This entry covers CLECA’s participation in CPUC Rulemaking R.26-04-009, the Order Instituting Rulemaking on California Advanced Electric Rate Design. The excerpts below are drawn from CLECA’s opening and reply comments.
Structure the proceeding into distinct tracks
CLECA urged the Commission to sequence the rulemaking’s issues into separate tracks reflecting their differing urgency and complexity.
The Commission should structure this proceeding to address the identified issues in distinct tracks that reflect the differing scope, complexity, and statutory posture of the issues. A single track to address all issues would risk delaying matters that are time-sensitive and subject to clear statutory requirements, while also compressing more complex issues that require more time for careful and deliberate consideration.
This structure would allow each set of issues to be considered in a manner proportionate to its complexity and urgency, while promoting an efficient and coherent proceeding.
An expedited parallel track for AB 2109
CLECA argued that implementing AB 2109’s process heat recovery exemption is a bounded, urgent task that should proceed on its own expedited track.
Implementation of Assembly Bill (AB) 2109 should be addressed first on a separate, expedited track. AB 2109 was passed in 2024 and requires the Commission to implement an exemption from nonbypassable or departing load charges for certain industrial process heat recovery technology, subject to narrow implementation details, including a statewide cap.
The two primary implementation questions, the statewide cap and eligibility criteria, are bounded questions that do not depend on the broader rate design and marginal cost issues in this proceeding. Accordingly, an expedited standalone track or a targeted workshop phase involving a limited set of affected parties can proceed in parallel without delaying other tracks.
Defer marginal cost and GRC Phase 2 issues
CLECA and other parties agreed that marginal cost methodology is already being litigated in GRC Phase 2 and should not be relitigated here on a compressed timeline.
The Commission should exercise caution with respect to issues 3.1.b and 3.1.c, which concern cost-of-service accuracy and marginal cost methodology reform. These issues should be addressed in a later, more deliberate phase of the proceeding, with sufficient time to examine the complexity of the underlying ratemaking questions.
Deferral to a later track with prospective principles that guide future GRC Phase 2 proceedings is warranted here, rather than outright removal of these issues from scope. This approach preserves the integrity of ongoing GRC Phase 2 proceedings while allowing the Commission to provide forward-looking guidance where appropriate.
Keep data-center tariff requirements off traditional industrial customers
CLECA supported narrowly tailored data-center rules but warned against sweeping traditional industrial customers into requirements designed for hyperscale loads.
While it is appropriate for the Commission to consider tariff requirements that address the specific risks presented by data centers, any tariff service agreement framework should be carefully tailored so that it does not sweep in traditional large-load customers that present materially different and lower-risk profiles.
Applying deposit requirements, mandatory minimum bills, long contract terms, and exit fees calibrated to the data center risk profile to existing industrial customers that do not present those risks would not reflect cost causation. The practical consequences would be significant and counterproductive.
Add EITE customer retention as a scoped issue
CLECA recommended a new scoped issue on retaining energy-intensive, trade-exposed customers, consistent with AB 1207’s mandate to minimize emissions leakage.
In addition to the identified issues, CLECA recommends adding a new scoped issue: whether rate design should explicitly consider the retention and expansion of energy-intensive, trade-exposed (EITE) customers as a policy objective, consistent with the state's interest in preventing emissions leakage.
The Commission should add EITE customer retention as a scoped issue, consistent with the Legislature's interest in preventing emissions leakage and with the environmental parties' findings that the current rate design suppresses the investments needed to achieve California's climate goals.
Send effective price signals for electrification
CLECA contended that current rate structures obscure price signals and that reform is needed to make industrial electrification economically viable.
Existing rate structures for large commercial and industrial customers contain extraneous costs that obscure the price signal in rates and do not provide accurate signals to encourage beneficial electrification or other decarbonization investments, or reward load flexibility.
The Commission should adopt similar principles through expanded dynamic rates, broader access to wholesale price exposure, and reform of nonbypassable charge structures that currently obscure price signals.
Read the filings
The excerpts above are drawn from CLECA’s filings in this proceeding. Read the complete documents: