BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the Matter of the Application of Pacific Gas and Electric Company for Approval of its 2018-2020 Electric Program Investment Charge Investment Plan And Consolidated Matters. A.17-04-028 (Filed April 28, 2017) A.17-05-003 A.17-05-005 A.17-05-009 COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U-338-E) TO THE ELECTRIC PROGRAM INVESTMENT CHARGE EVALUATION REPORT WORKSHOP, SEPTEMBER 20, 2017 I. INTRODUCTION Southern California Edison Company (SCE) respectfully submits this response to the California Public Utilities Commission s (CPUC or Commission) Electric Program Investment Charge (EPIC) Evaluation Report workshop 1 held in San Francisco on September 20, 2017. The Commission s Phase II Decision (D.12-05-037), 2 establishing EPIC called for an independent evaluation. Evergreen Economics was selected as the independent evaluator for the EPIC Program and issued their Evaluation Report on September 8, 2017. The Scoping Memo called for setting a public workshop for September 20, 2017 to discuss the Evaluation Report s 1 Scoping Memo and Ruling of Assigned Commissioner Guzman-Aceves and Administrative Law Judge Roscow, at p. 16. 2 D.12-05-037, Findings of Fact 12. 1

findings. SCE s comments respond to the Evaluation Report and incorporates responses to the supplementary questions prepared by Energy Division staff on September 25, 2017. The Final Evaluation Report states the purpose of the EPIC Evaluation was to conduct a comprehensive evaluation of EPIC to identify opportunities to improve program management and effectiveness. 3 Specifically, Evergreen Economics evaluated the following aspects of EPIC: Determining if the Program is being implemented in a manner consistent with the program objectives, requirements and intent of the CPUC and the California Legislature as set forth in a series of CPUC Decisions; Assessing the extent to which the Program supports key energy policies and public research code sections; Identifying best practices in research administration; Assessing the extent to which the Program is on track, thus far, in meeting its objectives to provide ratepayer benefits, advance energy innovation and support California s energy policy goals; and Providing recommendations for improvements to program requirements and practices. The Evaluation Report s key finding is that based on a review of program administrative procedures (including program document review and interviews with administrators), that the four administrators are in compliance with program requirements. 4 However, the Evaluators made recommendations to programmatically improve EPIC. SCE addresses the Evaluation Report s recommendations and how to prioritize the implementation of these recommendations, in order to improve the effectiveness of the EPIC Program, while retaining the Program s 3 EPIC Evaluation Report, p. 1-1. 4 EPIC Evaluation Report, p. 1-3. 2

efficiencies. Specifically, some of these recommendations are better suited for implementation after the EPIC III 2018-2020 period, given the potential impacts and do not necessarily hinder the progress and work that has been achieved thus far on the EPIC III Investment Plans. II. EVALUATION REPORT RECOMMENDATIONS A. Prioritize CPUC Policy Objectives to Help Inform the EPIC Program The Evaluation Report found there is a need to prioritize among EPIC s many objectives. 5 To improve EPIC the Evaluation report makes two recommendations: The CPUC establish priorities among its current policy goals and funding criteria to better guide the administrators in their investment planning; 6 and The administrators collaborate in categorizing and summarizing projects (such as by technology type and/or policy area) and review projects by topic areas to ensure that the portfolio of projects effectively supports key policy goals. 7 SCE supports the Evaluation Report s recommendation for the Commission to establish priorities for environmental and energy goals to help guide the EPIC Investment Plans. However, the Joint IOU Framework used by the IOU Administrators is currently mapped to key policy objectives at the funding area and initiative levels. A further re-scoping of environmental and energy policy goals would significantly impact the progress on the EPIC III Investment Plans. Therefore this recommendation would be best implemented after the conclusion of the EPIC III investment cycle. Furthermore, while SCE supports the Commission prioritizing environmental and energy policy goals, the EPIC Administrators will still need programmatic flexibility to initiate and conduct projects as technologies advance, policy goals are updated and customer needs evolve. 5 EPIC Evaluation Report, p. 1-5. 6 EPIC Evaluation Report, p. 1-5. Recommendation, 2A. 7 EPIC Evaluation Report, p. 1-5. Recommendation, 2B. 3

B. Convene an Independent Body to Coordinate Among Administrators The Evaluation Report states, there is a need to supplement the administrative structure by convening an independent body to coordinate, facilitate and lend technical expertise. 8 To enhance the EPIC Program, the Evaluation Report recommends: The CPUC and/or the administrators fund and convene an independent body to coordinate, facilitate and lend technical expertise. 9 SCE supports the recommendation to convene an independent body to help coordinate among the Administrators. However, in order to properly define the role and structure of this independent body this recommendation would be best implemented after the conclusion of the EPIC III Investment Plan cycle. In assessing the Evaluation Report, SCE believes this independent body should provide a dual purpose: providing task-focused functions by a third party and a separate independent advisory council that provides coordination and support on programmatic plans and projects. The third party would provide key materials to help inform the advisory group. These key tasks could include: Creating and maintaining a central database of all EPIC projects; Coordinating reporting for all Administrators, including benefits metrics; and Coordinating and hosting stakeholder engagement, including benchmarking for nonduplication and workshop outreach for interested stakeholders (e.g., Disadvantaged Communities). These key tasks by a third party as outlined above would help fulfill the Evaluation Report s recommendation that all Administrators could improve the frequency, usefulness and transparency of project status reports. 10 8 EPIC Evaluation Report, p. 1-7. 9 EPIC Evaluation Report, p. 1-7. Recommendation, 6A. 10 EPIC Evaluation Report, p. 11-14. 4

The independent body s advisory council could help to fulfill the Evaluation Report s recommendation for greater transparency into the Investment Plans, while also improving the efficiencies of the Program s current processes and overall Program effectiveness. If properly structured, the advisory council should replace the current Tier 3 advice letter process for new projects between investment plan cycle approvals. 11 While, the Evaluation Report recommends, the IOU Administrators should use the advice letter process for requesting substantive changes to projects or adding new projects that are not covered by one of the existing general description in their Investment Plans 12 it is difficult to determine exact business needs, environmental and energy policy goals and/or customer needs years in advance of implementation. The EPIC Portfolio needs to be flexible to be able to support environmental and energy policy goals, as well as Commission proceedings that are initiated subsequent to the filing of an Investment Plan Application. The advisory council could play a key role, because if new IOU projects or CEC initiatives are needed between investment plan cycles, the advisory council could help the CPUC determine if the projects/initiatives fulfill the Commission s EPIC requirements, aligns with the Commission s prioritized environmental and energy policy goals and is not duplicating existing efforts. SCE stresses the role of the advisory council is not to provide regulatory CPUC oversight, instead the advisory council provides technical support to keep the Commission informed of the Administrators investment plans. This recommendation could potentially enable faster decision making to help keep pace with the ever-changing environment of policy goals, technology and customer needs. To ensure faster decision making is enabled, SCE recommends the advisory council, along with appropriate Commission approvals, ensure new projects/initiatives are decided upon during a business quarter. 11 The CEC undergoes a similar process and files a Business Letter approved by the CEC Commissioners for new initiatives. 12 EPIC Evaluation Report, p. 11-13. 5

In addition to improving the process for projects, the independent body could also help the overall EPIC Program s effectiveness. The Evaluation Report found that stakeholders (with the exception of EPRI) are engaged relatively late in both the CEC s and IOU s investment planning processes, and the plans have not changed significantly following stakeholder input. 13 The advisory council could improve the stakeholder process by providing a forum for input. SCE emphasizes the Utilities staff are experts on grid issues and have intimate knowledge of grid operations and needs and should lead discussions on future grid proposals for investment plans. By improving the participation of interested stakeholders, the independent body would also fulfill the Evaluation Report s recommendation toward: Improving and increasing transparency for project selection. 14 Given the increased transparency and participation of interested stakeholders, the advisory council could help the EPIC Program become more flexible to respond to the dynamic environment of technologies, policy goals, and customer needs. To enable this increased flexibility, the IOUs could submit investment plans with broader strategic initiatives (similar to the CEC s approach for Investment Plans) that would map to the Commission s prioritized environmental and energy policy goals. The Advisory Group could advise on technical aspects (e.g. engineering, communication support, etc.) of projects proposed under these broad strategic initiatives and the third party could vet these projects to ensure the projects fulfill the requirements of EPIC and are aligned to the Commission s prioritized policy goals. In order to provide technical support for the EPIC Program, the advisory council needs to be a cross-section of diverse industry experts, which could include: IOUs, CEC, Electric Power Research Institute, Social Science Researchers at Universities, National Labs, Independent System Operator (CAISO), CPUC, ORA and other interested stakeholders. SCE recommends leveraging the existing approach being used for the California Energy System for the 21 st 13 EPIC Evaluation Report, p. 11-9. 14 EPIC Evaluation Report, p. 1-12. Recommendations, 3A & 3B. 6

Century (CES-21) Program s cybersecurity Machine-to-Machine Automated Threat Response project. The CES-21 Program s advisory body provides a process for industry experts to review technical information and provide guidance. Given the technical nature of the advisory council SCE does not expect costs to convene this advisory council, however in order to fund a third party to coordinate and administer the reporting (including benefits metrics and the maintenance of a project database) and stakeholder engagement, SCE recommends using the existing funding allocation split among the Administrators (80% CEC, with the IOUs sharing the remaining 20%). 15 The IOUs share would use the same split currently being used in the EPIC and CES-21 Programs (50.1% PG&E, 41.1% SCE, and 8.8% SDG&E). 16 C. Modifications to Intellectual Property Terms to Increase Participation The Evaluation Report indicated that some stakeholders reported that the Program s IP terms were a barrier to participation. 17 SCE as discussed in EPIC III Workshop opening comments, encourages modifications or waivers of IP language on a case by case basis, because all customers who fund technologies through EPIC deserve to benefit from the project outcomes. SCE discourages blanket modification and/or waivers of IP terms, because the Commission s current IP terms ensure all customers equitably benefit from the development of such utility assets, including licensing or transfer of assets. D. Private Investment, Commercialization The Evaluation Report states that many technologies do not have a clear path toward commercialization. Commercialization makes sense for the CEC s Portfolio, given that IOU customers are paying for third party projects. However, for the IOUs achieving private investment from IP created in EPIC is not the goal of the Portfolio, rather the IOUs determine technologies success by whether it becomes more widely deployed on the grid. 15 D.12-05-037, Ordering Paragraph (OP) 5. 16 D.12-05-037, OP 7. 17 EPIC Evaluation Report, p. 11-12. 7

III. CONCLUSION SCE respectfully submits these comments on the EPIC Evaluation Report. SCE appreciates the opportunity to provide feedback on how to incorporate the recommendations of the EPIC Program Evaluation into the Investment Plans and requests the Commission approve SCE s 2018-2020 EPIC Investment Plan. Respectfully submitted, KRIS G. VYAS WALKER A. MATTHEWS, III /s/ Walker A. Matthews, III By: Walker A. Matthews, III Attorney for SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770 Telephone: (626) 302-6879 Facsimile: (626) 302-6997 E-mail: walker.matthews@sce.com October 2, 2017 8

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA In the Matter of the Application of Pacific Gas and Electric Company for Approval of its 2018-2020 Electric Program Investment Charge Investment Plan And Consolidated Matters. A.17-04-028 (Filed April 28, 2017) A.17-05-003 A.17-05-005 A.17-05-009 CERTIFICATE OF SERVICE I hereby certify that, pursuant to the Commission s Rules of Practice and Procedure, I have this day served a true copy of COMMENTS OF SOUTHERN CALIFORNIA EDISON COMPANY (U-338-E) TO THE ELECTRIC PROGRAM INVESTMENT CHARGE EVALUATION REPORT WORKSHOP, SEPTEMBER 20, 2017 on all parties identified on the attached consolidated service list(s): A.17-04-028. Service was effected by one or more means indicated below: Transmitting the copies via e-mail to all parties who have provided an e-mail address. Placing the copies in sealed envelopes and causing such envelopes to be delivered by hand or by overnight courier to the offices of the Assigned ALJ(s) or other addressee(s), and by U.S. mail to those on the service list without an email address. ALJ Stephen C. Roscow CPUC 505 Van Ness Ave. San Francisco, CA 94102 Executed October 2, 2017, at Rosemead, California. /s/gina Leisure Gina Leisure SOUTHERN CALIFORNIA EDISON COMPANY 2244 Walnut Grove Avenue Post Office Box 800 Rosemead, California 91770

CPUC - Service Lists - A1704028 https://ia.cpuc.ca.gov/servicelists/a1704028_84365.htm Page 1 of 5 10/2/2017 CPUC Home CALIFORNIA PUBLIC UTILITIES COMMISSION Service Lists PROCEEDING: A1704028 - PG&E - FOR APPROVAL FILER: PACIFIC GAS AND ELECTRIC COMPANY LIST NAME: LIST LAST CHANGED: SEPTEMBER 26, 2017 Download the Comma-delimited File About Comma-delimited Files Back to Service Lists Index Parties KRIS G. VYAS, ESQ. KIRSTIE C. RAAGAS SR. ATTORNEY REGULATORY COUNSEL SOUTHERN CALIFORNIA EDISON COMPANY SAN DIEGO GAS & ELECTRIC COMPANY 2244 WALNUT GROVE AVE. / PO BOX 800 8330 CENTURY PARK COURT, CP31F ROSEMEAD, CA 91770 SAN DIEGO, CA 92123 FOR: SOUTHERN CALIFORNIA EDISON COMPANY FOR: SAN DIEGO GAS & ELECTRIC COMPANY ANAND DURVASULA CHRISTOPHER J. WARNER CALIF PUBLIC UTILITIES COMMISSION ATTORNEY LEGAL DIVISION PACIFIC GAS AND ELECTRIC COMPANY ROOM 4107 77 BEALE STREET / PO BOX 7442 505 VAN NESS AVENUE SAN FRANCISCO, CA 94120 SAN FRANCISCO, CA 94102-3214 FOR: PACIFIC GAS AND ELECTRIC COMPANY FOR: ORA MARK MILES SHIRLEY GEE CEO MANAGING PARTNER MARK CONSULTING, INC. ANGEL PLUS, LLC 1200 LAKESHORE AVENUE, SUITE 25A 844 PROSPECT AVENUE OAKLAND, CA 94606 OAKLAND, CA 94610 FOR: MARK MILES CONSULTING, INC. (MMCI) FOR: ANGEL PLUS, LLC DEEPA LOUNSBURY MADELINE STANO CALSEED PROGRAM MGR. ENERGY LEGAL COUNSEL CALIFORNIA CLEAN ENERGY FUND THE GREENLINING INSTITUTE 436 14TH STREET, SUITE 1220 360 14TH STREET, 2ND FLOOR OAKLAND, CA 94612 OAKLAND, CA 94612 FOR: CALIFORNIA CLEAN ENERGY FUND FOR: THE GREENLINING INSTITUTE

