46:41.610
you have a big atter.

04:46:41.610 --> 04:46:42.443
Next slide.

04:46:44.500 --> 04:46:47.200
In France, they do a more
sophisticated version of this,

04:46:47.200 --> 04:46:50.300
where they have a KVA Subscription.

04:46:50.300 --> 04:46:52.670
I believe they actually
enforce this a circuit breaker.

04:46:52.670 --> 04:46:54.610
So if you go over your
KVA subscription level,

04:46:54.610 --> 04:46:57.010
you get shut off, which
might be a little bit drastic,

04:46:57.010 --> 04:47:00.160
but there's different
ways to enforce the cutoff.

04:47:00.160 --> 04:47:02.855
And the way the math
works for this French tariff,

04:47:02.855 --> 04:47:06.821
if there's approximately a six
Euro based customer charge,

04:47:06.821 --> 04:47:09.580
and then it's about one Euro per KVA.

04:47:09.580 --> 04:47:11.550
So there's no magic to that formula,

04:47:11.550 --> 04:47:15.100
but that seems to be about
a cost based rate in France.

04:47:15.100 --> 04:47:15.933
Next slide.

04:47:18.170 --> 04:47:20.793
So here's where things
get a little more tricky.

04:47:22.570 --> 04:47:24.140
The modern grid,

04:47:24.140 --> 04:47:25.680
everyone talks about
how it's gonna be different

04:47:25.680 --> 04:47:26.800
than the old grid.

04:47:26.800 --> 04:47:27.730
And one of the key ways,

04:47:27.730 --> 04:47:29.330
it seems like it's gonna be different

04:47:29.330 --> 04:47:30.810
is that they're gonna
have a lot more customers

04:47:30.810 --> 04:47:33.680
with distributed generation and storage,

04:47:33.680 --> 04:47:37.460
and that we're gonna have
electricity flowing both ways

04:47:37.460 --> 04:47:38.760
at different times of day.

04:47:39.850 --> 04:47:41.670
And while there's a
number of engineering,

04:47:41.670 --> 04:47:43.500
things that you can
do to account for that

04:47:43.500 --> 04:47:47.490
to enable exports to flow
out through line transformers

04:47:47.490 --> 04:47:49.250
and out through substations
and protect both it is

04:47:49.250 --> 04:47:51.423
and all the other things you need to do.

04:47:53.670 --> 04:47:54.840
How and whether you start to think

04:47:54.840 --> 04:47:57.460
about rates in that context,

04:47:57.460 --> 04:47:58.750
I think is an interesting question

04:47:58.750 --> 04:48:01.363
and gets us to where
we are in this proposal.

04:48:02.530 --> 04:48:03.823
You go to the next slide.

04:48:06.186 --> 04:48:09.060
So instead of talking
about sales or delivery,

04:48:09.060 --> 04:48:11.240
since that's not how
the grid works anymore,

04:48:11.240 --> 04:48:12.880
we can talk about flows.

04:48:12.880 --> 04:48:14.090
And maybe on the supply side,

04:48:14.090 --> 04:48:15.690
you still have sales and deliveries,

04:48:15.690 --> 04:48:17.990
but on the distribution
system, we have flows.

04:48:19.210 --> 04:48:20.626
So what we're proposing here

04:48:20.626 --> 04:48:22.290
is that there's a specific category

04:48:22.290 --> 04:48:25.290
of what I call distribution
backbone costs,

04:48:25.290 --> 04:48:27.450
but it's really the
basic polls and wires

04:48:27.450 --> 04:48:28.800
that we see on our streets.

04:48:29.720 --> 04:48:31.730
That if you are having customers

04:48:31.730 --> 04:48:35.313
that are exporting electricity
out through those wires,

04:48:35.313 --> 04:48:37.590
they should be paying for those wires

04:48:37.590 --> 04:48:40.920
in the exact same way that
they're paying for their imports.

04:48:40.920 --> 04:48:42.410
And in that way, it's
non-discriminatory,

04:48:42.410 --> 04:48:44.393
the rate can be the same both ways.

04:48:45.240 --> 04:48:48.160
I mean, this has a number
of different consequences.

04:48:48.160 --> 04:48:51.270
So for a customer with
distributed generation of storage

04:48:51.270 --> 04:48:53.600
or an EV that that's exports,

04:48:53.600 --> 04:48:56.290
this is a natural method
to design a pricing system

04:48:56.290 --> 04:48:59.090
that has a higher
import kilowatt hour price

04:48:59.090 --> 04:49:03.090
than the value of the
export kilowatt create.

04:49:03.090 --> 04:49:04.450
So whether you call that net billing

04:49:04.450 --> 04:49:05.910
or some other type of label,

04:49:05.910 --> 04:49:08.050
this is one way to have separation

04:49:08.050 --> 04:49:11.270
between the import
rate and the export credit.

04:49:11.270 --> 04:49:14.220
And that helps with cross up
the issues among other things.

04:49:15.990 --> 04:49:17.940
And then as a level of aggregate rates,

04:49:18.976 --> 04:49:21.890
what you end up with is higher
billing determinants overall

04:49:21.890 --> 04:49:24.096
for all residential customers

04:49:24.096 --> 04:49:26.480
and for the same lump
sum category of costs,

04:49:26.480 --> 04:49:29.420
the effective rate ends up being lower.

04:49:29.420 --> 04:49:32.280
So once time I was
talking to a Michigan staffer

04:49:32.280 --> 04:49:33.960
and he said, what we do when we separate

04:49:33.960 --> 04:49:35.097
is we take one big number

04:49:35.097 --> 04:49:36.810
and we divide it by another big number

04:49:36.810 --> 04:49:38.280
and we come up with a rate.

04:49:38.280 --> 04:49:41.380
So basically here, the
bottom denominator number,

04:49:41.380 --> 04:49:42.720
we have a bigger number.

04:49:42.720 --> 04:49:45.980
So the overall rate
we have will be lower.

04:49:45.980 --> 04:49:46.873
Next slide.

04:49:48.780 --> 04:49:49.613
So the question is,

04:49:49.613 --> 04:49:52.020
how does this all fit
together into a rate design

04:49:52.020 --> 04:49:53.963
that might lead to more affordability?

04:49:54.840 --> 04:49:56.950
So having a more advanced time of use

04:49:56.950 --> 04:49:58.450
or time bearing rate structure

04:49:58.450 --> 04:50:01.240
should help efficiently size the system,

04:50:01.240 --> 04:50:03.440
and it contentized
better customer behavior.

04:50:04.900 --> 04:50:05.870
The low daytime rates are,

04:50:05.870 --> 04:50:08.497
how do you get storage
charging at the middle of the day?

04:50:08.497 --> 04:50:10.390
You be charging at
the middle of the day,

04:50:10.390 --> 04:50:12.840
all sorts of load ships
in the middle of the day.

04:50:14.200 --> 04:50:18.190
The every time you take a
cost out of volumetric rate

04:50:18.190 --> 04:50:21.240
as discussed by many
people earlier today

04:50:21.240 --> 04:50:22.950
and put it into a
different type of charge,

04:50:22.950 --> 04:50:24.660
you're lowering the volume rate

04:50:24.660 --> 04:50:26.410
so that enhances the affordability.

04:50:27.880 --> 04:50:30.880
And then just the overall way

04:50:30.880 --> 04:50:33.440
you are spreading
this cost is important.

04:50:33.440 --> 04:50:35.050
So putting it all together here,

04:50:35.050 --> 04:50:38.360
I'm gonna throw one
more idea at you at the end.

04:50:38.360 --> 04:50:39.710
What I would suggest actually

04:50:39.710 --> 04:50:42.760
is to segment the
residential rate class into two.

04:50:42.760 --> 04:50:45.600
So that way you can have
distributed generation customers,

04:50:45.600 --> 04:50:47.900
EV customers and large users

04:50:47.900 --> 04:50:51.436
deliberately put onto a
more advanced rate design

04:50:51.436 --> 04:50:53.160
and that low income and low users

04:50:53.160 --> 04:50:57.090
can be shielded from
some of these rate structures

04:50:57.090 --> 04:50:58.980
that are more efficient, but have risks.

04:50:58.980 --> 04:51:01.483
So if you do a site of
charge based on demand,

04:51:02.350 --> 04:51:04.360
there are no risks to
low income customers.

04:51:04.360 --> 04:51:07.080
So this is one way to package
all these rates together.

04:51:07.080 --> 04:51:09.590
When you have a
distribution flow charge,

04:51:09.590 --> 04:51:12.520
the way I've shown it here
is you do it on both sides

04:51:12.520 --> 04:51:13.950
of the symmetric rate at the bottom.

04:51:13.950 --> 04:51:15.370
So the way that this would work,

04:51:15.370 --> 04:51:16.960
if there would be in the daytime,

04:51:16.960 --> 04:51:19.348
there would be a 12 cent rate on imports

04:51:19.348 --> 04:51:22.313
and an 8 cent credit on exports.

04:51:23.650 --> 04:51:26.140
There's no perfect way to show this,

04:51:26.140 --> 04:51:28.420
but I thought this
was the most intuitive.

04:51:28.420 --> 04:51:30.540
So thank you for
letting me present again.

04:51:30.540 --> 04:51:33.467
And I'm at the end of my time
and at the end of my slides.

04:51:39.490 --> 04:51:40.500
<v ->All right, thank you, Mark.</v>

04:51:40.500 --> 04:51:41.687
Appreciate that very much.

04:51:41.687 --> 04:51:45.060
We are now going to
transition to Meredith Fowlie

04:51:45.060 --> 04:51:47.570
to talk to us about income charges

04:51:47.570 --> 04:51:49.570
and the research that she's done there.

04:51:49.570 --> 04:51:51.370
Meredith it's over to you.

04:51:51.370 --> 04:51:52.890
<v ->Great, and so I think
there are some slides.</v>

04:51:52.890 --> 04:51:53.723
Can you hear me?

04:51:56.070 --> 04:51:56.903
You can hear me.

04:51:56.903 --> 04:51:59.690
Okay, so I think there'll be
slides coming up in a minute,

04:51:59.690 --> 04:52:02.070
thanks to the organizers
for the invitations

04:52:02.070 --> 04:52:04.440
to participate in this conversation.

04:52:04.440 --> 04:52:06.770
And thanks to all of you who are still

04:52:06.770 --> 04:52:08.250
around for this last session,

04:52:08.250 --> 04:52:09.207
you're all busy and important,

04:52:09.207 --> 04:52:11.350
and I appreciate your attention.

04:52:11.350 --> 04:52:12.540
My name is Meredith Fowlie,

04:52:12.540 --> 04:52:14.270
and I'm a professor at UC Berkeley,

04:52:14.270 --> 04:52:17.920
faculty director at the UC
Energy Institute at Haas.

04:52:17.920 --> 04:52:20.130
And today I'll be using my 10 minutes

04:52:20.130 --> 04:52:21.880
to talk about some ongoing work

04:52:21.880 --> 04:52:24.360
that's in collaboration
with Berkeley colleagues,

04:52:24.360 --> 04:52:26.250
Severin Borenstein and Jim Sallee.

04:52:26.250 --> 04:52:27.320
And I should note that this work

04:52:27.320 --> 04:52:28.673
is being supported by Next 10,

04:52:28.673 --> 04:52:30.494
which we very much appreciate.

04:52:30.494 --> 04:52:31.963
Next slide, please.

04:52:33.010 --> 04:52:35.930
So we're here today because
California's electricity rates,

04:52:35.930 --> 04:52:38.610
our retail electricity
rates are really high,

04:52:38.610 --> 04:52:41.110
but if we're gonna talk
concretely about what to do

04:52:41.110 --> 04:52:42.060
about these high prices,

04:52:42.060 --> 04:52:44.540
I think it's important
to think precisely

04:52:44.540 --> 04:52:45.860
about the extent of the problem.

04:52:45.860 --> 04:52:47.630
So how high is too high

04:52:47.630 --> 04:52:49.616
and high relative to what benchmark.

04:52:49.616 --> 04:52:51.720
So with this in mind, I
wanted to start with this picture,

04:52:51.720 --> 04:52:54.610
which I'm taking from a
report that Mohit reference.

04:52:54.610 --> 04:52:55.493
Thank you, Mohit.

04:52:55.493 --> 04:52:57.550
That we released last spring.

04:52:57.550 --> 04:52:59.050
And what we're doing in this graph is

04:52:59.050 --> 04:53:01.930
we're comparing average
residential electricity prices

04:53:01.930 --> 04:53:03.930
paid by California households

04:53:03.930 --> 04:53:06.990
against our favorite are
being a economist benchmark

04:53:06.990 --> 04:53:09.487
of what tic price would look like.

04:53:09.487 --> 04:53:10.850
And so following over his leads,

04:53:10.850 --> 04:53:12.190
we're focusing on PG&amp;E here

04:53:12.190 --> 04:53:13.563
as part of the middle
of the road utility

04:53:13.563 --> 04:53:14.920
when we're thinking about rates

04:53:14.920 --> 04:53:18.497
but the report does look
across all three major IOU.

04:53:18.497 --> 04:53:20.320
And so what you're seeing is the average

04:53:20.320 --> 04:53:22.360
retail price paid by non care households

04:53:22.360 --> 04:53:25.620
in yellow over time, care
households in greens.

04:53:25.620 --> 04:53:27.070
And what the red line represents

04:53:27.070 --> 04:53:29.930
is our estimate of the
social marginal cost.

04:53:29.930 --> 04:53:31.940
And if economists were setting rates,

04:53:31.940 --> 04:53:35.170
the social marginal cost is
the efficient price to choose

04:53:35.170 --> 04:53:36.830
because it's intended to capture

04:53:36.830 --> 04:53:38.530
the incremental cost of society

04:53:38.530 --> 04:53:41.680
of incrementally increasing
electricity demand

04:53:41.680 --> 04:53:43.870
and production in
California by a kilowatt hour.

04:53:43.870 --> 04:53:45.640
So what this is conceptually including

04:53:45.640 --> 04:53:47.000
is the cost of the fuel burn

04:53:47.000 --> 04:53:49.380
when I consume one more kilo watt hour,

04:53:49.380 --> 04:53:52.400
the environmental impact
of any associated emissions,

04:53:52.400 --> 04:53:55.210
marginal capacity,
investment costs, et cetera.

04:53:55.210 --> 04:53:56.360
And so, as you can see

04:53:56.360 --> 04:53:58.160
that our estimate of
the social marginal cost

04:53:58.160 --> 04:54:02.010
that red line is squint
at, it is fall in recent years.

04:54:02.010 --> 04:54:03.010
And the main reason is that

04:54:03.010 --> 04:54:05.710
we're reducing the greenhouse
gas and intensity of the grid.

04:54:05.710 --> 04:54:07.693
So the climate costs are on the decline

04:54:07.693 --> 04:54:09.630
this is good.

04:54:09.630 --> 04:54:11.550
But over the same time
period of retail electric price

04:54:11.550 --> 04:54:13.340
have been arriving for all the reasons

04:54:13.340 --> 04:54:14.470
we've been talking about today,

04:54:14.470 --> 04:54:17.610
we are increasingly relying
on retail electricity rates

04:54:17.610 --> 04:54:20.220
to raise revenues, to
cover conducting grid,

04:54:20.220 --> 04:54:22.690
infrastructure,
wildfire risk mitigation,

04:54:22.690 --> 04:54:23.990
and public of purpose programs

04:54:23.990 --> 04:54:26.780
and all the costs
you've been discussing.

04:54:26.780 --> 04:54:28.490
So the point I wanna
make with this graph

04:54:28.490 --> 04:54:32.630
is setting that price well
above social marginal cost

04:54:32.630 --> 04:54:34.330
to raise these revenues amount

04:54:34.330 --> 04:54:36.570
to tax on electricity consumptions,

04:54:36.570 --> 04:54:38.280
there are lots of packages we could use

04:54:38.280 --> 04:54:39.113
to raise these revenues.

04:54:39.113 --> 04:54:42.120
And the point you
made in our earlier report

04:54:42.120 --> 04:54:43.460
that has been made so effectively

04:54:43.460 --> 04:54:45.630
by so many of the (indistinct) today

04:54:45.630 --> 04:54:47.550
is that tax electricity consumption

04:54:47.550 --> 04:54:49.140
is problematic with two reasons.

04:54:49.140 --> 04:54:51.420
The one is that when we
make electricity consumption

04:54:51.420 --> 04:54:54.070
with more costly than it actually is,

04:54:54.070 --> 04:54:55.560
we're slowing progress
on electrification,

04:54:55.560 --> 04:54:58.470
like who wants to electrify
when electricity prices

04:54:58.470 --> 04:54:59.890
are so high.

04:54:59.890 --> 04:55:02.060
And the second concern is that,

04:55:02.060 --> 04:55:05.370
tax on electricity consumption
is a really perspective tax

04:55:05.370 --> 04:55:07.570
that loads the substantial
cost recovery burden

04:55:07.570 --> 04:55:09.590
on household that afford to pay.

04:55:09.590 --> 04:55:11.665
So I know our focus
today is on affordability,

04:55:11.665 --> 04:55:12.720
that's an important focus,

04:55:12.720 --> 04:55:14.320
but really important
to keep in mind that

04:55:14.320 --> 04:55:17.280
there's no equity
efficiency trade off here,

04:55:17.280 --> 04:55:19.540
whether you're concerned
about economic efficiency

04:55:19.540 --> 04:55:21.320
and efficient electrification

04:55:21.320 --> 04:55:24.110
and/or you're concerned
about affordability and equity

04:55:24.110 --> 04:55:25.460
will pay energy transition,

04:55:26.690 --> 04:55:28.443
both concerns point
in the same direction

04:55:28.443 --> 04:55:31.390
and that's what you bring retail rates

04:55:31.390 --> 04:55:33.190
for electricity in California.

04:55:33.190 --> 04:55:34.770
Next slide please.

04:55:34.770 --> 04:55:36.660
So I wanna spend my very limited time

04:55:36.660 --> 04:55:38.410
summarizing some preliminary results

04:55:38.410 --> 04:55:42.090
that build on that
earlier Next 10 reports.

04:55:42.090 --> 04:55:43.150
Thank you, utilities,

04:55:43.150 --> 04:55:46.400
we now have access to really
household level billing data

04:55:46.400 --> 04:55:48.720
from millions of California households

04:55:48.720 --> 04:55:50.540
that allow us to
construct a clear picture

04:55:50.540 --> 04:55:53.230
of how this electricity
tax burden is being shared

04:55:53.230 --> 04:55:55.260
across different types of households.

04:55:55.260 --> 04:55:56.390
So what I wanna do is start

04:55:56.390 --> 04:55:58.980
by characterizing the
distributional implications

04:55:58.980 --> 04:56:00.560
of how we're doing things now,

04:56:00.560 --> 04:56:03.870
how we're recovering revenue fee rate,

04:56:03.870 --> 04:56:06.860
and then talk more about
this proposed alternative

04:56:06.860 --> 04:56:08.750
that will tension,

04:56:08.750 --> 04:56:10.367
that we argue would
provide a more efficient

04:56:10.367 --> 04:56:13.160
and more equitable
views of raising them.

04:56:13.160 --> 04:56:14.493
The next slide, please.

04:56:15.899 --> 04:56:17.040
Before I jump into the pictures,

04:56:17.040 --> 04:56:18.667
I wanna clarify jargon a bit.

04:56:18.667 --> 04:56:21.770
I'm gonna be talking
about cost recovery burden

04:56:21.770 --> 04:56:22.603
or electricity tax burden.

04:56:22.603 --> 04:56:26.110
I'm gonna use those jargony
terms interchangeably.

04:56:26.110 --> 04:56:27.020
What am I talking about?

04:56:27.020 --> 04:56:27.927
So for each household and our data,

04:56:27.927 --> 04:56:29.060
does that include you?

04:56:29.060 --> 04:56:32.200
If you're a customer of one
of the three major utilities,

04:56:32.200 --> 04:56:34.410
we look at your electricity
bill in a given year,

04:56:34.410 --> 04:56:37.830
and then we subtract from
that the bill you would've paid,

04:56:37.830 --> 04:56:40.790
if you were paying
efficient electricity price,

04:56:40.790 --> 04:56:42.700
if you're per kilowatt
hour charge was set

04:56:42.700 --> 04:56:44.640
at the social marginal cost.

04:56:44.640 --> 04:56:47.110
And that difference between the bill pay

04:56:47.110 --> 04:56:48.620
versus the bill to pay at prices

04:56:48.620 --> 04:56:50.360
were set at social margin cost

04:56:50.360 --> 04:56:54.940
is your contribution to the
raising of revenues we need

04:56:54.940 --> 04:56:57.420
to cover non incremental costs.

04:56:57.420 --> 04:56:58.830
And when we think about affordability,

04:56:58.830 --> 04:57:00.980
we're particularly
concerned about the costs

04:57:00.980 --> 04:57:03.130
that are born by low end household.

04:57:03.130 --> 04:57:05.710
It's notoriously hard as
we've heard about construct,

04:57:05.710 --> 04:57:08.690
accurate income measures
at the household level,

04:57:08.690 --> 04:57:11.010
we are developing a post
that leverages census data

04:57:11.010 --> 04:57:13.020
and last data and
household level billing data

04:57:13.020 --> 04:57:13.853
to come up with better estimates.

04:57:13.853 --> 04:57:16.470
I'm gonna show you some
preliminary results today,

04:57:16.470 --> 04:57:20.570
but not dive into the details
given time constraints,

04:57:20.570 --> 04:57:21.403
slide by.

04:57:22.250 --> 04:57:23.083
Next slide please.

04:57:23.083 --> 04:57:23.916
Thank you.

04:57:23.916 --> 04:57:25.250
So there's a really quick summary

04:57:25.250 --> 04:57:26.083
that says preliminary results.

04:57:26.083 --> 04:57:28.840
There's a lot going
on here late in the day.

04:57:28.840 --> 04:57:31.290
So let me walk you
to see the key details.

04:57:31.290 --> 04:57:32.710
So what this graph is showing you

04:57:32.710 --> 04:57:34.790
is this a summary of our estimates

04:57:34.790 --> 04:57:38.750
of household level cost recovery burden

04:57:38.750 --> 04:57:40.730
divided by income category.

04:57:40.730 --> 04:57:43.490
And again, we're so
looking on PG&amp;E in 2019,

04:57:43.490 --> 04:57:45.750
that there's a place to start.

04:57:45.750 --> 04:57:47.650
So if you're a PG&amp;E customer bundled

04:57:47.650 --> 04:57:49.367
or unbundled year to year.

04:57:49.367 --> 04:57:51.420
And each box is showing you

04:57:51.420 --> 04:57:54.090
the 25th to 75th percentile range,

04:57:54.090 --> 04:57:57.510
that annual tax burden
for each income category

04:57:57.510 --> 04:57:59.700
and the horizontal line
in boxes of immediate.

04:57:59.700 --> 04:58:01.680
So if you squint at it,

04:58:01.680 --> 04:58:03.577
you're looking at $400 per year

04:58:03.577 --> 04:58:05.570
for the lowest income category,

04:58:05.570 --> 04:58:07.720
upwards of 900 for the highest.

04:58:07.720 --> 04:58:09.320
So I wanna make three points about this,

04:58:09.320 --> 04:58:11.190
and I'd be happy to talk more and dive

04:58:11.190 --> 04:58:13.270
into the details and then Q&amp;A.

04:58:13.270 --> 04:58:15.530
The first thing you'll notice is
that the medium expenditure

04:58:15.530 --> 04:58:19.960
that medium annual
electricity consumption tax bill

04:58:19.960 --> 04:58:21.512
is increasing the income.

04:58:21.512 --> 04:58:24.300
And that's surprising
these cost calculations

04:58:24.300 --> 04:58:26.090
do account for the care discount

04:58:26.090 --> 04:58:28.260
that reduces bill for many
low income households.

04:58:28.260 --> 04:58:30.067
So care is helping to mitigate

04:58:30.067 --> 04:58:32.020
the impact of current rate structures

04:58:32.020 --> 04:58:34.250
on the lowest income household.

04:58:34.250 --> 04:58:37.600
Second point care,
notwithstanding the cost burden

04:58:37.600 --> 04:58:39.970
on low income households is substantial,

04:58:39.970 --> 04:58:41.650
essentially when you
measure the contribution

04:58:41.650 --> 04:58:45.030
of the shared income and
that's what they red line doing it,

04:58:45.030 --> 04:58:48.650
doing the dash red line
of new annual burden

04:58:48.650 --> 04:58:49.483
of the share of income

04:58:49.483 --> 04:58:50.900
is that just like drive home,

04:58:50.900 --> 04:58:54.300
I think we already grasped
is that this electricity tax,

04:58:54.300 --> 04:58:56.150
because for a much
larger share of income

04:58:56.150 --> 04:58:57.933
among the lower income households.

04:58:58.810 --> 04:59:00.240
And finding it's worth
building the (indistinct),

04:59:00.240 --> 04:59:01.683
even the same income group,

04:59:01.683 --> 04:59:05.560
there's a lot of variation in
household level contribution

04:59:05.560 --> 04:59:07.620
to non incremental cost recovery,

04:59:07.620 --> 04:59:10.360
particularly true in
that high 10 category

04:59:10.360 --> 04:59:11.690
where you have some large consumers,

04:59:11.690 --> 04:59:14.080
but you have an increasing
number of consumers

04:59:14.080 --> 04:59:16.140
putting these top solar on their roof,

04:59:16.140 --> 04:59:18.710
which is gonna a significantly reduced

04:59:18.710 --> 04:59:20.510
their cost recovery burden

04:59:20.510 --> 04:59:22.860
or their contribution to
non incremental costs.

04:59:24.310 --> 04:59:25.413
Next slide.

04:59:26.280 --> 04:59:28.380
So my remaining time, I
know I don't have much time,

04:59:28.380 --> 04:59:31.640
I wanna talk about this
alternative rate design proposal

04:59:31.640 --> 04:59:34.010
that we sketched
out in an earlier report

04:59:34.010 --> 04:59:37.100
that could raise needed
rather in a more efficient

04:59:37.100 --> 04:59:38.423
and less regressive way.

04:59:39.450 --> 04:59:40.860
And I should just mention that

04:59:40.860 --> 04:59:42.720
there's been lots of
important discussion today,

04:59:42.720 --> 04:59:44.360
urging up to find other ways,

04:59:44.360 --> 04:59:46.190
to pay for these non incremental costs,

04:59:46.190 --> 04:59:48.270
such the living cost
into the state budget,

04:59:48.270 --> 04:59:49.960
and we totally support those arguments,

04:59:49.960 --> 04:59:51.774
but I've asked to talk about

04:59:51.774 --> 04:59:54.100
what I see as a complimentary reform,

04:59:54.100 --> 04:59:56.880
which is assuming there's
still gonna be substantive

04:59:56.880 --> 04:59:59.920
non-incremental cost coverage
from electric consumers.

04:59:59.920 --> 05:00:01.860
Can we recover those costs differently

05:00:01.860 --> 05:00:04.640
in a way that's more
efficient, more equitable.

05:00:04.640 --> 05:00:06.110
And so in our early report,

05:00:06.110 --> 05:00:09.260
thank you Mohit for setting mistake,

05:00:09.260 --> 05:00:12.350
we picked this idea of an
income based discharge,

05:00:12.350 --> 05:00:13.470
and we did a great job

05:00:13.470 --> 05:00:15.500
of introducing the
basic concept with tables

05:00:15.500 --> 05:00:17.000
when we add a few more details

05:00:17.000 --> 05:00:19.373
and showed you the
basic idea and a graph.

05:00:20.370 --> 05:00:22.250
So we've soon updated
the analysis meeting

05:00:22.250 --> 05:00:26.257
where detail has billing
data, better income data,

05:00:26.257 --> 05:00:27.340
(indistinct) is the same.

05:00:27.340 --> 05:00:28.770
What we're doing here is we're saying

05:00:28.770 --> 05:00:30.900
supposed we set the electricity price

05:00:30.900 --> 05:00:32.900
at the efficient social marginal cost,

05:00:32.900 --> 05:00:36.720
which in 2019 PG&amp;E, which
is what we're looking at here,

05:00:36.720 --> 05:00:39.240
we got eight or nine of whatever.

05:00:39.240 --> 05:00:40.807
If that add is the price we set

05:00:40.807 --> 05:00:42.930
and here we're assuming analogic demand

05:00:42.930 --> 05:00:45.190
for the purpose of 10
minute presentation,

05:00:45.190 --> 05:00:46.960
we have to make of
the revenue collected,

05:00:46.960 --> 05:00:49.610
which fall short of the
revenue requirement in 2019

05:00:49.610 --> 05:00:53.590
by about 3.6 billion
for PG&amp;E in that year.

05:00:53.590 --> 05:00:54.423
So principal,

05:00:54.423 --> 05:00:57.360
we can recover that additional
revenue in a fixed charge.

05:00:57.360 --> 05:00:59.900
If the fixed charge did not
vary across households,

05:00:59.900 --> 05:01:02.410
all households paid
a six monthly charge,

05:01:02.410 --> 05:01:03.890
and that's the red line.

05:01:03.890 --> 05:01:05.560
It would address the efficiency concern,

05:01:05.560 --> 05:01:06.713
but not affordability.

05:01:07.650 --> 05:01:09.697
So alternatively, what
we can propose is that

05:01:09.697 --> 05:01:12.700
the fixed charge increase with income

05:01:12.700 --> 05:01:14.524
to shift the cost recovery burden

05:01:14.524 --> 05:01:16.853
away from low income household.

05:01:16.853 --> 05:01:19.830
And what that green
step function is doing

05:01:19.830 --> 05:01:23.870
is how calibrating fixed charge
that increases with income

05:01:23.870 --> 05:01:27.000
in a way that's as
progressive as the sales tax,

05:01:27.000 --> 05:01:27.940
we could choose other taxes,

05:01:27.940 --> 05:01:30.670
we could choose that tax income taxes,

05:01:30.670 --> 05:01:32.030
but here we're looking at something

05:01:32.030 --> 05:01:36.870
that's commensurate with
the sales tax in California.

05:01:36.870 --> 05:01:37.703
And there you see this

05:01:37.703 --> 05:01:39.750
the monthly charge ranges from Euro

05:01:39.750 --> 05:01:42.190
to the lowest lowest in categories,

05:01:42.190 --> 05:01:44.607
all the way upwards of $160 per month

05:01:44.607 --> 05:01:47.000
for the highest same income category.

05:01:47.000 --> 05:01:48.160
So by design,

05:01:48.160 --> 05:01:51.170
both of these six charge
schedules in the single picture

05:01:51.170 --> 05:01:53.687
raise the same revenues
of the current regime,

05:01:53.687 --> 05:01:57.570
but we're arguing with have a
six charges are more efficient

05:01:57.570 --> 05:02:01.380
and much less aggressive
approach than the current system.

05:02:01.380 --> 05:02:03.130
Next slide, please.

05:02:03.130 --> 05:02:05.354
So hopefully I convince you,

05:02:05.354 --> 05:02:08.010
or it makes sense that this
income based six charge

05:02:08.010 --> 05:02:10.620
could deliver real agreements
over the current regime

05:02:10.620 --> 05:02:12.560
in terms of efficiency and equity,

05:02:12.560 --> 05:02:14.983
but there are forces of equity
or implementation challenges

05:02:14.983 --> 05:02:18.000
that we've already talked
about a little bit today

05:02:18.000 --> 05:02:20.200
and chief among these
information related.

05:02:20.200 --> 05:02:21.710
So to implement this approach,

05:02:21.710 --> 05:02:25.070
we need to find is households
to an income category.

05:02:25.070 --> 05:02:26.500
Next slide please.

05:02:26.500 --> 05:02:29.920
If you're thinking about 100
or $160 per month charge,

05:02:29.920 --> 05:02:31.880
high income households have an incentive

05:02:31.880 --> 05:02:34.550
to under care for their income
to avoid that fixed charge

05:02:34.550 --> 05:02:36.080
that's real problem.

05:02:36.080 --> 05:02:37.430
And as we talked about today,

05:02:37.430 --> 05:02:40.370
utilities don't, right now
have good quality information

05:02:40.370 --> 05:02:43.430
about how level income
but other entities do.

05:02:43.430 --> 05:02:45.310
So we've been thinking through

05:02:45.310 --> 05:02:47.970
how this information
problem might be packing.

05:02:47.970 --> 05:02:49.263
One option you might think

05:02:49.263 --> 05:02:50.770
is just to calibrate the fixed charge

05:02:50.770 --> 05:02:53.870
on the basis of like a
neighborhood average income.

05:02:53.870 --> 05:02:55.910
The one thing that's really striking

05:02:55.910 --> 05:02:57.980
is when you work with individual

05:02:57.980 --> 05:03:00.150
or household level income data,

05:03:00.150 --> 05:03:01.940
is there is quite a bit of variations

05:03:01.940 --> 05:03:04.730
even within census block
grids around that average.

05:03:04.730 --> 05:03:06.233
So that would be a fairly course

05:03:06.233 --> 05:03:07.610
sort of blood approach

05:03:07.610 --> 05:03:10.290
to targeting the incentive fixed charge.

05:03:10.290 --> 05:03:11.260
If we go to the next slide

05:03:11.260 --> 05:03:13.383
here's our brief stats are an
approach that we think at work

05:03:13.383 --> 05:03:16.570
that we would love to get
feedback today or later on,

05:03:16.570 --> 05:03:19.624
we'll share our email
and contact information.

05:03:19.624 --> 05:03:20.457
So the basic idea,

05:03:20.457 --> 05:03:23.730
if you could give electric
consumers three options.

05:03:23.730 --> 05:03:26.241
One, they could provide their utility

05:03:26.241 --> 05:03:29.710
with the documentation
needed to verify their income.

05:03:29.710 --> 05:03:31.530
Two, they could authorize utilities,

05:03:31.530 --> 05:03:34.220
those paying information
from the franchise tax board

05:03:34.220 --> 05:03:36.677
about their category, the
way we're envisioning it.

05:03:36.677 --> 05:03:38.190
And please like push back

05:03:38.190 --> 05:03:40.790
and tell us the problems that you see

05:03:40.790 --> 05:03:44.913
it's your name, address,
maybe facility information

05:03:44.913 --> 05:03:46.780
through a secure interface

05:03:46.780 --> 05:03:47.823
and then the franchise tax board

05:03:47.823 --> 05:03:50.150
will transfer only their category

05:03:50.150 --> 05:03:52.185
in some category for the utility,

05:03:52.185 --> 05:03:54.420
for the purposes of
finding the fixed charge.

05:03:54.420 --> 05:03:57.610
Apparently, consumer
go like either the choices

05:03:57.610 --> 05:03:59.000
they can accept the default charge,

05:03:59.000 --> 05:04:03.800
for example, the maximum
fixed charge for this team.

05:04:03.800 --> 05:04:06.910
So interested in your
reactions and I know about time.

05:04:06.910 --> 05:04:07.833
The next slide.

05:04:09.330 --> 05:04:13.650
One more idea I wanted to
introduce before I conclude.

05:04:13.650 --> 05:04:14.770
There is another alternative proposal

05:04:14.770 --> 05:04:17.040
that's been getting some corrections.

05:04:17.040 --> 05:04:20.679
And the idea is to charge
enormous bills to all customers.

05:04:20.679 --> 05:04:23.333
So, if your bills above the minimum,

05:04:23.333 --> 05:04:24.547
you're not effective, but
if you're paying a low bill,

05:04:26.400 --> 05:04:27.780
you'd be brought up to the minimum bill.

05:04:27.780 --> 05:04:31.920
So $30 per month is a
proposal that's been out there.

05:04:31.920 --> 05:04:33.470
We looked at the data and said,

05:04:33.470 --> 05:04:36.000
how much revenue
would that really generate?

05:04:36.000 --> 05:04:38.810
And it's only operating on those Teslas

05:04:38.810 --> 05:04:40.820
for who that constraint buy.

05:04:40.820 --> 05:04:43.400
And we calculated that as PG&amp;E,

05:04:43.400 --> 05:04:46.850
a 30 month minimum
would raise about 0.1 billion,

05:04:46.850 --> 05:04:49.780
60 month minimum
bill raise about 0.5 billion

05:04:49.780 --> 05:04:53.163
sort of a drop in the bucket
of the revenue requirements

05:04:53.163 --> 05:04:54.297
you've been talking about.

05:04:54.297 --> 05:04:57.355
So to conclude finally, last slide.

05:04:57.355 --> 05:04:59.690
California electricity rates are high

05:04:59.690 --> 05:05:02.440
because we're using
vehicle to pay for lots of things

05:05:02.440 --> 05:05:03.597
that are not part of
the incremental cost

05:05:03.597 --> 05:05:05.163
of providing electricity.

05:05:06.180 --> 05:05:07.700
Looking at 2019,

05:05:07.700 --> 05:05:10.020
the actual avoidable
cost of electricity supply

05:05:10.020 --> 05:05:12.760
is like a third to a
half a retail price.

05:05:12.760 --> 05:05:15.510
It's a month to tax an
electricity consumption.

05:05:15.510 --> 05:05:17.960
Lots of important
alternatives being discussed

05:05:17.960 --> 05:05:20.240
based-budget is an important option.

05:05:20.240 --> 05:05:23.013
Income-based fixed charges
could help cover costs

05:05:23.013 --> 05:05:24.890
in a less aggressive,
in more efficient way.

05:05:24.890 --> 05:05:27.820
The minimum bill would
not raise much revenue

05:05:27.820 --> 05:05:29.640
and would likely be regret.

05:05:29.640 --> 05:05:31.070
So I'll stop there.

05:05:31.070 --> 05:05:33.100
Thank the organizers
again for all the work

05:05:33.100 --> 05:05:34.670
that (indistinct) into
convening this conversation

05:05:34.670 --> 05:05:36.317
and I look forward to the Q&amp;A.

05:05:42.820 --> 05:05:43.750
<v ->Okay, thank you, Meredith.</v>

05:05:43.750 --> 05:05:46.150
That was fantastic,
really appreciate that.

05:05:46.150 --> 05:05:48.310
We're gonna turn to
one more presentation

05:05:48.310 --> 05:05:50.810
before we take a very short break.

05:05:50.810 --> 05:05:52.940
So I'm gonna introduce
Frank Wolak from Stanford

05:05:52.940 --> 05:05:56.510
to discuss similar things to
what Meredith just discussed,

05:05:56.510 --> 05:05:58.090
but in a slightly different way.

05:05:58.090 --> 05:06:00.340
Frank let's have you
take it away, thank you,

05:06:21.730 --> 05:06:24.893
Frank, I think you're
on mute on your phone.

05:06:28.233 --> 05:06:29.333
<v ->Am I unmuted?</v>

05:06:31.430 --> 05:06:32.430
<v ->There you go, yap.</v>

05:06:33.484 --> 05:06:34.317
<v ->Okay.</v>

05:06:34.317 --> 05:06:35.730
So thanks very much.

05:06:35.730 --> 05:06:36.713
Next slide please.

05:06:39.150 --> 05:06:42.570
Okay, so I'm gonna
talk about two problems

05:06:42.570 --> 05:06:45.620
that I least see with
retail pricing in California.

05:06:45.620 --> 05:06:47.110
The first I will characterize

05:06:47.110 --> 05:06:49.150
it is average cost-based pricing,

05:06:49.150 --> 05:06:51.530
which means that what we're doing is

05:06:51.530 --> 05:06:53.480
we're essentially taking,

05:06:53.480 --> 05:06:55.720
I think as one of the
previous speakers said,

05:06:55.720 --> 05:07:00.480
the total cost dividing it
by the total volumes sold,

05:07:00.480 --> 05:07:02.730
and that's what we're
gonna set as the price.

05:07:02.730 --> 05:07:06.260
And this mechanism
to infers approximation

05:07:06.260 --> 05:07:09.290
is what we're doing
in setting the prices

05:07:09.290 --> 05:07:11.420
on the increasing block price schedules

05:07:11.420 --> 05:07:14.430
that virtually all California customers

05:07:14.430 --> 05:07:16.513
of the investor utilities pay.

05:07:18.240 --> 05:07:19.900
The thing about this mechanism is,

05:07:19.900 --> 05:07:22.610
is historically it really didn't lead

05:07:22.610 --> 05:07:26.420
to what we would like to
think of as inefficient behavior

05:07:26.420 --> 05:07:29.430
in the sense that, and
simply because the customer

05:07:29.430 --> 05:07:32.560
had the choice of buying
electricity from the grid

05:07:32.560 --> 05:07:35.120
or not getting electricity.

05:07:35.120 --> 05:07:39.357
But now there's
competition for this electricity

05:07:39.357 --> 05:07:43.630
and it comes in the
form of distributed solar.

05:07:43.630 --> 05:07:48.160
And so the customer
essentially only pays for the price

05:07:48.160 --> 05:07:50.300
for what he withdraws from the grid.

05:07:50.300 --> 05:07:55.300
And so what this means
is that what we can get

05:07:55.340 --> 05:08:00.300
is things that increase
the cost of all consumers

05:08:00.300 --> 05:08:03.260
that are privately
profitable for the individual,

05:08:03.260 --> 05:08:05.830
but raise, if you like the total cost

05:08:05.830 --> 05:08:08.010
of serving demand in California,

05:08:08.010 --> 05:08:12.420
contributing to the increasing
cost of California consumers.

05:08:12.420 --> 05:08:13.793
So next slide, please.

05:08:15.400 --> 05:08:18.410
So just as was discussed earlier,

05:08:18.410 --> 05:08:21.780
the at least taking from the EIA data

05:08:21.780 --> 05:08:25.580
average residential price
in California is 23 cents,

05:08:25.580 --> 05:08:27.020
all the investor on utilities

05:08:27.020 --> 05:08:29.640
have these increasing
block price schedules,

05:08:29.640 --> 05:08:34.640
a highest marginal price for
the PG&amp;E is currently 44 cents.

05:08:35.140 --> 05:08:38.430
Basically a $3 and
50 cent watt installed

05:08:38.430 --> 05:08:40.770
a rooftop solar system,

05:08:40.770 --> 05:08:43.640
looks very good in terms of effectively

05:08:43.640 --> 05:08:48.640
allowing the customer to
avoid paying for 44 cent power,

05:08:48.870 --> 05:08:51.720
but instead getting 15 cent power.

05:08:51.720 --> 05:08:55.310
But the difficulty is as
has been alluded to,

05:08:55.310 --> 05:08:59.150
is that most of the
cost of the electricity

05:08:59.150 --> 05:09:01.654
is recovering cost-unrelated

05:09:01.654 --> 05:09:05.549
to the cost of supplying
the customer with electricity.

05:09:05.549 --> 05:09:07.263
And in particular,

05:09:07.263 --> 05:09:10.730
the average cost of
wholesale energy in 2020

05:09:10.730 --> 05:09:13.640
it was roughly about 4
cents per kilowatt hour.

05:09:13.640 --> 05:09:15.400
So what we have is a situation

05:09:15.400 --> 05:09:18.920
where it's essentially
socially unprofitable

05:09:18.920 --> 05:09:20.440
to invest in rooftop solar,

05:09:20.440 --> 05:09:23.150
but it's much cheaper for the customer

05:09:23.150 --> 05:09:27.870
to get their electricity from
the rooftop solar system

05:09:27.870 --> 05:09:29.550
relative to paying

05:09:29.550 --> 05:09:33.620
this average cost-based
price for electricity.

05:09:33.620 --> 05:09:35.820
And so this creates a divergence

05:09:35.820 --> 05:09:38.520
between the privately optimal decision

05:09:38.520 --> 05:09:40.630
and the socially optimal decision

05:09:40.630 --> 05:09:44.460
that essentially raises
the cost to all consumers

05:09:44.460 --> 05:09:46.140
of a consuming electricity.

05:09:46.140 --> 05:09:47.253
Next slide please.

05:09:48.550 --> 05:09:49.840
So essentially,

05:09:49.840 --> 05:09:52.610
just to give a simple
example of this is that,

05:09:52.610 --> 05:09:56.530
a customer that install a
solar avoids the 23 cents

05:09:56.530 --> 05:09:59.670
buys essentially 15 cents the utility

05:09:59.670 --> 05:10:03.850
no longer receives essentially
19 cents per kilowatt hour

05:10:03.850 --> 05:10:05.520
for what the customer consumes,

05:10:05.520 --> 05:10:08.250
and so if we take this,
the simple example

05:10:08.250 --> 05:10:10.740
as the customer in this case saves

05:10:10.740 --> 05:10:13.210
essentially 8 cents per kilowatt hour

05:10:14.270 --> 05:10:16.340
by installing the rooftop solar system,

05:10:16.340 --> 05:10:21.020
the difference between
essentially the 15 cents

05:10:21.020 --> 05:10:22.830
that he would pay from the rooftop solar

05:10:22.830 --> 05:10:26.440
and the 23 cents that he
would pay from grid supply,

05:10:26.440 --> 05:10:29.160
but the utility no
longer receives 19 cents

05:10:29.160 --> 05:10:31.580
times the thousand megawatts from him,

05:10:31.580 --> 05:10:33.970
and so what we have is societal cost

05:10:33.970 --> 05:10:38.250
increases by $110, but in particular

05:10:38.250 --> 05:10:42.780
the customer essentially
benefits from this insulation.

05:10:42.780 --> 05:10:44.260
So next slide.

05:10:44.260 --> 05:10:48.010
So what's the other
problem that we face?

05:10:48.010 --> 05:10:51.660
The other problem that we
faced is a re fixed retail price

05:10:51.660 --> 05:10:55.710
that provides no incentive for
customers to reduce demand

05:10:55.710 --> 05:10:57.820
during a stress system condition.

05:10:57.820 --> 05:11:01.680
So what this means is that
we are telling the incentive

05:11:01.680 --> 05:11:03.880
for customers to invest in storage

05:11:03.880 --> 05:11:06.970
and other load flexibility technologies.

05:11:06.970 --> 05:11:10.240
And if we can expose
customers to real retail prices

05:11:10.240 --> 05:11:12.800
that vary with real
time system condition,

05:11:12.800 --> 05:11:15.420
what will dynamic pricing meaning,

05:11:15.420 --> 05:11:18.435
prices move with the hourly
price of wholesale power,

05:11:18.435 --> 05:11:21.640
we will likely expose those customers

05:11:21.640 --> 05:11:23.560
to bill risk volatility.

05:11:23.560 --> 05:11:26.420
This is not something
that we'd like to see,

05:11:26.420 --> 05:11:28.640
this is what exactly
happened to the customers

05:11:28.640 --> 05:11:32.680
of the retailer Griddy in
Texas during February, 2021,

05:11:32.680 --> 05:11:35.170
they ended up paying
for all their consumption

05:11:35.170 --> 05:11:36.940
at the hourly real time price,

05:11:36.940 --> 05:11:39.600
which was $9,000 per megawatt hour.

05:11:39.600 --> 05:11:42.370
So the question is how
do we capture the benefits

05:11:42.370 --> 05:11:44.000
of dynamic retail pricing,

05:11:44.000 --> 05:11:46.790
meaning getting customers
to invest in storage,

05:11:46.790 --> 05:11:48.740
load shifting technologies

05:11:48.740 --> 05:11:51.973
yet still protect them
from significant bill risk.

05:11:53.120 --> 05:11:53.953
Next slide.

05:11:56.250 --> 05:11:59.110
So what is the solution
to problem number one?

05:11:59.110 --> 05:12:00.430
The solution to problem number one

05:12:00.430 --> 05:12:04.167
is similar to what was
discussed by Meredith

05:12:04.167 --> 05:12:07.000
and number of other
speakers is essentially,

05:12:07.000 --> 05:12:10.610
charge for the marginal cost
of grid supplied electricity,

05:12:10.610 --> 05:12:13.550
Meredith number include
a social cost of carbon.

05:12:13.550 --> 05:12:15.750
The number that I came up with is

05:12:15.750 --> 05:12:16.840
it does not include that,

05:12:16.840 --> 05:12:19.290
which is explains the
difference between them

05:12:19.290 --> 05:12:21.020
and recover the remaining cost

05:12:21.020 --> 05:12:23.680
through customer specific fixed charges.

05:12:23.680 --> 05:12:26.220
How do you allocate those fixed charges?

