8.27.21- Pay As You Save® Updates in CO & CA
There have been lots of developments in the PAYS world in the last couple of weeks! This week we’ll cover two from the end of last week: 1) Xcel Colorado’s On-bill Financing Working Group Meeting, and 2) changes to the California Clean Energy Finance Proceeding schedule. We’ll cover Rappahannock Electric Cooperative’s Greening Together Stakeholder meeting held 8.26.2 in next week’s newsletter.
Xcel Energy, Colorado aka Public Service Company of Colorado, held a 2021 On-Bill Financing Working Group meeting on August 19 to share findings from its analysis of various financing options discussed in the kick-off meeting in July and to seek additional input from stakeholders. This working group is part of compliance with Settlement Agreement terms approved in the 2021-22 DSM Plan (Proceeding No. 20A-0287EG). Anyone interested in participating in future meetings should email their request to George.B.Mcguirk@xcelenergy.com. Key takeaways:
Xcel has evaluated four options: Tariff On-Bill, PAYS, On-Bill Loans and On-Bill Repayment. This first cut of the analysis, while admirably extensive, was not realistic in that it:
Considered measures (included beneficial electrification measures) individually and not bundled as they are typically installed
Used Xcel’s 6.5% Weighted Average Cost of Capital (WACC) rather than splitting it between participants (at 3% or less) and all rate-payers
Applied the current rate structure (rather than the Time of Use (TOU) rates that will become the default in two years in Colorado
Did not include the value of demand response features, and
Used market rate cost of installation rather than the much lower volume pricing obtained by other PAYS programs.
Due to the incompleteness of the analysis, the initial conclusions are not meaningful. Xcel itself acknowledged in its introduction that the analysis is just a starting point and stated that it will consider all feedback, which will include the above, as all these points were raised. In addition, Xcel committed to providing a spreadsheet that shows their assumptions and calculations in detail which will enable stakeholders to conduct comparative analyses and highlight inputs that need correction. Xcel also pledged to look into creating a publicly accessible wiki-type document where working group members could request additional analyses, provide comment, and share data,
New Clean Energy Financing Programs for California Delayed! On August 18, the CPUC issued an “E-MAIL RULING SUSPENDING PROCEDURAL SCHEDULE AND PROVIDING GUIDANCE ON UTILITY-LED COMMUNITY OUTREACH” in the Order Instituting Rulemaking to Investigate and Design Clean Energy Financing Options for Electricity and Natural Gas Customers (20-08-022). The ruling will likely delay consideration of new inclusive utility investment tariff-based models by at least three months, and possibly six months or more. The ruling:
Suspended the schedule adopted in the March 5, 2021, Assigned Commissioner’s Scoping Memo and Ruling for Rulemaking 20-08-022.
Required the California Investor Owned Utilities (IOUs)--San Diego Gas & Electric Company, Southern California Edison Company, Pacific Gas and Electric Company, and Southern California Gas Company—to hold public outreach workshops before the end of 2021 to inform customers about the existing clean energy financing programs available through 2026, and
Required the IOUs hold similar workshops in the first quarter of 2022 that also gather feedback on potential improvements to existing financing programs.
The schedule change is in response to a joint request by the IOUs to delay workshops on their new financing program proposals, which were to happen before the end of 2021, until after those proposals are submitted. The request suggests that we will not see any new Inclusive Utility Investment program proposals from the California IOUs until Q2 of 2022.
The original schedule for Track 3 that was to consider new financing proposals was:
Ruling Seeking new Financing Proposals Q3/Q4 ‘21,
Workshops on Proposals Q1 ‘22,
Final Decision Q3 ‘22
The new ruling would seem to push back the start of Track 3 until at least Q2 ‘22, but we will not know with certainty until the CPUC releases an updated schedule.