8. Assignment of Proceeding
Rachelle B. Chong is the assigned Commissioner, and Timothy J. Sullivan is the assigned ALJ.
1. The Recovery Act appropriated $4.5 billion to modernize the electric grid.
2. DOE issued FOAs offering up to 50 percent funding for proposed projects in a Smart Grid Investment Grant Program and a Smart Grid Demonstrations program. The final FOAs were adopted by DOE on June 25, 2009.
3. The FOAs attest that DOE will conduct a thorough review of projects before granting Recovery Act funding.
4. Each of the DOE-approved Smart Grid programs will require a commitment of funds in addition to the funds approved by the DOE.
5. It is reasonable to require IOUs subject to Commission regulation to file electronically and serve in this proceeding a notice when an application for funding has been submitted to DOE. It is reasonable for the notice to include: the application submitted to the DOE; a brief, one-page summary of the project or activity; the amount of federal funding being sought; estimated jobs created; amount and source of matching funding; partners involved in the project; and identification of any other type of federal or other funding being sought for the same activity.
6. It is reasonable to limit access to confidential and security-related information concerning the Smart Grid. Confidential and security-related information should be supplied only to the Commission including DRA. It may also be reasonable to supply such information to other interested parties upon the completion of appropriate non-disclosure agreements or after other measures that the Commission deems appropriate.
7. It is reasonable to require an IOU to file electronically and serve in this proceeding a further notice when DOE awards funding for an activity or informs the IOU that the activity will not receive a DOE award.
8. For projects or activities receiving a DOE award, it is reasonable to require an IOU to file electronically and serve in this proceeding quarterly notices describing in detail the status of all federally funded projects or activities until such time as the project or activity is complete.
9. Copies of quarterly status reports submitted to DOE are adequate for the purposes of this Commission as currently envisioned.
10. To the extent DOE requires an IOU to prepare and submit studies, evaluation, or other reports on Recovery Act-funded activities, it is reasonable to require an IOU to file electronically and serve in this proceeding copies of the same reports.
11. It is reasonable to abstain from the review of proposed Smart Grid projects that do not require additional ratepayer funds.
12. It is reasonable to require the IOUs to make available in a timely manner all studies, evaluations and other reports on Smart Grid activities funded by the Recovery Act that are submitted to DOE, consistent with confidentiality protections.
13. It is reasonable to require IOUs to provide all documentation that is necessary for an ALJ or the Energy Division to evaluate the Application or Advice Letter at the time of filing, and respond expeditiously to any data requests from Energy Division or parties, serving that information on all parties to the Application or Advice Letter.
14. It is reasonable to authorize each IOU subject to the Commission's jurisdiction to track the costs associated with Smart Grid projects for which funding by DOE is sought, from the effective date of this decision and to establish a memorandum account via an advice letter filing, made within 30 days, for booking these costs.
15. It is reasonable to review by a Tier-3 Advice Letter any IOU project that has obtained DOE Recovery Act Smart Grid funding in light of DOE's review of the project if the project does not require a CEQA review, a CPCN, or a permit to construct.
16. It is reasonable for the Commission to review through an application process those Smart Grid proposals that either lack DOE approval, or, even with DOE approval, require a CEQA review, a CPCN, or a permit to construct.
17. An advice letter or expedited application is a more reasonable process for reviewing a Smart Grid proposal than waiting for an IOU's next GRC.
18. It is reasonable to limit the protest period for applications filed pursuant to this decision to 15 days and to permit replies 7 days later.
19. The public interest is served by timely Commission action on Smart Grid projects that have applied for Recovery Act funding.
20. The DOE requires applicants for Smart Grid funds to submit information concerning the costs and benefits of the proposed projects.
21. The circumstances of the Recovery Act Smart Grid funding are unique.
1. The Assigned Commissioner's Ruling of May 29, 2009 amended the scope of this proceeding to cover the funding opportunities created by the Recovery Act.
2. The Commission should require the reporting by IOUs of the information identified herein pertaining to the DOE Smart Grid programs in order for the Commission to supervise and regulate these public utilities.
3. The reporting requirements contained herein are consistent with the authority granted the Commission under § 701 of the Pub. Util. Code.
4. A Smart Grid project funded by the DOE that needs no additional ratepayer funding does not require further Commission review of the reasonableness of its costs.