05:12:26.220 --> 05:12:28.830
The argument that I would make is that,

05:12:28.830 --> 05:12:31.880
we can use information based upon

05:12:31.880 --> 05:12:34.790
what the economic
benefits the customer gets

05:12:34.790 --> 05:12:38.320
from consuming
electricity from the grid.

05:12:38.320 --> 05:12:41.210
This is essentially a methodology

05:12:41.210 --> 05:12:44.330
that's outlined in
the paper that I cite.

05:12:44.330 --> 05:12:49.100
But the basic idea is you're
essentially using information

05:12:49.100 --> 05:12:52.560
about the customer's
consumption of electricity

05:12:52.560 --> 05:12:56.700
throughout the year to get an index

05:12:56.700 --> 05:12:59.660
of their essentially economic benefits

05:12:59.660 --> 05:13:03.630
or willingness to pay to
consume at marginal cost.

05:13:03.630 --> 05:13:05.390
So customers who have

05:13:05.390 --> 05:13:07.960
typically lower average
consumption levels,

05:13:07.960 --> 05:13:09.860
hourly consumption customers

05:13:09.860 --> 05:13:13.810
that have less volatile consumption

05:13:13.810 --> 05:13:15.250
across hours of the year

05:13:15.250 --> 05:13:18.433
will typically pay lower fixed charges

05:13:18.433 --> 05:13:23.433
than customers with higher
hourly low average loads,

05:13:23.687 --> 05:13:27.770
and more volatile loads
under this sort of scheme.

05:13:27.770 --> 05:13:31.890
And so, as you can
address the equity concerns

05:13:31.890 --> 05:13:35.770
that were discussed in terms
of low income in two ways,

05:13:35.770 --> 05:13:39.340
number one, we're charging
customers, all customers,

05:13:39.340 --> 05:13:41.860
the marginal cost of
grid supplied electricity,

05:13:41.860 --> 05:13:44.590
which is on the order
of say five to 6 cents

05:13:44.590 --> 05:13:49.590
on almost 75% reduction
in that marginal cost,

05:13:50.400 --> 05:13:52.680
but to the extent that there's concern

05:13:52.680 --> 05:13:57.680
about the need for further
addressing these concerns,

05:13:58.220 --> 05:14:02.090
you can reduce the fixed
charge, zero the fixed charge,

05:14:02.090 --> 05:14:05.050
or even have a negative fixed charge.

05:14:05.050 --> 05:14:08.750
And the other nice thing
about this mechanism is that

05:14:08.750 --> 05:14:12.410
distributed solar customers
would now essentially be free

05:14:12.410 --> 05:14:16.280
to inject as much energy
as they want to the grid,

05:14:16.280 --> 05:14:18.240
it's just that they would receive

05:14:18.240 --> 05:14:21.880
this marginal cost of
grid supplied electricity

05:14:21.880 --> 05:14:24.610
as the payment for the
electricity they inject,

05:14:24.610 --> 05:14:28.700
and they would also pay
that cost for the electricity

05:14:28.700 --> 05:14:30.690
that is withdrawn from the grip.

05:14:30.690 --> 05:14:31.523
Next slide.

05:14:32.780 --> 05:14:34.573
So solution number two.

05:14:35.410 --> 05:14:37.840
How do we address the issue of customers

05:14:38.720 --> 05:14:41.740
getting actively
involved in being flexible

05:14:41.740 --> 05:14:46.350
to manage their demand as
well as to provide an incentive

05:14:46.350 --> 05:14:49.730
for onsite say, investment in storage

05:14:49.730 --> 05:14:52.433
is that we have effectively,

05:14:53.290 --> 05:14:56.070
we have customers
purchase a fixed load shape

05:14:56.070 --> 05:14:57.020
at a fixed cost.

05:14:57.020 --> 05:14:59.820
So the idea would be is that

05:14:59.820 --> 05:15:02.370
if you're above your fixed load shape,

05:15:02.370 --> 05:15:04.840
you're essentially paying
at that marginal cost

05:15:04.840 --> 05:15:07.830
of grid supplied
electricity in real time,

05:15:07.830 --> 05:15:10.320
if you're below that load shape,

05:15:10.320 --> 05:15:11.990
you're essentially selling back

05:15:11.990 --> 05:15:14.440
what you purchased
on the fixed load shape

05:15:14.440 --> 05:15:17.210
at that hourly cost.

05:15:17.210 --> 05:15:19.550
And essentially this significantly

05:15:19.550 --> 05:15:20.900
limits the bill volatility,

05:15:22.450 --> 05:15:26.080
and moreover can
completely ensure the customer

05:15:26.080 --> 05:15:30.190
against any upside
increases in their bill.

05:15:30.190 --> 05:15:32.640
You simply are purchasing a load shape

05:15:32.640 --> 05:15:35.082
that's higher than your
expected consumption,

05:15:35.082 --> 05:15:37.540
and most of the time selling back.

05:15:37.540 --> 05:15:38.373
Next slide.

05:15:42.060 --> 05:15:45.700
So, this is analogous to,

05:15:45.700 --> 05:15:48.520
like a cellular telephone calling plan

05:15:48.520 --> 05:15:50.910
where you effectively would purchase say

05:15:50.910 --> 05:15:55.910
a flat load shape of 24/7
hours at 1.50 cents six by 16,

05:15:58.280 --> 05:16:01.500
getting the peaks and
then getting the super peaks

05:16:01.500 --> 05:16:04.370
for five days a week for four hours,

05:16:04.370 --> 05:16:07.500
this gives you a essentially
that fixed load shape

05:16:07.500 --> 05:16:12.500
at an average price, in
this case of route 4.66 cents.

05:16:15.290 --> 05:16:16.593
And next slide, please.

05:16:18.620 --> 05:16:20.850
So what you would
get is that the customer

05:16:20.850 --> 05:16:24.420
has purchased this load shape in red,

05:16:24.420 --> 05:16:28.780
and if the customer's actual
consumption is the blue shape,

05:16:28.780 --> 05:16:31.490
then sometimes the customer's purchasing

05:16:31.490 --> 05:16:35.650
the additional energy
at that hourly cost.

05:16:35.650 --> 05:16:38.070
And other times the
customer's selling back

05:16:38.070 --> 05:16:39.900
to the extent that the customer

05:16:39.900 --> 05:16:42.880
would like to get
certainty on their bill

05:16:43.960 --> 05:16:45.300
on their maximum bill,

05:16:45.300 --> 05:16:49.670
the customer can effectively
buy a red load shape

05:16:49.670 --> 05:16:53.060
that is most of the time
above the blue load shape

05:16:53.060 --> 05:16:55.920
and essentially they're
selling back most of the time.

05:16:55.920 --> 05:16:57.650
And essentially ensuring

05:16:57.650 --> 05:17:02.460
that they've effectively
got their bill volatility,

05:17:02.460 --> 05:17:04.330
at least in the upward
direction covered.

05:17:04.330 --> 05:17:05.163
Next slide.

05:17:07.120 --> 05:17:11.210
So just to finish up,
the idea is transitioning

05:17:11.210 --> 05:17:16.210
to a more marginal cost-based
of grid supply electricity,

05:17:16.780 --> 05:17:21.150
approach to pricing
customer-specific monthly fixed charge

05:17:21.150 --> 05:17:24.610
based on willing this willingness to pay

05:17:24.610 --> 05:17:28.320
to purchase at marginal
cost that will naturally build in

05:17:28.320 --> 05:17:31.130
the progressiveness that is inherent

05:17:31.130 --> 05:17:33.340
in a income-based approach,

05:17:33.340 --> 05:17:37.350
but does not require
information on income

05:17:37.350 --> 05:17:39.730
and simply uses information

05:17:39.730 --> 05:17:44.580
on the customer's hourly
consumption of electricity

05:17:44.580 --> 05:17:46.410
throughout the year.

05:17:46.410 --> 05:17:49.150
And you could address
with low income customers

05:17:49.150 --> 05:17:52.560
they now have access to
purchasing at marginal cost

05:17:52.560 --> 05:17:55.640
at a significantly
lower variable charge.

05:17:55.640 --> 05:17:58.380
And can essentially if further,

05:17:58.380 --> 05:18:03.380
can reduce the monthly
fixed charge to small level.

05:18:03.760 --> 05:18:07.550
There's actually an
example of this procedure

05:18:07.550 --> 05:18:12.440
we implemented in a
study we did in Columbia

05:18:12.440 --> 05:18:13.760
looking at essentially

05:18:13.760 --> 05:18:16.960
how we could address
the same sorts of issues

05:18:16.960 --> 05:18:19.193
and showing how we could effectively,

05:18:20.700 --> 05:18:25.700
replicate beneficial outcomes
to virtually all income groups

05:18:26.840 --> 05:18:28.543
through kind of procedure.

05:18:29.510 --> 05:18:30.523
And then the final,

05:18:33.050 --> 05:18:37.330
increasing the incentive for
customers become involved

05:18:37.330 --> 05:18:40.160
is that they could just
simply be purchasing

05:18:40.160 --> 05:18:43.950
a significant fraction of
their expected demand

05:18:43.950 --> 05:18:47.200
at a fixed load shape at a fixed price

05:18:47.200 --> 05:18:50.890
and now on the margin in the market,

05:18:50.890 --> 05:18:55.060
if you like for the deviations
from that load shape,

05:18:55.060 --> 05:18:59.100
this would then provide
incentives for load flexibility,

05:18:59.100 --> 05:19:02.840
storage and the like to
manage the intermittency

05:19:02.840 --> 05:19:06.680
associated with a larger share
of renewables on the system.

05:19:06.680 --> 05:19:07.513
So thank you.

05:19:11.560 --> 05:19:12.610
<v ->All right, thank you, Frank.</v>

05:19:12.610 --> 05:19:14.680
Thank you to all the panelists

05:19:14.680 --> 05:19:16.850
that have spoken over the past several,

05:19:16.850 --> 05:19:20.210
well, it's been about 45
minutes or so to an hour.

05:19:20.210 --> 05:19:22.307
I would like us to
take a quick help break

05:19:22.307 --> 05:19:24.360
for a break between panels.

05:19:24.360 --> 05:19:25.720
I think we could all probably use it.

05:19:25.720 --> 05:19:27.010
There was a very substantive discussion.

05:19:27.010 --> 05:19:30.017
So let's take five minutes
and cleans our pallets

05:19:30.017 --> 05:19:35.017
and come back at about 3:51,
if that works for everybody.

05:19:35.870 --> 05:19:37.130
And then we'll start
with the chance here

05:19:37.130 --> 05:19:39.350
to announce the discussions.

05:19:39.350 --> 05:19:40.183
Thank you.

05:19:44.220 --> 05:19:45.053
<v ->There will be a
five minute break</v>

05:19:45.053 --> 05:19:47.560
and the call will resume at 3:51.

05:19:47.560 --> 05:19:48.900
The time you'll hear music

05:19:48.900 --> 05:19:50.370
until the conference resume.

05:19:50.370 --> 05:19:52.953
(upbeat music)

05:20:02.507 --> 05:20:03.424
<v ->Patience.</v>

05:20:04.650 --> 05:20:06.320
<v ->Such that it does not increase</v>

05:20:06.320 --> 05:20:09.200
distribution system expenses.

05:20:09.200 --> 05:20:11.160
Going to the next slide.

05:20:11.160 --> 05:20:12.640
It's just for an example,

05:20:12.640 --> 05:20:14.930
the distribution why
are rates where they are,

05:20:14.930 --> 05:20:18.450
distribution system
costs are number one.

05:20:18.450 --> 05:20:22.360
Here is just one snapshot
se their current rate case

05:20:22.360 --> 05:20:25.100
from a work paper's $1.1 billion here

05:20:25.100 --> 05:20:28.470
for system augmentation of load growth.

05:20:28.470 --> 05:20:29.870
There has not been load growth,

05:20:29.870 --> 05:20:34.180
there was not load growth,
but this is 1.1 billion proposed

05:20:34.180 --> 05:20:37.333
to expand the distribution
system, to manage load growth.

05:20:38.265 --> 05:20:41.040
And it's based on a
projection, that's not real.

05:20:41.040 --> 05:20:43.050
If you go to the next slide,

05:20:43.050 --> 05:20:44.717
the projections are all over the place,

05:20:44.717 --> 05:20:48.270
and the one that was
presented to justify the expense

05:20:48.270 --> 05:20:50.710
is greatly increasing at the same time

05:20:50.710 --> 05:20:53.170
as the actual load was not.

05:20:53.170 --> 05:20:54.390
And you can see directionally,

05:20:54.390 --> 05:20:56.260
the CAISO kind of
starts in a different place,

05:20:56.260 --> 05:20:58.665
but it's a downward trajectory well,

05:20:58.665 --> 05:21:02.810
SCE is an upward trajectory
on its projected load.

05:21:02.810 --> 05:21:05.200
And that orange
curve is just out of step

05:21:05.200 --> 05:21:06.830
with our common understanding

05:21:06.830 --> 05:21:08.760
of what has happened with load recently.

05:21:08.760 --> 05:21:10.510
And we can also see here

05:21:10.510 --> 05:21:14.890
that the sum of individual
customer loads is lower

05:21:14.890 --> 05:21:17.640
than the sum of the
aggregated circuit loads,

05:21:17.640 --> 05:21:19.390
which is mathematically impossible,

05:21:20.260 --> 05:21:22.940
but this spending request was approved

05:21:22.940 --> 05:21:27.100
for medicine based on this
seemingly way out of step

05:21:27.100 --> 05:21:29.500
projection of growth.

05:21:29.500 --> 05:21:32.620
And this is what happens
and we're regulating utilities

05:21:32.620 --> 05:21:34.940
that have a shareholder profit motive,

05:21:34.940 --> 05:21:38.253
and we don't have enough
visibility and accountability,

05:21:38.253 --> 05:21:41.453
it's a recipe for bringing
to where we are today.

05:21:43.500 --> 05:21:47.370
TURN's idea for an
inflation strained alternative

05:21:47.370 --> 05:21:49.170
is an excellent one.

05:21:49.170 --> 05:21:50.670
I would go one step further

05:21:50.670 --> 05:21:52.260
and say that the Energy Commission

05:21:52.260 --> 05:21:53.910
should intervene in the GRC

05:21:53.910 --> 05:21:56.090
and create the base case, right?

05:21:56.090 --> 05:22:01.090
We need to get in there
and really have accountability

05:22:01.420 --> 05:22:04.690
and details look at where
the money is needed

05:22:04.690 --> 05:22:06.090
and where it's going.

05:22:06.090 --> 05:22:07.490
So for the Energy Commission

05:22:08.420 --> 05:22:11.060
to start this whole new
thing is no small task,

05:22:11.060 --> 05:22:13.020
but they are planning
entity, they're good at it,

05:22:13.020 --> 05:22:16.000
they could manage
this hiring the engineers

05:22:16.000 --> 05:22:17.990
and the analysts to
intervene in the GRCs

05:22:17.990 --> 05:22:21.080
would be no small task, but
these are big dollar numbers.

05:22:21.080 --> 05:22:23.209
There's big potential savings,

05:22:23.209 --> 05:22:25.909
we're getting taken for a
ride and we need to stop it.

05:22:27.390 --> 05:22:31.390
So that's the, the
proposal there is to have

05:22:31.390 --> 05:22:33.730
the utilities Commission
with the arbiter.

05:22:33.730 --> 05:22:37.670
But the Energy
Commission is an intervener

05:22:37.670 --> 05:22:40.010
and a creator of the base case.

05:22:40.010 --> 05:22:41.040
On the next slide,

05:22:41.040 --> 05:22:44.200
this is similar to what
Mr Chhabra was saying

05:22:44.200 --> 05:22:47.280
about increasing grid utilization.

05:22:47.280 --> 05:22:48.140
And we know know this, right?

05:22:48.140 --> 05:22:50.070
There are some circuits
that get overloaded,

05:22:50.070 --> 05:22:51.217
you have to upgrade them.

05:22:51.217 --> 05:22:52.510
And it's really regional

05:22:52.510 --> 05:22:55.500
because circuits are getting
reconfigured all the time.

05:22:55.500 --> 05:22:57.900
So there's some areas
where there's load load growth

05:22:57.900 --> 05:23:00.830
and the distribution
system is getting increased.

05:23:00.830 --> 05:23:03.700
We can see that coming and avoid it.

05:23:03.700 --> 05:23:05.740
We absolutely can avoid
distribution expansion

05:23:05.740 --> 05:23:07.680
by treating local resources,

05:23:07.680 --> 05:23:10.800
mainly storage as a grid resource.

05:23:10.800 --> 05:23:12.330
And we've been trying to do this

05:23:12.330 --> 05:23:16.540
through the distribution deferral
framework, unsuccessfully,

05:23:16.540 --> 05:23:19.720
because that is targeting expenses

05:23:19.720 --> 05:23:20.900
that are already baked in.

05:23:20.900 --> 05:23:23.470
It's a distribution upgrades
that are already planned,

05:23:23.470 --> 05:23:24.777
and there's a small sliver of time

05:23:24.777 --> 05:23:27.333
for those solicitations
and they're not happening.

05:23:28.220 --> 05:23:31.510
But we still know the
distribution system expenses

05:23:31.510 --> 05:23:33.720
are gonna happen if we do nothing.

05:23:33.720 --> 05:23:34.770
So we can see that coming

05:23:34.770 --> 05:23:37.150
and contracts are a capacity to avoid it

05:23:37.150 --> 05:23:40.130
and to manage peaks and an hourly basis.

05:23:40.130 --> 05:23:42.430
This would be similar to
the capacity bidding program.

05:23:42.430 --> 05:23:44.450
We currently have
capacity bidding program

05:23:44.450 --> 05:23:46.673
to target statewide system peaks, right?

05:23:46.673 --> 05:23:50.500
It's not vocational it's
statewide system peaks.

05:23:50.500 --> 05:23:54.490
And the utility chooses
whether a proposed portfolio

05:23:54.490 --> 05:23:55.323
is in the program.

05:23:55.323 --> 05:23:57.127
Aggregator proposes to enter the program

05:23:57.127 --> 05:24:00.370
with a set of resources,
you utility pick some.

05:24:00.370 --> 05:24:01.810
And if you're a part of the program,

05:24:01.810 --> 05:24:03.850
when you're called
on, you have to deliver

05:24:03.850 --> 05:24:07.490
and you're called on during
statewide system peaks.

05:24:07.490 --> 05:24:11.070
We can do the same thing
with an IOU-led program

05:24:11.070 --> 05:24:12.600
that is different for every circuit.

05:24:12.600 --> 05:24:14.860
The circuits are all unique

05:24:14.860 --> 05:24:19.860
and we can target those circuit
peaks with a export program

05:24:20.187 --> 05:24:23.343
that's similar to CBP,
but run by the utilities.

05:24:24.470 --> 05:24:26.120
Next slide.

05:24:26.120 --> 05:24:28.154
On the undergrounding,

05:24:28.154 --> 05:24:32.250
PG&amp;E has proposed underground
10,000 miles of transmission.

05:24:32.250 --> 05:24:34.270
Some people are saying that

05:24:34.270 --> 05:24:38.983
that is a price of
upwards of $40 billion.

05:24:40.050 --> 05:24:42.430
That's a big number, $40 billion.

05:24:42.430 --> 05:24:45.140
So there are many
cases a where microgrids

05:24:45.140 --> 05:24:46.570
can be done cheaper,

05:24:46.570 --> 05:24:49.990
in sparsely populated
remote areas mainly.

05:24:49.990 --> 05:24:54.900
M Cubed Research Firm has this data on,

05:24:54.900 --> 05:24:56.710
that you can find online,

05:24:56.710 --> 05:24:59.500
a methodology for systematically looking

05:24:59.500 --> 05:25:02.763
at when microgrids are
cheaper than undergrounding,

05:25:02.763 --> 05:25:05.100
We should take a careful look at that.

05:25:05.100 --> 05:25:07.212
And then on the final slide.

05:25:07.212 --> 05:25:10.950
Hang it together, we need a
comprehensive independent audit

05:25:11.800 --> 05:25:15.209
of distribution spending past and future

05:25:15.209 --> 05:25:17.363
and closer scrutiny of that spending.

05:25:18.750 --> 05:25:20.860
And then on the price signals,

05:25:20.860 --> 05:25:24.300
to get at the increased
grid utilization,

05:25:24.300 --> 05:25:26.380
we've paid that grid capacity.

05:25:26.380 --> 05:25:27.920
It is built and paid for.

05:25:27.920 --> 05:25:30.790
We need to make maximum
use of it on an hourly basis

05:25:30.790 --> 05:25:33.279
and shave the peaks circuit by circuit.

05:25:33.279 --> 05:25:36.620
And we can do that both
in real time pricing rates,

05:25:36.620 --> 05:25:39.950
which are just time
bearing, not location varying,

05:25:39.950 --> 05:25:44.950
but we can have very
targeted time bearing rates.

05:25:44.970 --> 05:25:47.320
There's a proposed settlement from PG&amp;E

05:25:47.320 --> 05:25:49.530
on the table currently,

05:25:49.530 --> 05:25:52.390
it's under discussion
other two utilities.

05:25:52.390 --> 05:25:53.820
So let's get that up and running

05:25:53.820 --> 05:25:56.336
and make it real and scalable.

05:25:56.336 --> 05:26:00.220
And then the targeted
energy dispatch program

05:26:00.220 --> 05:26:05.220
is similar to the CBP
and targeting circuit peaks.

05:26:05.440 --> 05:26:08.350
This is locate specific
and time specific

05:26:08.350 --> 05:26:10.280
and similar to a demand response,

05:26:10.280 --> 05:26:13.750
but it's with targeted energy dispatch.

05:26:13.750 --> 05:26:17.000
We should really get that going.

05:26:17.000 --> 05:26:19.230
It's been a very big challenge

05:26:19.230 --> 05:26:22.140
integrating TEDs with CAISO market.

05:26:22.140 --> 05:26:25.820
We don't have to, we can
do it with an IOU led program

05:26:25.820 --> 05:26:28.050
and then alternatives to
undergrounding as well.

05:26:28.050 --> 05:26:30.883
So those are my quick
thoughts, thank you very much.

05:26:32.920 --> 05:26:34.100
Thank you, Brad.

05:26:34.100 --> 05:26:36.600
Next, we have Michael
Campbell from Cal Advocates.

05:26:38.412 --> 05:26:39.320
<v ->Great, thank you.</v>

05:26:39.320 --> 05:26:41.870
I really appreciate
being able to be here.

05:26:41.870 --> 05:26:44.520
I'm program manager with
Public Advocates Office,

05:26:44.520 --> 05:26:48.420
and I really appreciate the
opportunity to follow up a talk

05:26:48.420 --> 05:26:52.203
that I was a part of last year
regarding the rates En Banc.

05:26:53.110 --> 05:26:55.280
What I've been taking a ton of notes.

05:26:55.280 --> 05:26:56.290
If you could see the workspace

05:26:56.290 --> 05:26:58.500
around me I've got piles of paper

05:26:58.500 --> 05:26:59.920
with notes from all the speakers.

05:26:59.920 --> 05:27:02.793
And what we're really
seeing here is how rates,

05:27:04.110 --> 05:27:06.540
are increasing, they're
expected to increase.

05:27:06.540 --> 05:27:09.640
And lots of speakers have
specifically emphasized

05:27:09.640 --> 05:27:11.910
the importance of
prioritizing rate payers

05:27:11.910 --> 05:27:14.680
and investments and considering
unintended consequences.

05:27:14.680 --> 05:27:16.520
So in discussing all that's come before,

05:27:16.520 --> 05:27:18.773
I'm gonna try to touch
upon those themes.

05:27:19.910 --> 05:27:21.770
First off, it's really
good to be talking

05:27:21.770 --> 05:27:24.220
about a affordability
'cause we've seen rates.

05:27:24.220 --> 05:27:26.560
Outpaced inflation,
largely for two reasons

05:27:26.560 --> 05:27:28.120
they've been talked about here.

05:27:28.120 --> 05:27:30.530
One is the utility costs

05:27:30.530 --> 05:27:33.580
that are being authorized
to be collected as going up.

05:27:33.580 --> 05:27:37.620
Also since 2014, residential
sales have been declining,

05:27:37.620 --> 05:27:39.120
but they've not been
declining uniformly.

