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Western Community Energy Joint Meeting of the

Board of Directors and Technical Advisory Committee

AGENDA Wednesday, October 14, 2020

1:00 p.m.

Western Riverside Council of Governments 3390 University Avenue, Suite 200

Riverside, CA 92501

WRCOG's OFFICE IS CURRENTLY CLOSED TO THE PUBLIC DUE TO COVID-19 AND STAFF ARE WORKING REMOTELY

Members of the public are encouraged to participate in this meeting via Zoom (see meeting information below)

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SPECIAL NOTICE – COVID-19 RELATED PROCEDURES IN EFFECT

Due to the state and local State of Emergency resulting from the threat of Novel Coronavirus (COVID-19), Governor Newsom has issued Executive Order N-29-20 (issued March 17, 2020) in which Section 3 supersedes Paragraph 11 of Executive Order N-25-20 (issued on March 12, 2020). This new order states that WRCOG does not need to make a physical location available for members of the public to observe a public meeting and offer public comment. The Order allows WRCOG to hold Committee meetings via teleconferencing and allows for members of the public to observe and address the meeting telephonically or electronically.

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To follow the Order issued by the Governor, the WCE Joint Meeting of the Board of Directors and Technical Advisory Committee scheduled for Wednesday, October 14, 2020, at 1:00 p.m. will be held via video and teleconference and any members of the public can attend electronically. Members of the public may send public comments by emailing [email protected], or calling (951) 405-6703 before or during the meeting, prior to the close of public comment. Any member of the public requiring a reasonable accommodation to participate in this meeting in light of this announcement shall contact Suzy Nelson prior to Monday, October 12, 2020, at 1:00 p.m. at (951) 405-6703 or at [email protected]. The Board of Directors may take any action on any item listed on the agenda, regardless of the Requested Action. 1. CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS

At this time members of the public can address the Board of Directors regarding any items within the subject matter jurisdiction of the Board of Directors that are not separately listed on this agenda. Members of the public will have an opportunity to speak on agendized items at the time the item is called for discussion. No action may be taken on items not listed on the agenda unless authorized by law. Whenever possible, lengthy testimony should be presented to the Board of Directors in writing and only pertinent points presented orally.

4. CONSENT CALENDAR

All items listed under the Consent Calendar are considered to be routine and may be enacted by one motion. Prior to the motion to consider any action by the Board of Directors, any public comments on any of the Consent Items will be heard. There will be no separate action unless members of the Board of Directors request specific items be removed from the Consent Calendar.

A. Summary Minutes from the September 9, 2020, Joint Meeting of the Board of Directors P. 1

and Technical Advisory Committee are Available for Consideration.

Requested Action: 1. Approve the Summary Minutes from the September 9, 2020, Joint Meeting of the Board of Directors and Technical Advisory Committee.

B. Financial Report Summary Update Andrew Ruiz, WRCOG P. 7

Requested Action: 1. Receive and file. C. Program Schedule Update Tyler Masters, WCE P. 13 Requested Action: 1. Receive and file.

D. Regulatory and Legislative Activities Update Ani Dhruva, WRCOG P. 15 Requested Action: 1. Receive and file.

E. Marketing and Outreach Activities Update Avie Barron, WCE P. 41

Requested Action: 1. Receive and file. F. Single Signature Authority Report Andrew Ruiz, WRCOG P. 57

Requested Action: 1. Receive and file.

mailto:[email protected]


G. WCE Enabling Agreement to add Additional Energy Tyler Masters, WRCOG P. 59 Provider Requested Actions: 1. Adopt Resolution No. 2020-18; A Resolution of the Board of Directors

of Western Community Energy approving a Master Purchase and Sale Agreement.

2. Approve the Edison Electric Institute Master Purchase and Sale Agreement (“Master Agreement”) between Western

Community Energy and Southern California Edison (“SCE”) and authorize the Executive Director, or designee, to

execute the Master Agreement, in substantially similar form as approved by Legal Counsel.

3. Approve Master Agreement Confirmation Letter (“Confirmation Letter”) between Western Community Energy and SCE and authorize Executive Director, or designee, to execute the Confirmation Letter in substantially similar form as approved by Legal Counsel.

5. REPORTS / DISCUSSION A. Program Launch Update Tyler Masters, WCE P. 125 Requested Action: 1. Receive and file.

B. Non-Residential Client Engagement and Don Ries, WCE P. 127 Outreach Update Requested Action: 1. Receive and file. C. Residential Time-of-Use Transition Update Tyler Masters, WCE P. 129

Requested Action: 1. Adopt Resolution No. 2020-17; A Resolution of the Board of Directors of

Western Community Energy adopting a 12-month bill protection to residential customers at Time of Automatic Transition to Time-of-Use Rates.

D. Arrearage Management Plan Update Ani Dhruva, WRCOG P. 135

Requested Action: 1. Direct the Executive Director to notify Southern California Edison by

October 23, 2020, of WCE’s intent to participate in SCE’s Arrearage Management Plan.

6. REPORT FROM THE EXECUTIVE DIRECTOR Rick Bishop

7. ITEMS FOR FUTURE AGENDAS Members Members are invited to suggest additional items to be brought forward for discussion at future Board of Directors meetings.

8. GENERAL ANNOUNCEMENTS Members Members are invited to announce items / activities which may be of general interest to the Board of Directors.

9. NEXT MEETING: The next Joint Meeting of the Board of Directors and Technical Advisory Committee is scheduled for Wednesday, November 11, 2020, at 1:00 p.m., on the Zoom platform.

Western Community Energy Item 4.A Joint Meeting of the Board of Directors and Technical Advisory Committee September 9, 2020 Summary Minutes 1. CALL TO ORDER The Joint Meeting of the Board of Directors and Technical Advisory Committee was called to order at 1:05 p.m. by Chair Ben Benoit on the Zoom virtual platform. 2. ROLL CALL Board of Directors present: Todd Rigby, City of Eastvale Russ Brown, City of Hemet Chris Barajas, City of Jurupa Valley Ted Hoffman, City of Norco Rita Rogers, City of Perris (1:11 p.m. arrival) Ben Benoit, City of Wildomar (Chair) Technical Advisory Committee Members present: Bryan Jones, City of Eastvale Rod Butler, City of Jurupa Valley Andy Okoro, City of Norco 3. PUBLIC COMMENTS There were no public comments. 4. CONSENT CALENDAR – (Norco / Eastvale) 5 yes; 0 no; 0 abstention. Items 4.A through 4.E were approved. Representatives from the Cities of Canyon Lake and Perris were not present. A. Summary Minutes from the August 12, 2020, Joint Meeting of the Board of Directors and Technical Advisory

Committee are Available for Consideration.

Action: 1. Approved the Summary Minutes from the August 12, 2020, Joint Meeting of the Board of Directors and Technical Advisory Committee.

B. Financial Report Summary Update

Action: 1. Received and filed. C. Program Schedule Update

Action: 1. Received and filed. D. Regulatory and Legislative Activities Update

Action: 1. Received and filed.

E. WCE Enabling Agreement to add Additional Energy Provider Actions: 1. Adopted Resolution No. 2020-16; A Resolution of the Board of Directors of Western

Community Energy approving Master Power Purchase Agreements.

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2. Approved the Edison Electric Institute Master Agreement (“Master Agreement”) between Western Community Energy and Uniper and authorize the Executive Director, or designee, to execute the Master Agreement, in substantially similar form as approved by Legal Counsel.

3. Approved the Edison Electric Institute Master Agreement (“Master Agreement”) between Western Community Energy and NextEra and authorize the Executive Director, or designee, to execute the Master Agreement, in substantially similar form as approved by Legal Counsel.

5. REPORTS / DISCUSSION A. Program Launch Update

Tyler Masters, Director of WCE, reported that opt-out reports have been aggregated from weekly to monthly. Opt-outs peaked during the mass enrollment months of April and May 2020. The August opt-out rate increased slightly. Staff believe this could be attributed to, 1) post-launch mailers are still being mailed to the Net Energy Meter (NEM) customers pursuant to July’s enrollment phase; 2) pre-launch physical mailers for October’s enrollment phase; and 3) the recent transition to summer rates, and this past month we have had multiple heat waves. Due to the heat waves, usage is increasing, which may cause customers to believe that their bill is higher because of the switch to WCE, which is not true. In total, opt-out rates across all customers hover at approximately 5.8%. Initial assumptions provided for a 5% opt-out rate in residential and 10% opt-out rate for commercial. Opt-up status to WCE’s 100% green Choice Plus Plan continues to increase with a total of 48 customers; this number has tripled since launch. NEM customers are enrolled on a quarterly basis that best align with their 12-month generation usage true-up schedule. The final of the four enrollment phases will occur in October 2020, after which this time all of the eligible customers will have had the opportunity to enroll in WCE. Beginning in October 2021, WCE will aggregate all NEM true-ups to the month of October annually thereafter. The California Independent Service Operator (CAISO) has initiated two multi-day flex alerts in the last 30 days due to a western region-wide heatwave, coupled with the rapid decrease in energy generated by wind resources and an unexpected loss of another generating capacity. Three of WCE member cities were impacted. Director Russ Brown indicated that the list of impacted areas on SCE’s website is confusing and incomplete. Can WCE prepare some kind of translation of information posted on SCE’s website and equate it to something geo-based that consumers can view and understand. Mr. Masters responded that the nomenclature for roaming outages is confusing. There is a long, convoluted way to obtain geographic mapping. For recent and future outages, WCE will attempt to breakdown the information provided by SCE in an understandable manner so the customers know how to find that information and determine if they will be impacted. Director Todd Rigby suggested emphasizing to constituents the ability to opt into outage email / text notices. Regarding the 5.8% residential opt-out rate, how does that affect WCE since the anticipated opt-out rate would be 5%. Is it normal for CCAs to see opt-out spikes several months into a launch. Mr. Masters responded that because the commercial opt-out rates are so much lower, the overall assumptions are still well within the anticipated percentages. Regarding opt-out spikes, staff anticipates that after post-launch physical mailers are sent, there will be a decrease in opt-outs. Director Rigby expressed concern in the residential opt-out rate with the reason being pricing concerns. From the beginning WCE indicated that its rates would be approximately 2% lower than SCE rates and the customers are not believing that. Another high percentage of customers have opted-out because they do not like being automatically enrolled. Director Ted Hoffman asked if staff will contact those who have opted out.

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Mr. Masters responded that staff is currently assessing an opt-back-in campaign. WCE’s opt-out rate is still quite a bit lower than other CCAs throughout the state. Staff believe that it may be best to focus on the larger commercial customers which have opted-out. Director Chris Barajas suggesting waiting until after January for another messaging campaign when SCE raises its rates. Perhaps information can be added to the FAQ page listed on the website regarding the wait time in switching between SCE and WCE. Chairman Ben Benoit indicated that it would be worth it to circle back to those who have opted out. Perhaps staff can do a bill comparison to show how much they would have saved. Action: 1. Received and filed.

B. Non-Residential Client Engagement and Outreach Update Don Ries, WRCOG Program Manager, reported that Southern California Edison (SCE) will have two rate changes effective October 2020 and January 1, 2021. WCE has 14,638 commercial clients. Only 538 of those have opted out. Staff has completed initial contact with all of the top 50 clients, those with significant energy usage. Staff continue updating and utilizing templates which project cost savings, provide custom usage reviews, and assist to determine applicable tariffs for commercial clients. One revision to the template being made includes SCE charges versus just generation charges. Secondly, the templates will include the affects of switching back and forth between SCE and WCE. An online savings calculator is expected to go live by the end of November 2020. Director Todd Rigby asked if staff tracks the reasons for commercial opt-outs. Mr. Ries responded that the reasons are not separated from the residential opt-outs. Initially, staff focused on the large energy consumers and are now working to initiate conversations with the smaller commercial customers. Action: 1. Received and filed.

C. Marketing and Outreach Activities Update

Avie Barron, WRCOG Senior Analyst, reported that since launch staff have been working with consultants on a post-launch marketing strategy which include targeted advertisements utilizing Facebook and Instagram platforms and will aim for specific geographic locations to access WCE customers. Staff will be working to respond to questions and comments posted on social media as quickly as possible. Staff are focusing on WCE’s website; for the month of August, over 11,000 visitors visited the website. A savings counter and alert banners have been added to the website. New to the website will be a landing spot for Agency updates, future flex alerts, etc. Printed and digital advertisements continue with Pandora and the Press Enterprise, as well as YouTube. Advertisements will run every other month. WCE will begin sponsoring local events such as State of the City events, as well as subscribing membership to local Chambers of Commerce. WCE will also begin providing micro-sponsorships to 48 Parent Teacher Associations in late fall in order to “give back to the community.” Action: 1. Received and filed.

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D. Bill Collection and Bad Debt Update

Andrew Ruiz, WRCOG Chief Financial Officer, reported that this Board adopted a Delinquent Accounts, Collections, and Bad Debt Policy in November 2019. In April 2020, the California Public Utilities Commission (CPUC), in response to the COVID-19 epidemic, passed a resolution authorizing and ordering utilities to implement emergency customer protections. One protection was to suspend disconnection for non-payment and associated fees. In May 2020, this Board updated its Policy to reflect CPUC’s order. WCE now allows up to 180-days for both residential and commercial customers for unpaid balances to be paid in full or for payment arrangements to be made before the account is reverted back to Southern California Edison (SCE). There are currently no accounts delinquent under this updated Policy. There are, however, 625 delinquent residential accounts and 427 commercial accounts that would have been flagged under the old Policy. If staff were to assume that all of these account balances were written off, this would represent a 1.06% bad debt percentage. WCE has estimated a 1.0% allowance for bad debt. WCE is working with SCE to obtain a recurring aging report for its shared customers. Director Todd Rigby asked if the bad debt amount is going up. Mr. Ruiz responded that once staff received data from SCE, we will have a clearer picture on the actual bad debt total. Director Rita Rogers indicated that the City of Perris is offering utility, rental, and mortgage assistance for up to three months, and is surprised to see outstanding receivables so high in her jurisdiction. Action: 1. Received and filed.

E. 4th Quarter Budget Amendment Andrew Ruiz, WRCOG Chief Financial Officer, reported that energy revenues are a little higher than anticipated, and expenditure were less than anticipated due to the hedge energy being procured lower than projected. Overall, there is a total net increase in expenditures of approximately $29,000. Action: 1. Approved the 4th Quarter Budget Amendment for Fiscal Year 2019/2020. (Jurupa Valley / Perris) 6 yes; 0 no; 0 abstention. Item 5.E was approved. A representative from the City of Canyon Lake was not present.

6. REPORT FROM THE EXECUTIVE DIRECTOR Rick Bishop reported that the 6th Annual Solar Valley Conference is scheduled for September 14, 2020, from 8:30 am. – 12:15 p.m. WRCOG has applied for a Climate Resilience Challenge grant to develop a Energy Resilience Plan and was awarded $200,000. 7. ITEMS FOR FUTURE AGENDAS There were no items for future agendas. 8. GENERAL ANNOUNCEMENTS Director Todd Rigby announce that the City of Eastvale will be holding its State of the City virtually on October 1, 2020. 9. NEXT MEETING: The next Joint Meeting of the Board of Directors and Technical Advisory Committee is

scheduled for Wednesday, October 14, 2020, at 1:00 p.m., on the Zoom platform.

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10. ADJOURNMENT: The Joint Meeting of the Board of Directors and Technical Advisory Committee adjourned at 2:45 p.m.

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Item 4.B



STAFF REPORT

Subject: Financial Report Summary Update Contact: Andrew Ruiz, WRCOG Chief Financial Officer, [email protected], (951) 405-6740 Date: October 14, 2020 The purpose of this item is to provide the Financial Report summary through July 2020. REQUESTED ACTION: 1. Receive and file. Financial Report summary through July 2020: The Agency Financial Report summary through July 2020, a monthly overview of WCE’s financial statements in the form of combined Agency revenues and costs, is provided as Attachment 1. PRIOR ACTION: September 9, 2020: The Board of Directors received and filed. FISCAL IMPACT: This item is for informational purposes only; therefore, there is no fiscal impact. ATTACHMENT: 1. Financial Report summary – July 2020.

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Item 4.B Financial Report Summary

Update

Attachment 1 Financial Report summary –

July 2020

9

Approved Thru RemainingBudget Actual Budget

Revenues and Transfers In 6/30/2021 7/31/2020 6/30/2021WCE Energy Revenue 102,959,782 12,048,759 (90,911,023) Opt Up Revenue 73,604 - (73,604) Doubtful Account Reserve (824,305) 96,390 920,695 Total Revenues Transfers 102,209,081 12,145,149 (90,063,932)

Approved Thru RemainingBudget Actual Budget

Expenditures 6/30/2021 7/31/2020 6/30/2021General OperationsGeneral Legal Services 100,000 6,234 93,766 Bank Fees 255,934 19,704 236,230 Stipends 10,000 10,000 Program/Office Supplies 4,500 322 4,178 Event Support 500 500 Parking Validations 500 500 Membership Dues 208,325 51,860 156,465 Meeting Support Services 1,000 1,000 Postage 500 500 Other Household Expense 500 500 Insurance - Gen/Bus Liab 7,000 7,000 Seminars/Conferences 1,500 1,500 Travel - Mileage Reimbursement 500 500 Travel - Ground Transportation 500 500 Meals 500 500 Other Incidentals 1,000 1,000 WRCOG Administration and Overhead 1,258,358 84,067 1,174,291 Consulting Labor 2,843,334 208,611 2,634,723 Program Expense 52,000 52,000 Supplier Fees 24,104 24,104 System/Hedged/Renewable Energy 60,916,787 6,612,242 54,304,545 Resource Adequecy - System 10,128,753 1,229,121 8,899,632 Resource Adequecy - Local 6,752,502 819,414 5,933,088 CAISO Charges 7,360,446 806,397 6,554,049 IOU Charges 247,658 20,638 227,020 Total Expenditures 90,176,702 9,858,610 80,318,092

Western Community EnergyBudget to Actuals

For the Month Ending July, 2020

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Item 4.C



STAFF REPORT

Subject: Program Schedule Update Contact: Tyler Masters, Director of Western Community Energy, [email protected],

(951) 405-6732 Date: October 14, 2020 The purpose of this item is to provide an update on the Program Schedule and major milestones for WCE through December 2020. REQUESTED ACTION: 1. Receive and file. Background: The following highlights future Board of Directors meeting topics for discussion, as well as WCE Program updates, anticipated through December 2020.