5. It is reasonable and in the public interest for the Commission to authorize IOUs to track costs incurred for Smart Grid projects for which DOE funding is sought from the effective date of this decision and to establish memorandum accounts via an advice letter filing made within 30 days of the effective date of this decision.
6. Due to the unique circumstances associated with the Recovery Act's support for Smart Grid investments and projects, including DOE's thorough review of all applications for funding, this use of a Tier-3 advice letter to review a project is reasonable, and the procedures we adopt in this decision provide no precedent for future Commission decisions.
7. The advice letter process proposed herein for the review of Smart Grid projects that have obtained DOE funding and do not require a CEQA review, a CPCN, or a permit to construct is consistent with Commission precedent and the authority granted in § 454(b) of the Pub. Util. Code.
8. Reducing the time for protesting applications filed pursuant to IOU efforts to obtain Commission approvals of Smart Grid projects seeking DOE funding is in the public interest and consistent with § 1701 of the Pub. Util. Code and the provisions of Rule 2.6 of the Commission's Rules of Practice and Procedure.
9. The information on costs and benefits submitted to the DOE can provide a basis for initiating this Commission's review of a proposed Smart Grid project.
IT IS ORDERED that:
1. Investor-owned utilities subject to Commission regulation that apply for Smart Grid funding from the United States Department of Energy shall provide reports to the Commission's Energy Division and DRA as set forth in Section 3.2 of this decision.
2. Investor-owned utilities subject to Commission regulation that apply for Smart Grid funding from the United States Department of Energy shall be authorized to establish memorandum accounts to track the costs associated with these projects. Each investor-owned utility is authorized to track these costs from the effective date of this decision. Costs must be separately tracked for each individual project. Each investor-owned utility seeking a memorandum account to track these costs shall file an advice letter with the Commission within 30 days of the effective date of this decision.
3. A Smart Grid project that has been reviewed and approved for funding by the United States Department of Energy and does not require a California Environmental Quality Act review, a Certificate of Public Convenience and Necessity, or a permit to construct and does not require ratepayer funding that exceeds 50t of costs, may file a Tier-3 Advice Letter seeking Commission approval. The Commission's Energy Division shall review the advice letter consistent with Tier-3 advice letter procedures to determine whether:
1. The DOE has selected the project to receive an award;
2. The project furthers one or more of the benefits to IOU ratepayers identified in Section 5.2;
3. The requested incremental ratepayer funding for the project does not exceed $30 million;
4. The utility attests that ratepayer funding does not exceed 50 percent of the total project costs;
5. The utility attests or otherwise demonstrates that it has sought third-party funding, in addition to DOE funding, and indicates what third-party co-funding it has received;
6. The utility has provided a detailed itemized budget for the project and included a reasonable explanation of how the budget was developed; and
7. The utility attests or otherwise demonstrates that the costs are necessary for the project.
If the conditions above are met, the Energy Division shall prepare a resolution approving the project for consideration by the Commission. A party protesting the Advice Letter should demonstrate that the Advice Letter does not meet the conditions set forth above.
4. Investor-owned utilities that receive an award of funding from the United States Department of Energy for Smart-grid related projects that require a California Environmental Quality Act review, a Certificate of Public Convenience and Necessity, a permit to construct shall file an application to obtain Commission review and determination of the reasonableness of the project and whether to authorize the recovery of costs through rates.
5. Except as indicated in Ordering Paragraphs 3, Smart Grid projects proposed by investor-owned utilities for funding by the United States Department of Energy shall seek Commission review of the reasonableness of recovering from ratepayers any costs associated with the project via an application process.
6. For applications filed pursuant to Ordering Paragraphs 4 and 5, the protest period is reduced to 15 days. The replies to protest are due with seven days thereafter.
7. Investor owned utilities shall make available in a timely manner all studies, evaluations and other reports on Smart Grid activities funded by the Recovery Act that are submitted to DOE, consistent with confidentiality protections.
8. Investor-owned utilities shall provide all documentation that is necessary for an Administrative Law Judge or the Energy Division to approve an Application or Advice Letter at the time of filing, and respond expeditiously to any data requests from Energy Division or parties, serving that information on all parties to the Application or Advice Letter.
This order is effective today.
Dated September 10, 2009, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