05:27:39.120 --> 05:27:41.093
There are some customers who have been,

05:27:42.430 --> 05:27:44.900
having less sales from them,

05:27:44.900 --> 05:27:48.345
whereas others from
the overwhelming success

05:27:48.345 --> 05:27:51.440
some of the programs has
led to this versatile a trend

05:27:51.440 --> 05:27:53.560
that's helped with some of our abilities

05:27:53.560 --> 05:27:55.020
to offset increasing rates.

05:27:55.020 --> 05:27:58.430
Historically, we could
expect increasing sales

05:27:58.430 --> 05:28:01.650
in terms of the number of
kilowatt hours to go up a bit

05:28:01.650 --> 05:28:06.030
to offset half more of the
overall utility rate increases.

05:28:06.030 --> 05:28:08.630
That's not the case anymore
on the residential side.

05:28:09.614 --> 05:28:13.100
So one of the key things I
wanted to leave you with is that

05:28:13.100 --> 05:28:16.460
we cannot use rate
design to solve problems

05:28:16.460 --> 05:28:17.720
of high revenue requirements.

05:28:17.720 --> 05:28:19.740
We just can't having said that,

05:28:19.740 --> 05:28:22.440
there have been a lot
of proposals raised here

05:28:22.440 --> 05:28:24.690
that look at rates might be changed

05:28:24.690 --> 05:28:27.260
to avoid unintended consequences,

05:28:27.260 --> 05:28:30.890
look at bill impacts and
try to address places

05:28:30.890 --> 05:28:35.150
where we may be creating
unsustainable subsidies

05:28:35.150 --> 05:28:40.150
that unfortunately
exacerbate inequality.

05:28:40.830 --> 05:28:43.070
So in terms of looking at solutions,

05:28:43.070 --> 05:28:45.900
I wanna emphasize what
Dr Fowlie was raising,

05:28:45.900 --> 05:28:49.130
which I think is important
in her charge showing

05:28:49.130 --> 05:28:54.130
the bins of usage
versus economic impact.

05:28:55.080 --> 05:28:57.930
I wanna highlight we
should not consider usage

05:28:57.930 --> 05:28:59.380
as an indicator of income.

05:28:59.380 --> 05:29:02.110
So things that target trying
to provide more benefits

05:29:02.110 --> 05:29:07.000
for lower usage customers
won't necessarily mean

05:29:07.000 --> 05:29:11.780
that you are getting
a targeting anything

05:29:11.780 --> 05:29:13.960
for low income customers.

05:29:13.960 --> 05:29:17.090
And this least, Mrs Solis,
her presentation provide

05:29:17.090 --> 05:29:19.990
a lot of good examples for
that, so I won't get into that.

05:29:21.970 --> 05:29:23.350
Having said that there's a lot of room

05:29:23.350 --> 05:29:25.170
for rate design changes

05:29:25.170 --> 05:29:27.870
and all the tools that are out
here should be considered.

05:29:27.870 --> 05:29:31.300
This form is a great way to
get that conversation started.

05:29:31.300 --> 05:29:34.560
And I'll note that we are ourselves,

05:29:34.560 --> 05:29:37.020
Cal Advocates is doing our own research

05:29:37.020 --> 05:29:39.970
and looking at part of the
affordability per and elsewhere.

05:29:40.860 --> 05:29:43.350
So when we look at the various proposals

05:29:43.350 --> 05:29:46.550
that we're considering just we're in the

05:29:46.550 --> 05:29:48.040
just in the research phase currently,

05:29:48.040 --> 05:29:50.950
but what we have to keep in
mind is kind of similar things

05:29:50.950 --> 05:29:54.805
when if you all remember
the efforts of reducing

05:29:54.805 --> 05:29:59.805
the undoing the tenure freeze on rates,

05:30:00.410 --> 05:30:03.100
follow AB1X and the energy crisis.

05:30:03.100 --> 05:30:04.780
We've gotta look at the rate shocks

05:30:04.780 --> 05:30:07.143
associated with making
changes to customers.

05:30:08.072 --> 05:30:10.090
And we need to look at what
unintended consequences

05:30:10.090 --> 05:30:11.674
might come up.

05:30:11.674 --> 05:30:16.244
One unfortunate consequence
of rate design is that

05:30:16.244 --> 05:30:18.590
often the rate changes get concentrated

05:30:18.590 --> 05:30:21.500
on one segment of the customers.

05:30:21.500 --> 05:30:23.510
And unfortunately, often
it winds up being those

05:30:23.510 --> 05:30:26.850
that have the least ability to
respond one way or another,

05:30:26.850 --> 05:30:30.640
and that can create
additional inequities

05:30:31.750 --> 05:30:35.060
for customers that are vulnerable.

05:30:35.060 --> 05:30:38.180
So in terms of affordability,

05:30:38.180 --> 05:30:40.490
we're very grateful that the
Commission been looking

05:30:40.490 --> 05:30:43.140
at various metrics on affordability.

05:30:43.140 --> 05:30:44.350
There's one simple metric

05:30:44.350 --> 05:30:45.550
that some folks have talked about here,

05:30:45.550 --> 05:30:48.143
just in terms of
comparing rates to inflation.

05:30:48.980 --> 05:30:50.850
If customers are feeling the pinch,

05:30:50.850 --> 05:30:52.590
they're right to feel the pinch,

05:30:52.590 --> 05:30:54.290
rates have been far outpacing inflation,

05:30:54.290 --> 05:30:56.920
but a number of charts
people have put up

05:30:56.920 --> 05:30:58.133
associated with that.

05:31:00.992 --> 05:31:03.420
We have been recommending
that the Commission

05:31:03.420 --> 05:31:06.680
just look at tracking where rates are

05:31:06.680 --> 05:31:07.513
and where they've been going

05:31:07.513 --> 05:31:09.900
compared to inflation,
just as a simple benchmark.

05:31:10.820 --> 05:31:13.290
The other piece in terms of equity,

05:31:13.290 --> 05:31:14.980
I think we just have a basic,

05:31:14.980 --> 05:31:17.870
simple analytical exercise
when we're considering things.

05:31:17.870 --> 05:31:19.840
So it's not cost effective.

05:31:19.840 --> 05:31:22.220
There's a really big likelihood
going to increase rates

05:31:22.220 --> 05:31:24.760
and often it's going
to do that equitably.

05:31:24.760 --> 05:31:27.533
If there are public policy
reasons for doing that,

05:31:28.530 --> 05:31:31.770
then we should look at all
the various investment options

05:31:31.770 --> 05:31:32.900
really for those funds.

05:31:32.900 --> 05:31:36.780
As Ganion of Blue Lake
Rancheria said this morning,

05:31:36.780 --> 05:31:38.860
cost are rising, let's make them count.

05:31:38.860 --> 05:31:40.770
We couldn't agree more.

05:31:40.770 --> 05:31:43.080
If some of customers don't have ability

05:31:43.080 --> 05:31:44.770
to access some of these programs,

05:31:44.770 --> 05:31:47.030
especially those
vulnerable and lower income,

05:31:47.030 --> 05:31:50.520
we're gonna have inequitable
results just by definition.

05:31:50.520 --> 05:31:52.593
Regarding comments about utilization,

05:31:53.658 --> 05:31:55.960
we need to keep in mind
that we can't just presumed

05:31:55.960 --> 05:31:57.593
increasing the amount of kilowatt hours

05:31:57.593 --> 05:32:00.620
will always result in
lower overall costs.

05:32:00.620 --> 05:32:02.470
The timing is important, for example,

05:32:03.580 --> 05:32:05.500
we've seen the duck chart earlier today,

05:32:05.500 --> 05:32:08.652
just adding load during
that fast ramp rate

05:32:08.652 --> 05:32:09.970
is going to be counterproductive.

05:32:09.970 --> 05:32:10.820
Having said that,

05:32:10.820 --> 05:32:14.020
there are definitely benefits
for trying to use more energy

05:32:14.020 --> 05:32:17.220
when we have more renewables
and when rates are lower.

05:32:17.220 --> 05:32:20.520
Regarding adding a fixed
charge, we need to think about,

05:32:20.520 --> 05:32:25.520
again, looking through
the lens of the rate shocks.

05:32:28.160 --> 05:32:31.150
We need to see how they're
essentially not felt equitably

05:32:31.150 --> 05:32:33.750
and how they might be
structural winners and losers.

05:32:34.958 --> 05:32:39.958
We're gonna continue
also to evaluate access

05:32:40.010 --> 05:32:41.330
that have been discussed
in the mother morning

05:32:41.330 --> 05:32:44.690
about access to income support
programs like CARE and FERA

05:32:45.570 --> 05:32:48.410
Cal Advocates has long
been supportive of approaches

05:32:48.410 --> 05:32:49.920
to reduce the paperwork
burdens for those customers

05:32:49.920 --> 05:32:53.040
we're gonna continue to
work with stakeholders on that.

05:32:53.040 --> 05:32:56.740
Some potential methods to
increase automatic enrollment.

05:32:56.740 --> 05:32:59.250
Some of method may be
similar to what Dr Fowlie

05:32:59.250 --> 05:33:01.930
was describing in terms
of how we can look at

05:33:02.910 --> 05:33:05.880
figuring out who would be
qualified for different levels

05:33:05.880 --> 05:33:08.990
of payment for a fixed charge.

05:33:08.990 --> 05:33:11.633
So I think there's some synergies there.

05:33:12.660 --> 05:33:16.113
So the core message here,
there is a rate in bills crisis.

05:33:17.080 --> 05:33:18.380
There increase recent bills,

05:33:18.380 --> 05:33:20.310
not only threatens our climate goals,

05:33:20.310 --> 05:33:23.690
they're burdening our
most vulnerable customers.

05:33:23.690 --> 05:33:25.950
Electricity is an
essential service needed

05:33:25.950 --> 05:33:28.150
to assure public health,
safety and comfort,

05:33:28.150 --> 05:33:30.913
so we need to look at all
methods to reduce rates,

05:33:31.930 --> 05:33:34.940
and we should see rate
payer funds as an investment,

05:33:34.940 --> 05:33:36.730
prioritizing those on those,

05:33:36.730 --> 05:33:40.240
have the greatest bang
for the buck, that's critical.

05:33:40.240 --> 05:33:42.070
The second is we support efforts

05:33:42.070 --> 05:33:45.800
to look at additional sources
for funding, other than rates.

05:33:45.800 --> 05:33:48.010
If you're charging for programs,

05:33:48.010 --> 05:33:50.280
through rates as been discussed,

05:33:50.280 --> 05:33:52.130
that is one of the more regressive ways

05:33:52.130 --> 05:33:54.140
we could consider doing that.

05:33:54.140 --> 05:33:56.420
And lastly, we should
have rates that align

05:33:56.420 --> 05:33:58.200
with utility cost profiles.

05:33:58.200 --> 05:34:00.020
It doesn't mean any
to be exactly the same.

05:34:00.020 --> 05:34:03.130
There's a lot of research
that shows like for time of use

05:34:03.130 --> 05:34:06.490
periods just simply having
there be a price differential

05:34:06.490 --> 05:34:09.830
is important for customers
to change their behavior,

05:34:09.830 --> 05:34:11.620
making those too big
can just be punitive,

05:34:11.620 --> 05:34:15.710
'cause there is a limit to how
elastic that demand would be.

05:34:15.710 --> 05:34:17.540
So lastly, just with
an immediate action,

05:34:17.540 --> 05:34:20.390
the Commission can take
here is to require the utilities,

05:34:20.390 --> 05:34:24.380
to include information on
approved and pending data requests

05:34:24.380 --> 05:34:27.540
with their rate tracking
tool in those proceedings

05:34:27.540 --> 05:34:29.950
where they're expected to have that

05:34:29.950 --> 05:34:31.660
have a greater than 1% increase

05:34:31.660 --> 05:34:34.260
on the given utilities
revenue requirement.

05:34:34.260 --> 05:34:37.010
That way we could have the
overall impact of any request

05:34:37.010 --> 05:34:40.330
to be considered along with
all other pending requests.

05:34:40.330 --> 05:34:41.860
We think that would help make

05:34:41.860 --> 05:34:44.310
the decision making bit more informed,

05:34:44.310 --> 05:34:46.530
like Jennifer Dowdell said,

05:34:46.530 --> 05:34:50.140
this is something the
Commission can do now,

05:34:50.140 --> 05:34:51.860
it will help improve the record.

05:34:51.860 --> 05:34:53.320
And in closing, I would just say,

05:34:53.320 --> 05:34:55.250
I don't wanna get virtually
kicked under the table

05:34:55.250 --> 05:34:57.940
by my colleagues in Cal Advocates

05:34:57.940 --> 05:34:59.930
on the telco or water side,

05:34:59.930 --> 05:35:01.820
so I wanna to make a plug that,

05:35:01.820 --> 05:35:03.530
requiring that rate tracking full tool

05:35:03.530 --> 05:35:05.490
for all the types of utilities,

05:35:05.490 --> 05:35:08.760
the CPUC regulates is really important

05:35:08.760 --> 05:35:12.440
because as it's been noted
by several speakers here today,

05:35:12.440 --> 05:35:15.120
the other utilities are
a substantial portion

05:35:15.120 --> 05:35:17.502
of the various rate burdens

05:35:17.502 --> 05:35:20.710
that customers feel here in California.

05:35:20.710 --> 05:35:22.100
So sorry, I went so quickly,

05:35:22.100 --> 05:35:25.000
but I did promise I was gonna
try to keep under five minutes

05:35:25.000 --> 05:35:26.033
and I hope I did so.

05:35:28.038 --> 05:35:29.610
<v Achintya>Thank you
very much, Michael.</v>

05:35:29.610 --> 05:35:32.567
Next we have Robert Thomas
from California (indistinct).

05:35:34.920 --> 05:35:36.883
<v ->Okay, can you hear me?</v>

05:35:38.550 --> 05:35:40.110
<v Achintya>Yes, we can.</v>

05:35:40.110 --> 05:35:41.247
<v ->Okay all right thank you.</v>

05:35:41.247 --> 05:35:43.670
So thank you Commissioners
for having me here

05:35:43.670 --> 05:35:44.880
on this discussion.

05:35:44.880 --> 05:35:48.190
And I wanna also thank the
staff for all the organization

05:35:48.190 --> 05:35:50.273
and help you provide it along the way.

05:35:51.670 --> 05:35:55.540
Today, I'm gonna cover
income based fixed charges

05:35:55.540 --> 05:35:58.393
and also targeted securitization.

05:36:00.120 --> 05:36:00.953
So conceptually,

05:36:00.953 --> 05:36:03.100
we agree with the structure of income

05:36:03.100 --> 05:36:05.513
based or graduated fixed charges.

05:36:06.710 --> 05:36:09.700
And in fact, a general
application of fixed charges

05:36:09.700 --> 05:36:11.290
in the residential class,

05:36:11.290 --> 05:36:13.490
will greatly benefit affordability

05:36:13.490 --> 05:36:15.660
and has the added
benefit of facilitating

05:36:15.660 --> 05:36:18.083
our path towards our GHG goals.

05:36:20.027 --> 05:36:22.770
Spectrum structure will
address affordability concerns

05:36:22.770 --> 05:36:24.743
across the spectrum of customers.

05:36:25.620 --> 05:36:28.610
As the lower volume vector charges

05:36:28.610 --> 05:36:32.030
will be felt by all
customers within the class

05:36:32.030 --> 05:36:35.200
with the income graduated charges,

05:36:35.200 --> 05:36:37.500
making the structure more progressive

05:36:37.500 --> 05:36:40.810
and staying in line with affordability

05:36:40.810 --> 05:36:43.480
and rate stability goals that we have

05:36:43.480 --> 05:36:45.860
as well as the lower
volume metric charges,

05:36:45.860 --> 05:36:48.503
making electrification more
affordable for everyone.

05:36:50.640 --> 05:36:52.250
As an initial step (clears theoat),

05:36:52.250 --> 05:36:53.600
the Commission should consider

05:36:53.600 --> 05:36:57.690
a three level income-based
fixed charge approach, right?

05:36:57.690 --> 05:37:01.620
This approach would have
a non care fixed charge

05:37:01.620 --> 05:37:05.120
initially set at statutory level of $10

05:37:05.120 --> 05:37:08.210
and then use the CARE and FERA discounts

05:37:08.210 --> 05:37:09.713
for the income graduation.

05:37:12.020 --> 05:37:16.420
As we progress down this
road with this initial application,

05:37:16.420 --> 05:37:20.450
additional adjustments
can be made, it's necessary.

05:37:20.450 --> 05:37:22.050
One advantage of this is that

05:37:22.050 --> 05:37:24.570
because CARE and FERA exist today,

05:37:24.570 --> 05:37:26.710
and there are processes in place today

05:37:26.710 --> 05:37:28.923
for customer care
and so forth like that.

05:37:29.840 --> 05:37:34.223
You have already a structure
with income-based designations.

05:37:36.180 --> 05:37:39.338
A fourth fixed charge level

05:37:39.338 --> 05:37:43.320
could be included and
applied to electrification rates.

05:37:43.320 --> 05:37:45.227
And electrification rates

05:37:45.227 --> 05:37:48.272
are rates that are specifically designed

05:37:48.272 --> 05:37:51.780
for electrification
technologies like heat pump,

05:37:51.780 --> 05:37:55.553
water heaters, heat
pump, split systems DERs.

05:37:57.090 --> 05:38:02.090
And these rates are designed
time of use volumetric charges

05:38:03.071 --> 05:38:06.370
that take the duck
curve into consideration,

05:38:06.370 --> 05:38:09.570
I know one of the panelists
discussed that earlier,

05:38:09.570 --> 05:38:11.760
but they take the duck
curve into consideration

05:38:11.760 --> 05:38:14.483
and they take system
constraints into consideration.

05:38:15.740 --> 05:38:17.500
So the fourth level of fixed charge

05:38:17.500 --> 05:38:20.610
then applied to the
electrification rates

05:38:20.610 --> 05:38:23.723
could include in addition
to a basic charge,

05:38:23.723 --> 05:38:27.090
it could include such
elements as coincident

05:38:27.090 --> 05:38:28.693
and non coincident peak charges.

05:38:30.488 --> 05:38:33.510
This type of structure
would be appropriate.

05:38:33.510 --> 05:38:37.280
We feel for this application,
given that in the future,

05:38:37.280 --> 05:38:40.130
we will be seeing
more bidirectional flows,

05:38:40.130 --> 05:38:43.830
and more flows that'll be
managed by customers.

05:38:43.830 --> 05:38:47.310
This ensures that those
who use the system

05:38:47.310 --> 05:38:48.543
will pay for the system.

05:38:50.410 --> 05:38:53.290
Because CARE and FERA
customers are also eligible

05:38:53.290 --> 05:38:55.530
for service on electrification rates.

05:38:55.530 --> 05:38:57.950
This framework gives the benefit

05:38:57.950 --> 05:39:00.700
of the graduated fixed charge structure,

05:39:00.700 --> 05:39:02.110
having a broader reach

05:39:03.280 --> 05:39:05.530
through the potential of
reducing energy burdens

05:39:05.530 --> 05:39:07.580
in the low income segment,

05:39:07.580 --> 05:39:12.333
as electrification
technologies are adopted.

05:39:14.560 --> 05:39:16.570
The optional electrification rates

05:39:16.570 --> 05:39:18.130
would incorporate fixed charges

05:39:18.130 --> 05:39:20.270
that are better aligned with costs

05:39:20.270 --> 05:39:23.880
and for the expected
prosumer usage profiles.

05:39:23.880 --> 05:39:25.310
As customers electrify,

05:39:25.310 --> 05:39:28.730
we expect that they'll
change their usage behaviors

05:39:28.730 --> 05:39:31.950
and be more prosumers,
instead of simply customers

05:39:31.950 --> 05:39:34.833
who are receiving
power from the utility.

05:39:35.935 --> 05:39:38.810
Customers will be more active

05:39:38.810 --> 05:39:40.870
in the technologies they adopt

05:39:40.870 --> 05:39:42.520
and definitely more active

05:39:42.520 --> 05:39:45.110
in the way that they manage their loads.

05:39:45.110 --> 05:39:49.560
This will result in flatter
more high volume profiles,

05:39:49.560 --> 05:39:52.743
similar to what we see in
the non residential classes.

05:39:53.680 --> 05:39:56.020
And just like non customers,

05:39:56.020 --> 05:39:58.430
as these customers
flatten their load profiles

05:39:58.430 --> 05:40:01.200
and use more volume,
they will actually benefit

05:40:01.200 --> 05:40:03.040
from having some level of fixed charge

05:40:03.040 --> 05:40:04.920
within the rate, right?

05:40:04.920 --> 05:40:08.290
Just in general, it doesn't
matter what the commodity is

05:40:08.290 --> 05:40:12.390
if your high volume or
lower volume metric charge

05:40:12.390 --> 05:40:15.453
is more favorable with
some level of fixed charges.

05:40:19.350 --> 05:40:21.260
The lower volume metric charges

05:40:21.260 --> 05:40:22.830
can also create the opportunity

05:40:22.830 --> 05:40:26.330
for us to take bigger steps
towards our GHC goals

05:40:26.330 --> 05:40:28.850
and reducing whole house energy burdens,

05:40:28.850 --> 05:40:32.510
especially when one
considers fuel switching

05:40:32.510 --> 05:40:33.943
associated with vehicles.

05:40:35.420 --> 05:40:39.590
We know that the transportation
sector produces 40%

05:40:39.590 --> 05:40:42.090
of overall GHC missions

05:40:42.090 --> 05:40:46.400
and that gasoline can comprise
approximately 30% or more

05:40:46.400 --> 05:40:47.943
of a household energy budget.

05:40:49.120 --> 05:40:54.120
So taking the SCE values for
energy budget in the May, 2021

05:40:56.360 --> 05:40:58.510
SB 695 White Paper,

05:40:58.510 --> 05:41:01.273
I put together this
example for you here.

05:41:02.760 --> 05:41:06.930
So if we look at the year 2022,

05:41:06.930 --> 05:41:09.700
I believe it was their gasoline prices

05:41:09.700 --> 05:41:11.430
are probably lower
than what they are today,

05:41:11.430 --> 05:41:16.230
but IOUs that example
and you can do the math.

05:41:16.230 --> 05:41:18.810
So, but if you take that example,

05:41:18.810 --> 05:41:22.180
a customer can save approximately 50%

05:41:22.180 --> 05:41:24.590
on vehicle fueling costs, right?

05:41:24.590 --> 05:41:29.020
And that 50% savings
on vehicle fueling costs

05:41:29.020 --> 05:41:32.110
translates to about a 60% savings,

05:41:32.110 --> 05:41:37.110
once again, using
gasoline prices from 2021.

05:41:37.540 --> 05:41:42.057
I recognize electricity prices
have also gone up since then,

05:41:42.057 --> 05:41:45.883
but in my rough mass the
spread is still about the same.

05:41:49.900 --> 05:41:52.410
By then connect policies and programs

05:41:52.410 --> 05:41:55.250
to expand the availability of Evs

05:41:55.250 --> 05:41:57.510
across various income levels,

05:41:57.510 --> 05:41:59.380
these similar savings can be expected

05:41:59.380 --> 05:42:01.290
in the low income segment.

05:42:01.290 --> 05:42:04.780
And an added benefit is
that this type of structure

05:42:04.780 --> 05:42:09.070
would then extend the
CARE or FERA discounts

05:42:09.070 --> 05:42:10.303
to vehicle fueling.

05:42:11.140 --> 05:42:13.020
And as noted in the white paper,

05:42:13.020 --> 05:42:15.341
currently vehicle fueling
on the gassing side

05:42:15.341 --> 05:42:18.400
has no benefits for the low income.

05:42:18.400 --> 05:42:20.470
So this would be a little bit better.

05:42:23.748 --> 05:42:24.940
(clearing throat)

05:42:24.940 --> 05:42:25.773
Okay.

05:42:25.773 --> 05:42:30.030
So we recognize that their
existing statutory requirements

05:42:30.030 --> 05:42:33.230
that limit the ability for
us to reach this goal.