October 2020 November 2020 December 2020 • Board Meeting

- Financial update - Marketing and outreach and

post-launch activity update - Legislative update

• Program Update - Review of customer service

calls and opt-outs - Discuss bill protection on

customers’ transition to time-of-use rates

- Arrearage Management Plan (AMP) Update – debt forgiveness programs for eligible customer classes

• Board Meeting - Discuss bill protection on

customers’ transition to time-of-use rates

- Financial update - Legislative update - Continue marketing and

outreach

• Program Update - WRCOG Energy Resiliency

Plan Update - Bill Comparison Tool

demonstration - Review of customer service

calls and opt-outs

• Board Meeting - Financial update - Legislative update - Continue marketing and

outreach

• Program Update - Review of customer service

calls and opt-outs

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PRIOR ACTION: September 9, 2020: The Board of Directors received and filed. FISCAL IMPACT: This item is for informational purposes only; therefore, there is no fiscal impact. ATTACHMENT: None.

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Item 4.D



STAFF REPORT

Subject: Regulatory and Legislative Activities Update Contacts: Anirudhha Dhruva, WRCOG Fellow, [email protected], (951) 405-6725

Ryan Baron, Of Counsel, Best Best & Krieger, [email protected], (941) 263-6568

Date: October 14, 2020 The purpose of this item is to provide an update on recent regulatory and legislative activities that have occurred that may affect WCE and other CCAs. REQUESTED ACTION: 1. Receive and file. Legislative Update: As part of our Membership with the California Community Choice Association (CalCCA), its legislative staff has provided the following information. On August 14 and 15, 2020, a Stage 3 Emergency was enacted by the California Independent System Operator (CAISO), which saw the deployment of Rotating Outages due to a heatwave across the Western portion of the United States, threatening the electricity infrastructure and generation capability of resources. A Stage 3 Emergency signals that the state’s power demand is within 3% of the available supply, and that Utilities need to begin preparing to curtail its customers’ electricity usage through deployment of available Demand Response Programs and rotating outages, if further ordered. On these two days, heat-related failure of energy infrastructure and rotating outages led to the de-energization of a portion of the Cities of Eastvale, Jurupa Valley, and Perris on August 14th from 6:56 pm to 7:59 pm. On August 16, 2020, the CAISO enacted its backstop procurement abilities in order to procure resource generation and enacted a four-day Stage 2 Flex Alert, lasting until August 20, 2020. In response to these events the Office of the Governor of California wrote a letter on August 18th to the Presidents of the California Energy Commission (CEC), CAISO, and the California Public Utilities Commission (CPUC) indicating the Governor’s displeasure in the actions leading up to and the occurrence of the events and requesting action be taken to identify and review the policy and regulatory conditions which allowed the outages to occur. In response on August 19th the Presidents of CAISO, CPUC, and CEC transmitted a joint response letter back to the Governor, acknowledging the letter and request for review, while providing other information as requested. Both letters can be found as Attachments 1 and 2 to this report. On August 20th Assembly member Holden, Chair of the Assembly Committee on Utilities and Energy, issued a letter to members of the California State Assembly highlighting the desire to schedule an oversight hearing in early September regarding the de-energization that occurred on August 14 and 15. A copy of Assembly Member Holden’s letter can be found as Attachment 3 in this report. On October 5, 2020, CalCCA Lobbying Staff notified WCE staff that the CA Assembly Committee on Utilities and Energy will hold an Oversight Hearing regarding the August rolling blackouts and the ‘root cause’ of the issue on Monday, October 12th at 10:00 a.m. CCA regulators (CPUC, CEC, CAISO) have also indicated that they are to release a joint report on the heat event on either Tuesday, October 6, or Wednesday, October 7, 2020. 15



On August 31, 2020, the State Legislature officially ended the 2020 Legislative Session. Both houses had until August 31st to pass any bills, or they must wait until the next legislative year. The Governor of California had until September 30, 2020, to sign any bills into law or to veto them. Between August 31, and September 30, 2020, three CalCCA priority bills were sent to the Governor which are Senate Bill (SB) 364 (Mitchell), SB 1117 (Monning) and Assembly Bill (AB) 841 (Ting). The Governor signed all three bills into law, bringing the tally of CCA priority bills that were passed and signed into law this year to seven. In addition, CalCCA managed to successfully fight three bills it viewed as unfavorable for CCAs. CalCCA has provided WCE with end-of-the-year statistics regarding its legislative tracking efforts. CalCCA tracked and flagged 56 bills during the 2020 legislative year, up from 27 bills in the 2019 legislative year. Twenty-three bill positions were adopted by CalCCA in the 2020 legislative year. Seven bills that CalCCA supported have been signed into law by the Governor in 2020, while managing to kill off three unfavorable bills. Below is an extensive table of bills that CalCCA is tracking. In addition, if the CalCCA Board has taken a position, it is also annotated.

Bill Author (s) Description Status CalCCA Position

SB 45 Allen

Proposes the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020, subject to voter approval in the November 3, 2020, statewide general election. This bill proposes the issuance of $5.51 billion in general obligation bonds to implement its provisions.

01/30/20: In Assembly. Read first time. Held at Desk. Support

SB 115 Mitchell Solar Tax Credits. 09/09/20: Chaptered by Secretary of State. Chapter 40, Statutes of 2020.

SB 255 Bradford

Requires ESPs, including CCAs, with revenues of $1,000,000 or more to report to the CPUC their current contracting statuses and future annual procurement contracting plans with local Diverse Business Enterprises (DBEs).

10/02/2019: Chaptered by Secretary of State. Chapter 407, Statutes of 2019.

Support

SB 364 Mitchell

Caps property taxes for Veterans over 65, attempting to mitigate factors that lead to homelessness for veterans. Will enable the current nonresidential solar property tax rules to continue, if Proposition 15 is to pass in November. Under Prop 15, solar and solar + storage projects will become economically unfeasible.


Support

SB 378 Wiener

Establishes the California Public Utilities Commission’s (CPUC) regulatory authority over public utilities, including electrical corporations. Requires each electrical corporation to annually prepare and submit a wildfire mitigation plan to the CPUC for review and approval, as specified. Requires a wildfire mitigation plan of an electrical corporation to include, among other things, protocols for de-energizing portions of the electrical distribution system that consider the associated impacts on public safety, as well as protocols related to mitigating the public safety impacts of those protocols,

07/27/20: Referred to Committee on Rules. Support

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including impacts on critical first responders and on health and communications infrastructure.

SB 605 Hueso

This bill requires numerous provisions related to an electrical investor-owned utility’s (IOU) decision to proactively shut off power, including requiring reimbursements of specified costs, specified penalties for shutting off power, and other reporting.

06/29/20: Referred to Committee on Utilities & Energy.

SB 633 Stern

This bill would establish the California Electric Vehicle Authority within the Governor’s Office. This authority will be responsible for funding and financing programs that accelerate or boost the transition to a zero-emissions based transportation system. Under this bill the authority will be required to coordinate with local agencies, including CCAs in transitioning to an emissions-free transportation system.

07/27/20: Amended in Assembly. Referred to Committee on E.S. & T.M.

Support, as

amended

SB 702 Hill

Authorizes a retail seller the option to rely on the contracts or ownership agreements entered into prior to January 1, 2019, directly by its nonprofit educational institution end-use customer to help satisfy the long-term procurement requirement in the state’s renewable portfolio standard.


SB 801 Glazer

Requires an electrical corporation to deploy backup electrical resources or provide financial assistance for backup electrical resources to a customer receiving a medical baseline allowance if the customer meets those conditions.

07/27/20: From committee with author’s amendments. Read second time and amended. Re-referred to Committee on Utilities & Energy.

SB 802 Glazer

Require an air district to adopt a rule or revise its existing rules to allow a health facility to construct and operate an emergency backup generator during a deenergization event without having that usage count toward any time limitation.

05/12/20: Referral to Senate Committee on Environment, Utilities, and Communications. Rescinded due to the shortened 2020 Legislative Calendar.

SB 804 Wiener

Allows publicly owned electric utilities to issue rate reduction bonds, a type of financing mechanism already used by public water and wastewater agencies and, in some cases, investor-owned electric utilities. Rate reduction bonds can help utilities invest in projects such as clean energy development, equipment upgrades, and more in a cost-effective manner that saves ratepayers money.

05/12/20: Referral to Senate Energy, Utilities, and Communications Committee. Rescinded due to the shortened 2020 Legislative Calendar.

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SB 862 Dodd

This bill would require an electrical corporation, as a part of its public safety mitigation protocols, to include protocols that deal specifically with access and functional need individuals, as defined, including those individuals who are enrolled in the California Alternative Rates for Energy program. This bill would recast those provisions to authorize the electrical corporation to deploy backup resources to a customer, including an individual with an access of functional need, as defined, and would delete the requirement that the customer not be eligible for backup electrical resources from the other providers.

06/29/20: Referred to Committee on Utilities & Energy.

SB 917 Wiener Transitions PG&E to a publicly owned utility over a five-year span.

05/12/20: Referral to Senate Committees on Government and Finance and Judicial. Rescinded due to the shortened 2020 Legislative Calendar.

SB 942 Wilk

Codifies an existing regulation that authorizes the CEC to approve community solar projects for housing projects to comply with legislation that requires new home construction to include solar and storage systems.

02/20/20: Referred to Senate Rules Committee.

SB 947 Dodd Directs the CPUC to study performance-based rates for IOUs and report back to the Legislature.

03/16/20: March 17 hearing postponed by Senate Energy, Utilities, and Communications Committee.

Watch

SB 953 Wiener Prevents discriminatory and/or unreasonable fees for customer sited energy and storage systems.

03/16/20: March 17 hearing postponed by Senate Energy, Utilities, and Communications Committee.

Watch

SB 1035 Rubio

Establishes the Climate Pollution Reduction in Low-Income Homes Initiative to provide financial assistance for low carbon emitting appliances.

02/27/20: Referred to Senate Energy, Utilities, and Communications Committee.

Support

SB 1059 Hill

Clarifies that "partnership flips" do not trigger property tax reassessments for solar projects. This measure is intended to be a cleanup to AB 15x from 2011 that is not being interpreted incorrectly by the Board of Equalization.

05/21/20: From committee with author's amendments. Read second time and amended. Re-referred to Com. on Governance & Finance

SB 1117 Monning

Eliminates a statutory conflict that results in residents of mobile home parks being charged the electrical corporation rate rather than the CCA rate.


Support

SB 1215 Stern Creates the Local Government Deenergization Resiliency Grant Program. Grants are for planning and deployment.

07/27/20: From committee with author’s amendments. Read second time and amended. Re-referred to Committee on Utilities & Energy.

Support, if Amended

SB 1312 McGuire Requires the CPUC to develop a standard against which to measure the prudency of

06/29/20: Referred to Committee on Utilities & Energy. Support

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an IOUs conduct of a public safety power shutoff (PSPS) and an electrical corporation’s fire risk mitigation capital expenditures on the distribution or transmission infrastructure that motivated the PSPS. The bill would also require IOUS to identify and report to the commission at least 15% of its transmission and distribution infrastructure that is most likely to cause a PSPS or ignite a wildfire, that needs fire risk mitigation capital expenditures, and for which fire risk mitigation capital expenditures have not been made by July 1, 2021. The bill establishes timelines for the fire mitigation capital expenditures: 50% of the identified infrastructure by July 1, 2023; 75% by July 1, 2024; 100% by July 1, 2025.

SB 1314 Dodd Creates a community resiliency planning grants program.

05/12/20: Referral to Senate Government and Finance and Judicial Committees. Rescinded due to the shortened 2020 Legislative Calendar.

Watch

SB 1321 Bradford Transportation electrification: electric vehicles: grid integration.

04/03/20: From committee with author's amendments. Read second time and amended. Re-referred to Senate Energy, Utilities, and Communications Committee.

SB 1358 Bradford RPS adjustments for locally owned public utilities. Likely a spot bill.


SB 1416 Bradford

This bill would make battery of a utility worker, as defined, engaged in the performance of their duties, when the person committing the battery knows or reasonably should know that the victim is a utility worker engaged in the performance of their duties, and an injury is inflicted on the utility worker, punishable by a fine of not more than $3,000, by imprisonment in a county jail not exceeding 6 months, or by both that fine and imprisonment.

03/25/20: From Committee with author's amendments. Read second time and amended. Re-referred to Senate Rules Committee.

SB 1422 Bradford Including microgrids in supplier diversity requirements. Likely a spot bill.


SB 1451 Bradford

This bill would require that the resource adequacy program also optimally integrate renewable energy resources in a cost-effective manner.

03/25/20: From Committee with author's amendments. Read second time and amended. Re-referred to Senate Rules Committee.

19

AB 56 E. Garcia

Allows the CPUC to authorize the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) to undertake procurement of electricity to meet the state’s climate, clean energy, and reliability goals if the PUC makes specified findings. The newly formed authority would be permitted to procure electricity for customers of electrical corporations, community choice aggregators, and electric service providers to attain certain energy, environmental, economic, public health and public safety objectives.

08/28/19: In Committee: Reconsideration granted. Oppose

AB 235 Mayes

Creates the California Wildfire Catastrophe Fund Authority (Authority) as a tax-free means for electric utilities to provide coverage for utility liability costs from wildfires when those costs exceed available insurance.

07/02/20: Re-referred to Committee on Natural Resources and Water.

AB 352 Garcia, E Creates the Wildfire Prevention, Safe Drinking Water, Drought Preparation, and Flood Protection Bond Act of 2020.

08/14/19: From Committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Senate Environmental Quality Committee.

AB 841 Ting

This bill would require each electrical corporation to file an advice letter and would require the PUC to approve a new tariff or rule that authorizes each electrical corporation to design and deploy all electrical distribution infrastructure on the utility side of the customer meter for all customers installing a separately metered infrastructure to support charging stations. This bill also requires each electrical corporation and gas corporation to establish the School Energy Efficiency Stimulus Program.

9/30/20: Chaptered by Secretary of State – Chapter 372, Statutes of 2020.

AB 913 Calderon

This bill would authorize an electrical corporation to file an application requesting the commission issue a financing order to authorize the recovery of certain incremental under collection amounts for Calendar Year 2020 through bonds secured by a rate.

9/29/20: Chaptered by the Secretary of State – Chapter 253, Statutes of 2020.

AB 1659 Bloom, et al

This bill would establish a Wildfire Prevention and Community Resilience Fund. This fund would be used to establish wildfire prevention and programs. This program requires IOUs to create a non-bypassable surcharge for all customers in order to finance bonds issued in support of the Wildfire Prevention and Community Resilience Fund.

08/30/20: Ordered to third reading. Ayes 29, Noes 10.

20

AB 1720 Carrillo

The bill will mandate the procurement from a proposed pumped storage project located in Joshua Tree National Park. NextEra proposes to have the California Department of Water Resources (DWR) procure the amount of long-duration energy storage (LDES) to get under the 38mmt greenhouse gas emission scenario identified in D. 20-03-028 if, by March 1, 2021, the CPUC fails to order LSEs to procure this amount.

08/03/20: In committee: Hearing postponed by committee. Oppose

AB 1839

Bonta, Chiu, Kalra, Reyes,

and Weber

Create the California Green New Deal Council and is to provide a commitment by the state to establish a policy framework of goals and principles to address the negative impacts of climate change and social inequality.

05/11/20: Re-referred to Assembly Committee on Natural Resources.

AB 1847 Levine

Authorizes the California Public Utilities Commission (CPUC) to appoint a public administrator at an Investor-Owned Utility (IOU) if the CPUC determines that the IOU is not following state laws or regulations.

1/17/20: Referred to Assembly Utilities and Energy Committee.

AB 2313 Eggman SB 772 (Bradford). revisited. Long duration energy storage. Bill is likely to begin as technology neutral.

02/15/20: From printer. May be heard in committee March 16. Watch

AB 2255 Eggman

Requires the CAISO to assess the need for long-duration energy storage and report its findings to the Governor. Should the Governor agree with the CAISO’s conclusions, the Governor would authorize the CAISO to develop and implement a competitive solicitation process and operational cost recovery mechanisms to develop long duration energy storage systems, with benefits and cost responsibility assigned to all LSEs.

05/05/20: Re-referred to Assembly Committee on Natural Resources.

Oppose

AB 2547 Gonzalez Eliminates bucket 3 and increase bucket 1 by an equal percentage in RPS compliance requirements.

03/12/20: Referred to Assembly Committees on Utilities and Energy and Natural Resources.

Support

AB 2887 Bonta

Contains a variety of measures targeting Covid-19 relief but drafted to apply to states of emergency and major disasters more broadly. The most relevant issue raised in this bill for CCAs, deals with utility disconnection provisions. The bill addresses disconnections and bill repayment but does so in a way that is less consumer friendly that what is currently being discussed at the PUC.

05/07/20: Re-referred to Assembly Committee on Budget, pursuant to Assembly Rule 96.

Watch

AB 2951 Chiu Study to look at offshore wind development. 02/24/20: Read first time.

AB 2969 Mayes

The Base Interruptible Program (BIP) is an emergency electricity demand response program regulated by the PUC, used as a last line of defense against rolling blackouts. This bill would allow customers to stay on the IOUs BIP program even if

03/05/20: Referred to Assembly Committee on Utilities and Energy.

Oppose

21

the CCA or DA provider that serves the customer creates its own similar program.

AB 3191 Gray

Establishes minimum penalties for assault and battery of a utility work and also established some enhance traffic safety laws to better protect utility workers.

03/09/20: Referred to Assembly Public Safety and Transportation Committees.

Support

AB 3251 Bauer-Kahan

Requires the CPUC to establish rules to allow demand response programs and resources procured by LSE’s meet the RA requirements of the LSE regardless of whether the program is integrated into the ISO wholesale market

03/17/20: Re-referred to Assembly Committee on Utilities and Energy.

Watch

Regulatory Update: This is a placeholder in the event staff needs to provide information or needs an action from the Board regarding any recent regulatory activities that have occurred since the agenda has been released. PRIOR ACTION: September 9, 2020: The Board of Directors received and filed. FISCAL IMPACT: This item is for informational purposes only; therefore, there is no fiscal impact. ATTACHMENTS: 1. Office of the Governor letter to Regulators. 2. Joint Regulatory Response Letter to Governor. 3. ASM Holden Letter on Oversight Hearing.

22

Item 4.D Regulatory and Legislative

Activities Update

Attachment 1 Office of the Governor letter to

Regulators

23


Activities Update

Attachment 2 Joint Regulatory Response

Letter to Governor

29

1

August 19, 2020

Governor Gavin Newsom

1303 10th Street, Suite 1173

Sacramento, CA 95814

Dear Governor Newsom,

We write in response to your letter from earlier this week regarding the power

outages of August 14 and 15 that were triggered due to insufficient resources.