CPUC - Service Lists - A1704028 https://ia.cpuc.ca.gov/servicelists/a1704028_84365.htm Page 2 of 5 10/2/2017 (CALCEF) SHANA LAZEROW ANTHONY HARRISON ATTORNEY DIR - PUBLIC POLICY COMMUNITIES FOR A BETTER ENVIRONMENT CHARGEPOINT 120 BROADWAY, SUITE 2 254 E. HACIENDA AVENUE RICHMOND, CA 94804 CAMPBELL, CA 95008 FOR: CALIFORNIA ENVIRONMENTAL JUSTICE FOR: CHARGEPOINT, INC. ALLIANCE (CEJA) ALLAN L. WARD, II CALIFORNIA ENERGY COMMISSION CHIEF COUNSELS OFFICE 1516 9TH STREET, MS 14 SACRAMENTO, CA 95814 FOR: CALIFORNIA ENERGY RESOURCES CONSERVATION AND DEVELOPMENT COMMISSION Information Only AARON RENFRO SOUTHERN CALIFORNA EDISON EMAIL ONLY EMAIL ONLY, CA 00000 BONNIE DATTA SR. DIR - AMERICAS & ASIA PACIFIC SIEMENS EMAIL ONLY EMAIL ONLY, CA 00000 CASE ADMINISTRATION JOHN MINNICUCCI SOUTHERN CALIFORNIA EDISON COMPANY SOUTHERN CALIFORNIA EDISON EMAIL ONLY EMAIL ONLY EMAIL ONLY, CA 00000 EMAIL ONLY, CA 00000 KENT THOMSON LARA ETTENSON SOUTHERN CALIFORNIA EDISON NATURAL RESOURCES DEFENSE COUNCIL EMAIL ONLY EMAIL ONLY EMAIL ONLY, CA 00000 EMAIL ONLY, CA 00000 MARIA STAMAS PAMELA DOUGHMAN LEGAL FELLOW, ENERGY PROGRAM CALIF. ENERGY COMMISSION NATURAL RESOURCES DEFENSE COUNCIL EMAIL ONLY EMAIL ONLY EMAIL ONLY, CA 00000 EMAIL ONLY, CA 00000 MRW & ASSOCIATES LLC EMAIL ONLY EMAIL ONLY, CA 00000 DANIEL DOUGLASS ATTORNEY DOUGLASS & LIDDELL 4766 PARK GRANADA, SUITE 209 CALABASAS, CA 91302 FOR: WESTERN POWER TRADING FORUM CASE ADMINISTRATION ANNLYN FAUSTINO SOUTHERN CALIFORNIA EDISON COMPANY REGULATORY & COMPLIANCE 2244 WALNUT GROVE AVE. / PO BOX 800 SAN DIEGO GAS & ELECTRIC COMPANY ROSEMEAD, CA 91770 8330 CENTURY PARK COURT, CP32F

CPUC - Service Lists - A1704028 https://ia.cpuc.ca.gov/servicelists/a1704028_84365.htm Page 3 of 5 10/2/2017 SAN DIEGO, CA 92118 DEAN A. KINPORTS EMMA D. SALUSTRO REGULATORY CASE MGR. ATTORNEY SAN DIEGO GAS & ELECTRIC COMPANY SAN DIEGO GAS & ELECTRIC COMPANY 8330 CENTURY PARK COURT, CP32F 8330 CENTURY PARK COURT, CP32D SAN DIEGO, CA 92123 SAN DIEGO, CA 92123 FOR: SAN DIEGO GAS & ELECTRIC COMPANY (SDG&E) CENTRAL FILES JULIE CERIO SAN DIEGO GAS & ELECTRIC COMPANY PACIFIC GAS AND ELECTRIC COMPANY 8330 CENTURY PARK CT, CP31-E 77 BEALE ST., RM. 2388B SAN DIEGO, CA 92123-1530 SAN FRANCISCO, CA 94104 DANIEL OHLENDORF GREG STEWART PACIFIC GAS AND ELECTRIC COMPANY PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE STREET, ROOM 2388B 77 BEALE STREET, ROOM 2388B SAN FRANCISCO, CA 94105 SAN FRANCISCO, CA 94105 GEORGE ZAHARIUDAKIS FRANCESCA WAHL RESOURCE / ENTEGRATED PLANNING SR. ASSOCIATE, BUS. DEVELOPMENT PACIFIC GAS AND ELECTRIC COMPANY TESLA, INC. 77 BEALE STREET, B9A 444 DE HARO STREET, STE. 101 SAN FRANCISCO, CA 94105-0001 SAN FRANCISCO, CA 94107 DEBORAH BEHLES CASE ADMINISTRATION OF COUNSEL PACIFIC GAS AND ELECTRIC COMPANY CALIFORNIA ENVIRONMENTAL JUSTICE ALLIANC EMAIL ONLY EMAIL ONLY EMAIL ONLY, CA 94177 EMAIL ONLY, CA 94131 FOR: CALIFORNIA ENVIRONMENTAL JUSTICE ALLIANCE (CEJA) CHRIS KING ROGER LIN GLOBAL CHIEF REGULATORY OFFICER CENTER ON RACE POVERTY & THE ENVIRONMENT SIEMENS SMART GIRD SOLUTIONS 1999 HARRISON STREET, STE. 650 4000 E 3RD AVE., STE. 400 OAKLAND, CA 94612 FOSTER CITY, CA 94404 FOR: CALIFORNIA ENVIRONMENTAL JUSTICE ALLIANCE ANDREW G. CAMPBELL RENEE SAMSON EXEC. DIR., ENERGY INSTITUTE AT HAAS DIR - UTILITY SOLUTIONS UNIVERSITY OF CALIFORNIA, BERKELEY CHARGEPOINT, INC. UNIVERSITY OF CALIFORNIA, BERKELEY 245 HACIENDA AVENUE 324 GIANNINI HALL CAMPBELL, CA 95008 BERKELEY, CA 94720 FOR: RESEARCH CENTER COALITION GABRIEL HERRERA, ESQ. LYNN HAUG OFFICE OF CHIEF COUNSEL ATTORNEY CALIFORNIA ENERGY COMMISSION ELLISON SCHNEIDER HARRIS & DONLAN LLP 1516 NINTH STREET, MS 14 2600 CAPITOL AVE., STE. 400 SACRAMENTO, CA 95814-5512 SACRAMENTO, CA 95816