05:42:33.230 --> 05:42:38.110
As we saw in the proposal,
some of the fixed charges

05:42:38.110 --> 05:42:41.010
for what we assume to be default rates

05:42:41.010 --> 05:42:44.210
reach levels of over a
hundred dollars a month, right?

05:42:44.210 --> 05:42:47.200
So statutory limits
that specified the level

05:42:47.200 --> 05:42:49.057
and the application of fixed charges

05:42:49.057 --> 05:42:52.923
and the residential default
rates would need to be changed.

05:42:54.150 --> 05:42:55.430
These changes include,

05:42:55.430 --> 05:42:59.360
but are not limited to a
movement towards a true cost basis

05:42:59.360 --> 05:43:00.817
for determining fixed charges

05:43:00.817 --> 05:43:02.173
and the residential default rate

05:43:02.173 --> 05:43:05.283
that would mean the elimination
of the $10 per month cap,

05:43:06.830 --> 05:43:09.700
as well as the removal of language

05:43:09.700 --> 05:43:12.230
and the definition of fixed charges.

05:43:12.230 --> 05:43:14.840
That includes the much
things as demand charges

05:43:14.840 --> 05:43:16.880
in quote, other charges,

05:43:16.880 --> 05:43:21.408
not based upon the volume
of electricity consumed.

05:43:21.408 --> 05:43:24.660
The fact that the statute
limits any type of recovery

05:43:24.660 --> 05:43:27.513
other than volume
electric charges to $10,

05:43:28.770 --> 05:43:30.840
Really shows that that this statute

05:43:30.840 --> 05:43:33.480
has reached the end of its of its stated

05:43:33.480 --> 05:43:35.433
or it reach the end of its life.

05:43:37.400 --> 05:43:41.610
The statute basically flies
in the opposite direction

05:43:41.610 --> 05:43:43.933
of California's current GHG goals.

05:43:46.380 --> 05:43:48.170
So given the potential benefits

05:43:48.170 --> 05:43:50.720
of the graduated fixed charge framework

05:43:50.720 --> 05:43:53.740
with respect to affordability
and GHC reductions,

05:43:53.740 --> 05:43:55.920
we think these changes of statute

05:43:55.920 --> 05:43:57.943
should be made in our work pursuing.

05:43:59.950 --> 05:44:00.920
So in summary,

05:44:00.920 --> 05:44:02.790
this graduated fixed charge framework

05:44:04.380 --> 05:44:07.890
could be in place until
the necessary statutory,

05:44:07.890 --> 05:44:10.870
data integration and
system changes are made

05:44:10.870 --> 05:44:13.533
to accommodate a more refined approach.

05:44:14.570 --> 05:44:19.480
This framework would ease implementation

05:44:19.480 --> 05:44:21.760
and simplify customer care,

05:44:21.760 --> 05:44:23.860
as well as billing and
maintenance issues.

05:44:26.253 --> 05:44:30.700
Some of the frameworks that
were discussed earlier today

05:44:30.700 --> 05:44:33.480
would require an extensive
amount of coordination

05:44:33.480 --> 05:44:37.250
between the utilities and other entities

05:44:37.250 --> 05:44:39.700
that are associated with
the government or other.

05:44:40.920 --> 05:44:42.320
And that would be very complicated

05:44:42.320 --> 05:44:45.253
from a service perspective
and customer care perspective.

05:44:46.132 --> 05:44:49.700
We would still be able
to provide similar benefit

05:44:49.700 --> 05:44:50.900
through this framework,

05:44:50.900 --> 05:44:54.943
as described by the HOAs Institute.

05:44:55.800 --> 05:44:58.410
This framework would also
bring residential rates closer

05:44:58.410 --> 05:45:01.260
to cost causation while still adhering

05:45:01.260 --> 05:45:03.993
to the stability and
affordability priorities.

05:45:05.390 --> 05:45:07.017
Once the Commission and the IOU

05:45:07.017 --> 05:45:10.220
gained experience with
income-graduated fixed charges

05:45:10.220 --> 05:45:12.970
and residential fixed
charges in general,

05:45:12.970 --> 05:45:15.560
then it's necessary the process

05:45:15.560 --> 05:45:20.260
or the structure can be
refined as we go along.

05:45:20.260 --> 05:45:23.960
Ultimately, we'll need to
balance the competing priorities

05:45:23.960 --> 05:45:27.940
and opposing constraints
regarding affordability

05:45:27.940 --> 05:45:29.853
and these solutions.

05:45:33.520 --> 05:45:36.647
So I also wanted to
cover, put down my notes.

05:45:39.070 --> 05:45:43.483
So I also wanted to
cover securitization.

05:45:46.419 --> 05:45:49.919
Securitization of O&amp;M
cost is another tool

05:45:51.570 --> 05:45:53.270
that the Commission should consider

05:45:53.270 --> 05:45:56.140
for reducing near term near term

05:45:56.140 --> 05:45:59.520
or short term cost
pressures on customers.

05:45:59.520 --> 05:46:01.990
Securitization can benefit customers

05:46:02.950 --> 05:46:05.713
when used in a very targeted approach.

05:46:07.250 --> 05:46:10.420
And in other words,
when used for such items

05:46:10.420 --> 05:46:13.243
such as wildfire, capital
and wildfire, O&amp;M,

05:46:14.460 --> 05:46:19.040
we recognize that the
Commission has approved

05:46:19.040 --> 05:46:23.550
wildfire capital
securitizations under AB 1054,

05:46:23.550 --> 05:46:26.180
and we believe the
Commission should use this tool

05:46:26.180 --> 05:46:27.810
also for O&amp;M

05:46:30.380 --> 05:46:34.410
The securitization O&amp;M
provides an affordable benefit

05:46:34.410 --> 05:46:36.740
to help these pancaking,

05:46:36.740 --> 05:46:40.830
you could say of revenue
requirements that occurs

05:46:41.851 --> 05:46:46.851
when wildfire revenue
requirements are placed in the rates

05:46:49.170 --> 05:46:52.490
by creating a near term build relief

05:46:52.490 --> 05:46:54.320
that'll spread these O&amp;M costs

05:46:54.320 --> 05:46:56.190
over longer recovery periods.

05:46:56.190 --> 05:46:57.900
And by using financing tools

05:46:57.900 --> 05:46:59.970
that align with the cost
of service principles

05:46:59.970 --> 05:47:03.720
that are fundamental to a
utilities regulatory model.

05:47:03.720 --> 05:47:06.860
Now in using this targeted tool,

05:47:06.860 --> 05:47:07.990
the Commission would not need

05:47:07.990 --> 05:47:10.910
to approve a real long
term securitization,

05:47:10.910 --> 05:47:15.910
but could approve a short
term five year securitization

05:47:16.008 --> 05:47:18.830
that would limit the
overall rate adjustment

05:47:18.830 --> 05:47:22.400
while at the same time
maintaining the cost

05:47:22.400 --> 05:47:24.620
with the customer base,

05:47:24.620 --> 05:47:26.393
with the appropriate customer base.

05:47:27.780 --> 05:47:31.110
This would also
provide significant relief

05:47:31.110 --> 05:47:34.613
relative to a traditional
O&amp;M recovery mechanism.

05:47:35.970 --> 05:47:38.840
So once again, I wanna say
thank you for having me here.

05:47:38.840 --> 05:47:40.763
And that's all I have.

05:47:42.809 --> 05:47:43.642
<v Achintya>Thank you very much.</v>

05:47:43.642 --> 05:47:47.900
And we last have Robert Kenny from PG&amp;E.

05:47:50.380 --> 05:47:53.380
<v ->Thank you, let me first confirm
that you can hear me well.</v>

05:47:54.630 --> 05:47:55.790
<v Achintya>Yes, we can.</v>

05:47:55.790 --> 05:47:57.210
<v ->The heads nodding,
thank you very much.</v>

05:47:57.210 --> 05:47:59.350
And let me just say thank
you to the Commissioners,

05:47:59.350 --> 05:48:03.080
all the Commissioners, CPUC
and CEC and to all the staff

05:48:03.080 --> 05:48:05.570
for convening this very
important discussion.

05:48:05.570 --> 05:48:08.960
I was very honored and
privileged to participate last year,

05:48:08.960 --> 05:48:12.180
and I'm very pleased
that I've been invited again

05:48:12.180 --> 05:48:14.280
to attend this year.

05:48:14.280 --> 05:48:16.230
I wanna be mindful of time,

05:48:16.230 --> 05:48:19.810
so I'm going to comment on a few areas

05:48:19.810 --> 05:48:22.060
where I've seen significant agreement

05:48:22.060 --> 05:48:23.770
and few areas of disagreement.

05:48:23.770 --> 05:48:25.930
And let me just start by saying,

05:48:25.930 --> 05:48:30.650
I see and hear more with
which I think we can all agree

05:48:30.650 --> 05:48:33.440
than with which we can disagree.

05:48:33.440 --> 05:48:35.580
And so it's just really
important that this conversation

05:48:35.580 --> 05:48:37.710
has being convened at all.

05:48:37.710 --> 05:48:39.120
When we talk about affordability,

05:48:39.120 --> 05:48:43.500
I think it's important to recall
about whom we are talking.

05:48:43.500 --> 05:48:45.390
And I know that
several of the presenters

05:48:45.390 --> 05:48:50.330
have spoken earlier about
the need to be focus on

05:48:50.330 --> 05:48:53.040
low income, moderate income customers.

05:48:53.040 --> 05:48:54.660
As we heard this morning,

05:48:54.660 --> 05:48:57.450
people are making choices
between food, medication

05:48:57.450 --> 05:49:00.470
and running their AC
on dangerously hot days.

05:49:00.470 --> 05:49:02.840
People should not be
placed in the position

05:49:02.840 --> 05:49:04.430
of having to make these choices.

05:49:04.430 --> 05:49:08.400
So just very supportive of
the fact of this conversation

05:49:08.400 --> 05:49:12.300
and the areas where
we can work to find relief

05:49:12.300 --> 05:49:15.423
for customers, particularly
vulnerable customers.

05:49:16.370 --> 05:49:18.700
I do wanna agree and associate myself

05:49:18.700 --> 05:49:20.610
with one of the comments
Mike Campbell made.

05:49:20.610 --> 05:49:23.044
It's important to remember
that rate design is a tool

05:49:23.044 --> 05:49:25.760
to make customer rates
and bills more affordable,

05:49:25.760 --> 05:49:27.740
but it's not the sole tool.

05:49:27.740 --> 05:49:30.440
Other tools that we're
very supportive of include,

05:49:30.440 --> 05:49:32.330
removing items from the bill,

05:49:32.330 --> 05:49:35.190
like we talked about those
societally beneficial items

05:49:35.190 --> 05:49:38.230
that would be more appropriately funded

05:49:38.230 --> 05:49:41.280
through dollars other
than the customer dollar

05:49:41.280 --> 05:49:43.270
pursuing alternate funding sources

05:49:43.270 --> 05:49:44.970
like the federal one,
infrastructure dollars

05:49:44.970 --> 05:49:45.803
and other measures

05:49:45.803 --> 05:49:48.863
to decrease the overall
utility revenue requirement.

05:49:50.410 --> 05:49:53.750
We're support of examining
rate reform measures generally.

05:49:53.750 --> 05:49:55.380
And more specifically,

05:49:55.380 --> 05:49:57.110
we are very supportive of studying

05:49:57.110 --> 05:49:59.520
and implementing a fixed charge,

05:49:59.520 --> 05:50:02.700
whether that's income
graduated or otherwise.

05:50:02.700 --> 05:50:04.640
Current default residential rates

05:50:04.640 --> 05:50:08.970
with tier and no fixed
charges create artificially high

05:50:08.970 --> 05:50:10.690
and inefficient price signals.

05:50:10.690 --> 05:50:14.310
And aren't structured to
maximally promote electrification

05:50:14.310 --> 05:50:15.833
to fright climate change.

05:50:16.710 --> 05:50:18.440
We're very encouraged by the ideas

05:50:18.440 --> 05:50:19.920
that seek non-traditional

05:50:19.920 --> 05:50:23.110
and in some cases
non-energy bill funding costs

05:50:23.110 --> 05:50:27.160
for benefits that go customers
role as energy consumers.

05:50:27.160 --> 05:50:27.993
And I think as I said,

05:50:27.993 --> 05:50:31.300
programs or initiatives
that are societally beneficial

05:50:31.300 --> 05:50:34.440
should not be born by
utility customers alone,

05:50:34.440 --> 05:50:36.350
instead they should be born more broadly

05:50:36.350 --> 05:50:37.653
by all Californians.

05:50:39.180 --> 05:50:41.180
Couple of areas of disagreement,

05:50:41.180 --> 05:50:43.560
and then I'll talk a little
bit more particularly

05:50:43.560 --> 05:50:45.720
that we're not supportive of proposals

05:50:45.720 --> 05:50:48.473
that are counter to traditional
rate making principles.

05:50:49.780 --> 05:50:52.460
And I heard RAP really

05:50:52.460 --> 05:50:54.630
go through some traditional
rate making principles

05:50:54.630 --> 05:50:56.420
that we're supportive of

05:50:56.420 --> 05:50:58.900
and those rate making
principles remain sound

05:50:58.900 --> 05:51:01.150
particularly those that ensure fairness,

05:51:01.150 --> 05:51:03.550
economic efficiency and transparency.

05:51:03.550 --> 05:51:05.570
We should resist the urge

05:51:05.570 --> 05:51:08.560
to reflexively abandon
traditional rate making principles

05:51:08.560 --> 05:51:11.590
without fully understanding
why we're doing it,

05:51:11.590 --> 05:51:14.620
and any potential
unintended consequences.

05:51:14.620 --> 05:51:17.280
Here, I'm thinking about proposals

05:51:17.280 --> 05:51:19.913
to reduce IOU balancing accounts,

05:51:20.780 --> 05:51:23.410
the GRC phase one
anchor bias reduction in

05:51:23.410 --> 05:51:27.310
with a proposed test year CPI based cap

05:51:27.310 --> 05:51:30.493
and reducing IOU's
authorized rate of return.

05:51:32.080 --> 05:51:34.780
So let me just say
a little bit more detail

05:51:34.780 --> 05:51:38.490
about the ideas that
we are very supportive of

05:51:38.490 --> 05:51:41.560
the income graduated fixed charge.

05:51:41.560 --> 05:51:43.617
And one idea that we're
not particularly supportive of

05:51:43.617 --> 05:51:45.850
is the CPI-based cap.

05:51:45.850 --> 05:51:48.050
First, I wanna say that the rate design,

05:51:48.050 --> 05:51:51.070
I think we talked about
faces some limitations,

05:51:51.070 --> 05:51:52.850
in the phase of increasing costs

05:51:52.850 --> 05:51:55.420
and can function to
basically squeeze the balloon

05:51:55.420 --> 05:51:57.320
or the revenue requirement
for some customers

05:51:57.320 --> 05:51:59.020
at the expense of others

05:51:59.020 --> 05:52:03.237
and can potentially further
deviate from cost-based rates.

05:52:03.237 --> 05:52:05.410
And so to the greatest extent possible

05:52:05.410 --> 05:52:07.700
rates should be set
to refer lack the cost

05:52:07.700 --> 05:52:09.033
of providing service.

05:52:09.920 --> 05:52:12.820
Costs from promoting
policies and technologies,

05:52:12.820 --> 05:52:16.720
or from incentivizing
behaviors, should be transparent

05:52:16.720 --> 05:52:20.130
to enable meaningful
discussion about policy priorities

05:52:20.130 --> 05:52:22.230
and how, if at all those costs

05:52:22.230 --> 05:52:24.230
should be shared with utility customers.

05:52:25.260 --> 05:52:27.870
So we agree that major
changes are needed

05:52:27.870 --> 05:52:29.820
to start recovering significant portions

05:52:29.820 --> 05:52:31.570
of our costs and fixed charges.

05:52:31.570 --> 05:52:34.180
And we think fixed charges
for residential customers

05:52:34.180 --> 05:52:35.283
are long overdue.

05:52:36.890 --> 05:52:41.830
Approximately half or
more of our costs are fixed,

05:52:41.830 --> 05:52:44.370
but our rates are
disproportionately recovering

05:52:44.370 --> 05:52:46.383
those costs through volumetric rates.

05:52:47.470 --> 05:52:51.250
And we are very interested
in getting more discussion

05:52:51.250 --> 05:52:53.090
about the income-based proposals

05:52:53.090 --> 05:52:55.600
that Meredith discussed earlier.

05:52:55.600 --> 05:52:57.830
We do see some challenges,

05:52:57.830 --> 05:53:01.260
but absolutely want to
continue that discussion.

05:53:01.260 --> 05:53:03.760
We think that a universal or
a uniform rather fixed charge

05:53:03.760 --> 05:53:05.683
is not necessarily regressive.

05:53:06.560 --> 05:53:09.990
It would potentially
benefit higher users,

05:53:09.990 --> 05:53:12.390
particularly higher users
in the Central Valley.

05:53:13.808 --> 05:53:17.410
Somebody also noted earlier
that there's not necessarily

05:53:17.410 --> 05:53:20.240
a correlation between
high usage and high income

05:53:20.240 --> 05:53:21.953
and so that's important to note.

05:53:22.850 --> 05:53:24.380
We're particularly thoughtful

05:53:24.380 --> 05:53:27.540
about low income and
moderate income customers,

05:53:27.540 --> 05:53:29.660
particularly those in the Central Valley

05:53:31.240 --> 05:53:34.500
that would benefit
from the implementation

05:53:34.500 --> 05:53:35.823
of a fixed charge.

05:53:37.180 --> 05:53:40.880
Any approved fixed charge
would already have three levels

05:53:40.880 --> 05:53:44.433
based on income, non-CAREe,
non-FERA, CARE and FERA.

05:53:45.350 --> 05:53:47.410
And we think that there are other ways

05:53:47.410 --> 05:53:48.980
to differentiate fixed charges

05:53:48.980 --> 05:53:50.410
that are based on cost of service.

05:53:50.410 --> 05:53:53.380
For example, based on
connection costs or service size,

05:53:53.380 --> 05:53:54.773
or even dwelling size.

05:53:56.740 --> 05:54:01.740
Let me briefly turn to
the CPI-based proposal.

05:54:02.090 --> 05:54:04.390
We wanna be careful
about some on thing like that

05:54:04.390 --> 05:54:06.100
for a couple of different reasons.

05:54:06.100 --> 05:54:08.790
We don't believe that it is consistent

05:54:08.790 --> 05:54:09.970
with infrastructure needs

05:54:09.970 --> 05:54:13.480
and would potentially place constraints

05:54:13.480 --> 05:54:17.907
on needed investments
for reliability and safety.

05:54:17.907 --> 05:54:20.110
And so we think it's really inconsistent

05:54:20.110 --> 05:54:21.987
with principles of forecast rate making,

05:54:21.987 --> 05:54:24.220
and would potentially
undermine our obligation

05:54:24.220 --> 05:54:26.930
to provide safe and reliable service.

05:54:26.930 --> 05:54:31.930
Secondarily, risk scores
are already provided in GRCs

05:54:32.220 --> 05:54:35.733
to allow parties to prioritize requests.

05:54:37.970 --> 05:54:39.700
A couple of other
points that I wanna make

05:54:39.700 --> 05:54:44.320
regarding state ownership
of transmission assets.

05:54:44.320 --> 05:54:47.470
I know that there has been
significant increased scrutiny

05:54:47.470 --> 05:54:50.150
on transmission spending.

05:54:50.150 --> 05:54:52.200
We've been very supportive of creating

05:54:52.200 --> 05:54:53.580
a stakeholder review process

05:54:53.580 --> 05:54:56.220
that provides greater transparency

05:54:56.220 --> 05:54:59.270
into our transmission planning.

05:54:59.270 --> 05:55:04.270
But we do think that it's
really unclear if we reliability

05:55:04.530 --> 05:55:06.700
or operational concerns
would be addressed

05:55:06.700 --> 05:55:07.670
at the state of California,

05:55:07.670 --> 05:55:09.940
where to own transmission assets,

05:55:09.940 --> 05:55:11.450
and whether those transmission assets

05:55:11.450 --> 05:55:12.690
would continue to be subject

05:55:12.690 --> 05:55:16.430
to (indistinct) regulation for
interstate commerce purposes.

05:55:16.430 --> 05:55:19.200
We think there also
may be negative impacts

05:55:19.200 --> 05:55:21.510
on the expansion of the CAISO market

05:55:21.510 --> 05:55:25.183
and would deter PTOs and
other states from participating.

05:55:26.310 --> 05:55:29.090
In a regional transmission
organization or ISO,

05:55:29.090 --> 05:55:32.763
that is in essence state
operated transmission system.

05:55:34.240 --> 05:55:36.410
Let me conclude by saying that,

05:55:36.410 --> 05:55:40.260
we support the exploration
implementation of a fixed charge.

05:55:40.260 --> 05:55:42.190
We support funding,

05:55:42.190 --> 05:55:44.270
societally beneficial
programs off the bill

05:55:44.270 --> 05:55:47.340
to be funded more broadly.

05:55:47.340 --> 05:55:49.530
And we're very supportive
of a general discussion

05:55:49.530 --> 05:55:52.120
to continue to explore
all the different ways

05:55:52.120 --> 05:55:55.450
in which we can decrease
revenue requirements

05:55:55.450 --> 05:55:58.000
and in which we can use rate design

05:55:58.000 --> 05:56:00.330
as a tool of affordability.

05:56:00.330 --> 05:56:01.980
Thank you for the opportunity to speak,

05:56:01.980 --> 05:56:04.390
and I look forward to
continuing the discussion.

05:56:06.299 --> 05:56:07.132
<v ->Thank you very much</v>

05:56:07.132 --> 05:56:08.990
and thank you to all the presenters

05:56:08.990 --> 05:56:12.330
and discussants for their remarks.

05:56:12.330 --> 05:56:15.460
So Paul and I do have
some prepared questions.

05:56:15.460 --> 05:56:17.870
We're gonna start with a couple of those

05:56:17.870 --> 05:56:19.820
before turning it over
to the Commissioners

05:56:19.820 --> 05:56:22.320
for any questions they may a have.

05:56:22.320 --> 05:56:25.000
I did want to maybe go back to the top

05:56:25.000 --> 05:56:26.560
where we started with NRDC

05:56:27.410 --> 05:56:30.720
and talk through the transmission

05:56:30.720 --> 05:56:32.250
state own transmission system proposal

05:56:32.250 --> 05:56:33.450
that they had put forth.

05:56:34.320 --> 05:56:36.600
It appears that there might
be quite a few challenges

05:56:36.600 --> 05:56:38.410
from an operational
and political perspective

05:56:38.410 --> 05:56:42.240
that were mentioned by
Robert Kenny from PG&amp;E,

05:56:42.240 --> 05:56:46.150
but it does seem like there
could be quite a few savings

05:56:48.090 --> 05:56:50.450
in terms of share reduced
shareholder returns

05:56:50.450 --> 05:56:53.000
or savings on shareholder
returns and tax expenses.

05:56:54.540 --> 05:56:57.680
Mohit could you walk us
through the rate payer impact

05:56:57.680 --> 05:57:01.140
of this sort of longer term
proposal and how that compares

05:57:01.140 --> 05:57:04.753
versus to the rate-base and IOU impact?

05:57:06.630 --> 05:57:10.920
<v ->Yeah, I can answer
that question partially.</v>

05:57:10.920 --> 05:57:14.787
So our results showed
that if you were to date

05:57:16.100 --> 05:57:19.380
on all existing PG&amp;E transmission,

05:57:19.380 --> 05:57:22.810
then you could reduce
rates by around 4%,

05:57:24.150 --> 05:57:29.030
for non-CARE customers,
slightly more for CARE customers.

05:57:29.030 --> 05:57:31.560
But as we build more transmission

05:57:31.560 --> 05:57:34.080
that would potentially increase.

05:57:34.080 --> 05:57:37.780
Now note that this isn't
a all or nothing solution,

05:57:37.780 --> 05:57:39.810
there's also the option of identifying

05:57:39.810 --> 05:57:42.480
certain riskier transmission lines

05:57:42.480 --> 05:57:44.823
and then identifying
how to own that publicly.

05:57:46.340 --> 05:57:50.190
And of course, buying
all the transmission assets

05:57:50.190 --> 05:57:52.037
would require a lot of money.

05:57:52.037 --> 05:57:54.303
And the savings really are,

05:57:55.690 --> 05:57:58.200
the data between the rate you pay now

05:57:58.200 --> 05:58:00.240
versus the rate you would pay later.

05:58:00.240 --> 05:58:02.250
And I guess some
opportunity cost of coming up

05:58:02.250 --> 05:58:05.361
with all that funds to buy it, right?

05:58:05.361 --> 05:58:07.720
So that's how you wanna think about it.

05:58:07.720 --> 05:58:10.293
And, yeah, I'll pause back.

05:58:13.440 --> 05:58:16.600
<v ->Thanks and I did wanna give
others on the panel a chance</v>

05:58:16.600 --> 05:58:19.930
if they wanted to follow up
on any of those comments

05:58:19.930 --> 05:58:22.170
or if they had any follow
up questions on that,

05:58:22.170 --> 05:58:24.970
and then I'll turned over to
Paul for his next question.

05:58:31.800 --> 05:58:34.763
Okay, seeing none
I'll turn it over to Paul.

05:58:38.080 --> 05:58:39.111
<v ->Thanks Achintya.</v>

05:58:39.111 --> 05:58:42.120
So Robert Kenny, I heard
you mention a moment ago,

05:58:42.120 --> 05:58:43.877
and I think you agreed with
Mike Campbell from Cal Ad

05:58:43.877 --> 05:58:46.260
because that we can't
really rate designer our way

05:58:46.260 --> 05:58:48.650
outta of revenue management,

05:58:48.650 --> 05:58:52.520
out of rising revenue
requirements and such,

05:58:52.520 --> 05:58:53.930
but you were supportive
of fixed charges,

05:58:53.930 --> 05:58:57.690
you're supportive of
continued opportunities

05:58:57.690 --> 05:58:59.603
in redesign changes.

05:59:01.198 --> 05:59:03.460
With a little more backdrop,
to what I'm about to ask

05:59:03.460 --> 05:59:07.830
I noted that in PG&amp;E's
fourth quarter earnings report

05:59:07.830 --> 05:59:11.270
that about 35 billion
in capital expenditures

05:59:11.270 --> 05:59:13.340
have been accrued over
the past four or five years

05:59:13.340 --> 05:59:17.240
and that PG&amp;E is hoping
for another 53 billion

05:59:17.240 --> 05:59:18.613
between now and 2026.

05:59:19.667 --> 05:59:22.210
And that the utility sectors
had about a 13% growth rate

05:59:22.210 --> 05:59:24.650
over the past year in general.

05:59:24.650 --> 05:59:28.420
I wonder if you could share concerns

05:59:28.420 --> 05:59:32.590
with shareholder impacts
of some of these proposals,

05:59:32.590 --> 05:59:35.183
not the least of which
would be shaving of the ROE

05:59:35.183 --> 05:59:36.710
down to a national average

05:59:37.620 --> 05:59:39.400
when it appears to me
that PG&amp;E stockholders

05:59:39.400 --> 05:59:42.040
are doing quite well in a pandemic year

05:59:42.040 --> 05:59:44.960
and that the utility sector
in general does quite well

05:59:44.960 --> 05:59:47.620
and seems almost
Bulletproof and impervious

05:59:47.620 --> 05:59:51.273
to shareholder health.

05:59:55.560 --> 05:59:57.120
<v ->Thank you for the question.</v>

05:59:57.120 --> 05:59:59.170
So I wanna talk a little bit

05:59:59.170 --> 06:00:02.307
about the notion of reducing ROEs

06:00:04.720 --> 06:00:05.850
down to the national average

06:00:05.850 --> 06:00:07.340
and I think there was
a proposal to reduce it

06:00:07.340 --> 06:00:12.230
even further to 7% while
increasing the capital structure.

06:00:12.230 --> 06:00:15.233
And I'll just, couple of
things to say about that.

06:00:16.750 --> 06:00:19.470
As a practical matter,
as a threshold matter,

06:00:19.470 --> 06:00:22.080
rather the ROEs intents
to compensate investors

06:00:22.080 --> 06:00:23.650
for the risks that they incur

06:00:23.650 --> 06:00:26.207
by placing their money
into the state of California.

06:00:26.207 --> 06:00:29.180
And so there's two points
to keep in mind there.

06:00:29.180 --> 06:00:32.800
First of all, we are
competing increasingly

06:00:32.800 --> 06:00:34.830
not just with other
California utilities,

06:00:34.830 --> 06:00:36.420
but with utilities from
around the country,

06:00:36.420 --> 06:00:38.690
and we're competing

06:00:38.690 --> 06:00:40.590
for other capital
investment opportunities

06:00:40.590 --> 06:00:41.423
around the world world.

06:00:41.423 --> 06:00:43.140
And so investors have choices

06:00:43.140 --> 06:00:44.870
about where they put their money.

06:00:44.870 --> 06:00:47.390
California utilities
do have higher risks

06:00:47.390 --> 06:00:49.590
as compared to those in other states.

06:00:49.590 --> 06:00:52.680
And so the notion of
the national average

06:00:52.680 --> 06:00:55.100
being an appropriate
proxy for California,

06:00:55.100 --> 06:00:57.610
I think isn't born out

06:00:57.610 --> 06:01:01.113
just by the comparatively
different risks that we face.

06:01:02.100 --> 06:01:03.900
I'd also note that the
credit rating agencies

06:01:03.900 --> 06:01:07.440
view California's political
and regulatory environment

06:01:07.440 --> 06:01:11.330
as unique and relatively
or comparatively complex

06:01:11.330 --> 06:01:12.783
as compared to other states.

06:01:14.010 --> 06:01:18.220
California does have a
long history of big and bold

06:01:18.220 --> 06:01:19.901
and innovative energy policies,

06:01:19.901 --> 06:01:23.150
but those policies do
who come with risks

06:01:23.150 --> 06:01:26.360
such as the California
energy crisis in 2000,

06:01:26.360 --> 06:01:27.870
and investors recall that,

06:01:27.870 --> 06:01:29.514
and they take that into
account when making decisions

06:01:29.514 --> 06:01:31.653
about where to place their capital.

06:01:33.820 --> 06:01:35.483
Legislation such as AB 1054,

06:01:35.483 --> 06:01:40.483
has served to reduce
that risk to a certain extent,

06:01:40.970 --> 06:01:44.660
but until the cost recovery
work is completely tested,

06:01:44.660 --> 06:01:46.423
some of that risk still remains.

06:01:47.270 --> 06:01:50.510
We are very supportive of
cost recovery mechanisms,

06:01:50.510 --> 06:01:53.140
such as decoupling
and forward test years

06:01:53.140 --> 06:01:55.730
and above average rates of return

06:01:55.730 --> 06:01:59.810
on equity contribute to
the more favorable view

06:01:59.810 --> 06:02:01.537
of California regulation by regulators

06:02:01.537 --> 06:02:03.103
or by investors rather.

06:02:04.290 --> 06:02:06.730
We are, in fact, as you
pointed out correctly,

06:02:06.730 --> 06:02:08.050
investing billions of dollars

06:02:08.050 --> 06:02:09.950
in infrastructure in the coming years,

06:02:10.870 --> 06:02:14.140
we do need to be able to
attract the capital to do that.

06:02:14.140 --> 06:02:17.070
And we need to attract that capital

06:02:17.070 --> 06:02:18.360
at the lowest possible cost,

06:02:18.360 --> 06:02:21.570
which ultimately inures
to the benefit of customers.

06:02:21.570 --> 06:02:24.250
And so we are very understanding

06:02:24.250 --> 06:02:26.050
and appreciative of the notion that,

06:02:26.996 --> 06:02:28.900
we're gonna continue to make capital

06:02:32.310 --> 06:02:34.660
and that investment's gonna
need to continue to be made.

06:02:34.660 --> 06:02:36.360
And that's why we're very interested

06:02:36.360 --> 06:02:38.360
in exploring other options

06:02:38.360 --> 06:02:41.080
that will allow us to help
mitigate the impact on customers.

06:02:41.080 --> 06:02:42.665
But we don't think that reducing the ROE

06:02:42.665 --> 06:02:45.023
is one that we would support.

06:02:48.000 --> 06:02:48.919
<v ->Thanks, I appreciate that.</v>

06:02:48.919 --> 06:02:49.752
And I just have a quick follow up

06:02:49.752 --> 06:02:51.540
that I wanted redirect to Jennifer

06:02:51.540 --> 06:02:53.430
to correct something
on the record real quickly

06:02:53.430 --> 06:02:54.620
regarding your presentation.

06:02:54.620 --> 06:02:56.230
Go ahead, Jennifer.

06:02:56.230 --> 06:02:57.880
<v ->Thank you, Paul.</v>

06:02:57.880 --> 06:03:02.880
I noticed that Robert referred
to the inflation constrained

06:03:06.430 --> 06:03:10.430
alternative proposal as
a cap on utility spending.

06:03:10.430 --> 06:03:11.790
And I wanna be very clear,

06:03:11.790 --> 06:03:14.670
that is not what TURN is proposing.

06:03:14.670 --> 06:03:18.710
TURN is proposing that
the record be improved

06:03:18.710 --> 06:03:22.970
by using the risk spend deficiency

06:03:22.970 --> 06:03:25.950
by the utility using the
risk spend deficiency

06:03:25.950 --> 06:03:29.320
to show what work it would perform

06:03:29.320 --> 06:03:32.080
based on risk spend deficiency

06:03:32.080 --> 06:03:34.647
should it be constrained by CPI.

06:03:35.883 --> 06:03:40.883
And I probably wasn't clear
in terms of our proposal,

06:03:43.000 --> 06:03:47.530
but I do think that's a
very important distinction.

06:03:47.530 --> 06:03:52.530
TURN does not encourage
a hard CPI driven cap

06:03:52.840 --> 06:03:54.700
on utility spending.

06:03:54.700 --> 06:03:57.053
We only encourage the Commission

06:03:57.053 --> 06:04:02.053
to make the record for that
spending as strong as possible,

06:04:02.710 --> 06:04:06.480
and to ensure that the 10 years

06:04:06.480 --> 06:04:10.120
that we've spent
developing a robust ramp

06:04:10.120 --> 06:04:15.120
and risk and deficiency
scoring be reflected,

06:04:15.260 --> 06:04:16.093
that's all.

06:04:17.590 --> 06:04:19.780
<v ->Paul, can I respond
to what you stated</v>

06:04:19.780 --> 06:04:22.286
at the beginning of the question
referencing two comments

06:04:22.286 --> 06:04:25.050
that rate design is not a tool

06:04:25.050 --> 06:04:26.480
for reducing revenue requirement.

06:04:26.480 --> 06:04:29.850
I find it kind of shocking
that people would say

06:04:29.850 --> 06:04:32.990
that rate design is
not an important tool

06:04:32.990 --> 06:04:34.820
to reduce utility expenses.

06:04:34.820 --> 06:04:39.820
And if we don't use rate design
to steer customer behavior,

06:04:40.310 --> 06:04:41.911
those expense are only gonna grow.

06:04:41.911 --> 06:04:45.753
And so fundamentally,

06:04:47.614 --> 06:04:51.970
to say that utility costs are
high, they're gonna be high,

06:04:51.970 --> 06:04:53.190
we can't do anything about that

06:04:53.190 --> 06:04:56.240
so let's assess those costs in a way

06:04:56.240 --> 06:04:59.507
that minimizes the impact
on low income rate payers.

06:04:59.507 --> 06:05:02.890
Is not the only answer, can't
be the only answer, right?

06:05:02.890 --> 06:05:04.438
That's certainly, we
need to think about that.

06:05:04.438 --> 06:05:08.560
How the cost recovery happens of course,

06:05:08.560 --> 06:05:10.300
but rate design is a tool.

06:05:10.300 --> 06:05:12.840
And if we don't use it to
steer customer behavior

06:05:12.840 --> 06:05:15.080
in ways that reduce utility expenses,

06:05:15.080 --> 06:05:17.883
then we're ignoring
a very important tool.

06:05:19.470 --> 06:05:22.467
<v ->And I wanted jump back
in on, thank you for that.</v>

06:05:22.467 --> 06:05:26.350
And I brought it up as a
really to kind of redirect back

06:05:26.350 --> 06:05:28.300
to the revenue requirement question,

06:05:28.300 --> 06:05:29.970
not so much to agree

06:05:29.970 --> 06:05:33.050
that we can't use redesign
to manage behavior

06:05:33.050 --> 06:05:34.900
and therefore manage bills.

06:05:34.900 --> 06:05:36.670
I wonder if you could expand
on that a little bit though

06:05:36.670 --> 06:05:40.840
about system utilization, load factors,

06:05:40.840 --> 06:05:43.941
how advanced rates
can kind of bring us back

06:05:43.941 --> 06:05:46.490
to better bill management around,

06:05:46.490 --> 06:05:48.950
the very concepts you just discussed.

06:05:48.950 --> 06:05:49.930
<v ->Yeah and historically,</v>

06:05:49.930 --> 06:05:52.930
we've built the transmission
distribution system

06:05:52.930 --> 06:05:54.640
based on annual peak, right?

06:05:54.640 --> 06:05:58.340
And it's partially because
we've didn't have the data

06:05:58.340 --> 06:06:01.780
that was granular and
hourly and it partially

06:06:01.780 --> 06:06:03.379
because we didn't
have the modeling tools

06:06:03.379 --> 06:06:08.050
to really model out or
the computing capacity.

06:06:08.050 --> 06:06:09.783
Computing capacity
itself was a limiting factor.

06:06:09.783 --> 06:06:14.130
Now we can run models that
have five minute increments

06:06:14.130 --> 06:06:18.003
every year for the next 25
years and use scenario planning.

06:06:19.000 --> 06:06:21.970
So we need to do that and
manage things to maximize

06:06:23.600 --> 06:06:26.510
to stop planning based on annual peaks

06:06:26.510 --> 06:06:30.480
and to start planning
based on location specific,

06:06:30.480 --> 06:06:34.283
time specific, very granular loads.

06:06:35.300 --> 06:06:39.780
And so first off we paid
for a lot of excess capacity,

06:06:39.780 --> 06:06:41.100
and I think we're seeing that,

06:06:41.100 --> 06:06:46.020
that the CAISO long
term transmission plan is,

06:06:46.020 --> 06:06:48.030
doesn't have a lot of
growth in the next 10 years

06:06:48.030 --> 06:06:50.950
because they are starting to
think hourly, and that's great.

06:06:50.950 --> 06:06:54.083
The capacity is there and we can use it.

06:06:55.220 --> 06:06:56.950
The fact that the new IRP says

06:06:56.950 --> 06:06:58.290
we can do better on greenhouse gas

06:06:58.290 --> 06:07:00.960
without a lot of new
transmissions spending

06:07:00.960 --> 06:07:02.980
through 2032 is great,

06:07:02.980 --> 06:07:04.596
but after 2032, we still
need to think about that.

06:07:04.596 --> 06:07:07.420
And we need to start
thinking about that right now,

06:07:07.420 --> 06:07:08.740
'cause there, there will be needs.

06:07:08.740 --> 06:07:11.080
And the same is true on
the distribution system that,

06:07:11.080 --> 06:07:14.640
that thank hopefully the
overbuilding that we've done

06:07:14.640 --> 06:07:15.840
will become useful.

06:07:15.840 --> 06:07:19.120
And as we manage it more dynamically,

06:07:19.120 --> 06:07:22.913
we can avoid capacity
additions in the coming years.

06:07:25.680 --> 06:07:26.750
<v ->Thank you and I
think Mike Campbell</v>

06:07:26.750 --> 06:07:28.233
wanted to respond to that.

06:07:28.233 --> 06:07:29.066
Go ahead Mike.

06:07:29.066 --> 06:07:29.899
<v ->Yeah, thanks.</v>

06:07:29.899 --> 06:07:31.532
I just wanted to,

06:07:31.532 --> 06:07:36.093
I'm gonna agree with everyone
to start using that tactic.

06:07:37.070 --> 06:07:37.903
When I was trying to say

06:07:37.903 --> 06:07:40.310
you can't rate design
your way out to high bills

06:07:40.310 --> 06:07:41.876
or high revenue requirement,

06:07:41.876 --> 06:07:44.690
it's simply to note
that there's limitations

06:07:44.690 --> 06:07:49.143
as pointed out at the
last rates En Banc,

06:07:50.090 --> 06:07:52.120
we're concerned that

06:07:52.120 --> 06:07:55.130
as the overall revenue
requirement goes up,

06:07:55.130 --> 06:07:58.550
there's limitations to how
much we can design rates

06:07:58.550 --> 06:07:59.967
to make things like electrification

06:07:59.967 --> 06:08:02.891
and those types of things effective.

06:08:02.891 --> 06:08:06.820
So the example that we
gave at the rates En Benc

06:08:06.820 --> 06:08:11.720
was comparing the X per
vehicle mile fueling cost

06:08:11.720 --> 06:08:13.720
for EVs versus rates.

06:08:13.720 --> 06:08:15.573
So we can push costs
down to a certain level

06:08:15.573 --> 06:08:18.590
to make it effective,
but once we get too low,

06:08:18.590 --> 06:08:22.530
we wind up having there be a
set where we are losing money,

06:08:22.530 --> 06:08:24.320
the utility's losing money
in every kilowatt hour

06:08:24.320 --> 06:08:26.660
that they sell to encourage that,

06:08:26.660 --> 06:08:28.233
which therefore will
create rate pressures

06:08:28.233 --> 06:08:30.640
for everybody else who
doesn't have the privilege

06:08:30.640 --> 06:08:32.340
to own electric car,

06:08:32.340 --> 06:08:34.120
straight equity per
problems and other things.

06:08:34.120 --> 06:08:37.110
So that's something we need
to keep very close in mind.

06:08:37.110 --> 06:08:39.370
Similarly, I don't think we should be,

06:08:39.370 --> 06:08:44.370
I tried to point out we shouldn't
be too simple in thinking

06:08:45.210 --> 06:08:50.210
about more load
necessarily equals less cost

06:08:53.960 --> 06:08:56.810
whether customers will always
respond to the price signal,

06:08:56.810 --> 06:08:58.280
customers may have just times

06:08:58.280 --> 06:09:00.670
when they need to do their business,

06:09:00.670 --> 06:09:02.480
whether that's
charging electric vehicle,

06:09:02.480 --> 06:09:03.830
doing things at their home.

06:09:04.840 --> 06:09:07.640
So we should keep those things in mind.

06:09:07.640 --> 06:09:09.440
I do appreciate the thoughts about

06:09:09.440 --> 06:09:11.990
that Mr. (indistinct) is raising

06:09:11.990 --> 06:09:15.470
about location value and timing,

06:09:15.470 --> 06:09:16.303
because that's true,

06:09:16.303 --> 06:09:17.959
there is different vocational
value and different timing,

06:09:17.959 --> 06:09:20.070
but then we start to address

06:09:20.070 --> 06:09:22.140
just complexity and challenges, right?

06:09:22.140 --> 06:09:27.140
And are we creating systems
where we're violating statute

06:09:29.390 --> 06:09:30.930
of having similar situated customers

06:09:30.930 --> 06:09:32.750
be getting different treatment?

06:09:32.750 --> 06:09:34.240
How do we address that?

06:09:34.240 --> 06:09:35.840
And at some point,

06:09:35.840 --> 06:09:37.478
anybody who's tried to do
these complex modeling things

06:09:37.478 --> 06:09:39.060
you can realize that,

06:09:39.060 --> 06:09:40.808
you can have the perfect
be the enemy of the good,

06:09:40.808 --> 06:09:43.265
so it needs to be
understandable effective

06:09:43.265 --> 06:09:45.695
and not create long term situations

06:09:45.695 --> 06:09:48.217
that you can't get yourself out of

06:09:48.217 --> 06:09:51.630
where you're driving an equities

06:09:51.630 --> 06:09:55.840
and creating a system
that is very hard to change.

06:09:55.840 --> 06:09:57.630
So that's really the
points I was trying to make.

06:09:57.630 --> 06:09:59.530
So I appreciate folks
giving me an opportunity

06:09:59.530 --> 06:10:01.310
to get back on my same box.

06:10:01.310 --> 06:10:02.143
Thanks.

06:10:07.710 --> 06:10:08.543
<v ->Okay, thank you, Mike.</v>

06:10:08.543 --> 06:10:10.190
And I just wanted to note the time

06:10:10.190 --> 06:10:12.581
we are quite a bit over
our scheduled time here,

06:10:12.581 --> 06:10:15.032
but I do wanna open it up to
Commissioners for a minute.

06:10:15.032 --> 06:10:17.250
We can, of course open up afterwards,

06:10:17.250 --> 06:10:18.492
just when we're done
with this discussion,

06:10:18.492 --> 06:10:21.840
we wanna open it up to
the public comment period.

06:10:21.840 --> 06:10:23.510
If folks can stick around past 5:00,

06:10:23.510 --> 06:10:25.930
we can of course
continue this discussion

06:10:25.930 --> 06:10:26.830
for a little while longer,

06:10:26.830 --> 06:10:29.414
but I just wanted to note
that to be fair to everybody.

06:10:29.414 --> 06:10:32.103
So Commissioners, what
questions do you have?

06:10:40.630 --> 06:10:41.463
Go ahead.

06:10:41.463 --> 06:10:43.312
<v ->Commissioner (indistinct),</v>

06:10:43.312 --> 06:10:44.145
I have have a couple of quick comments

06:10:44.145 --> 06:10:46.987
and two quick where will
hopefully be two quick questions.

06:10:47.900 --> 06:10:51.960
First of all, I wanna
note on the rate tracker

06:10:51.960 --> 06:10:55.360
and Paul I think you should
correct me if I'm wrong,

06:10:55.360 --> 06:10:56.956
we are in the process of implementing

06:10:56.956 --> 06:11:01.818
that for water utilities as
well as energy utilities, right?

06:11:01.818 --> 06:11:05.143
That's been built into our
affordability proceeding.

06:11:06.090 --> 06:11:09.373
So that's number one.

06:11:10.310 --> 06:11:12.110
Secondly is (clears throat),

06:11:12.110 --> 06:11:15.240
the PUC has probably
been one of the leads,

06:11:15.240 --> 06:11:16.860
if not the lead in the country,

06:11:16.860 --> 06:11:19.593
in arguing at facts for
greater competitive bidding

06:11:19.593 --> 06:11:22.089
of transmission projects

06:11:22.089 --> 06:11:24.621
and we're engaged right
now in a lot of comment

06:11:24.621 --> 06:11:28.770
on that as fur considers

06:11:28.770 --> 06:11:31.390
how to reform its current
transmission process.

06:11:31.390 --> 06:11:34.770
That's obviously transmission
rates are set by FERA

06:11:34.770 --> 06:11:39.770
not by the PUC, but we've
been a very active advocate there.

06:11:39.890 --> 06:11:41.494
The most exciting proposal I heard,

06:11:41.494 --> 06:11:43.630
I think it was that the CEC

06:11:43.630 --> 06:11:46.440
will do half of our general rate cases.

06:11:46.440 --> 06:11:47.873
So I think that's a really good idea.

06:11:47.873 --> 06:11:50.811
And I'd like to have that
implemented as soon as possible.

06:11:50.811 --> 06:11:53.490
I actually, I have a
question for Jennifer

06:11:53.490 --> 06:11:54.640
and one for Dr. Fowlie.

06:11:54.640 --> 06:11:56.173
So Jennifer the question is,

06:11:57.320 --> 06:11:58.807
and there's similar questions.

06:11:58.807 --> 06:12:02.010
The CPI constrained in option

06:12:02.010 --> 06:12:03.773
that you've proposed without a cap,

06:12:05.380 --> 06:12:10.070
is that do any PUCs do that
around the country right now?

06:12:10.070 --> 06:12:11.654
And then for Dr. Fowlie the question is,

06:12:11.654 --> 06:12:14.233
are there other PUCs

06:12:14.233 --> 06:12:18.893
that have implemented
income-based fixed charges?

06:12:21.950 --> 06:12:23.588
<v ->Should I go?</v>

06:12:23.588 --> 06:12:28.588
I am unaware of whether
there are other Commissions

06:12:29.530 --> 06:12:32.830
doing this around the
country, I think probably not.