We agree that the power outages experienced by Californians this week are

unacceptable and unbefitting of our state and the people we serve. We

understand the critical importance of providing reliable energy to Californians

at all times, but especially now, as the state faces a prolonged heat wave and

continues to deal with impacts from the COVID-19 pandemic.

Californians have always responded to great disruptions with courage,

determination, and creativity. This week was no exception. But it is unfair to

make Californians endure disruptions that are within our reach to avoid. We, as

individuals, and the organizations we lead, share in the responsibility for what

many Californians unnecessarily endured. We also share in the commitment to

pinpoint the causes and ensure they do not reoccur.

Your letter requests that our organizations provide information to understand the

causes of the recent supply deficiencies and the actions that can be taken in

the near and longer-terms to minimize power outages. These questions deserve

a more thorough review and response from us in the coming days, but in the

sections below we provide responses based on the information we have now.

Near-Term Energy Demand Forecast

In the near term, the California Independent System Operator (CAISO) expects

that energy demand will remain high as the current heat wave persists. In the

table below, the CAISO provides its most recent demand forecasts for August 20

through 24. The table shows forecasted demand for two times of the day when

the demand on the grid peaks. The first is the peak load hour, which occurs from

5 to 6pm (peak load hour) and the second is when the demand on the system,

net of expected wind and solar production, occurs which is from 7 to 8pm (net

load peak hour) for each day:

Table 1: Short Term Demand Forecasts

Forecast Period

8/20 8/21 8/22 8/23 8/24

Peak Load Hour

Demand

45,113 44,743 42,718 42,154 46,779

Net Load Peak

Hour Demand

42,850 42,415 41,393 40,946 44,329

31

2

The CAISO estimates that August resource adequacy capacity provides

approximately 46,000 megawatts (MW) of load carrying capability at the peak

load hour, after considering estimated outages. This load carrying capability

drops to approximately 43,000 MW during the net load peak hour. Based on

these forecasts, there is currently a risk of resource insufficiency on Monday,

August 24. If those projections materialize as forecasted, the CAISO will require

economic import energy to meet system needs. If economic import energy is

unavailable, it could lead to additional supply shortages. The CAISO will do

everything it can to avoid service interruptions. As detailed later in this letter,

significant efforts have been undertaken across the state in recent days to

reduce demand and identify additional supply.

Lack of Advance Warnings for Supply Deficiencies

As the CAISO anticipated high loads and temperatures beginning on August 14,

it issued an order restricting maintenance operations on August 12, an alert

identifying a possible system reserve deficiency on August 13, and a Flex Alert for

August 14. However, the situation deteriorated on the afternoon of August 14,

with the unanticipated loss of supply and severe constraints on imports because

of a developing, historic west-wide heat wave. The imbalance in supply and

demand led to the need to order the utilities to turn off power to their customers

later that evening. On August 15, the CAISO experienced similar supply

conditions, as well as significant swings in wind resource output when evening

demand was increasing. Wind resources first quickly increased output during

the 4:00 pm hour (approximately 1,000 MW), then decreased rapidly the next

hour. These factors, combined with another unexpected loss of generating

resources, led to a sudden need to shed load to maintain system reliability. The

combination of high system demand, unanticipated loss of supply, and low net

import availability due to hot temperatures throughout the West created

untenable system conditions. Although the CAISO could not have predicted

the specific series of events that ultimately required power outages, better

communications and advance warnings about tight supply conditions were

possible, and should have been done. The CAISO is committed to improving its

communications, and providing appropriate warnings of such circumstances.

Causes of Recent Supply Deficiencies

We are working closely as joint energy organizations to understand exactly why

these events occurred. The grid conditions of August 14 and 15, with peak

demands of approximately 47,000 MW and 45,000 MW respectively, were high

but not above similar hot days in prior years. Given this, our organizations will

need to conduct a deep dive into how we ensure sufficient electric supply, and

will make modifications to our reliability rules to make sure reliability resources

can be available to address unexpected grid conditions.

Assigning definite causes to events on the electricity grid requires careful

analysis, which will take time, however, we do know a number of things already.

We know that capacity shortfalls played a major role in the CAISO’s ability to

maintain reliable service on the grid. A major focus of our review will need to be

on the joint organizations’ process of determining the needed capacity.

The resource adequacy procurement requirements are set by the California

Public Utilities Commission (CPUC), to be based on a 1-in-2 peak forecast, i.e.,

an average year forecast. This forecast is developed by the California Energy

Commission (CEC) based on an agreed-upon methodology between the CEC,

the CPUC, and the CAISO. To account for contingencies such as outages,

import variability, load forecast error, and reserve requirements, the program

requires utilities to procure a 15% planning reserve margin above the monthly

32

3

peak load forecast. The rules take into account the fact that the grid needs

both a sufficient quantity and quality of resources to meet demand. As the

events of the past few days indicate, a review of how the organizations forecast

hourly demand and set reserve margins is critical. The forecasts and planning

reserves need to better account for the fact that climate change will mean

more heat storms and more volatile imports, and that our changing electricity

system may need larger reserves.

Another factor that appears to have contributed to resource shortages is

California’s heavy reliance on import resources to meet increasing energy

needs in the late afternoon and evening hours during summer. Some of these

import resources bid into the CAISO energy markets but are not secured by

long-term contracts. This poses a risk if import resources become unavailable

when there are West-wide shortages due to an extreme heat event, such as the

one we are currently experiencing. The CAISO has observed that during the

current heat wave, energy supporting imports from other Western utilities have

been significantly constrained during the late afternoon and evening hours, as

those other utilities must plan to meet their own demand and have limited ability

to export supplies to California. This hampers the CAISO’s ability to secure net

import energy sufficient to meet evening ramping requirements.

After this heat wave passes, as directed in your letter, our organizations will

perform a root cause analysis of the events of August 14 and the following days,

to understand the cause of the resource shortfalls. The CAISO will collaborate

with the CPUC and the CEC on this analysis, and to promote long-term action to

avoid these types of events in the future.

Collectively, our organizations want to be clear about one factor that did not

cause the rotating outage: California’s commitment to clean energy.

Renewable energy did not cause the rotating outages. Our organizations

understand the impacts wind and solar have on the grid. We have already

taken many steps to integrate these resources, but we clearly need to do more.

Clean energy and reliable energy are not contradictory goals.

Our collective investigation will include, at a minimum, a review of the following:

• Resource sufficiency, including:

o Level of resource adequacy requirements relative to grid loads and

grid conditions,

o Imports and exports and their impact on reliability during periods of

system stress conditions,

o Outages, derates, and resource performance during system stress

hours,

o Performance of resources supplied to grid operator by CPUC and

non-CPUC jurisdictional entities,

o Availability of CAISO import capability to CPUC jurisdictional entities;

• Transmission grid performance, including outages and availability

constraints;

• Sufficiency of existing incentives and penalty structure for deterring non-

performance of reliability resources;

• Demand forecasts and how they are utilized in resource planning;

• Review of interagency coordination on summer reliability planning and

assessment;

• Challenges to contracting for the retention of gas fleet resources needed

for reliability; and

• Market performance observations and opportunities.

Immediate Actions to Address this Week’s Supply Deficiencies

33

4

Since August 14, a number of immediate actions have been taken to minimize

disruption and increase reliability. A collective effort, led by you and your staff,

created a massive statewide mobilization to conserve electricity and maximize

existing generation resources. The efforts led to reductions in peak demand on

Monday and Tuesday of nearly 4,000 MW and an addition of nearly 950 MW of

available temporary generation.

Some specific examples of actions that were taken include:

Demand Side Conservation Actions

• The CAISO called on demand response programs and other available

demand relief;

• The CPUC issued a letter on Monday, August 17th, clarifying use of back-

up generators in connection with specific demand response programs is

allowable, which resulted in at least 50 MW of additional demand

reduction each day;

• Solar and storage companies, including Sunrun and Tesla, worked with

their customers to change battery charging patterns so that they are

maximizing effectiveness between 4 and 9pm;

• The CEC coordinated with data center customers of Silicon Valley Power

to move approximately 100 MW of load to backup generation facilities

onsite;

• The CEC coordinated with the US Navy and Marine Corps to disconnect

22 ships from shore power, move a submarine base to backup generators,

and activate several microgrid facilities resulting in approximately 23.5

MW of load reduction; and

• Six Electric Program Investment Charge (EPIC)-funded microgrids reduced

load by a total of approximately 1.2 MW each day.

Supply Side Resources Actions1

• The CAISO procured available emergency energy;

• The CAISO executed significant event Capacity Procurement Mechanism

to procure additional supply resources;

• The CAISO Suspended a market feature to ensure physical certainty of

solution;

• Department of Water Resources (DWR) and Metropolitan Water District

(MWD) adjusted water operations to shift 80 MW of electricity generation

to the peak period;

• DWR and the U.S. Bureau of Reclamation (USBR) shifted on-peak pumping

load that resulted in 72 MW of load flexibility;

• The CEC worked with the City and County of San Francisco to maximize

power output at Hetch Hetchy which allowed for an additional 150 MW

during the peak period;

• The CEC worked with private power producers to contribute an additional

147 MW from the following sources: SEGS Solar Plant: 60 MW, Ivanpah

Solar Power Plant: 42 MW, and Sentinel: 45 MW;

• PG&E deployed temporary generation, that was procured for public

safety power shutoff purposes, across its service territory totaling

approximately 60 MW;

• SCE worked with generators to ensure that additional capacity was made

available to the system from facilities with gas onsite or through invertor

changes; and

1 The additional capacity highlighted in this section is part of the 950 MW of available temporary generation, but does not comprise the totality of the 950 MW.

34

5

• LADWP helped bring additional generation from Haynes 1 and

Scattergood power plants totaling 300 to 600 MW

Conservation Messaging Actions

• The CAISO Issued Flex Alerts and warnings;

• The CAISO, CEC and CPUC supported the Governor’s Office and the

California Governor’s Office of Emergency Services to publicly request

electricity customers lower energy use during the most critical time of the

day, 3:00 pm to 10:00 pm;

• The CPUC issued a letter to the investor owned utilities on August 16

requesting that they aggressively pursue conservation messaging and

advertising, and requested Community Choice Aggregators do the same;

and

• The CPUC redirected the Energy Upgrade California marketing campaign

messaging and media outreach to focus on conservation messaging.

With these efforts, we hope to reduce or prevent immediate future outages to

the greatest extent possible.

Going-Forward Actions to Ensure Reliability

Our organizations are committed to collaborating on longer-term solutions and

to re-examining our forecasts and existing reliability policies and programs to

avoid future supply shortfalls.

The CEC will continue to refine its demand forecast, which currently accounts

for climate change, based on improving science and stakeholder engagement,

and will expand its demand forecasting process to include a broader set of

scenarios that capture extreme weather events and associated load impacts.

New peak demand forecasts could be used in the CPUC’s resource adequacy

program, which currently requires a 1-in-2 peak forecast. In addition, the CEC

will:

• Develop an aggregate statewide view of resource adequacy obligations

and available resources serving those obligations.

• Continue work to enable distributed energy resources and load flexibility,

including development of load management standards to support grid

reliability.

The CAISO will review its assumptions regarding solar power and other sources of

energy to ensure its assumptions of available capacity are accurate.

The CPUC will review its resource adequacy requirements, existing procurement

plans and demand response programs. The results of the root cause analysis will

better help to strengthen and inform this reassessment. Some of the work that

will contribute to the holistic reassessment you request has already been

initiated.

• In 2019, the CPUC tightened electricity import rules to ensure imports and

all other resources the state relies on are actually delivered to California

on peak days.

• The CPUC ordered 3,300 MW of new capacity to come online by 2023 to

meet potential shortfalls that were identified when it adjusted assumptions

to reflect that peak demand occurs later in the day.

• The CPUC opened a phase in its Resource Adequacy proceeding to

consider changing the framework for determining reliability rules. These

changes may be needed to adjust for the fact that community choice

aggregators dominate the retail electricity market.

35

6

Beyond that, the CPUC will work to ensure that increasingly prevalent distributed

resources can be efficiently activated to support the grid even if they do not

qualify to provide reliability services.

With regard to your request to review the mix of imports and in-state generation,

our organizations agree that further attention is required to ensure that these

resources are available when needed. As discussed above, the CPUC has

already taken action to make imported electricity more dependable, and has

also reduced the planning assumption for how much imported electricity will be

available into California. The changes in those assumptions resulted in the

directive to build 3,300 MW of new resources that will start coming online in 2021.

Each of our organizations has more work to do in order to be fully responsive to

your letter and to ensure that we are taking every measure necessary to

guarantee the events of this past week will not be repeated. We thank you for

your leadership and will each be sending you individual follow on letters that will

address the questions and directives in your letter in more depth.

Sincerely,

Marybel Batjer

President

California Public Utilities Commission

Stephen Berberich

President and Chief Executive Officer

California Independent System Operator

David Hochschild

Chair

California Energy Commission

36


Activities Update

Attachment 3 ASM Holden Letter on Oversight

Hearing

37

August 20, 2020 RE: Deenergization Dear Members, California State Assembly:

The confluence of events leading to the broad-scale deenergization occurring on August 14th and

15th are intolerable. The fact that this occurred with no warning, while we are in the midst of a global

pandemic, west-wide heat storm, and with wildfires raging throughout the state makes the situation

all the more egregious. Californians must not accept anything less than a reliable electric grid that is

robust enough to withstand the dreadful impact of climate change and operate consistently with our

climate and affordability goals.

In recognition of this dire situation, Governor Newsom moved quickly to identify and implement

strategies to manage the immediate shortfall of resources on the grid. Additionally, the Governor

called for a root-cause analysis focusing on how this unacceptable situation occurred Governor’s

Letter to CAISO/PUC/CEC.pdf. On 8/19/20 the energy organizations: California Public Utilities

Commission, the Independent System Operator and the California Energy Commission sent a

preliminary response to the Governor Joint Response to Governor Newsom Letter.pdf. That letter

rightfully calls out the organizations’ shared responsibility for what many Californians unnecessarily

endured. The response also identifies the “massive statewide mobilization to conserve electricity and

maximize existing generation resources. The efforts led to reductions in peak demand on Monday

and Tuesday of nearly 4,000 MW and an addition of nearly 950 MW of available temporary

generation.”

However, the energy organizations point out the risk of a shortage of electricity is expected on

Monday, August 24th in the Independent System Operator’s balancing area. The previous actions

that were undertaken to avoid load curtailment will continue. Yet, several weeks of potentially hot

weather and correspondingly high energy demand remain. As such, the energy organizations are

called upon to address the immediate and long-term reliability needs of the system.

The Assembly Utilities and Energy Committee looks forward to scheduling an oversight hearing in

early September to ascertain, among other things, how this situation occurred and what steps the

energy principals have taken and will undertake to ensure that we are never again threatened with

rolling outages. Pending the scheduling of our hearing, I want to provide a few observations:

39

https://www.gov.ca.gov/wp-content/uploads/2020/08/8.17.20-Letter-to-CAISO-PUC-and-CEC.pdf

https://www.gov.ca.gov/wp-content/uploads/2020/08/8.17.20-Letter-to-CAISO-PUC-and-CEC.pdf

https://www.cpuc.ca.gov/uploadedFiles/CPUCWebsite/Content/News_Room/NewsUpdates/2020/Joint%20Response%20to%20Governor%20Newsom%20Letter%20August192020.pdf

California State Assembly August 20, 2020

Page 2 of 2

Some in the media have characterized the outages as “a week long.” To date, the rolling

outages occurred on Friday, August 21st and Saturday, August 22nd. After clearly getting

caught flat-footed, the agencies and utilities were able to prevent outages from Sunday

through Wednesday by utilizing demand response, conservation, and the procurement of

additional resources;

Many utilities had heat-related failures of distribution infrastructure, which caused system

outages of greater duration and separate from the Stage 3 rolling outages on Friday and

Saturday nights;

I have heard many immediate opinions to remedy the rolling outages, including the need to

“keep nuclear plants”, “eliminate solar”, and “bring back gas plants.” Although we do not

yet have a complete analysis of the circumstances which led to a shortfall in supply, it is clear

that at the heart of these outages was a lack of planning and/or execution. No one generation

resource triggered the Stage 3 outages, and there is not one procurement resource that will

prevent it from occurring in the future;

The Stage 3 outages in 2001 were the result of two distinct problems – lack of long-term

energy contracts and market control of gas plants. One of the many responses to the energy

crisis was the first renewable procurement mandate in 2002 to ensure that no one resource

could control the delivery of electricity to Californians;

Additional measures taken after the energy crisis included requirements for resource

adequacy on all load-serving entities (e.g. community choice aggregators, investor-owned

utilities and energy service providers). Resource adequacy mandates require that each entity

have the availability of sufficient dispatchable capacity resources to meet the demand for

electricity of its customers at specified time intervals. It is not clear whether those resource

adequacy requirements were adequate or that the load-serving entities were in compliance;

Ultimately the Independent System Operator has backstop procurement authority to ensure

reliability. It is not clear at this time why that authority was not exercised until Sunday,

August 16th;

We must be cautious and not jump into a solution that commits billions of dollars to

procurement in response to this week’s crisis. We must be cautious and focus remedies

squarely on the problems and targeted remedies once the root cause analysis called for by the

Governor has been completed; and

In the end, I suspect that the solution is improved planning and execution of those plans to

ensure that targeted resources, with the best fit for the grid and weather events, are available

when we need to call on them.

The gravity of the failure of the energy agencies to fulfill their reliability mandate is

inexcusable. We now must understand how the situation occurred and take very surgical actions to

prevent this failure from occurring in the future.

Sincerely,

CHRIS R. HOLDEN, Chair

Assembly Committee on Utilities and Energy

40

Item 4.E



STAFF REPORT

Subject: Marketing and Outreach Activities Update Contact: Avie Barron, Senior Analyst, [email protected], (951) 405-6727 Date: October 14, 2020 The purpose of this item is to provide an update on WCE’s social media campaign and marketing, and outreach initiatives scheduled for Fiscal Year 2020/2021. REQUESTED ACTION: 1. Receive and file.