CPUC - Service Lists - A1704028 https://ia.cpuc.ca.gov/servicelists/a1704028_84365.htm Page 4 of 5 10/2/2017 ANDREW B. BROWN ATTORNEY AT LAW ELLISON SCHNEIDER HARRIS & DONLAN LLP 2600 CAPITAL AVENUE, SUITE 400 SACRAMENTO, CA 95816-5905 State Service MARIA SOTERO CHRISTOPHER MYERS REGULATORY ANALYST-ENERGY DIVISION CALIF PUBLIC UTILITIES COMMISSION CALIFORNIA PUBLIC UTILITIES COMMISSION ELECTRICITY PLANNING & POLICY BRANCH EMAIL ONLY ROOM 4104 EMAIL ONLY, CA 00000 505 VAN NESS AVENUE SAN FRANCISCO, CA 94102-3214 KARIN M. HIETA STEPHEN C. ROSCOW CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION ELECTRICITY PLANNING & POLICY BRANCH DIVISION OF ADMINISTRATIVE LAW JUDGES ROOM 5010 ROOM 5109 505 VAN NESS AVENUE 505 VAN NESS AVENUE SAN FRANCISCO, CA 94102-3214 SAN FRANCISCO, CA 94102-3214 THOMAS GARIFFO DAVID X. HUANG CALIF PUBLIC UTILITIES COMMISSION CALIF PUBLIC UTILITIES COMMISSION ELECTRICITY PLANNING & POLICY BRANCH PROCUREMENT STRATEGY AND OVERSIGHT BRANC AREA 300 Capitol Mall 505 VAN NESS AVENUE Sacramento, CA 95814 SAN FRANCISCO, CA 94102-3214 SARA KIM ANTHONY NG STAFF ATTORNEY CALIFORNIA ENERGY COMMISSION CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET, MS 51 1516 NINTH STREET, MS-14 SACRAMENTO, CA 95814-5512 SACRAMENTO, CA 95814 DORIS YAMAMOTO ERIK STOKES CALIFORNIA ENERGY COMMISSION CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET, MS 51 1516 NINTH STREET, MS 43 SACRAMENTO, CA 95814-5512 SACRAMENTO, CA 95814-5512 LAURIE TENHOPE LINDA SPIEGEL CALIFORNIA ENERGY COMMISSION CALIFORNIA ENERGY COMMISSION 1516 NINTH STREET, MS 51 1516 NINTH STREET, MS 51 SACRAMENTO, CA 95814-5512 SACRAMENTO, CA 95814-5512 MARK KOOTSTRA MIKHAIL HARAMATI CALIFORNIA ENERGY COMMISSION SUPERVISOR, BLDG ENERGY EFFICIENCY 1516 NINTH STREET, MS 51 CALIFORNIA ENERGY COMMISSION SACRAMENTO, CA 95814-5512 1500 5TH STREET SACRAMENTO, CA 95814-5512

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