06:12:32.830 --> 06:12:34.481
What I will say is that,

06:12:34.481 --> 06:12:37.030
the California Public
Utilities Commission

06:12:37.030 --> 06:12:39.539
has prided itself on being a vanguard.

06:12:39.539 --> 06:12:44.539
And I do think that
the stronger the record,

06:12:46.760 --> 06:12:48.129
the better the decision.

06:12:48.129 --> 06:12:51.880
So TURN proposes this simply

06:12:51.880 --> 06:12:56.880
as an additional piece of
information to help inform

06:12:59.800 --> 06:13:02.370
what will give rate payers
the biggest bang for their buck.

06:13:02.370 --> 06:13:04.150
And also as we begin to think

06:13:04.150 --> 06:13:08.220
about these other
funding outside of rates,

06:13:08.220 --> 06:13:11.860
this kind of prioritization
lets you know

06:13:11.860 --> 06:13:14.610
where to make the cut
between what rate payers ought

06:13:14.610 --> 06:13:17.160
to fund and some lower priority work

06:13:17.160 --> 06:13:21.580
that might be beneficially
funded through other needs.

06:13:21.580 --> 06:13:25.070
And so to me, this is a no brainer.

06:13:25.070 --> 06:13:29.230
It also leverages
the utilities own ability

06:13:29.230 --> 06:13:33.930
to use their ramp frameworks

06:13:33.930 --> 06:13:35.413
and they are risk and deficiencies

06:13:35.413 --> 06:13:37.700
as well as their own forecasting.

06:13:37.700 --> 06:13:41.130
So, this is something
utilities know how to do.

06:13:41.130 --> 06:13:44.130
And all we're asking is that,

06:13:44.130 --> 06:13:48.260
we incorporate some of
their core competencies

06:13:48.260 --> 06:13:53.240
into a stronger record
to inform affordability.

06:13:53.240 --> 06:13:57.100
And then that we measure
where our affordability is now

06:13:57.100 --> 06:14:02.100
and basically use the
metrics that the Commission

06:14:03.440 --> 06:14:05.053
has began to put in place

06:14:05.053 --> 06:14:10.053
to create a time series
where affordability is

06:14:11.160 --> 06:14:12.757
and where it's going.

06:14:12.757 --> 06:14:15.296
That was long winded, so I'll stop now.

06:14:15.296 --> 06:14:16.173
Thank you.

06:14:20.170 --> 06:14:21.620
Did that answer the question?

06:14:24.930 --> 06:14:26.534
<v ->Yes, thank you.</v>

06:14:26.534 --> 06:14:27.367
<v ->Okay.</v>

06:14:31.240 --> 06:14:34.480
<v ->Okay, any other
Commissioners or anyone else?</v>

06:14:34.480 --> 06:14:37.870
<v ->Okay, could Dr. Fowlie
answer the second question,</v>

06:14:37.870 --> 06:14:38.930
Paul if that's okay.

06:14:38.930 --> 06:14:40.633
I think you were muted Dr. Fowlie.

06:14:51.960 --> 06:14:53.635
<v ->I think you're
muted Dr. Fowlie.</v>

06:14:53.635 --> 06:14:55.390
<v ->Yeah, (laughing).</v>

06:14:55.390 --> 06:14:56.875
<v ->Okay, there you go.</v>

06:14:56.875 --> 06:14:58.490
<v ->Is that working,
is that working?</v>

06:14:58.490 --> 06:14:59.323
Great.

06:14:59.323 --> 06:15:01.210
Okay, I was getting an
option is not available precisely

06:15:01.210 --> 06:15:02.750
when I wanted it to be available.

06:15:02.750 --> 06:15:04.500
So thanks to the question.

06:15:04.500 --> 06:15:05.740
And I guess it's a great question

06:15:05.740 --> 06:15:07.750
that I can't answer
immediately I know of course

06:15:07.750 --> 06:15:10.110
that better than I do
that there are plenty of

06:15:10.110 --> 06:15:13.300
public utility Commissions
that do you use fix charges.

06:15:13.300 --> 06:15:15.170
We had looked into whether
there was any precedence

06:15:15.170 --> 06:15:16.003
for an income-based charge.

06:15:16.003 --> 06:15:18.010
And I think we maybe
had found one example

06:15:18.010 --> 06:15:21.020
where it was paired with a
low income type program.

06:15:21.020 --> 06:15:22.510
So there was a different radiation

06:15:22.510 --> 06:15:25.730
between the CARE equivalent to non-CARE.

06:15:25.730 --> 06:15:27.490
Again, one thing that I wanted to raise

06:15:27.490 --> 06:15:28.323
and I thought Robert Thomas

06:15:28.323 --> 06:15:29.630
has some really interesting ideas,

06:15:29.630 --> 06:15:32.269
one concern we have about
using sort of CARE and FERA

06:15:32.269 --> 06:15:37.269
as a basis for assigning
income-based fix charges is that

06:15:37.410 --> 06:15:38.790
this will be a much more salient,

06:15:38.790 --> 06:15:41.135
potentially much more
economically significant difference

06:15:41.135 --> 06:15:42.490
that we're talking about

06:15:42.490 --> 06:15:43.870
in terms of income-based fix charges.

06:15:43.870 --> 06:15:46.660
So relying on the current
approaches we have

06:15:46.660 --> 06:15:48.530
for their buying CARE and FERA,

06:15:48.530 --> 06:15:51.240
might not be so strong
or rigorous enough

06:15:51.240 --> 06:15:53.613
to get accurate
targeting of fix charges,

06:15:53.613 --> 06:15:56.100
but I will get back to
you a specific example.

06:15:56.100 --> 06:15:57.067
So on my recollection,

06:15:57.067 --> 06:16:00.410
it was small fixed charges in one state

06:16:00.410 --> 06:16:05.410
or another costly targeted
at lower income programs.

06:16:07.920 --> 06:16:08.753
<v ->Thank you.</v>

06:16:15.640 --> 06:16:18.503
<v ->Okay, anyone else, final call.</v>

06:16:19.950 --> 06:16:21.226
I could ask questions all day,

06:16:21.226 --> 06:16:22.850
but I think we need to wrap this up here

06:16:22.850 --> 06:16:24.150
and get to our public comment period,

06:16:24.150 --> 06:16:27.203
if nobody else has anything to request.

06:16:29.583 --> 06:16:30.416
Okay.

06:16:30.416 --> 06:16:31.249
(indistinct)

06:16:31.249 --> 06:16:33.580
<v ->Paul, I saw
Commissioner McAllister say</v>

06:16:33.580 --> 06:16:34.413
that he was gonna wait

06:16:34.413 --> 06:16:37.640
after the public comments for questions.

06:16:37.640 --> 06:16:38.640
<v ->Commissioner McAllister
would you like to wait</v>

06:16:38.640 --> 06:16:39.790
or do you wanna go now?

06:16:43.501 --> 06:16:45.043
<v ->Yeah, I'll just save
comments to the wrap up</v>

06:16:45.043 --> 06:16:47.213
like the agenda says.

06:16:48.307 --> 06:16:49.863
<v ->Okay, great.</v>

06:16:50.810 --> 06:16:53.480
All right, well, I guess
Robert from Stanford,

06:16:53.480 --> 06:16:56.230
we can now switch over to
the public comment period.

06:16:56.230 --> 06:16:59.873
And I think we're adhering
to a 30 minute period, correct?

06:17:01.640 --> 06:17:03.280
And I understand that we
have about seven questions

06:17:03.280 --> 06:17:04.730
in the queue from the public.

06:17:06.930 --> 06:17:09.317
<v ->Yeah, we have seven questions,</v>

06:17:09.317 --> 06:17:12.863
senior operator turn on
the public comment line,

06:17:12.863 --> 06:17:14.883
the Spanish translation as well.

06:17:17.790 --> 06:17:20.010
<v Operator>Thank you,
and this is the operator.</v>

06:17:20.010 --> 06:17:21.580
The public comment line are open,

06:17:21.580 --> 06:17:23.970
if you wish to speak during
the public comment period,

06:17:23.970 --> 06:17:25.700
please press star one,

06:17:25.700 --> 06:17:28.020
unmute your phone and
clearly record your full name

06:17:28.020 --> 06:17:30.480
and organization one prompted.

06:17:30.480 --> 06:17:32.460
Our first comment is from Nora sheriff.

06:17:32.460 --> 06:17:33.310
You may go ahead.

06:17:34.930 --> 06:17:36.850
<v Nora>Thank you,
this is Nora sheriff.</v>

06:17:36.850 --> 06:17:37.783
Can you hear me?

06:17:40.873 --> 06:17:43.350
<v ->Yes, we can hear you.</v>

06:17:43.350 --> 06:17:44.183
<v Nora>Okay.</v>

06:17:44.183 --> 06:17:46.050
I represent (indistinct)

06:17:46.050 --> 06:17:48.990
as well as EPC and
the indicated shippers

06:17:48.990 --> 06:17:51.540
all large power industrial customers.

06:17:51.540 --> 06:17:53.350
And I just want to reiterate

06:17:53.350 --> 06:17:56.940
what my colleague Cathy
Yap said along with Mark Tony,

06:17:56.940 --> 06:17:58.492
Jennifer Dowdell and Mike Campbell,

06:17:58.492 --> 06:18:02.280
California rate payers,
all classes of rate payers,

06:18:02.280 --> 06:18:05.980
electric and gas are in
a house of pain right now

06:18:05.980 --> 06:18:07.607
rates have increased to the point

06:18:07.607 --> 06:18:10.163
where they are no longer affordable.

06:18:10.163 --> 06:18:13.360
There is real concern about the justice

06:18:13.360 --> 06:18:14.955
and the reasonableness of the rates.

06:18:14.955 --> 06:18:19.040
And I implore you Commissioners

06:18:19.040 --> 06:18:21.160
to every time you have a decision

06:18:21.160 --> 06:18:25.850
before you look for
ways to reduce the impact

06:18:25.850 --> 06:18:29.370
of that specific decision
on customer rates,

06:18:29.370 --> 06:18:33.420
whether that be a slightly
longer amortization period,

06:18:33.420 --> 06:18:36.670
two to three years to get
us through this timeframe

06:18:36.670 --> 06:18:40.490
of intense revenue
requirement increases,

06:18:40.490 --> 06:18:43.240
particularly if we cannot find

06:18:43.240 --> 06:18:46.000
decent alternative sources of funding,

06:18:46.000 --> 06:18:49.900
but it is untenable, the rate increase

06:18:49.900 --> 06:18:52.690
that we have seen in
the past three months,

06:18:52.690 --> 06:18:57.690
I never would've imagined
being adopted and approved.

06:18:58.350 --> 06:19:00.690
And I've been practicing
before the Commission

06:19:00.690 --> 06:19:02.420
since the energy crisis.

06:19:02.420 --> 06:19:04.570
And it is simply shocking.

06:19:04.570 --> 06:19:08.170
So that is my plea to you, I
appreciate your time today.

06:19:08.170 --> 06:19:12.730
And I appreciate the effort
that staff has put into this.

06:19:12.730 --> 06:19:13.563
Thank you.

06:19:19.757 --> 06:19:22.580
<v ->And our next comment
comes from Deborah Howard.</v>

06:19:22.580 --> 06:19:24.239
You may go ahead.

06:19:24.239 --> 06:19:25.100
<v Deborah>Thank you.</v>

06:19:25.100 --> 06:19:27.362
Hi, this is Deborah Howard.

06:19:27.362 --> 06:19:29.540
I am a volunteer board member

06:19:29.540 --> 06:19:32.680
with the California
Senior Advocates League.

06:19:32.680 --> 06:19:35.720
We are a nonprofit advocacy organization

06:19:35.720 --> 06:19:39.220
who sometimes engages in issues

06:19:39.220 --> 06:19:41.700
that are not necessarily senior issues,

06:19:41.700 --> 06:19:44.880
but that impacts the
economic health of seniors,

06:19:44.880 --> 06:19:47.530
their families and their community.

06:19:47.530 --> 06:19:49.250
So I wanna start off
by thanking you both

06:19:49.250 --> 06:19:51.794
for the opportunity to comment today

06:19:51.794 --> 06:19:56.110
and also to focus on the
annual focus on the affordability

06:19:56.110 --> 06:19:58.800
of the components
and the cost of electricity

06:19:58.800 --> 06:20:02.490
for small consumers, homeowners.

06:20:02.490 --> 06:20:05.773
I want to highlight aside,

06:20:06.940 --> 06:20:10.110
I have owned two homes in California

06:20:10.110 --> 06:20:12.570
with solar panels on their roof.

06:20:12.570 --> 06:20:15.890
So I am definitely not
an anti-solar person

06:20:15.890 --> 06:20:19.270
or even anti-roof solar person.

06:20:19.270 --> 06:20:20.580
I would love to see
the expansion of solar,

06:20:20.580 --> 06:20:23.380
just not at the
expense of cost shifting.

06:20:23.380 --> 06:20:26.960
And that is the core of my comment today

06:20:26.960 --> 06:20:30.520
that the current structure
unfairly charges homeowners

06:20:30.520 --> 06:20:33.840
without solar often low
income Californians,

06:20:33.840 --> 06:20:37.230
and sometimes seniors to
subsidize those with solar

06:20:37.230 --> 06:20:40.450
at the point at which that
policy was put in place,

06:20:40.450 --> 06:20:43.550
it made sense it no longer does.

06:20:43.550 --> 06:20:47.160
And so I would like
you to meaningful reform

06:20:47.160 --> 06:20:50.040
that requires all electricity users

06:20:50.040 --> 06:20:53.680
to pay for the maintenance of the state,

06:20:53.680 --> 06:20:55.430
California's electrical grid

06:20:55.430 --> 06:20:59.620
and its maintenance
programs, mandated programs,

06:20:59.620 --> 06:21:03.130
so that all customers,
even those with solar

06:21:03.130 --> 06:21:06.390
pay a fair and equitable rate.

06:21:06.390 --> 06:21:07.347
That's my comments

06:21:07.347 --> 06:21:11.460
and again, I just appreciate
you tackling this issue

06:21:11.460 --> 06:21:14.700
with the consumer, the
small fee consumer in mind.

06:21:14.700 --> 06:21:15.700
Thank you very much.

06:21:20.666 --> 06:21:23.310
<v ->And our next comment
is from Elizabeth Kelly.</v>

06:21:23.310 --> 06:21:24.160
You may go ahead.

06:21:25.840 --> 06:21:26.673
<v Kelly>Thank you.</v>

06:21:26.673 --> 06:21:27.506
My name is Beth Kelly

06:21:27.506 --> 06:21:30.460
and I represent Bay REN and 3C-REN.

06:21:30.460 --> 06:21:35.460
The CPUC has authorized
the regional energy networks

06:21:35.760 --> 06:21:37.890
to be administrators of
energy efficiency funds.

06:21:37.890 --> 06:21:40.140
And so I think there's
been a lot of discussion

06:21:40.140 --> 06:21:43.460
about environmental and
social justice and equity.

06:21:43.460 --> 06:21:45.720
And I just wanna say
that there are programs

06:21:45.720 --> 06:21:48.071
that are really effective
and are working,

06:21:48.071 --> 06:21:53.071
including REN programs,
which they're there to fill gaps

06:21:54.200 --> 06:21:58.230
where IOU's don't serve
customers, piloting programs

06:21:58.230 --> 06:22:01.483
and also critically serving
hard reach customers.

06:22:02.864 --> 06:22:04.550
So just a couple of examples.

06:22:04.550 --> 06:22:07.830
One is deep energy efficiency upgrades,

06:22:07.830 --> 06:22:11.100
including heat pumps
of farm worker housing,

06:22:11.100 --> 06:22:12.690
deep energy efficiency upgrades

06:22:12.690 --> 06:22:15.370
of SRO here in San Francisco

06:22:15.370 --> 06:22:18.130
and also bringing workforce
education and training

06:22:18.130 --> 06:22:19.140
to the central coast

06:22:19.140 --> 06:22:20.780
where there weren't
opportunities before.

06:22:20.780 --> 06:22:22.840
And so, there are areas where things

06:22:22.840 --> 06:22:24.180
are going well at the Commission

06:22:24.180 --> 06:22:26.150
I just wanted to have
that highlighted for you.

06:22:26.150 --> 06:22:26.983
Thank you.

06:22:32.470 --> 06:22:36.580
<v ->Thank you and our next caller
is John Kennedy with RCRC.</v>

06:22:36.580 --> 06:22:37.430
You may go ahead.

06:22:38.320 --> 06:22:39.610
<v John>Hi, good afternoon.</v>

06:22:39.610 --> 06:22:40.730
My name's John Kennedy.

06:22:40.730 --> 06:22:43.390
I'm with the rural county
representatives of California.

06:22:43.390 --> 06:22:46.430
We're an association
of 38 rural counties.

06:22:46.430 --> 06:22:48.750
I just wanted to say,
and I'll try to be brief.

06:22:48.750 --> 06:22:51.270
RCRC is very appreciative
of the Commission's attention

06:22:51.270 --> 06:22:52.900
to energy affordability.

06:22:52.900 --> 06:22:53.750
Our member counties,

06:22:53.750 --> 06:22:55.730
many of whom have
meeting household incomes

06:22:55.730 --> 06:22:57.620
far below the statewide average

06:22:57.620 --> 06:23:00.330
are really sensitive
to rising energy prices.

06:23:00.330 --> 06:23:02.960
We've born the majority of
destruction cost by wildfires

06:23:02.960 --> 06:23:05.500
and experienced sharply
declining electrical reliability.

06:23:05.500 --> 06:23:08.040
So we recognize the need to
focus significant investments

06:23:08.040 --> 06:23:10.630
on improving grid,
reliability and safety.

06:23:10.630 --> 06:23:13.480
We support shifting significant
wildfire mitigation costs

06:23:13.480 --> 06:23:15.170
from rate payers to the general fund

06:23:15.170 --> 06:23:17.020
while the state flush with cash.

06:23:17.020 --> 06:23:17.853
At the same time,

06:23:17.853 --> 06:23:20.530
we are deeply troubled by
several of the suggestions

06:23:20.530 --> 06:23:23.060
and believe will have an
extremely regressive impact

06:23:23.060 --> 06:23:25.813
on the individuals upon
whom they're imposed.

06:23:26.670 --> 06:23:30.080
RCRC opposes any efforts to
impose new taxes or surcharges

06:23:30.080 --> 06:23:31.701
on customers in high fire threat areas.

06:23:31.701 --> 06:23:34.490
Rural Californians would
be subject to these taxes

06:23:34.490 --> 06:23:36.230
are also an increased risk of utility

06:23:36.230 --> 06:23:37.819
caused wildfire from transmission lines

06:23:37.819 --> 06:23:40.560
that provide electricity
to urban customers

06:23:40.560 --> 06:23:42.360
and who would not pay those fees.

06:23:42.360 --> 06:23:43.193
Furthermore,

06:23:43.193 --> 06:23:45.540
the state abandoned the
similar wildly unpopular

06:23:45.540 --> 06:23:47.230
and unwidly program,

06:23:47.230 --> 06:23:50.040
the RCRC fee referenced
earlier several years ago.

06:23:50.040 --> 06:23:53.700
So we hope the CPUC
wouldn't repeat the same mistake.

06:23:53.700 --> 06:23:55.160
And then finally, we're also concerned

06:23:55.160 --> 06:23:57.530
about imposing new taxes
on gasoline and vehicles

06:23:57.530 --> 06:23:59.860
to pay for transportation
electrification.

06:23:59.860 --> 06:24:01.560
Our communities have
some of the greatest need

06:24:01.560 --> 06:24:03.097
for electric vehicle
charging infrastructure.

06:24:03.097 --> 06:24:05.590
However, we're deeply
concerned that this approach

06:24:05.590 --> 06:24:06.690
would be very regressive

06:24:06.690 --> 06:24:09.330
for those who can't afford to
purchase an electric vehicle,

06:24:09.330 --> 06:24:10.510
and those who live in areas

06:24:10.510 --> 06:24:11.986
with the lowest number of chargers.

06:24:11.986 --> 06:24:14.007
So again, we sincerely appreciate

06:24:14.007 --> 06:24:16.360
the CPUC's attention to affordability.

06:24:16.360 --> 06:24:18.090
We really look forward
to thoroughly engaging

06:24:18.090 --> 06:24:20.480
on these proposals in the coming months.

06:24:20.480 --> 06:24:21.593
Thank you very much.

06:24:26.570 --> 06:24:27.910
<v ->Thank you.</v>

06:24:27.910 --> 06:24:29.860
And our next caller is Beth Olaso.

06:24:29.860 --> 06:24:31.450
You may go ahead.

06:24:31.450 --> 06:24:34.610
<v Beth>Thank you, good
afternoon, almost evening.</v>

06:24:34.610 --> 06:24:35.920
This is Beth Olaso

06:24:35.920 --> 06:24:39.640
with the Agricultural Energy
Consumers Association.

06:24:39.640 --> 06:24:41.130
Just wanted to start,

06:24:41.130 --> 06:24:42.785
we're a little disappointed
that our request

06:24:42.785 --> 06:24:45.647
for representation on a panel

06:24:45.647 --> 06:24:48.840
from the agricultural
class is not permitted.

06:24:48.840 --> 06:24:50.380
Like you've heard
affordability is a major concern

06:24:50.380 --> 06:24:52.540
for many rate payer groups,

06:24:52.540 --> 06:24:54.035
as well as the ag and
food processing sector

06:24:54.035 --> 06:24:56.870
as we too have to be competitive

06:24:56.870 --> 06:24:59.420
in national and international markets.

06:24:59.420 --> 06:25:01.460
And really, don't have the opportunity

06:25:01.460 --> 06:25:05.363
to just absorb increases
like some other classes do.

06:25:06.550 --> 06:25:09.410
We wanna echo the concerns
of other rate payer groups,

06:25:09.410 --> 06:25:11.056
especially earlier comments of Ms Yap

06:25:11.056 --> 06:25:14.937
and the recent comments
of Ms. Sheriff from (indistinct).

06:25:16.350 --> 06:25:19.120
As you know, rate increases
are wildly out of control

06:25:19.120 --> 06:25:23.660
and IOU rate payers cannot be the bank

06:25:23.660 --> 06:25:26.450
to implement the
state's climate policies.

06:25:26.450 --> 06:25:30.673
The CPUC must rethink
adding these rates,

06:25:30.673 --> 06:25:32.230
these charges into rates,

06:25:32.230 --> 06:25:34.533
especially when it comes to EV charging.

06:25:35.720 --> 06:25:38.670
It's imperative that
when easing the burden

06:25:38.670 --> 06:25:42.960
on residential rate payers,
which we agree is necessary,

06:25:42.960 --> 06:25:46.230
we just don't wanna see
that revenue requirement

06:25:46.230 --> 06:25:49.650
pushed off onto other rate classes.

06:25:49.650 --> 06:25:51.014
It's a really big concern.

06:25:51.014 --> 06:25:54.440
So the PUC really needs to focus

06:25:54.440 --> 06:25:59.280
on reducing pressure overall
in any additional mandates

06:25:59.280 --> 06:26:01.093
on already sky rocking rates.

06:26:02.410 --> 06:26:07.410
We firmly believe that PG&amp;E
and other IOU shareholders

06:26:07.950 --> 06:26:11.840
should bear more of the
burden on system hardening.

06:26:11.840 --> 06:26:16.260
Shareholders have benefited
of massive profits for decades

06:26:16.260 --> 06:26:18.860
while sure responsibility
to properly maintain

06:26:18.860 --> 06:26:21.060
the backbone of the infrastructure.

06:26:21.060 --> 06:26:22.740
It's now time for these shareholders

06:26:22.740 --> 06:26:25.300
to pay the bill for years of neglect.

06:26:25.300 --> 06:26:26.502
We appreciate this ongoing conversation.

06:26:26.502 --> 06:26:29.110
We look forward to participating

06:26:29.110 --> 06:26:32.640
in this next phase of the
affordability proceeding,

06:26:32.640 --> 06:26:35.030
and we're glad that that other classes

06:26:35.030 --> 06:26:39.360
beyond residential rate
payers are gonna be included.

06:26:39.360 --> 06:26:41.470
We've been waiting
and watching for years.

06:26:41.470 --> 06:26:44.400
So we are happy that
we are able to participate,

06:26:44.400 --> 06:26:45.755
and we look forward to
this broader conversation

06:26:45.755 --> 06:26:48.060
that includes all rate payers.

06:26:48.060 --> 06:26:49.060
Thank you very much.

06:26:53.270 --> 06:26:54.300
<v ->Thank you.</v>

06:26:54.300 --> 06:26:58.180
And our next comment is from
Claire Broom with 350 Bay Area.

06:26:58.180 --> 06:26:59.030
You may go ahead.

06:27:00.550 --> 06:27:01.383
<v Claire>Thank you.</v>

06:27:01.383 --> 06:27:02.422
This is Claire Broom,

06:27:02.422 --> 06:27:04.810
I'm a professor public health

06:27:04.810 --> 06:27:08.970
and represent 350 Bay Area at the CPUC

06:27:09.830 --> 06:27:13.370
on a number of issues of concern

06:27:13.370 --> 06:27:17.640
to the environmentalists
and to rate payers

06:27:17.640 --> 06:27:20.720
and to low income
rate payers particularly.

06:27:20.720 --> 06:27:22.830
This has been an outstanding day

06:27:22.830 --> 06:27:26.470
and I really wanna
thank the Commissioners

06:27:26.470 --> 06:27:29.740
of all the agencies
for putting this together

06:27:29.740 --> 06:27:31.913
and their thoughtful consideration.

06:27:32.900 --> 06:27:35.793
Commissioner McAllister earlier today,

06:27:38.080 --> 06:27:41.123
framed the issue as
conflicting benefits.

06:27:42.010 --> 06:27:45.750
In fact, we have the opportunity

06:27:45.750 --> 06:27:50.750
to both decrease emissions
and to increase affordability.

06:27:51.950 --> 06:27:56.250
And I would strongly
urge the energy division

06:27:56.250 --> 06:28:01.250
and all of our collaborators
to focus on optimal outcomes

06:28:02.340 --> 06:28:05.023
that accomplish both of our objectives.

06:28:07.690 --> 06:28:10.840
First, I'd like to say explicitly

06:28:10.840 --> 06:28:13.900
that distributed energy resources

06:28:13.900 --> 06:28:16.800
behind the meter and
in front of the meter,

06:28:16.800 --> 06:28:21.800
including solar,
storage, electric vehicles

06:28:21.870 --> 06:28:24.820
are public benefits potentially

06:28:24.820 --> 06:28:28.530
as well as per private benefits.

06:28:28.530 --> 06:28:29.850
For example,

06:28:29.850 --> 06:28:33.640
if electric vehicles
are strongly incentive

06:28:33.640 --> 06:28:38.640
to charge at midday, they
can decrease peak load,

06:28:38.960 --> 06:28:41.430
all rate payers can benefit.

06:28:41.430 --> 06:28:46.430
If we do this right,
we'll all come out ahead

06:28:47.080 --> 06:28:49.563
and California will continue to lead.

06:28:50.730 --> 06:28:53.373
I'm not using just one example,

06:28:54.210 --> 06:28:56.113
vibrant clean energy,

06:28:57.290 --> 06:29:00.669
Princeton and Mark Jacobson at Stanford

06:29:00.669 --> 06:29:04.410
have done detailed modeling.

06:29:04.410 --> 06:29:08.568
When you optimize
distribution grid resources,

06:29:08.568 --> 06:29:12.153
electricity (beeps) down,

06:29:13.800 --> 06:29:17.700
we should focus on decreasing
the revenue requirement,

06:29:17.700 --> 06:29:22.290
transmission costs, distribution
grid costs and wildfire.

06:29:22.290 --> 06:29:25.230
Those 40 billion for undergrounding.

06:29:25.230 --> 06:29:27.840
The utilities need to be accountable

06:29:27.840 --> 06:29:30.630
and have performance-based rate making,

06:29:30.630 --> 06:29:35.630
and we need fair benefits to
distributed energy resources.

06:29:35.700 --> 06:29:36.533
Thank you.

06:29:42.140 --> 06:29:43.251
<v ->Thank you.</v>

06:29:43.251 --> 06:29:45.500
And our next caller is Sam White.

06:29:45.500 --> 06:29:46.503
You may go ahead.

06:29:48.530 --> 06:29:49.820
<v Sam>Thank you, I'm Sam White,</v>

06:29:49.820 --> 06:29:52.570
I'm a consultant for
several nonprofit rate payers

06:29:52.570 --> 06:29:54.840
in environmental organizations.

06:29:54.840 --> 06:29:58.273
I'd like to say we heard many
excellent proposals today.

06:29:59.240 --> 06:30:00.670
I'd like to in particular,

06:30:00.670 --> 06:30:03.790
highlight the attention given by NRDC

06:30:03.790 --> 06:30:06.830
to the potential for rate payer savings

06:30:06.830 --> 06:30:08.470
through public bond financing

06:30:08.470 --> 06:30:10.620
of transmission
infrastructure investments.

06:30:11.910 --> 06:30:15.170
I'd just like to note that
the investor on utility costs

06:30:15.170 --> 06:30:17.370
and return on equity
for capital investment

06:30:17.370 --> 06:30:19.780
result in rate payer savings.

06:30:19.780 --> 06:30:22.520
Rate payer is paying
actually nearly double,

06:30:22.520 --> 06:30:26.623
the base capital cost after
that return is incorporated.

06:30:27.550 --> 06:30:29.930
Because of that public financing

06:30:29.930 --> 06:30:32.660
or even ownership of grid infrastructure

06:30:32.660 --> 06:30:35.790
offers large opportunities
for rate payer savings

06:30:35.790 --> 06:30:39.250
with IOU role focused on grid
operation and maintenance,

06:30:39.250 --> 06:30:40.553
along with performance based incentives

06:30:40.553 --> 06:30:42.093
for rate payer efficiency.

06:30:43.600 --> 06:30:46.960
I'd also be remis, if I
did not note the need

06:30:46.960 --> 06:30:49.710
for interagency review and reform

06:30:49.710 --> 06:30:51.910
of transmission cost allegation

06:30:51.910 --> 06:30:55.130
in order to recognize reduced peak needs

06:30:55.130 --> 06:30:56.420
potentially realized

06:30:56.420 --> 06:30:59.730
through distribution level
mitigation of transmission load,

06:30:59.730 --> 06:31:03.790
which can result in substantial
reductions in needs capacity

06:31:03.790 --> 06:31:06.223
as was shown in Cal's
presentation earlier.

06:31:07.580 --> 06:31:08.580
Lastly,

06:31:08.580 --> 06:31:12.440
I'd just like to note that
electric vehicles represent

06:31:12.440 --> 06:31:15.780
an enormous quantity of
deployed energy storage

06:31:15.780 --> 06:31:20.100
over 40 gigawatts already
today and rapidly rising.

06:31:20.100 --> 06:31:22.640
They can be leveraged
for rate pair benefit,

06:31:22.640 --> 06:31:23.883
and for good operation.

06:31:25.290 --> 06:31:28.410
These opportunities have
not received sufficient attention,

06:31:28.410 --> 06:31:29.726
and I appreciate the
opportunity to bring them up.

06:31:29.726 --> 06:31:31.047
Thank you.

06:31:36.720 --> 06:31:37.553
<v ->Thank you.</v>

06:31:37.553 --> 06:31:40.570
And our next comment
is from Karen Mills.

06:31:40.570 --> 06:31:42.040
You me go ahead.

06:31:42.040 --> 06:31:43.940
<v Karen>Yes, thank you very much.</v>

06:31:43.940 --> 06:31:44.843
I appreciate it.

06:31:44.843 --> 06:31:49.260
Yes, this is Karen Mills for
the California Farm Bureau.

06:31:49.260 --> 06:31:50.573
We represent farmers and ranchers

06:31:50.573 --> 06:31:53.223
throughout the state of California.

06:31:54.080 --> 06:31:56.140
Our members predominantly take service

06:31:56.140 --> 06:31:58.750
on agricultural schedules

06:31:58.750 --> 06:32:01.860
from the investor
on utilities in the state

06:32:01.860 --> 06:32:06.610
and affordability of
racism, important issue.

06:32:06.610 --> 06:32:08.920
So we appreciate the conversation.

06:32:08.920 --> 06:32:11.360
Our members own and
operate their businesses

06:32:11.360 --> 06:32:14.597
in rural areas of California.

06:32:14.597 --> 06:32:16.060
And as you've heard today,

06:32:16.060 --> 06:32:20.100
it raises unique challenges
for many of the programs

06:32:20.100 --> 06:32:23.600
that are in the process
of being implemented.

06:32:23.600 --> 06:32:27.223
We support those who have
raised the need to fund programs,

06:32:28.140 --> 06:32:30.663
such as undergrounding utility lines,

06:32:31.610 --> 06:32:34.600
electrical vehicle expansion,

06:32:34.600 --> 06:32:38.400
and building
electrification to resources

06:32:38.400 --> 06:32:42.650
other than by rate payers.

06:32:42.650 --> 06:32:44.570
The Commission and the utilities

06:32:45.480 --> 06:32:50.480
need to exercise their leverage
and support such an effort.

06:32:51.290 --> 06:32:54.120
And finally, I would like to point out

06:32:54.120 --> 06:32:57.520
about the concept of transitioning

06:32:58.510 --> 06:33:02.660
transmission
infrastructure from the IOUs

06:33:02.660 --> 06:33:06.970
to state or public ownership
that such a change

06:33:06.970 --> 06:33:09.900
would have more than
just right implications.

06:33:09.900 --> 06:33:14.900
The lines traverse thousands
of miles of private property,

06:33:15.930 --> 06:33:17.234
and it would impact the landowner

06:33:17.234 --> 06:33:21.140
to change the ownership structure.

06:33:21.140 --> 06:33:25.500
We don't support that type
of a change in ownership,

06:33:25.500 --> 06:33:28.710
but recognize that
new transmission lines

06:33:29.570 --> 06:33:33.207
might be appropriate for
competitive solicitation.

06:33:36.130 --> 06:33:37.283
Thanks very much.

06:33:44.533 --> 06:33:46.780
<v ->And I have no additional
callers on the line at this time,</v>

06:33:46.780 --> 06:33:48.097
but again, if you would
like to make a comment,

06:33:48.097 --> 06:33:51.290
please unmute your
phone, press star one,

06:33:51.290 --> 06:33:53.620
and record your full
name and organization

06:33:53.620 --> 06:33:55.263
slowly and clearly one prompted.

06:34:02.940 --> 06:34:04.190
<v ->So this is Paul Philips,</v>

06:34:04.190 --> 06:34:08.090
I wanted to it back over
to Commissioner Houck

06:34:09.310 --> 06:34:10.374
if we do get other calls coming in

06:34:10.374 --> 06:34:12.370
during this time please let us know

06:34:12.370 --> 06:34:14.750
we can of course field them,

06:34:14.750 --> 06:34:16.430
but in the absence of calls,

06:34:16.430 --> 06:34:19.740
it might make sense to
transition out to the Commissioner

06:34:19.740 --> 06:34:22.690
and Commissioner McAlister
as well, for final comments,

06:34:22.690 --> 06:34:24.810
I did wanna say thank
you to all the panelists

06:34:24.810 --> 06:34:28.740
for fantastic discuss
obviously we could keep going.

06:34:28.740 --> 06:34:31.380
I think that we've left room
for more discussion tomorrow

06:34:31.380 --> 06:34:34.320
during Commissioner
Houck's round table perhaps,

06:34:34.320 --> 06:34:35.618
but once again, thank you
for everyone's appearance

06:34:35.618 --> 06:34:37.860
and for robust discussion.

06:34:37.860 --> 06:34:40.610
And with that, I will turn it
over to Commission Houck.

06:34:42.590 --> 06:34:43.740
<v ->Thank you, Paul.</v>

06:34:43.740 --> 06:34:47.900
Commissioner Shiroma has
asked me to step in for her

06:34:47.900 --> 06:34:51.570
to make some closing comments
on behalf of the PUC today.

06:34:51.570 --> 06:34:53.979
So I wanna thank everyone,

06:34:53.979 --> 06:34:56.090
all of the panelists,
moderators that presented today.

06:34:56.090 --> 06:34:58.550
I also want to thank
energy division staff,

06:34:58.550 --> 06:35:02.350
my colleagues at the PUC, the
California Energy Commission,

06:35:02.350 --> 06:35:03.458
California Air Resources Board,

06:35:03.458 --> 06:35:06.220
and the state legislature for joining us

06:35:06.220 --> 06:35:08.450
to discuss this important topic.

06:35:08.450 --> 06:35:09.620
We appreciate hearing

06:35:09.620 --> 06:35:11.589
from such a broad range of
stakeholders and the public

06:35:11.589 --> 06:35:13.690
on the challenges we face

06:35:13.690 --> 06:35:15.610
on how to ensure electric and gas rates

06:35:15.610 --> 06:35:17.960
are affordable for Californians.

06:35:17.960 --> 06:35:19.490
Despite the challenges we face,

06:35:19.490 --> 06:35:22.260
we've heard ideas today that
present us with opportunities

06:35:22.260 --> 06:35:23.540
to minimize cost impacts.

06:35:23.540 --> 06:35:26.750
We're committed to actively
engage with all stakeholders

06:35:26.750 --> 06:35:28.890
to find innovative paths forward

06:35:28.890 --> 06:35:30.110
that address affordability

06:35:30.110 --> 06:35:32.560
for all rate payers in California.

06:35:32.560 --> 06:35:33.580
And with that again,

06:35:33.580 --> 06:35:35.430
I just wanna thank energy division staff

06:35:35.430 --> 06:35:38.430
for all of their work and
putting this event together

06:35:38.430 --> 06:35:40.930
and today's panelists for
their thoughtful discussion.

06:35:40.930 --> 06:35:44.010
And I look forward to
tomorrow's panel discussions

06:35:44.010 --> 06:35:48.800
and we'll turn over
the mic, the virtual mic

06:35:48.800 --> 06:35:53.100
to Commissioner McAllister
to conclude today's event.

06:35:53.100 --> 06:35:53.933
<v ->Well, great.</v>

06:35:53.933 --> 06:35:54.766
Thank you, Commissioner Houck.

06:35:54.766 --> 06:35:56.216
And I'll just not reiterate,

06:35:56.216 --> 06:35:59.620
but just a second the
thanks to all involved

06:35:59.620 --> 06:36:00.453
in putting this together.

06:36:00.453 --> 06:36:03.530
This has been a really
enlightening and insightful day,

06:36:03.530 --> 06:36:06.000
hugely a very high
quality of the presenters

06:36:06.000 --> 06:36:07.220
and the discussion.

06:36:07.220 --> 06:36:09.800
So lots of food for thought obviously,

06:36:09.800 --> 06:36:12.100
and complex issues that
we're working through.

06:36:12.100 --> 06:36:13.581
I kind of wanted just to quickly,

06:36:13.581 --> 06:36:17.960
I know I'm the last
speaker here on a long day,

06:36:17.960 --> 06:36:22.960
but I kind of have been trying
to bucket some of the issues

06:36:23.150 --> 06:36:25.493
and I'm gonna just
make a little stab at that.

06:36:26.840 --> 06:36:29.670
Essentially for kind of topics

06:36:29.670 --> 06:36:32.950
or process for getting to rates

06:36:32.950 --> 06:36:35.600
that might serve California's
purposes going forward.

06:36:37.180 --> 06:36:39.930
So we heard rough consensus,

06:36:39.930 --> 06:36:42.930
I think on the following issues.

06:36:42.930 --> 06:36:43.763
First that we need active management

06:36:43.763 --> 06:36:45.907
of the revenue requirement

06:36:45.907 --> 06:36:49.882
and that's good governance
and good management.

06:36:49.882 --> 06:36:51.723
And I think we're all
in agreement on that.

06:36:52.790 --> 06:36:55.207
Next, priority has to be equity.

06:36:55.207 --> 06:36:59.630
And I think we have broad
consensus on that as well.

06:36:59.630 --> 06:37:04.630
And that means anchoring
rates in some appreciation

06:37:04.880 --> 06:37:09.310
of income or proxy
for certainly taking care

06:37:09.310 --> 06:37:14.293
of lower income and rural
customers, so number two.

06:37:15.238 --> 06:37:16.450
And then number three is,

06:37:16.450 --> 06:37:18.090
this is where it gets a
little more complicated,

06:37:18.090 --> 06:37:22.150
restructure rates to
get back to a cost-based

06:37:23.182 --> 06:37:25.700
sort of more explicitly back
to a cost-based approach.

06:37:25.700 --> 06:37:30.500
And that is the sort of
traditional good rate making

06:37:30.500 --> 06:37:33.123
kind of arena, but
obviously it's complicated.

06:37:34.190 --> 06:37:37.490
But getting back to
some kind of fixed charge

06:37:37.490 --> 06:37:42.110
or proxy demand based type charge

06:37:42.110 --> 06:37:45.077
to take on the burden of much more

06:37:45.077 --> 06:37:48.050
of the revenue requirement
than currently is in volumetric

06:37:48.050 --> 06:37:50.963
and deemphasize pure volumetric charges.

06:37:54.350 --> 06:37:56.963
And also I appreciated, I think it was,

06:37:56.963 --> 06:37:58.030
I wasn't sure Robert or Kenny,

06:37:58.030 --> 06:38:02.750
maybe who was a gentleman
from Edison made the point

06:38:02.750 --> 06:38:05.740
that there are some precedents here

06:38:05.740 --> 06:38:09.065
for all electric customers
do get a different rate

06:38:09.065 --> 06:38:10.960
and maybe there's some way that

06:38:10.960 --> 06:38:13.440
that kind of approach could be used.

06:38:13.440 --> 06:38:15.290
All their customers
have a different baseline

06:38:15.290 --> 06:38:18.360
they have different application
of volumetric charges.

06:38:18.360 --> 06:38:20.813
So I just wanted to highlight that.

06:38:22.050 --> 06:38:23.083
And then finally,

06:38:24.860 --> 06:38:28.230
to kind of optimize the system overall

06:38:28.230 --> 06:38:29.556
and particularly agree
with those who've said

06:38:29.556 --> 06:38:33.870
we have this opportunity
when as load rises overtime

06:38:33.870 --> 06:38:35.950
with electrification of transportation

06:38:35.950 --> 06:38:39.520
and buildings that in optimizing,

06:38:39.520 --> 06:38:41.820
I think we have a lot
of tools in our toolbox

06:38:41.820 --> 06:38:43.856
to do that well in ways that
we really never had before.

06:38:43.856 --> 06:38:47.750
So that's developed flexibility value.

06:38:47.750 --> 06:38:50.980
We're doing a bunch of the
energy Commission on that front

06:38:50.980 --> 06:38:53.460
with low management standards

06:38:53.460 --> 06:38:55.283
and flexible demand appliances.

06:38:56.230 --> 06:38:57.759
We're doing a lot of
joint work with the PUC

06:38:57.759 --> 06:38:59.844
on supply side demand response.

06:38:59.844 --> 06:39:01.600
And in particular,

06:39:01.600 --> 06:39:03.283
as Commissioner
Monahan said this morning,

06:39:03.283 --> 06:39:07.780
transportation as well,
that's a huge opportunity

06:39:07.780 --> 06:39:12.117
to optimize the active
management of the grid in real time

06:39:12.117 --> 06:39:13.760
to improve load factors

06:39:13.760 --> 06:39:16.840
and therefore optimize the
investment as we go forward.

06:39:16.840 --> 06:39:19.620
So I wanted to just sort of
lay out those four buckets.

06:39:19.620 --> 06:39:23.320
I think in different ways
we've heard their relevance

06:39:23.320 --> 06:39:26.170
from almost every speaker
throughout the course of the day.

06:39:26.170 --> 06:39:29.550
And one thing I'll just
bring up as well as

06:39:29.550 --> 06:39:33.640
is trying to figure out how to best view

06:39:33.640 --> 06:39:36.030
all of these issues from the
customer per perspective.

06:39:36.030 --> 06:39:40.830
And as we do a fair amount
of increasing fuel substitution

06:39:40.830 --> 06:39:43.080
from gas to electricity,

06:39:43.080 --> 06:39:46.090
and sort of trying to understand
the pocket look impacts

06:39:46.957 --> 06:39:50.827
of those transformations on customers

06:39:50.827 --> 06:39:53.890
and these different segments
that we're concerned about.

06:39:53.890 --> 06:39:55.240
So hopefully,

06:39:55.240 --> 06:39:57.843
we can have of an integrated
conversation going forward.

06:39:58.774 --> 06:40:00.038
And that would be relatively

06:40:00.038 --> 06:40:03.397
I think unique if California
can manage to do that

06:40:03.397 --> 06:40:07.140
and very proactively
in kind of with care

06:40:07.140 --> 06:40:09.850
toward our customers in our residents.

06:40:09.850 --> 06:40:13.730
So I want again just lay
those kinds of ideas out there,

06:40:13.730 --> 06:40:15.838
lots of food for thought today.

06:40:15.838 --> 06:40:17.820
I think a lot of us, our
heads are spinning

06:40:17.820 --> 06:40:21.100
with all the discussion to
have so many smart people

06:40:21.100 --> 06:40:22.597
giving us different
perspectives on this issue.

06:40:22.597 --> 06:40:25.640
And just again, wanna thank everyone

06:40:25.640 --> 06:40:27.110
at the Public Utilities Commission,

06:40:27.110 --> 06:40:28.940
primarily who put this together,

06:40:28.940 --> 06:40:32.030
Commissioner Houck, chair Reynolds,

06:40:32.030 --> 06:40:33.960
Commissioners Rechtschaffen and Shiroma

06:40:33.960 --> 06:40:36.147
and new Commissioner
Reynolds (chuckles),

06:40:37.780 --> 06:40:41.930
and as well as my colleagues
at the Energy Commission

06:40:41.930 --> 06:40:42.763
for staying on all day

06:40:42.763 --> 06:40:46.870
and really giving us the deep
consideration that it deserves

06:40:46.870 --> 06:40:50.060
looking forward to working
together with the PUC,

06:40:50.060 --> 06:40:51.960
with all of my colleagues
on these issues

06:40:51.960 --> 06:40:53.662
and try to find solutions
that work for California

06:40:53.662 --> 06:40:56.230
and help us in our
decarbonization journey

06:40:56.230 --> 06:40:58.130
at the same time managing costs

06:40:58.130 --> 06:41:01.410
and sort the impacts on our residents.

06:41:01.410 --> 06:41:04.575
So with that, Commissioner Houck

06:41:04.575 --> 06:41:07.185
I am adjourning the
proceedings for today.

06:41:07.185 --> 06:41:08.325
(laughing)

06:41:08.325 --> 06:41:09.570
<v ->(indistinct) staff.</v>

06:41:09.570 --> 06:41:10.870
<v ->Back over to staff</v>

06:41:10.870 --> 06:41:14.720
and Jack's gonna give us
further information for tomorrow,

06:41:14.720 --> 06:41:17.426
but thank you, Commissioner McAllister,

06:41:17.426 --> 06:41:19.473
and I'll turn it back over to Jack.

06:41:21.940 --> 06:41:25.080
<v ->Thank you to all the panelists,
moderators and speakers</v>

06:41:25.080 --> 06:41:27.340
for very productive day.

06:41:27.340 --> 06:41:30.880
We'll be back here at 10:00
AM tomorrow for gas day,

06:41:30.880 --> 06:41:33.670
we'll have some local remarks then panel

06:41:33.670 --> 06:41:37.610
led by Dorothy Duda and
James Spencer of that institution.

06:41:37.610 --> 06:41:40.350
And the afternoon will be
a round table discussion

06:41:40.350 --> 06:41:41.830
led by Commissioner Houck.

06:41:41.830 --> 06:41:43.642
So thank you again,

06:41:43.642 --> 06:41:46.403
and we will see you tomorrow hopefully.

06:41:47.331 --> 06:41:48.164
Take care.

06:41:51.360 --> 06:41:52.540
<v Operator>And this
concludes today conference,</v>

06:41:52.540 --> 06:41:53.640
thank you for participating.

06:41:53.640 --> 06:41:55.240
You may disconnect at this time.