Background: Staff is working with WCE member city staff to participate in and sponsor local events during the year at which WCE staff can attend, distribute materials, and answer questions about WCE either in-person or virtually. Staff will continue to provide the Board with updates on these events and add to the schedule as additional events are scheduled. Print / Digital Media Reports: At the September WCE Board meeting, staff discussed a post-launch strategy to expand print / digital advertising beyond the previously used platforms of The Press Enterprise, local community newspapers, and Pandora. WCE staff developed audio and banner ads for the Pandora platform and developed a video ad for the YouTube platform. Staff have worked with our consultants to ensure these ads would be delivered to consumers within WCE service territories. At the end of August, audio and ad banners campaigns on the Pandora platform went live. These advertisements will be staggered and will occur every other month during August, October, and December 2020. The effectiveness of digital marketing efforts is measured through ad impressions and ad reach numbers. ‘Impressions’ are the number of times the ad content is displayed, regardless if it results on it being clicked on or not. ‘Reach’ in digital marketing refers to the total number of people who see the content of the ad. For WCE’s Pandora Ad Campaign, the goal for impressions was set to 500,000. During the first month of the ad run, impressions surpassed the goal and were counted at 522,654 resulting in an ad reach of 60,653 unique listeners / viewers. The WCE Video Advertisement Campaign on the YouTube platform began in the month of September 2020. During the first week of the YouTube launch, the ad received nearly 2,000 views. During the second week of the video ad run, views increased to over 3,850 views with an ad impression count of 6,740. Stat reports for the YouTube video ad will not be available until the end of October and will be shared with the Board at the following Board Meeting. Both Pandora and YouTube ad campaigns launched successfully with stats continuing to increase for impressions and reaches. Staff will continue to monitor and review these expanded marketing strategies and its reception by WCE customers and communities. State of the City Event Sponsorships: Staff has been actively working to identify opportunities to partner with WCE member cities for local events. WCE is participating as sponsors to State of the City events for the Cities of Eastvale

41

and Jurupa Valley. Staff continue to communicate with the appropriate contacts from each member agency or its related Chamber of Commerce to coordinate WCE’s participation and sponsorship for future events. Chamber Membership and Participation: WCE has enrolled as a member to each of the six WCE member’s Chambers of Commerce. Staff has been in touch with many of the Chamber membership coordinators and will continue to remain in contact with them for important local event updates and opportunities that allow for WCE to get involved in the communities. Staff will also be working with a few Chambers of Commerce’s to schedule speaking engagements either in-person or via virtual platform in order to introduce staff to other Chamber members. Social Media Reports: Staff will regularly share statistics with the Board on how WCE’s social media campaign is performing. Staff has provided August and September activities as Attachment 1 and 2 respectively. PRIOR ACTION: September 9, 2020: The Board of Directors received and filed. FISCAL IMPACT: Costs associated with implementing the marketing and outreach components are reflected in the Consulting line item of the Agency’s Fiscal Year 2020/2021 Budget. ATTACHMENTS: 1. WCE Social Media Report – August 2020. 2. WCE Social Media Report – September 2020.

42

Item 4.E Marketing and Outreach

Activities Update

Attachment 1 WCE Social Media Report –

August 2020

43

Social Media Report - August 2020

45

Overall Insights

Facebook Insights

Instagram Insights


Total Followers Engaged Users Organic Reach Paid ReachOrganic

ImpressionsPaid Impressions Page Consumptions

419 (+7) 105 (-86%) 764 (21%) 1,313 (-99%) 1,202 (26%) 1,357 (-99%) 90 (-84%)

Facebook

Posts Followers Reach Impressions Engagement

5 65 (+14%) 90 (+125%) 99 (+71%) 15 (+50%)

Instagram

46


Web Insights

Audience Insights

47

We recommend keeping content consistent and relevant to the campaign and overall content strategy, as well as continuing to look for ways to create content that provides added value to communities (like the tips on how to conserve energy). Keeping a finger on the pulse of what is happening in each community and using that to create community based content is a good way to illustrate the “Powered By The Community Means” campaign.

We continue to recommend consistency in providing responses to consumers from the team at Western Community Energy in order to build a positive brand sentiment. Providing informative and expedient answers to concerns and questions continues to be high priority. Performing social listening to identify key areas of concern continues to be crucial to driving the content strategy for social media.

Instagram, currently your secondary platform, may shift to be the more prominent platform in the future. Following accounts and connecting on this platform is part of an overall growth strategy. The list that TCB provided for key accounts to follow should be used to start creating brand awareness on this platform. However, following is not enough. There must be engagement on the brand’s part. Meet people where they are. This means that using social listening to find opportunities to engage with community organization accounts and other key accounts, and then regularly commenting on relevant posts is the best way to grow a social footprint and earn trust capital with communities and community members.

It is still recommended that WCE utilizes both boosts and paid ads on Facebook for both retention and acquisition purposes. Using the template that The Creative Bar provided in order to continue to create posts on FAQs would be a great idea. Performing social listening to identify key areas of concern is crucial to driving the content strategy for social media.


Executive Summary

RecommendedNext Steps

RecommendationsDuring the month of August WCE, experienced a decrease in engagement and consumption, due to the inactivity during the month of July. This period of inactivity affects the algorithm, deprioritizing WCE’s content in the followers’ feeds. This will improve over time as content is regularly shared again.

There is no data available for brand sentiment for the months of July and August due to the brand being largely inactive. This is an opportunity to increase brand sentiment moving forward with the new campaign messaging.

Paid boosts in August saw relatively low results. This is due to a quick campaign life of only one day. Normally, boosted posts and ads take about four days to really start to see results. This affects the CPE as well, causing it to be higher than average. Please keep in mind that paid ads will see a drastic decrease in reach and results as well due to the decrease in the ad budget.

Instagram is getting an increase in reach, engagement and growth. This is due to boosted posts carrying over into Instagram and the delivery being most effective on the Instagram platform.

• Continue to regularly post on social media accounts and respond to comments/messages.

• A/B testing for ads will begin 9/27.

• Integrate boosted posts and paid ads.

• Create an internal community based content calendar for each of the six communities that WCE serves, showcasing resources for consumers, digital events, local business support, etc. Share with TCB so that we can use this to create social content.

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Item 4.E Marketing and Outreach

Activities Update

Attachment 2 WCE Social Media Report –

September 2020

49

Social Media Report - September 2020

51

Overall Insights

Facebook Insights

Instagram Insights


Total Followers Engaged Users Organic Reach Paid ReachOrganic

ImpressionsPaid Impressions Page Consumptions

448 (+7%) 351 (+234%) 711 (-7%) 14,882 (+1,033%) 1,084 (-10%) 16,709 (+1,131%) 326 (+262%)

Facebook

Posts Followers Reach Impressions Engagement

5 69 (+6%) 102 (+13%) 109 (+10%) 22 (+47%)

Instagram

52


Web Insights

Audience Insights

53


YouTube Insights

54

We recommend keeping content consistent and relevant to the campaign and overall content strategy, as well as continuing to look for ways to create content that provides added value to communities (like the tips on how to conserve energy, keep bills low, find ways to balance energy use with being at home more). Keeping a finger on the pulse of what is happening in each community and using that to create community based content is a good way to illustrate the “Powered By the Community Means” campaign. As things start to open back up, highlighting local businesses, school and community organizations that are hosting events is a great way to connect with communities. We recommend reaching out to the communities and asking for event

We recommend shifting your ad spend due to the decreased budget, ad performance and overall goals of the brand. We advise that 75% of the ad budget for social be allocated to boosted posts and 25% go toward page likes.

We continue to recommend consistency in providing responses to consumers from the team at Western Community Energy in order to build a positive brand sentiment. Providing informative and expedient answers to concerns and questions continues to be high priority. Performing social listening to identify key areas of concern continues to be crucial to driving the content strategy for social media.

Following accounts and connecting on this platform is part of an overall growth strategy. The list that TCB provided for key accounts to follow should be used to start creating brand awareness on this platform. However, following is not enough. There must be engagement on the brand’s part. Meet people where they are. This means that using social listening to find opportunities to engage with community organization accounts and other key accounts, and then regularly commenting on relevant posts is the best way to grow a social footprint and earn trust capital with communities and community members.

It is still recommended that WCE utilizes both boosts and paid ads on Facebook for both retention and acquisition purposes. Using the template that The Creative Bar provided in order to continue to create posts on FAQs would be a great idea. Performing social listening to identify key areas of concern is crucial to driving the content strategy for social media.


Executive Summary

RecommendedNext Steps

RecommendationsDuring the month of September WCE, experienced a decrease in organic reach and engagement overall. However, the paid reach and engagement accounted for the increase in overall performance and activity. Organic results should continue to improve over time as content is regularly shared again.

Brand sentiment is negative this month due to followers being unhappy with the summer rates being higher than average. We recommend responding to these concerns in order to keep people informed and keep sentiment from continuing to be negative.

The paid boost in September saw decent engagement. However the series of ads we ran did not perform well. The overall spend on the six ads for each community was $22.26 and only garnered one page like. This might be due to running the ads in each area instead of running one ad targeted for all six communities. We ran the next ad as just one ad targeted for all six communities. It is performing much better so far. We suggest that, moving forward, the ads are run with all six communities included as opposed to breaking them up per community. Please keep in mind that paid ads will continue to see a drastic decrease in reach and results as well, due to the decrease in the ad budget.

Instagram is still seeing an increase in reach, engagement and growth. This is due to boosted posts carrying over into Instagram and the delivery being most effective on the Instagram platform. It is also due in part to tagging local city Instagram accounts in posts.

• Continue to regularly post on social media accounts and respond to comments/messages.

• Continue new WCE ad campaign for all cities.

• Shift ad spend to more retention and less acquisition, meaning 75% of the budget going to boosted posts and 25% going to page likes.

• Create an internal community based content calendar for each of the six communities that WCE serves, showcasing resources for consumers, digital events, local business support, etc. Share with TCB so that we can use this to create social content.

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Item 4.F



STAFF REPORT

Subject: Single Signature Authority Report Contact: Andrew Ruiz, WRCOG Chief Financial Officer, [email protected], (951) 405-6741 Date: October 14, 2020 The purpose of this item is to notify the Board of contracts recently signed under the Single Signature Authority of the Executive Director. REQUESTED ACTION: 1. Receive and file. The Executive Director has Single Signature Authority for contracts up to $50,000. For the months of July 2020 through September 2020, no contracts were signed by the Executive Director.

PRIOR ACTION: July 8, 2020: The Board of Directors received and filed. FISCAL IMPACT: No items were executed under the Executive Director’s Single Signature Authority; therefore, there is no fiscal impact. ATTACHMENT: None.

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Item 4.G



STAFF REPORT

Subject: WCE Enabling Agreement to add Additional Energy Provider

Contact: Tyler Masters, Director of Western Community Energy, [email protected], (951) 405-6732

Date: October 14, 2020

The purpose of this item is to request approval of the Edison Electric Institute Master Agreements with Southern California Edison.

REQUESTED ACTIONS:

1. Adopt Resolution No. 2020-18; A Resolution of the Board of Directors of Western Community Energyapproving Master Purchase and Sale Agreement.

2. Approve the Edison Electric Institute Master Purchase and Sale Agreement (“Master Agreement”) between WesternCommunity Energy and Southern California Edison (“SCE”) and authorize the Executive Director, or designee, toexecute the Master Agreement, in substantially similar form as approved by Legal Counsel.

3. Approve Master Agreement Confirmation Letter (“Confirmation Letter”) between Western Community Energyand SCE and authorize Executive Director, or designee, to execute the Confirmation Letter in substantiallysimilar form as approved by Legal Counsel.

Background: On February 12, 2020, and April 8, 2020, the Board of Directors approved the documents necessary to establish a lockbox arrangement with counterparties for energy purchases (i.e., Lockbox, Credit, and Intercreditor Agreements, etc.). The Board also adopted Resolution No.’s 2020-04, 2020-07, and 2020-15 which allows certain energy service providers to be enabled with WCE for energy purchases:

1. TransAlta Energy Marketing (U.S.), Inc.2. Morgan Stanley Capital Group, Inc.3. BP Energy Company4. Shell Energy North America (U.S.), LP5. Direct Energy6. Constellation / Exelon7. 3 Phases Renewable8. Uniper9. NextEra

WCE staff, consultants, and legal counsel have been working to get enabled with SCE so that WCE can bid on future SCE Request for Offers (RFO) and, if awarded, WCE would be able to easily enter into an energy contract.

For the month of October 2020, staff is bringing forward one Edison Electric Institute (EEI) Master Agreement (“Master Agreement”):

1. Southern California Edison (SCE)59


In order to be enabled with SCE, staff seeks Board approval of the Master Agreement and delegation of authority for execution in a substantially similar form. The Master Agreement (EEI Master) (Attachment 2) is in substantially similar form to the Master Agreement that will be finalized with SCE. Staff recommends the Board approve the Master Agreement so that WCE can be enabled with SCE for future transactions, and direct staff to execute the final Master Agreement upon final review by Legal Counsel. A more detailed description of the Master Agreement process is discussed below. Confirmation Agreement: A Confirmation is a binding agreement between an energy purchaser and an energy supplier for the purchase and sale of specific quantities of specific types of energy products at specific prices and is governed by the terms and conditions of the Master Agreement. Confirmations may be subject to Board approval in accordance with the terms of WCE’s Risk Management Policy governing delegated authority on transaction limits including contract term, volume and notional amount of the contract. WCE is currently participating in a SCE solicitation for resource adequacy for 2021 and 2022. WCE’s bid has been provisionally accepted subject to meeting certain requirements and executing a Confirmation by October 23, 2020. The Confirmation exceeds WCE staff ’s delegated authority and requires approval by your Board. Therefore, staff recommends the Board approve the SCE Confirmation Letter and delegate authority to the Executive Director, or designee, to execute in order to comply with and ensure timeliness with SCE requirements.

PRIOR ACTION: None. FISCAL IMPACT: The costs of procuring the energy associated with the RFOs to meet the Renewables Portfolio Standard (RPS) requirements and the agreements is included in the Fiscal Year 2020/2021 Agency Budget. ATTACHMENTS: 1. Resolution No. 2020-18; A Resolution of the Board of Directors of Western Community Energy

approving Master Purchase & Sale Agreement. 2. Edison Electric Institute Master Agreement between Western Community Energy and SCE. 3. Master Agreement Confirmation Letter between Western Community Energy and SCE.

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Item 4.G WCE Enabling Agreement to add

Additional Energy Provider

Attachment 1 Resolution No. 2020-18; A

Resolution of the Board of Directors of Western Community Energy approving a Master Purchase &

Sale Agreement

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RESOLUTION NO. 2020-18

A RESOLUTION OF THE BOARD OF DIRECTORS OF WESTERN COMMUNITY ENERGY

APPROVING A MASTER PURCHASE AND SALE AGREEMENT

WHEREAS, Western Community Energy (“WCE”) is interested in participating in future Request for Offer with Southern California Edison (“SCE”) for energy, renewable energy, carbon free energy, and/or related products and services (“Product”) at competitive prices; and WHEREAS, WCE intends to be enabled with SCE in order to expedite contracting between the parties; and WHEREAS, WCE has negotiated an Edison Electric Institute Master Purchase and Sale Agreement (“Master Agreement”) between WCE and Southern California Edison; and WHEREAS, the Master Agreement is an industry standard agreement that governs the purchase and sale of energy and may require a separate written Confirmation Agreement to execute a specific binding transaction. NOW, THEREFORE, THE WESTERN COMMUNITY ENERGY BOARD OF DIRECTORS DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 1. The Board of Directors has determined that the recitals herein are true and correct. 2. The Board of Directors approves the Master Agreement between Western Community

Energy and Southern California Edison. 3. The Board of Directors authorizes the Executive Director, or designee, to execute the

Master Agreement, in substantially similar form as approved by Legal Counsel. PASSED AND ADOPTED by the Board of Directors on October 14, 2020. ___________________________ ___________________________ Ben Benoit, Chairperson Rick Bishop, Secretary Western Community Energy Western Community Energy Approved as to form: ___________________________ Steven DeBaun Western Community Energy Legal Counsel AYES: _______ NAYS: _______ ABSENT: _______ ABSTAIN: _______

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Attachment 2 Edison Electric Institute Master Agreement between Western Community Energy and SCE

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EEI Master Agreement Cover Sheet SCE version 03.22.2018

1

[THIS MASTER AGREEMENT IS SUBJECT TO SCE MANAGEMENT REVIEW AND APPROVAL1]

MASTER POWER PURCHASE AND SALE AGREEMENT

COVER SHEET

This Master Power Purchase and Sale Agreement (Version 2.1; modified 4/25/00) (“Master Agreement”) is made as of the following date: ________________2 (“Effective Date”). The Master Agreement, together with the exhibits, schedules and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support, margin agreement, or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement”. The Parties to this Master Agreement are the following:

Name: Western Community Energy (“Party A”) Name: Southern California Edison Company (“Party B”)

All Notices: All Notices:

Street: 3390 University Avenue, Suite 200 Street: 2244 Walnut Grove Ave., G.O.1, Quad 1C

City: Riverside, CA Zip: 92501 City: Rosemead, CA Zip: 91770

Attn: Contract Administration Phone: (951) 405-6701

Duns: Federal Tax ID Number:

Attn: Director, Energy Contracts Management Phone: (626) 302-3126 Facsimile: (626) 302-1103 Email: [email protected] Duns: Federal Tax ID Number:

Invoices:Attn: Andrew Ruiz Phone: (951) 405-6743 Facsimile: N/A

Email: [email protected]

Invoices:Attn: EPM & Contract Settlements Phone: (626) 302-8908 Facsimile: (626) 302-3276 Email: [email protected]

Scheduling:Attn: Reina Le Phone: (858) 678-0118 ext. 120 Facsimile:

Email: [email protected]

Scheduling:Attn: Manager or Day Ahead Operations Phone: (626) 307-4425 or (626) 307-4420 Facsimile: (626) 307-4413 E-mail: [email protected]

Payments:Attn: Andrew Ruiz

Phone: (951) 405-6743 Facsimile: N/A Email: [email protected]

Payments:Attn: EPM & Contract Settlements Phone: 626-302-8908 Facsimile: (626) 302-3276 E-mail: [email protected]

Wire Transfer:BNK: ABA: ACCT:

Wire Transfer:BNK: ABA: ACCT:

1 [SCE Comment: Green highlights are comments or instructions to be deleted prior to final execution.]2 [SCE Comment: Blue highlights indicate required information to be completed prior to final execution.]

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2

Credit and Collections:Attn: Andrew Ruiz

Phone: (951) 405-6743 Facsimile: N/A Email: [email protected]

Credit:Attn: Manager of Credit Risk Phone: (626) 302-3672

Confirmations:Attn: Tyler Masters & Sheetal Parr Phone: (951) 405-6732 / (858) 678-0118 x 120 Facsimile:

Email: [email protected] / [email protected]

Confirmations:Attn: Confirmation Coordinator Phone: (626) 302-3383 Facsimile: (626) 302-3410 Email: [email protected]

Collateral: Southern California Edison Company

Attn: Manager of Risk Operations & Collateral Management 2244 Walnut Grove Avenue, GO1 Quad 2A Rosemead, CA 91770 Phone: (626) 302-3383 Email: [email protected]

With additional Notices of an Event of Default or Potential Event of Default to:

Attn: Ryan Baron, Best Best & Krieger LLP Phone: (949) 263-6568 Email: [email protected]

With additional Notices of an Event of Default or Potential Event of Default to:

Southern California Edison Company 2244 Walnut Grove Ave., G.O.1, Quad 1C Rosemead, CA 91770 Attn: Director, Contracts Management and Administration Phone: (626) 302-3126 Facsimile: (626) 302-8168 Email: [email protected]

and

Attention: Director and Managing Attorney Power Procurement Section E-mail: [email protected]

The Parties hereby agree that the General Terms and Conditions are incorporated herein, and to the following provisions as provided for in the General Terms and Conditions:

Party A Tariff Tariff Dated Docket Number

Party B Tariff Tariff Original Vol. No. 8 Dated 09/01/2002 Docket Number ER 02-2263-000

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3

Article Two

Transaction Terms and Conditions

Optional provision in Section 2.4. If not checked, inapplicable.

Article Four

Remedies for Failure to Deliver or Receive

Accelerated Payment of Damages. If not checked, inapplicable.

Article Five

Events of Default; Remedies 5.1(g) Cross Default for Party A:

Party A: Cross Default Amount $________ [Amount and/or Methodology To Be Negotiated]

Other Entity:[Guarantor, if applicable] Cross Default Amount $________ [Amount and/or Methodology To Be Negotiated]

5.1(g) Cross Default for Party B:

Party B: Southern California Edison Company.

Cross Default Amount $

Other Entity: Not Applicable. Cross Default Amount $________ [Amount and/or Methodology To Be Negotiated]

5.6 Closeout Setoff

Option A, as amended.

Option B - Affiliates shall have the meaning set forth in the Agreement unless otherwise specified as follows:

Option C (No Setoff).

Article Eight [ARTICLE EIGHT PROVISIONS TO BE NEGOTIATED BY CREDIT GROUPS]

Credit and Collateral Requirements

8.1 Party A Credit Protection:

(a) Financial Information:

Option A, as amended. Option B Specify: Option C Specify:

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4

(b) Credit Assurances:

(c) Collateral Threshold:

Not Applicable. Applicable, as specified in Paragraph 10 to the EEI Collateral Annex.

(d) Downgrade Event:

Not Applicable. Applicable.

If applicable, complete the following:

It shall be a Downgrade Event for Party B if Party B’s Credit Rating falls below ______ from S&P or _________ from Moody's or if Party B is not rated by any Ratings Agency.

Other: Specify:

(e) Guarantor for Party B: Not Applicable.

Guarantee Amount: Not Applicable.

8.2 Party B Credit Protection:

(a) Financial Information:

Option A, as amended. Option B, as amended. Specify: [Guarantor or other party specified, if

applicable]________________ Option C Specify: ___________

(b) Credit Assurances:

(c) Collateral Threshold:

Not Applicable. Applicable, as specified in Paragraph 10 to the EEI Collateral Annex.

(d) Downgrade Event:

Not Applicable. Applicable.

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5

If applicable, complete the following:

It shall be a Downgrade Event for Party A if Party A’s Credit Rating falls below ___ from S&P or ___ from Moody's or if Party A is not rated by any Ratings Agency.

Other: Specify:

(e) Guarantor for Party A:

Guarantee Amount: $__________

Article Ten

Confidentiality Confidentiality Applicable. If not checked, inapplicable.

Schedule M Party A is a Governmental Entity or Public Power System.

Party B is a Governmental Entity or Public Power System.

Add Section 3.6. If not checked, inapplicable.

Add Section 8.4. If not checked, inapplicable.

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6

Other Changes The following changes shall be applicable.

ARTICLE ONE: GENERAL DEFINITIONS. Amend Article One as follows:

Section 1.4 is amended by (i) deleting the word “or” in the first line, and (ii) inserting the words “, or the Friday immediately following the U.S. Thanksgiving holiday” immediately after “Bank holiday”.

Section 1.11 is amended by (i) deleting the words “attorneys’ fees and” and (ii) inserting the words “(excluding attorneys’ fees)” after the word “expenses” in the fifth line.

Section 1.12 is amended to read as follows:

“1.12 ‘Credit Rating’ means with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt or deposit obligations (not supported by third party credit enhancements) by the Ratings Agencies. If no rating is assigned to such entity’s unsecured, senior long-term debt or deposit obligations the Ratings Agencies, then ‘Credit Rating’ shall mean the general corporate credit rating or long-term issuer rating assigned to such entity by the Ratings Agencies. If any entity is rated by more than one Ratings Agency and the ratings are at different levels, then ‘Credit Rating’ means the lowest such rating.”

Section 1.24 is amended by inserting the words “in accordance with Section 5.2(b)” immediately after “reasonable manner”.


“1.27 ‘Letter of Credit’ means an irrevocable, nontransferable standby letter of credit, substantially in the form of Schedule 1 and acceptable to Secured Party, issued by a major U.S. commercial bank, U.S. financial institution, or the U.S. branch office of a foreign bank with, in either case, a Credit Rating of at least A- by S&P or A3 by Moody’s. If such financial institution or bank is rated by more than one Ratings Agency and the ratings are at different levels, the lowest rating shall be the Credit Rating for this purpose. Costs of a Letter of Credit shall be borne by the applicant for such Letter of Credit.”

Section 1.28 is amended by inserting the words “in accordance with Section 5.2(b)” immediately after “reasonable manner”.

Section 1.50 is amended by replacing the term “Section 2.4” with the term “Section 2.5”.

Section 1.51 is amended by (i) deleting the phrase “at the Delivery Point” and replacing it with “, from an entity that is not an Affiliate of either Party,”; (ii) in clause (ii) inserting after the phrase “at Buyer’s option,” the phrase “absent a purchase from an entity that is not an Affiliate of either Party,”; and (iii) in the last sentence thereof deleting the phrase “at the Delivery Point” and replacing it with “that is not an Affiliate of either Party”.

Section 1.53 is amended by (i) deleting the phrase “at the Delivery Point” and replacing it with “, to an entity that is not an Affiliate of either Party,”; (ii) in clause (ii) inserting after the phrase “at Seller’s option,” the phrase “absent a sale to an entity that is not an Affiliate of either Party,”; and (iii) in the last sentence thereof deleting the phrase “at the Delivery Point” and replacing it with “that is not an Affiliate of either Party”.

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New Sections [For Non-FTAA: 1.62, 1.63, 1.64, 1.65, 1.66, 1.67, and 1.68] [or for FTAA: 1.62, 1.63, 1.64, 1.65, 1.66, 1.67, 1.68, and 1.69] are added to read as follows:

“1.62 ‘Forward Price Assessments’ means quotations solicited or obtained in good faith from regularly published and widely-distributed forward price assessments from a broker that is not an Affiliate of either Party and who is actively participating in markets for the relevant Products.”

“1.63 ‘Market Quotation Average Price’ means the arithmetic mean of the quotations solicited in good faith from not less than three (3) Reference Market-Makers (as hereinafter defined); provided, however, that the Party obtaining the quotes shall use reasonable efforts to obtain good faith quotations from at least five (5) Reference Market-Makers and, if at least five (5) such quotations are obtained, the Market Quotation Average Price shall be determined by disregarding the highest and lowest quotations and taking the arithmetic mean of the remaining quotations. The quotations shall be based on the offers to sell or bids to buy, as applicable, obtained for transactions substantially similar to each Terminated Transaction. The quote must be obtained assuming that the Party obtaining the quote will provide sufficient credit support for the proposed transaction. Each quotation shall be obtained in good faith by such Party, to the extent reasonably practicable, as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date, such day and time as of which those quotations will be selected shall be specified in accordance with Section 5.2. If fewer than three (3) quotations are obtained, it will be deemed that the Market Quotation Average Price in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.”

“1.64 ‘Merger Event’ means, with respect to a Party or its Guarantor, that such Party or its Guarantor consolidates or amalgamates with, merges into or with, or transfers substantially all its assets to another entity and (i) the resulting entity fails to assume all the obligations of such Party hereunder or of such Party’s Guarantor under its guaranty, or (ii) the benefits of any credit support provided by such Party pursuant to Article Eight, or any guaranty provided by such Party’s Guarantor, fail to extend to the performance of such resulting, surviving or transferee entity’s obligations hereunder, or (iii) the resulting entity’s creditworthiness is materially weaker than that of such Party or its Guarantor immediately prior to such action. The creditworthiness of the resulting entity shall not be deemed to be ‘materially weaker’ so long as the resulting entity maintains a Credit Rating of at least that of the applicable Party or its Guarantor, as the case may be, immediately prior to the consolidation, merger or transfer.”

“1.65 ‘Ratings Agency’ means any of S&P and Moody’s, and any other ratings agency agreed by the Parties (collectively the ‘Ratings Agencies’).”

“1.66 ‘Reference Market-Maker’ means a leading dealer in the relevant market that is not an Affiliate of either Party and that is selected by a Party in good faith among dealers of the highest credit standing which satisfy all the criteria that such Party applies generally at the time in deciding whether to offer or to make an extension of credit. Such dealer may be represented by a broker.”

“1.67 ‘Specified Energy Transaction’ means any transaction (including an agreement with respect to any such transaction) now existing or hereafter entered into between Party A and Party B (or any Guarantor of such Party) which is not a Transaction under this Agreement, which is a transaction under the International Swaps and Derivatives Association Master Agreement, the North American

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8

Energy Standards Board Base Contract for Purchase and Sale of Natural Gas, the WSPP Agreement, or under any other agreement with respect to the purchase, sale, or transfer of (a) wholesale physical electric energy, capacity, ancillary services or resource adequacy benefits; (b) wholesale physical natural gas; (c) transmission services or capacity, (d) emissions (including greenhouse gas emissions) related credits, allowances or offsets, or (e) financial derivative products related to any of the foregoing.”

[For FTAA: “1.69 ‘FTAA’ means the Fund Transfer Annex Agreement between Party A and Party B as incorporated by Addendum A to this Master Agreement.“]

ARTICLE TWO: TRANSACTION TERMS AND CONDITIONS. Amend Article Two as follows:

Section 2.1 is amended by adding the following sentence to the end thereof “Any Transaction formed and effectuated pursuant to the foregoing shall be considered a ‘writing’ or ‘in writing’ and to have been ‘signed’ by each Party or otherwise binding on the Parties.”

Section 2.2 is amended to delete the second comma after the words “supplements hereto),” and before “the Party” in the second sentence.

Section 2.4 is amended by (i) deleting the words “either orally or” after the phrase “Section 2.3 unless agreed to” in the second to last line thereof.

Section 2.5 is amended (i) to delete the phrase “Unless a Party expressly objects to a Recording (defined below) at the beginning of a telephone conversation,”; (ii) by capitalizing the word “each” in the first sentence; and (iii) replacing the words “Parties to this Master Agreement” with “Parties’ trading and marketing personnel”.

A new Section 2.6 is added to read as follows:

“2.6 Imaged Agreement. Any original executed Master Agreement, Confirmation or other related document may be photocopied and stored on computer tapes and disks (the ‘Imaged Agreement’). The Imaged Agreement, if introduced as evidence on paper, the Confirmation, if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper or into other written format, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the Recording, the Confirmation, or the Imaged Agreement (or photocopies of the transcription of the Recording, the Confirmation, or the Imaged Agreement) on the basis that such were not originated or maintained in documentary or written form under either the hearsay rule or the best evidence rule. However, nothing in this Section 2.6 shall preclude a Party from challenging the admissibility of such evidence on some other grounds, including, without limitation, the basis that such evidence has been materially or substantially altered from the original.”

ARTICLE THREE: OBLIGATIONS AND DELIVERIES. Amend Article Three as follows:


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“3.4 Index Transactions. If the Contract Price for a Transaction is determined by reference to an index, then the following provisions shall be applicable to such Transaction.

(a) Market Disruption. If a Market Disruption Event occurs during a Determination Period, the Floating Price for the affected Trading Day(s) shall be determined by reference to the Floating Price specified in the Transaction for the first Trading Day thereafter on which no Market Disruption Event exists; provided, however, if the Floating Price is not so determined within three (3) Business Days after the first Trading Day on which the Market Disruption Event occurred or existed, then the Parties shall negotiate in good faith to agree on a Floating Price (or a method for determining a Floating Price), and if the Parties have not so agreed on or before the twelfth Business Day following the first Trading Day on which the Market Disruption Event occurred or existed, then the Floating Price shall be determined in good faith by taking the average of the price quotations for the relevant commodity and relevant Business Days that are obtained from no more than two (2) Reference Market-Makers selected by each Party.

(b) For purposes of this Section 3.4, the following definitions shall apply:

(i) ‘Determination Period’ means each calendar month a part or all of which is within the Delivery Period of a Transaction.

(ii) ‘Exchange’ means, in respect of a Transaction, the exchange or principal trading market specified in the relevant Transaction.

(iii) ‘Floating Price’ means a price per unit in $U.S. specified in a Transaction that is based upon a Price Source.

(iv) ‘Market Disruption Event’ means, with respect to any Price Source, any of the following events: (a) the failure of the Price Source to announce or publish the specified Floating Price or information necessary for determining the Floating price; (b) the failure of trading to commence or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange or in the market specified for determining a Floating Price; (c) the temporary or permanent discontinuance or unavailability of the Price Source; (d) the temporary or permanent closing of any Exchange specified for determining a Floating Price; or (e) a material change in the formula for or the method of determining the Floating Price.

(v) ‘Price Source’ means, in respect of a Transaction, the publication (or such other origin of reference, including an Exchange) containing (or reporting) the specified price (or prices from which the specified price is calculated) specified in the relevant Transaction.

(vi) ‘Trading Day’ means a day in respect of which the relevant Price Source published the Floating Price.

(c) Corrections to Published Prices. For purposes of determining a Floating Price for any day, if the price published or announced on a given day and used or to be used to determine a relevant price is subsequently corrected and the correction is published or announced by the person responsible for that publication or announcement within twelve (12) months of the original publication or announcement, either Party may notify the other Party of (i)

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that correction and (ii) the amount (if any) that is payable as a result of that correction. If, not later than thirty (30) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Party that originally either received or retained such amount will, not later than ten (10) Business Days after the effectiveness of that notice, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction.

(d) Calculation of Floating Price. For the purposes of the calculation of a Floating Price, all numbers shall be rounded to three (3) decimal places. If the fourth (4th) decimal number is five (5) or greater, then the third (3rd) decimal number shall be increased by one (1), and if the fourth (4th) decimal number is less than five (5), then the third (3rd) decimal number shall remain unchanged.”

ARTICLE FIVE: EVENTS OF DEFAULT; REMEDIES. Amend Article Five as follows:

Section 5.1(e) is amended by adding after the word “hereof” the phrase “or any other credit arrangement, including, but not limited to, the Collateral Annex (or any similar agreement) related to this Agreement”.

Section 5.1(f) is amended to read as follows: “(f) a Merger Event occurs with respect to such Party or its Guarantor, if applicable;”

Section 5.1(h)(iv) is amended by inserting the words “made in connection with this Agreement” after the first instance of the word “guaranty”.

Section 5.1(h)(v) is amended by inserting the words “made in connection with this Agreement” after the word “guaranty”.

Section 5.1 is amended by adding the following [For Non-FTAA: Sections 5.1(i) and 5.1(j)][or for FTAA: Sections 5.1(i), 5.1(j), and 5.1(k)] at the end thereof:

“(i) an event of default occurs (howsoever determined) under a Specified Energy Transaction with respect to such Party and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of that Specified Energy Transaction; or

(j) the Party disaffirms, disclaims, repudiates, or rejects, in whole or in part, or challenges the validity of, this Master Agreement, any Confirmation executed and delivered by that Party, or any Transaction evidenced by such a Confirmation.

[For FTAA: (k) it shall be an Event of Default of Party A if Party A fails to comply with the terms of the FTAA.]”

Section 5.2 is amended by (i) inserting “(a)” at the beginning thereof; (ii) reversing the placement of “(i)” and “to”; (iii) inserting after the words “designate a day” the words “and time of day” in clause (i) thereof; (iv) replacing the phrase “as soon thereafter as is reasonably practicable)” with “, then each such Transaction — individually, an ‘Excluded Transaction’ and collectively, the ‘Excluded Transactions’— shall be terminated as soon thereafter as is reasonably practicable, and upon termination shall be deemed to be a Terminated Transaction) and the Termination Payment payable in connection with all Terminated Transactions shall be calculated in accordance with this

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Section 5.2 and with Section 5.3 below”; and (v) adding the following paragraph at the end thereof:

“(b) The Non-Defaulting Party shall determine its Gains and Losses by determining the Market Quotation Average Price for each Terminated Transaction. In the event the Non-Defaulting Party is not able, after commercially reasonable efforts, to obtain the Market Quotation Average Price with respect to any Terminated Transaction, then the Non-Defaulting Party shall calculate its Gains and Losses for such Terminated Transaction in a commercially reasonable manner by calculating the arithmetic mean of at least three (3) Forward Price Assessments for transactions substantially similar to each Terminated Transaction. In the event the Non-Defaulting Party is not able, after commercially reasonable efforts to obtain at least three (3) Forward Price Assessments with respect to any Terminated Transaction, then the Non-Defaulting Party shall calculate its Gains and Losses for such Terminated Transaction in a commercially reasonable manner by reference to information supplied to it by one or more third parties including, without limitation, index prices, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads, or other relevant market data in the relevant markets; provided, however, that the provider of such information shall not be an Affiliate of either Party. Only in the event the Non-Defaulting Party is not able, after using commercially reasonable efforts, to obtain such third party information, then the Non-Defaulting Party may calculate its Gains and Losses for such Terminated Transaction in a commercially reasonable manner using relevant market data it has available to it internally.”

Section 5.3 is amended by (i) deleting the “:” in the second line thereof; (ii) replacing the words “Agreement against” with “Agreement, against” immediately before “(b)”; and (iii) inserting the phrase “any cash then available to the Defaulting Party pursuant to Article Eight,” between the words “Non-Defaulting Party,” and “plus any” in the sixth line thereof.

Section 5.4 is amended by inserting the phrase “but in no event more than fifteen (15) Business Days following the Early Termination Date,” after the phrase “liquidation,” in the second line thereof.

Section 5.6 Option A is amended by (i) inserting the following phrase “with respect to the Specified Energy Transactions,” before the words “and/or (ii)” and (ii) adding the following at the end thereof :

“Notwithstanding anything to the contrary contained in this Master Agreement, or in any other agreement, instrument, or undertaking between the Parties with respect to a Specified Energy Transaction, if an Early Termination Date has been designated pursuant to Section 5.2, then, in addition to the other remedies provided in this Master Agreement, the Non-Defaulting Party may accelerate, liquidate and terminate all, but not less than all, Specified Energy Transactions between the Parties.”

Section 5.7 is amended to capitalize the word “early” in line 6 to read “Early”.

ARTICLE SIX: PAYMENT AND NETTING. Amend Article Six as follows:


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“6.3 Disputes and Adjustments of Invoices. A Party may adjust any invoice rendered by it under this Agreement to correct any arithmetic or computational error or to include additional charges or claims within twenty-four (24) months after the close of the month in which the obligations being invoiced arose. A receiving Party may, in good faith, dispute the correctness of any invoice or of any adjustment to any invoice previously rendered to it by providing notice to the other Party on or before the later of (i) twelve (12) months of the date of receipt of such invoice or adjusted invoice, or (ii) twenty-four (24) months after the close of the month in which the obligation being invoiced arose. Failure to provide such notice within the time frame set forth in the preceding sentence waives the dispute with respect to such invoice. A Party disputing all or any part of an invoice or an adjustment to an invoice previously rendered to it may pay only the undisputed portion of the invoice when due, provided such Party provides notice to the other Party of the basis for and amount of the disputed portion of the invoice that has not been paid. The disputed portion of the invoice must be paid within two (2) Business Days of resolution of the dispute, along with interest accrued at the Interest Rate from and including the original due date of the invoice to but excluding the date the disputed portion of the invoice is actually paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment but excluding the date repaid or deducted by the Party receiving such overpayment. An invoice can only be adjusted or amended after it was originally rendered within the time frames set forth in this Section 6.3. If an invoice is not rendered within twenty-four (24) months after the close of the month in which the payment obligations arose, the right to payment for that month under this Agreement is waived.”

Section 6.7 is amended to replace the phrase “Section 6.1” with the phrase “Section 6.2”.

[For FTAA: Article 6 is amended by adding a new Section 6.9:

“6.9 Conflict of Payment Terms. To the extent there is a conflict between the payment terms of this Master Agreement and the FTAA, the FTAA shall prevail.”]ARTICLE SEVEN: LIMITATIONS. Amend Article Seven as follows:

Section 7.1 is amended to (i) delete the phrase “EXCEPT AS SET FORTH HEREIN” in the first sentence; and (ii) in the fifth sentence (a) replace in its entirety the phrase “UNLESS EXPRESSLY HEREIN PROVIDED” with “NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY”; (b) add the following phrase “SET FORTH IN THIS AGREEMENT” after the words “INDEMNITY PROVISION”; and (c) add the following phrase “; PROVIDED, HOWEVER, THAT NOTHING IN THIS PROVISION SHALL AFFECT THE ENFORCEABILITY OF SECTIONS 5.2 AND 5.3 OF THIS AGREEMENT” after the words “OR OTHERWISE”.

ARTICLE EIGHT: CREDIT AND COLLATERAL REQUIREMENTS. Amend Article Eight as follows:

Section 8.1(a) Option A is amended to add (i) the following phrase “(income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes) after the words “consolidated financial statements” in the third line; (ii) the phrase “setting forth in each case in comparative form the figures for the previous year” after the words “for such fiscal year,” in the third line; and (iii) the

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phrase “and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year certified in accordance with all applicable laws and regulations, including without limitation all applicable Securities and Exchange Commission rules and regulations, provided however, for the purposes of this (i) and (ii), if Party B’s financial statements are publicly available electronically on the Securities and Exchange Commission’s website or Party B’s website, then Party B shall be deemed to have met this requirement” after the words “for such fiscal quarter” in the fifth line.

[SCE comment—The following is applicable if Option A is selected]

Section 8.2(a) Option A is amended to add (i) the following phrase “(income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes)” after the words “consolidated financial statements” in the third line; (ii) the phrase “setting forth in each case in comparative form the figures for the previous year” after the words “for such fiscal year,” in the third line; and (iii) the phrase “and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year [if Party A is an SEC reporting company: certified in accordance with all applicable laws and regulations, including without limitation all applicable Securities and Exchange Commission rules and regulations] [OR if Party A is not an SEC reporting company: certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year end audit adjustments)], provided however, for the purposes of this (i) and (ii), if Party A’s financial statements are publicly available electronically on the Securities and Exchange Commission’s website or Party A’s website, then Party A shall be deemed to have met this requirement” after the words “for such fiscal quarter” in the fifth line; and (v) at the end thereof the phrase “[if Party A is not an SEC reporting company: For purposes of this Section, ‘Responsible Officer’ shall mean the Chief Financial Officer, Treasurer or any Assistant Treasurer of Party A or any employee of Party A designated by any of the foregoing.]”.

[SCE comment—The following is applicable if Option B is selected]

Section 8.2(a) Option B is amended to add (i) the phrase “or Party A’s Guarantor [or other entity specified on the Cover Sheet]” after the words “Party A” in the first line; (ii) the following phrase “(income statement, balance sheet, statement of cash flows and statement of retained earnings and all accompanying notes)” after the words “consolidated financial statements” in the third line; (iii) the phrase “setting forth in each case in comparative form the figures for the previous year” after the words “for such fiscal year,” in the third line; (iv) is amended by replacing the phrase “for the party(s) specified on the Cover Sheet” with the phrase “and the portion of the fiscal year through the end of such quarter, setting forth in each case in comparative form the figures for the previous year [if Party A’s Guarantor [or other entity specified on the Cover Sheet] is an SEC reporting company: certified in accordance with all applicable laws and regulations, including without limitation all applicable Securities and Exchange Commission rules and regulations] [OR if Party A’s Guarantor [or other entity specified on the Cover Sheet]is not an SEC reporting company: certified by a Responsible Officer as being fairly stated in all material respects (subject to normal year end audit adjustments)], provided however, for the purposes of this (i) and (ii), if Party A’s Guarantor’s [or other entity specified on the Cover Sheet] financial statements are publicly available electronically on the Securities and Exchange Commission’s website or Party A’s Guarantor’s [or other entity specified on the Cover Sheet] website, then this requirement shall be deemed satisfied” in the fifth line; and (v) at the end thereof the phrase “[if Party A’s Guarantor [or other entity specified

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on the Cover Sheet] is not an SEC reporting company: For purposes of this Section, ‘Responsible Officer’ shall mean the Chief Financial Officer, Treasurer or any Assistant Treasurer of Party A’s Guarantor or any employee of Party A’s Guarantor designated by any of the foregoing.]”.


“8.4 [Uniform/California] Commercial Code Waiver. This Agreement and the Collateral Annex set forth the entirety of the agreement of the Parties regarding credit, collateral and adequate assurances. Except as expressly set forth in the options elected by the Parties in respect of Sections 8.1 and 8.2, in Section 8.3, and in the relevant portions of the Collateral Annex, neither Party:

(a) has or will have any obligation to post margin, provide letters of credit, pay deposits, make any other prepayments or provide any other financial assurances, in any form whatsoever, nor

(b) will have reasonable grounds for insecurity with respect to the creditworthiness of a Party that is complying with the relevant provisions of Section 8 of this Master Agreement and of the relevant provisions of the Collateral Annex;

and all implied rights relating to financial assurances arising from Section [2-609 of the Uniform][2609 of the California] Commercial Code or case law applying similar doctrines, are hereby waived.”

ARTICLE NINE: GOVERNMENTAL CHARGES. Amend Article Nine as follows:

Section 9.2, is amended to add the words “, charges, or fees” after the word “taxes” in the first line thereof.

ARTICLE TEN: MISCELLANEOUS. Amend Article Ten as follows:

Section 10.2(vi) is amended to add the phrase “(for purposes of this Section 10.2(vi), Party B shall be deemed to have no Affiliates)” after the word “Affiliates”.

[Include the below amendments to Section 10.2(x) and Section 10.2(xi) for all CPs able to make reps re eligible commercial entity/eligible contract participant. Delete the amendments to 10.2(x) and (x) for CPs unable to make those reps]

Section 10.2(x) is amended to read as follows:

“(x) it is an ‘eligible commercial entity’ within the meaning of the Commodity Exchange Act, as otherwise amended, updated or modified from time to time;”

Section 10.2(xi) is amended to read as follows:

“(xi) it is an ‘eligible contract participant’ within the meaning of the Commodity Exchange Act, as otherwise amended, updated or modified from time to time; and ”]

Section 10.2(xii) is amended to read as follows:

“(xii) each Transaction that is not executed or traded on a ‘trading facility’, as defined in the Commodity Exchange Act, as otherwise amended, updated or modified from time to time, is subject to individual negotiation by the Parties.”

Section 10.4 is amended by adding the following sentence at the end thereof:

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“Neither Party shall be liable with respect to any Claim to the extent that such Claim resulted from the negligence, willful misconduct, or bad faith of the indemnified Party.”

Section 10.5 is amended as follows:

(a) add the following phrase to the end of clause (i) immediately after the word “arrangements” the phrase “to any person or entity whose creditworthiness is equal to or higher than that of such Party”; (b) in clause (ii) replace the words “affiliate” and “affiliate’s” with, respectively “Affiliate” and “Affiliate’s”; and (c) in clause (iii) immediately after the words “substantially all of the assets” insert the words “of such Party and”.


“10.6 Governing Law; Venue; Dispute Resolution.

(a) Governing Law and Venue: THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT. The Parties hereby consent to conduct all dispute resolution, judicial actions or proceedings arising directly, indirectly or otherwise in conjunction with, out of, related to, or arising from this Agreement in Los Angeles County, California.

(b) Dispute Resolution:

(i) Mediation. The Parties agree that any and all disputes, claims or controversies arising out of, relating to, concerning or pertaining to this Agreement, or to either Party’s performance or failure of performance under this Agreement, which disputes, claims, or controversies the Parties have been unable to resolve by informal methods after undertaking a good faith effort to do so, shall first be submitted to Judicial Arbitration and Mediation Services, Inc. (‘JAMS’), its successor, or any other mutually agreeable neutral (the ‘Mediator’) for mediation, and if the matter is not resolved through mediation, then it shall be submitted as provided below for final and binding arbitration.

The Parties agree that there will be no interlocutory appellate relief (such as writs) available. Any dispute resolution process pursuant to this Section 10.6(b) shall be commenced within one (1) year of the date of the occurrence of the facts giving rise to the dispute, without regard to the date such facts are discovered; provided, if the facts giving rise to the dispute were not reasonably capable of being discovered at the time of their occurrence, then such one (1) year period shall commence on the earliest date that such facts were reasonably capable of being discovered, and in no event more than four (4) years after the occurrence of the facts giving rise to the dispute. If any dispute resolution process pursuant to this Section 10.06(b) with respect to a dispute is not commenced within such one (1) year time period, such dispute shall be waived and forever barred, without regard to any other limitations period set forth by law or statute.

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Either Party may initiate the mediation by providing to the other Party a written request for mediation setting forth the subject of the dispute and the relief requested.

The Parties will cooperate with one another in selecting the Mediator from the JAMS’ panel of neutrals, or in selecting a mutually acceptable non-JAMS Mediator, and in scheduling the time and place of the mediation.

Such selection and scheduling will be completed within forty-five (45) days after a Party provides a written request for mediation.

Unless otherwise agreed to by the Parties, the mediation will not be scheduled for a date that is greater than one hundred twenty (120) days after a Party provides a written request for mediation.

The Parties covenant that they will participate in the mediation in good faith, and that they will share equally in its costs (other than each Party’s individual attorneys’ fees and costs related to the Party’s participation in the mediation, which fees and costs will be borne by such Party).

All offers, promises, conduct and statements, whether oral or written, made in connection with or during the mediation by either of the Parties, their agents, representatives, employees, experts and attorneys, and by the Mediator or any of the Mediator’s agents, representatives and employees, will not be subject to discovery and will be confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding between or involving the Parties, or either of them, provided, evidence that is otherwise admissible or discoverable will not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

(ii) Arbitration. Either Party may initiate binding arbitration with respect to the matters first submitted to mediation by making a written demand for binding arbitration before a single, neutral arbitrator (the ‘Arbitrator’) within sixty (60) days following the unsuccessful conclusion of the mediation provided for in Section 10.06(b)(i). If a written demand for arbitration is not provided by either Party within sixty (60) days following the unsuccessful conclusion of the mediation provided for in Section 10.06(b)(i), the dispute resolution process shall be deemed complete and further resolution of such dispute shall be barred, without regard to any other limitations period set forth by law or statute.

The Parties will cooperate with one another in promptly selecting the Arbitrator and shall further cooperate in scheduling the arbitration to commence no later than 180 days from the date of the initial written demand for binding arbitration.

If, notwithstanding their good faith efforts, the Parties are unable to agree upon a mutually acceptable Arbitrator, the Arbitrator shall be appointed as provided for in California Code of Civil Procedure Section 1281.6.

Unless otherwise agreed to by the Parties, the individual acting as the Mediator shall be disqualified from serving as the Arbitrator in the dispute, although the Arbitrator may be another member of the JAMS panel of

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neutrals or such other panel of neutrals from which the Parties have agreed to select the Mediator.

Upon a Party’s written demand for binding arbitration, such dispute, claim or controversy submitted to arbitration, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by binding arbitration before the Arbitrator, in accordance with the laws of the State of California, without regards to principles of conflicts of laws.

Except as provided for herein, the arbitration shall be conducted by the Arbitrator in accordance with the rules and procedures for arbitration of complex business disputes for the organization with which the Arbitrator is associated.

Absent the existence of such rules and procedures, the arbitration shall be conducted in accordance with the California Arbitration Act, California Code of Civil Procedure Section 1280 et seq and California procedural law (including the Code of Civil Procedure, Civil Code, Evidence Code and Rules of Court, but excluding local rules).

Notwithstanding the rules and procedures that would otherwise apply to the arbitration, and unless the Parties agree to a different arrangement, the place of the arbitration shall be in Los Angeles County, California.

Also, notwithstanding the rules and procedures that would otherwise apply to the arbitration, and unless the Parties agree to a different arrangement, discovery will be limited as follows:

(1) Before discovery commences, the Parties shall exchange an initial disclosure of all documents and percipient witnesses which they intend to rely upon or use at any arbitration proceeding (except for documents and witnesses to be used solely for impeachment);

(2) The initial disclosure will occur within thirty (30) days after the initial conference with the Arbitrator or at such time as the Arbitrator may order;

(3) Discovery may commence at any time after the Parties’ initial disclosure;

(4) The Parties will not be permitted to propound any interrogatories or requests for admissions;

(5) Discovery will be limited to twenty-five (25) document requests (with no subparts), three (3) lay witness depositions, and three (3) expert witness depositions (unless the Arbitrator holds otherwise following a showing by the Party seeking the additional documents or depositions that the documents or depositions are critical for a fair resolution of the Dispute or that a Party has improperly withheld documents);

(6) Each Party is allowed a maximum of three (3) expert witnesses, excluding rebuttal experts;

(7) Within sixty (60) days after the initial disclosure, or at such other time as the Arbitrator may order, the Parties shall exchange a list of all experts upon which they intend to rely at the arbitration proceeding;

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(8) Within thirty (30) days after the initial expert disclosure, the Parties may designate a maximum of two (2) rebuttal experts;

(9) Unless the Parties agree otherwise, all direct testimony will be in form of affidavits or declarations under penalty of perjury; and

(10) Each Party shall make available for cross examination at the arbitration hearing its witnesses whose direct testimony has been so submitted.

Subject to Section 7.1, the Arbitrator will have the authority to grant any form of equitable or legal relief a Party might recover in a court action. The Parties acknowledge and agree that irreparable damage would occur if certain provisions of this Agreement are not performed in accordance with the terms of the Agreement, that money damages would not be a sufficient remedy for any breach of these provisions of this Agreement, and that the Parties shall be entitled, without the requirement of posting a bond or other security, to specific performance and injunctive or other equitable relief as a remedy for a breach of Section 10.11 of this Agreement.

Judgment on the award may be entered in any court having jurisdiction.

The Arbitrator shall, in any award, allocate all of the costs of the binding arbitration (other than each Party’s individual attorneys’ fees and costs related to the Party’s participation in the arbitration, which fees and costs shall be borne by such Party), including the fees of the Arbitrator, against the Party who did not prevail.

Until such award is made, however, the Parties shall share equally in paying the costs of the arbitration.

At the conclusion of the arbitration hearing, the Arbitrator shall prepare in writing and provide to each Party a decision setting forth factual findings, legal analysis, and the reasons on which the Arbitrator’s decision is based. The Arbitrator shall also have the authority to resolve claims or issues in advance of the arbitration hearing that would be appropriate for a California superior court judge to resolve in advance of trial. The Arbitrator shall not have the power to commit errors of law or fact, or to commit any abuse of discretion, that would constitute reversible error had the decision been rendered by a California superior court. The Arbitrator’s decision may be vacated or corrected on appeal to a California court of competent jurisdiction for such error. Unless otherwise agreed to by the Parties, all proceedings before the Arbitrator shall be reported and transcribed by a certified court reporter, with each Party bearing one-half of the court reporter’s fees.”

Section 10.8 is amended to replace in the penultimate sentence thereof the phrase “twelve (12) months” with the phrase “two (2) years”.


“10.10 Bankruptcy Issues. The Parties intend that (i) all Transactions constitute a ‘forward contract’ within the meaning of the United States Bankruptcy Code (the ‘Bankruptcy Code’) or a ‘swap agreement’ within the meaning of the Bankruptcy Code; (ii) all payments made or to be made by one Party to the other Party pursuant to this Agreement constitute ‘settlement payments’ within the meaning of the Bankruptcy Code; (iii) all transfers of Performance Assurance by one Party to the other Party under this Agreement constitute ‘margin payments’ within the meaning of the Bankruptcy Code; (iv) this Agreement constitutes a

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‘master netting agreement’ within the meaning of the Bankruptcy Code; and (v) each of Party A and Party B are “forward contract merchants” within the meaning of the Bankruptcy Code.

Each Party further agrees that, for purposes of this Agreement, the other Party is not a ‘utility’ as such term is used in 11 U.S.C. Section 366, each Party waives and agrees not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further waives the right to assert that the other Party is a provider of last resort to the extent such term relates to 11 U.S.C. Section 366 or another provision of 11 U.S.C. Section 101-1532.”


“10.11 Confidentiality. If the Parties have elected on the Cover Sheet to make this Section 10.11 applicable to this Master Agreement, neither Party shall disclose the terms or conditions of this Agreement to a third party (other than the Party’s or the Party’s Affiliates’ officers, directors, employees, lenders, counsel, accountants, advisors, or rating agencies who have a need to know such information and have agreed to keep such terms strictly confidential and to take reasonable precautions to protect against disclosure of such terms) except (i) in order to comply with any applicable law, order, regulation, ruling, summons, subpoena, exchange rule, or accounting disclosure rule or standard, or to make any showing required by any applicable governmental authority; (ii) to the extent necessary for the enforcement of this Agreement or to implement any Transaction; (iii) as may be obtained from a non-confidential source that disclosed such information in a manner that did not violate its obligations to the non-disclosing Party or its Guarantor in making such disclosure; (iv) to the extent such disclosure to a third party is for the sole purpose of calculating a published index, so long as such third party (1) has agreed prior to the disclosure to protect the specific information disclosed from public disclosure and (2) is a party engaged in the business of collecting such information for the purpose of establishing, creating, or formulating a published index; (v) to the extent such information is or becomes generally available to the public prior to such disclosure by a Party; (vi) when required to be released in connection with any regulatory proceeding (provided that the releasing Party makes reasonable efforts to obtain confidential treatment of the information being released); or (vii) with respect to Party B, as may be furnished to its duly authorized regulatory and governmental agencies or entities, including without limitation the California Public Utilities Commission (the “CPUC”) and all divisions thereof, and to Party B’s Procurement Review Group (the “PRG”), a group of participants including members of the CPUC and other governmental agencies and consumer groups established by the CPUC in D.02-08-071 and D.03-06-071; provided, Party B shall have no liability to Party A in the event of any unauthorized use or disclosure by such entities. The existence of this Agreement is not subject to this confidentiality obligation; provided that neither Party shall make any public announcement relating to this Agreement unless required pursuant to subsection (i) or (vi) of the foregoing sentence of this Section 10.11. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. With respect to information provided in connection with a Transaction, this obligation shall survive for a period of three (3) years following the expiration or termination of such Transaction. With respect to information provided under this Agreement, this obligation shall survive for a period of three (3) years following the expiration or termination of this Agreement. For the purposes of this Section

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10.11, “Affiliate” for Party A shall mean __________ and “Affiliate” for Party B shall mean Edison International.”

New Sections 10.12, 10.13, 10.14, 10.15, 10.16, and 10.17 shall be added as follows:

“10.12 No Agency. Except as otherwise provided explicitly herein, in performing their respective obligations under this Agreement, neither Party is acting, or is authorized to act, as the other Party’s agent.”

“10.13 Mobile Sierra Doctrine.

(a) Absent the agreement of all Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement, whether proposed by a Party (to the extent that any waiver in subsection (b) below is unenforceable or ineffective as to such Party), a non-party or FERC acting sua sponte, shall be the ‘public interest’ standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956), Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956), and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008), and NRG Power Marketing LLC v. Maine Public Utility Commission, 558 U.S. 527 (2010) (the ‘Mobile Sierra’ doctrine).

(b) Notwithstanding any provision of Agreement, and absent the prior written agreement of the Parties, each Party, to the fullest extent permitted by applicable laws, for itself and its respective successors and assigns, hereby also expressly and irrevocably waives any rights it can or may have, now or in the future, whether under Sections 205, 206, or 306 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation, supporting a third party seeking to obtain or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any Section of this Agreement specifying any rate or other material economic terms and conditions agreed to by the Parties.”

“10.14 Multiple Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission, Portable Document Format (i.e., PDF) or by other electronic means constitutes effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes.”

“10.15 Independent Contractors. The Parties are independent contractors. Nothing contained herein shall be deemed to create an association, joint venture, or partnership relationship between the Parties or to impose any partnership obligations or liability on either Party in any way.”

“10.16 Severability. If any term, section, provision or other part of this Agreement, or the application of any term, section, provision or other part of this Agreement, is held to be invalid, illegal or void by a court or regulatory agency of proper jurisdiction, all other terms, sections, provisions or other parts of this Agreement shall not be affected thereby but shall remain in force and effect unless a court or regulatory agency holds that the provisions are not separable from all other provisions of this Agreement.”

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“10.17 Rules of Construction.

(a) The word “or” when used in this Agreement includes the meaning “and/or” unless the context unambiguously dictates otherwise.

(b) Where days are not specifically designated as Business Days, they will be considered as calendar days.

(c) All references to time shall be in PPT unless stated otherwise.”

SCHEDULE P: PRODUCTS AND DEFINITIONS. Amend Schedule P as follows:

The following definitions are added:

“ ‘CAISO Energy’ means with respect to a Transaction, a Product under which the Seller shall sell and the Buyer shall purchase a quantity of energy equal to the hourly quantity without Ancillary Services (as defined in the Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the applicable tariff and protocol provisions of the CAISO (as amended from time to time, the ‘Tariff’) for which the only excuse for failure to deliver or receive is an Uncontrollable Force (as defined in the Tariff).”

The following products are added:

“Other Products and Service Levels.

If the Parties agree to a service level or product defined by a different agreement, set of rules, tariff, or protocol (herein, the ‘agreement’) (i.e., the WSPP Agreement) for a particular Transaction, then, unless the Parties expressly state and agree that all the terms and conditions of such other agreement will apply, such reference to a service level or product defined by such other agreement means that the service level or product for that Transaction is subject to the applicable regional independent system operator and/or utility reliability requirements and guidelines as well as the permitted excuses for performance, Force Majeure, Uncontrollable Forces, or other such excuses applicable to performance under such other agreement, to the extent inconsistent with the terms of this Agreement, provided, however, that all other terms and conditions of this Agreement shall and do remain applicable including, without limitation, Section 2.2; and provided, further that with respect to any Transaction for a product or service level defined by such other agreement, the methodology for calculating the payments for failure to deliver or receive shall be in accordance with Sections 4.1 and 4.2 of the Master Agreement; provided, further that the ‘Accelerated Payment of Damages’ addressed in Article Four and agreed to in the Cover Sheet of the Master Agreement shall continue to apply.”

“Into __________ (the ‘Receiving Transmission Provider’), Seller’s Daily Choice” is deleted in its entirety.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the date first above written.

Party A: Party B: SOUTHERN CALIFORNIA EDISON COMPANY

By: By:

Name: Name:

Title: Title:

DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting there from. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected.

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SCHEDULE 1 – Form of Letter of Credit

IRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDIT

Bank Reference Number:__________________

Issuance Date:

Issuing Bank: [insert bank name and address]

Applicant: [insert applicant name and address]

Beneficiary: [insert beneficiary name and address]

Available Amount: [insert amount and spell out]

Expiration Date: [insert date]

Ladies and Gentlemen: (the “Bank”) hereby establishes this Irrevocable

Nontransferable Standby Letter of Credit (“Letter of Credit”) in favor of Southern California Edison Company, a California corporation (the “Beneficiary”), for the account of , a ____________ corporation, also known as ID# ____ (the “Applicant”), for the amount stated above (the “Available Amount”), effective immediately.

This Letter of Credit shall be of no further force or effect at 5:00 p.m., California time on the expiration date stated above or, if such day is not a Business Day (as hereinafter defined), on the next Business Day (as may be extended pursuant to the terms of this Letter of Credit) (the “Expiration Date”).

For the purpose hereof, “Business Day” shall mean any day other than: 1. A Saturday or a Sunday, 2. A day on which banking institutions in the city of Los Angeles, California, are

required or authorized by Law to remain closed, or 3. A day on which the payment system of the Federal Reserve System is not

operational.

It is a condition of this Letter of Credit that the Expiration Date shall be automatically extended without amendment for one (1) year from the Expiration Date hereof or any future Expiration Date unless at least sixty (60) days prior to such Expiration Date, we send notice to you by certified mail or hand delivered courier, at the address stated below, that we elect not to extend this Letter of Credit for any such additional period.

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2

Subject to the terms and conditions herein, funds under this Letter of Credit are available to Beneficiary by complying presentation on or before 5:00 p.m. California time, on or before the Expiration Date of the following:

1. A copy of this Letter of Credit and all amendments;

2. A copy of the Drawing Certificate in the form of Attachment “A” attached hereto and which forms an integral part hereof, duly completed and bearing the signature of an authorized representative of the Beneficiary signing as such; and

3. A copy of the Sight Draft in the form of Attachment “B” attached hereto and which forms an integral part hereof, duly completed and bearing the signature of an authorized representative of the Beneficiary.

Drawings may also be presented by telecopy (“Fax”) to fax number [insert number] under telephone pre-advice to [insert number] or alternatively to [insert number]; provided that such Fax presentation is received on or before the Expiration Date on this instrument in accordance with the terms and conditions of this Letter of Credit. It being understood that any such fax presentation shall be considered the sole operative instrument of drawing. In the event of presentation by fax, the original documents should not also be presented.

Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of Credit shall remain in full force and effect with respect to any continuing balance; provided, the Available Amount shall be reduced by the amount of each such drawing.

This Letter of Credit is not transferable or assignable. Any purported transfer or assignment shall be void and of no force or effect.

All correspondence and any drawings (other than those made by facsimile) hereunder are to be directed to [Bank address/contact].

All notices to Beneficiary shall be in writing and are required to be sent by certified letter, overnight courier, or delivered in person to: [insert Beneficiary name and address]. Only notices to Beneficiary meeting the requirements of this paragraph shall be considered valid. Any notice to Beneficiary which is not in accordance with this paragraph shall be void and of no force or effect.

Banking charges shall be the sole responsibility of the Applicant.

This Letter of Credit sets forth in full our obligations and such obligations shall not in any way be modified, amended, amplified or limited by reference to any documents, instruments or agreements referred to herein, except only the attachment referred to herein; and any such reference shall not be deemed to incorporate by reference any document, instrument or agreement except for such attachment. Except in the case of an increase in the Available Amount or extension of the Expiration Date, this Letter of Credit may not be amended or modified without the Beneficiary’s prior written consent.

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3

The Bank engages with the Beneficiary that Beneficiary’s drafts drawn under and in compliance with the terms of this Letter of Credit will be duly honored if presented to the Bank on or before the Expiration Date.

Except so far as otherwise stated, this Letter of Credit is subject to the International Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect (the “ISP”). As to matters not covered by the ISP, the laws of the State of California, without regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to this Letter of Credit.

AUTHORIZED SIGNATURE for Bank

By

Name: [print name]

Title: [print title]

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4

ATTACHMENT A Drawing Certificate

TO [ISSUING BANK NAME & ADDRESS]

IRREVOCABLE NONTRANSFERABLE STANDBY LETTER OF CREDIT REFERENCE NUMBER: ________________

DATE: _________

[insert Beneficiary name] (the “Beneficiary”), demands [Issuing Bank Name] (the “Bank”) payment to the order of the Beneficiary the amount of U.S. $______ (_________ U.S. Dollars), drawn under the Letter of Credit referenced above (the “Letter of Credit”), for the following reason(s) [check applicable provision]:

[ ] A. An Event of Default (as defined in the Edison Electric Institute Master Power Purchase & Sale Agreement Version 2.1 (modified on 4/25/00) between [insert Counterparty name] or its successor (the “Counterparty”) and Beneficiary, dated as of [Date of Execution], as may be amended from time to time, (the “EEI Agreement”), with respect to the Counterparty has occurred and is continuing.

[ ] B. The Letter of Credit will expire in fewer than twenty (20) Business Days (as defined in the EEI Agreement) from the date hereof, and the Counterparty or its successor has not provided Beneficiary alternative Performance Assurance (as defined in the EEI Agreement) acceptable to Beneficiary.

Unless otherwise provided herein, capitalized terms which are used and not defined herein shall have the meaning given each such term in the Letter of Credit.

Authorized Signature for Beneficiary:

[insert Beneficiary name]

By:

Name: [print name]

Title: [print title]

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ATTACHMENT B SIGHT DRAFT

[Insert Date] TO:

[ISSUING BANK NAME & ADDRESS]

PAY AT SIGHT TO THE ORDER OF [INSERT BENEFICIARY NAME] (THE “BENEFICIARY”) THE AMOUNT OF USD [INSERT AMOUNT] DRAWN UNDER [ISSUING BANK NAME] IRREVOCABLE NONTRANSFERABLE STANDY LETTER OF CREDIT NUMBER [INSERT NUMBER] ISSUED ON [INSERT DATE].

FUNDS PAID PURSUANT TO THE PROVISIONS OF THE LETTER OF CREDIT SHALL BE WIRE TRANSFERRED TO THE BENEFICIARY IN ACCORDANCE WITH THE FOLLOWING INSTRUCTIONS:

[INSERT WIRING INSTRUCTION]

_______________________________ AUTHORIZED SIGNATURE [INSERT BENEFICIARY NAME]

NAME: [PRINT NAME]

TITLE: [PRINT TITLE]

93



Attachment 3 Master Agreement Confirmation

Letter between Western Community Energy and SCE

95

RA Capacity (Buy or Sell Confirmation) v.08.28.2018

Confidential 1

MASTER POWER PURCHASE AND SALE AGREEMENT

CONFIRMATION LETTER BETWEEN

[INSERT COUNTERPARTY NAME ] AND

SOUTHERN CALIFORNIA EDISON COMPANY

This Confirmation Letter including all appendices hereto (“Confirmation”) confirms the Transaction between [_______________] (“Buyer” or [“SCE”/“Counterparty”]) {SCE Comment: Select appropriate selection. Where SCE is acting as the buyer, the term “Counterparty” should be deleted.} and [___________] (“Seller” or [“SCE”/ “Counterparty”]) {SCE Comment: Select appropriate selection. Where SCE is acting as the seller, the term “Counterparty” should be deleted.},1 each individually a “Party” and together the “Parties”, dated as of [Date] (the “Confirmation Effective Date”) in which Seller agrees to provide to Buyer the right to the Product, as such term is defined in this Confirmation, in the amounts described in this Confirmation. This Transaction is governed by the Edison Electric Institute (“EEI”) Master Power Purchase and Sale Agreement between the Parties, effective as of [Date], along with the Cover Sheet, any amendments and annexes thereto (the “Master Agreement”), and including, the EEI Collateral Annex to the Master Agreement along with the Paragraph 10 to the Collateral Annex between the Parties (such Paragraph 10 and the Collateral Annex are referred to collectively herein as the “Collateral Annex”) (the Master Agreement and the Collateral Annex shall be collectively referred to as the “EEI Agreement”). The EEI Agreement and this Confirmation shall be collectively referred to herein as the “Agreement”. Capitalized terms used but not otherwise defined in this Confirmation have the meanings ascribed to them in the EEI Agreement, or the CAISO Tariff (defined herein below). To the extent this Confirmation is inconsistent with any provision of the EEI Agreement, this Confirmation shall govern the rights and obligations of the Parties hereunder.

ARTICLE 1. TRANSACTION TERMS

1.1 Product; Elections

Buyer: [_______________]

Seller: [_______________]

1 Drafting Note: Please insert the appropriate names of the Parties depending upon whether the party is acting as Seller or Buyer.

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Flexible Capacity: Applicable

Not applicable

Product: The product, including the Capacity Attributes of the Unit(s), Alternate Unit(s) or Shown Unit(s), is as defined in Appendix B.

1.2 Delivery of Product Seller shall sell and deliver to Buyer, and Buyer shall receive and purchase from Seller the Product in the amount of the applicable Contract Quantity for each day of each month of the Delivery Period.

1.3 Delivery Period and Term

(a) Delivery Period. The Delivery Period shall be: [Start Date] through [End Date], inclusive, unless terminated earlier in accordance with the terms of this Agreement.

(b) Term. The Term of this Transaction shall commence upon the Confirmation Effective Date and shall continue until the later of (i) the expiration of the Delivery Period or (ii) the date the Parties’ obligations under this Confirmation have been satisfied. This Confirmation shall be effective and binding as of the Confirmation Effective Date.

1.4 Contract Quantity The Contract Quantity for each day of each applicable Showing Month is as follows:

Contract Quantity (MWs for each day of such Showing Month)

Showing Month 2019 2020

January

February

March

April

May

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June

July

August

September

October

November

December

1.5 Flexible Capacity If the Parties have designated Flexible Capacity as “Applicable”, then the Flexible Capacity included in the Contract Quantity for each day of each applicable Showing Month is as follows:

Flexible Capacity (MWs for each day of such Showing Month)


January

February

March

April

May

June

July

August

September

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October

November

December

1.6 Contract Price The Contract Price means, for any Showing Month, the price specified in the Contract Price table as set forth below, for such Showing Month:

CONTRACT PRICE TABLE

Showing Month, Year

Contract Price ($/kW-month)

[Month, Year] [Month, Year]

ARTICLE 2. DELIVERY OBLIGATIONS

2.1 Delivery of Product

Seller shall provide Buyer with the Expected Contract Quantity of Product for each day of each Showing Month consistent with the following:

(a) Seller shall, on a timely basis, submit, or cause the Unit’s SC to submit, (i) Monthly Supply Plans and (ii) Annual Supply Plans if the Confirmation Effective Date is prior to the year-ahead Compliance Showing deadline applicable for the Showing Months as specified in Sections 1.4 and 1.5 herein, in accordance with the CAISO Tariff to identify and confirm the Expected Contract Quantity provided to Buyer for each day of each Showing Month so that the total amount of Expected Contract Quantity identified and confirmed for each day of such Showing Month equals the Expected Contract Quantity for such day of such Showing Month.

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(b) Seller shall or shall cause the Unit’s SC to submit written notification to Buyer, no later than fifteen (15) Business Days before the initial Compliance Showing deadline for each Showing Month, confirming that Buyer will be specified as the recipient of the Expected Contract Quantity for each day of such Showing Month in the Unit’s SC Supply Plan. For illustrative purposes only, as of the Confirmation Effective Date, the applicable Compliance Showing deadlines are as follows: (A) forty-five (45) days prior to the Showing Month covered by the Supply Plan for the Monthly Supply Plan; and (B) the last Business Day of October that is prior to commencement of the year for the Annual Supply Plan. The Parties acknowledge and agree that such dates may be modified by the CAISO from time to time throughout the Term.

2.2 Adjustments to Contract Quantity

Seller shall deliver to Buyer the Contract Quantity of Product for each day of each Showing Month consistent with the following:

(a) Planned Outages: Seller’s obligation to deliver the Contract Quantity for each day of each Showing Month may be reduced at Seller’s option by the amount of any Planned Outages which exist with respect to any portion of the Unit during the applicable Showing Month for the applicable days of such Planned Outages; provided, (i) Seller notifies Buyer, no later than fifteen (15) Business Days before the initial deadline for the Compliance Showing applicable to that Showing Month, of the amount of Product from the Unit Buyer is permitted to include in Buyer’s Compliance Showings applicable to that month as a result of such Planned Outage, and (ii) such reduction is able to be reflected on the Supply Plans in accordance with the CAISO Tariff.

(b) Reductions in Unit NQC and Unit EFC: Seller’s obligation to deliver the applicable Contract Quantity for each Showing Month may also be reduced in the event the Unit experiences a reduction in Unit NQC or Unit EFC after the Confirmation Effective Date as determined by the CAISO. In the event the Unit experiences such a reduction in Unit NQC or Unit EFC, Seller has the option, but not the obligation, to provide the applicable Contract Quantity for such Showing Month from (i) the same Unit, provided the Unit has sufficient remaining and available Product or (ii) from Replacement Units, provided, that in each case Seller provides and identifies such Replacement Units in accordance with Section 2.3.

2.3 Seller’s Option To Provide Substitute Capacity If Seller is unable to provide the full Contract Quantity in accordance with Section 2.2 for any Showing Month for any reason, or Seller desires to provide the Contract Quantity for any Showing Month from a different generating unit other than the Unit, then Seller may, at no cost to Buyer, provide Buyer with replacement Product

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Confidential 6

from one or more Replacement Units in an amount such that the total amount of Product provided to Buyer from the Unit and Replacement Units for each day of the Showing Month is not more than the Contract Quantity in accordance with Section 2.2 for the applicable Showing Month, provided that in each case:

(a) Seller shall notify Buyer of its intent to provide replacement Product and identify like-for-like replacement units, similar to the Unit originally identified in Appendix B (“Replacement Units”), meeting the above Contract Quantity requirements no later than fifteen (15) Business Days before the initial deadline for Buyer’s Compliance Showing related to such Showing Month;

(b) [Reserved]; (c) Seller shall cause such Replacement Units to be approved in CAISO’s

CIRA Tool (or successor platform) prior to CAISO issuing its Planned Outage Substitution Obligation (“POSO”) requirement to SCE; and

(d) if Seller does not cause the approval of the Replacement Units in CAISO’s CIRA Tool (or successor platform) as set forth in Section 2.3(c) for the applicable Showing Month, then any such Replacement Units shall not be deemed a Unit for purposes of this Confirmation for that Showing Month and Seller shall not receive payment for such replacement Product.

Subject to the satisfaction of the conditions contained in subsections (a) – (d) of this Section 2.3, once Seller has identified in writing any Replacement Units that meet the requirements of this Section 2.3, then any such Replacement Units shall be automatically deemed a Unit for purposes of this Confirmation for that Showing Month.

2.4 Damages for Failure to Provide Capacity If Seller fails to provide Buyer with the Expected Contract Quantity of Product for any day of any Showing Month, in accordance with Section 2.1 (the “Replacement Obligation”), in each case as applicable, then the following shall apply: (a) Buyer may, but shall not be required to, replace all or any portion of the

Replacement Obligation for the applicable Showing Month with capacity having equivalent Capacity Attributes as the Expected Contract Quantity; provided, if, using commercially reasonable efforts, Buyer is unable to acquire capacity having equivalent Capacity Attributes for any portion of any Showing Month, Buyer may replace such portion of the Replacement Obligation with capacity having Capacity Attributes in excess of the Contract Quantity (the “Replacement Capacity”). Buyer may enter into purchase transactions with one or more parties to purchase Replacement Capacity. Additionally, Buyer may enter into one or more arrangements to repurchase its obligation to sell and deliver capacity to another party, and such arrangements shall be considered the procurement of Replacement

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Capacity. Buyer shall act in a commercially reasonable manner to minimize damages in procuring any Replacement Capacity.

(b) Seller shall pay to Buyer at the time set forth in Section 4.1 of the Master Agreement, the following damages in lieu of damages specified in Section 4.1 of the Master Agreement: an amount equal to the positive difference, if any, between (i) the sum of (A) the actual cost paid by Buyer for any Replacement Capacity, including any transaction costs and expenses incurred in connection with such procurement, plus (B) each applicable Replacement Capacity Price multiplied by the aggregate amount of Replacement Obligation neither provided by Seller as Substitute Capacity nor purchased by Buyer as Replacement Capacity, for all applicable portions of the applicable Showing Month pursuant to Section 2.4(a), and (ii) the Replacement Obligation minus the Substitute Capacity, not provided for all applicable portions of the applicable Showing Month times the Contract Price for that month.

2.5 Indemnities for Failure to Deliver Expected Contract Quantity

Seller agrees to indemnify, defend and hold harmless Buyer from any penalties, fines or costs assessed against Buyer by the CPUC or the CAISO, resulting from any of the following:

(a) Seller’s failure to provide any portion of the Contract Quantity for any portion of the Delivery Period;

(b) Seller’s failure to provide notice of the non-availability of any portion of the Expected Contract Quantity for any portion of the Delivery Period as required under Section 2.2;

(c) Seller’s or the Unit’s SC’s failure to timely submit Supply Plans that identify Buyer’s right to the Expected Contract Quantity for each Unit purchased hereunder for each day of the Delivery Period; or

(d) Seller’s or the Unit’s SC’s failure to submit accurate Supply Plans that identify Buyer’s right to the Expected Contract Quantity for each Unit purchased hereunder for each day of the Delivery Period.

(e) any other failure by Seller to perform its obligations under this Confirmation.

With respect to the foregoing, the Parties shall use commercially reasonable efforts to minimize such penalties, fines and costs; provided, that in no event shall Buyer be required to use or change its utilization of its owned or controlled assets or market positions to minimize these penalties and fines.

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Confidential 8

2.6 Buyer’s Re-Sale of Product

(a) Buyer may re-sell all or a portion of the Product and any associated rights, in each case, acquired under this Confirmation. Subject to Article 6 below, in the event Buyer re-sells all or a portion of the Product and any associated rights acquired under this Confirmation (“Resold Product”) Seller agrees, and agrees to cause the Unit’s SC, to follow Buyer’s instructions with respect to providing such Resold Product to subsequent purchasers of such Resold Product. Subject to Article 6 below, Seller further agrees, and agrees to cause the Unit’s SC, to take all commercially reasonable actions and execute any and all documents or instruments reasonably necessary to allow such subsequent purchasers to use such Resold Product. Seller acknowledges and agrees that with respect to any Resold Product, if Buyer incurs any liability to any purchaser of such Resold Product due to the failure of Seller or the Unit’s SC to comply with the terms of this Confirmation, and Seller would have had liability to Buyer under this Confirmation for such failure had Buyer not sold the Resold Product to a subsequent purchaser, then Seller shall be liable to Buyer under this Confirmation, including without limitation, pursuant to Sections 2.4 and 2.5, for the amounts it would have been liable to Buyer for had such Resold Product not been sold to a subsequent purchaser.

(b) In the event there is any Resold Product, Buyer agrees to notify Seller that such a sale has occurred and agrees to provide Seller with the information described in Appendix D promptly following such sale. Buyer also agrees to promptly notify Seller of any subsequent changes to the information in Appendix D with respect to any particular sale.

2.7 CAISO Offer Requirements

Seller shall, or cause each Unit’s SC to, schedule with, or make available to, the CAISO the Expected Contract Quantity for each Unit in compliance with the CAISO Tariff, and shall, or shall cause each Unit’s SC, owner, or operator, as applicable, to perform all obligations under the CAISO Tariff that are associated with the sale and delivery of Product hereunder. Buyer shall have no liability for the failure of Seller or the failure of any Unit’s SC, owner, or operator to comply with such CAISO Tariff provisions, including any penalties, charges or fines imposed on Seller or such Unit’s SC, owner, or operator for such noncompliance.

2.8 Unit SC’s Replacement Obligation

After the obligation to replace all or any portion of the Expected Contract Quantity transfers from the load serving entity to the Unit’s SC for a Showing Month in accordance with the CAISO Tariff, and if the CAISO determines that any portion of the Expected Contract Quantity for any portion of a Showing Month that was shown by Buyer in its Compliance Showings requires outage

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Confidential 9

replacement in accordance with Section 40.7(b) of the CAISO Tariff because the Unit, or Replacement Unit, as applicable, is scheduled to take an outage (planned or otherwise) (such amount requiring outage replacement, the “SC Replacement Capacity”), then: (a) Seller shall have no liability under Sections 2.4 or 2.5 with respect to such SC Replacement Capacity; and (b) Seller shall have no liability to Buyer for any costs that are allocated to Buyer by the CAISO for any CPM Capacity procured by the CAISO pursuant to the Capacity Procurement Mechanism and that are related to such SC Replacement Capacity. For illustrative purposes only, as of the Confirmation Effective Date, the obligation to replace all or any portion of the Expected Contract Quantity transfers from the load serving entity to the Unit’s SC eight (8) days prior to the Showing Month covered by the Supply Plan for the Monthly Supply Plan. The Parties acknowledge and agree that such date may be modified by the CAISO from time to time throughout the Term.

ARTICLE 3 PAYMENT

3.1 Monthly Payment

In accordance with the terms of Article Six of the Master Agreement, Buyer shall make a Monthly Payment to Seller, after the applicable Showing Month, as follows:

Monthly Payment = (A x B x 1,000)

where:

A = applicable Contract Price for that Showing Month

B = ∑ [(𝐶𝐶𝑖𝑖 − 𝐷𝐷𝑖𝑖) × (1𝑛𝑛

)]𝑛𝑛𝑖𝑖

C = Expected Contract Quantity provided by Seller to Buyer for the applicable day of the Showing Month

D = Aggregate megawatts of Shortfall Capacity associated with the applicable day of the Showing Month

i = Each day of Showing Month

n = number of days in the Showing Month

The Monthly Payment calculation shall be rounded to two decimal places.

3.2 Allocation of Other Payments and Costs

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Confidential 10

(a) Seller shall retain any revenues it may receive from and pay all costs charged by the CAISO or any other third party with respect to the Unit for (i) start-up, shutdown, and minimum load costs, (ii) energy sales, and (iii) any revenues for black start or reactive power services.

(b) Buyer shall be entitled to receive and retain all revenues associated with the Aggregate Contract Quantity (including any capacity revenues from RMR Contracts for the Unit, Capacity Procurement Mechanism or its successor, RUC Availability Payments, or its successor, but excluding payments described in Section 3.2(a)(i)-(iv)).

(c) In accordance with Section 3.1 of this Confirmation and Article Six of the Master Agreement,

(i) all such Buyer revenues described in this Section 3.2, but received by Seller, or a Unit’s SC, owner, or operator shall be remitted to Buyer, and Seller shall pay such revenues to Buyer if the Unit’s SC, owner, or operator fails to remit those revenues to Buyer. If Seller fails to pay such revenues to Buyer, Buyer may offset any amounts owing to it for such revenues pursuant to Article Six of the Master Agreement against any future amounts Buyer may owe to Seller. In order to verify the accuracy of such revenues, Buyer shall have the right, at its sole expense and during normal working hours after reasonable prior notice, to hire an independent third party reasonably acceptable to Seller to audit any documents, records or data of Seller associated with the Contract Quantity; and

(ii) all such Seller, or a Unit’s SC, owner, or operator revenues described in this Section 3.2, but received by Buyer shall be remitted to Seller. If Buyer fails to pay such revenues to Seller, Seller may offset any amounts owing to it for such revenues pursuant to Article Six of the Master Agreement against any future amounts it may owe to Buyer.

(d) If a centralized capacity market develops within the CAISO region, Buyer will have exclusive rights to offer, bid, or otherwise submit the applicable Contract Quantity of Product for each day of each Showing Month provided to Buyer pursuant to this Confirmation for re-sale in such market, and retain and receive any and all related revenues.

(e) Seller agrees that the Unit is subject to the terms of the Availability Standards, Non-Availability Charges, and Availability Incentive Payments as contemplated under Section 40.9 of the CAISO Tariff. Furthermore, the Parties agree that any Availability Incentive Payments are for the benefit

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of the Seller and for Seller’s account and that any Non-Availability Charges are the responsibility of the Seller and for Seller’s account.

3.3 Offset Rights

Either Party may offset any amounts owing to it for revenues, penalties, fines, costs reimbursement, or other payments pursuant to Article Six of the Master Agreement against any future amounts it may owe to the other Party.

ARTICLE 4 OTHER BUYER AND SELLER COVENANTS

4.1 Seller’s and Buyer’s Duty to Take Action to Allow the Utilization of the Product

Buyer and Seller shall, throughout the Delivery Period: (a) cause the required showing information listed in Appendix C to be included in all applicable Supply Plans; (b) execute any and all documents or instruments reasonably necessary to ensure Buyer’s right to the use of the Aggregate Contract Quantity for the sole benefit of Buyer or any subsequent purchaser under Section 2.6; and (c) cause all Supply Plans to be filed in conformance with the requirements of the CPUC Filing Guide and the CAISO Tariff. If during the Delivery Period, there are changes to the information included in Appendix C, the Parties agree to communicate such changes to each other promptly. The Parties further agree to negotiate in good faith to make necessary amendments, if any, to this Confirmation to conform this Transaction to subsequent clarifications, revisions, or decisions rendered by the CPUC, FERC, CAISO or other Governmental Authority having jurisdiction to administer Compliance Obligations, so as to maintain the benefits of the bargain struck by the Parties on the Confirmation Effective Date.

4.2 Seller’s Representations, Warranties and Covenants

(a) Seller represents, warrants and covenants to Buyer that, throughout the Delivery Period:

(i) Seller owns or has the exclusive right to the Product sold under this Confirmation from the Unit, and shall furnish Buyer, CAISO, CPUC or other Governmental Authority with such evidence as may reasonably be requested to demonstrate such ownership or exclusive right;

(ii) No portion of the Aggregate Contract Quantity has been committed by Seller to any third party in order to satisfy Compliance Obligations or analogous obligations in any CAISO or non-CAISO markets, other than pursuant to an RMR Contract between the CAISO and either Seller or the Unit’s owner or operator;

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(iii) Seller and the Unit’s SC, owner and operator shall each obligated to, comply with Applicable Laws relating to the Product;

(iv) (A) Seller shall, and shall cause the Unit’s SC to promptly (and in any event within one (1) Business Day of the time Seller receives notification from the CAISO) notify Buyer in the event the CAISO designates any portion of the Aggregate Contract Quantity as CPM Capacity and (B) in the event the CAISO makes such a designation Seller shall, and shall cause the Unit’s SC to not accept any such designation by the CAISO unless and until Buyer has agreed to accept such designation;

(v) Buyer shall have the exclusive right to offer the Aggregate Contract Quantity, or any portion thereof, to the CAISO as CPM Capacity and Seller shall not, and shall cause the Unit’s SC not to, offer any portion of the Aggregate Contract Quantity to the CAISO as CPM Capacity or accept any designation of any portion thereof as CPM Capacity;

(vi) The Unit is connected to the CAISO Controlled Grid, is within the CAISO Control Area, and is under the control of CAISO;

(vii) Seller shall, and the Unit’s SC, owner and operator is obligated to, comply with Applicable Laws relating to the Product;

(viii) Buyer shall have no liability for the failure of Seller or the failure of the Unit’s SC, owner, or operator to comply with such CAISO Tariff provisions, including any penalties, charges or fines imposed on Seller or the Unit’s SC, owner, or operator for such noncompliance.

(ix) If Seller is the owner of the Unit, the aggregation of all amounts of Capacity Attributes that Seller has sold, assigned or transferred for the Unit does not exceed the Unit NQC or Unit EFC for that Unit;

(x) Seller has notified the SC of the Unit that Seller has transferred the Contract Quantity, including the amount of Flexible Capacity and Inflexible Capacity, to the extent applicable, with respect to each day of each Showing Month to Buyer, and the SC is obligated to deliver the Supply Plans in accordance with the CAISO Tariff and this Confirmation;

(xi) Seller has notified the SC of the Unit that Seller is obligated to cause the Unit’s SC to provide to the Buyer, at least fifteen (15) Business Days before the initial deadline for each Compliance Showing, the applicable Expected Contract Quantity of the Unit for each day of such Showing Month, including the amount of Flexible Capacity and Inflexible Capacity, to the extent applicable, that is to be submitted in the Supply Plan associated with this Agreement for the applicable

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period; and

(xii) Seller has notified the Unit’s SC that Buyer is entitled to the revenues set forth in Section 3.2, and such SC is obligated to promptly deliver those revenues to Buyer, along with appropriate documentation supporting the amount of those revenues.

(b) If the Parties have designated Flexible Capacity as “Applicable”, then the following representation and warranty shall apply to Seller throughout the Delivery Period:

(i) If Seller is the owner of the Unit, the aggregation of all amounts of Capacity Attributes that Seller has sold, assigned or transferred for the Unit and which are eligible to satisfy a load serving entity’s Flexible RAR, does not exceed the Unit EFC for that Unit.

(c) Seller represents, warrants and covenants to Buyer that, as of the Confirmation Effective Date, all of the information set forth on Appendix B hereto is true, correct and complete.

(d) If the Parties have designated Flexible Capacity as “Applicable”, then Seller represents, warrants and covenants to Buyer that, as of the Confirmation Effective Date, the CAISO has given the Unit the Unit EFC set forth on Appendix B hereto.

ARTICLE 5 CONFIDENTIALITY

Notwithstanding Section 10.11 of the Master Agreement, the Parties agree that: (i) Buyer may disclose the Aggregate Contract Quantity or any applicable portion of the Aggregate Contract Quantity, including any amounts of Flexible Capacity and Inflexible Capacity, to the extent applicable, under this Transaction to any Governmental Authority, the CPUC, the CAISO in order to support its Compliance Showings, if applicable; (ii) Seller may disclose the transfer of the Aggregate Contract Quantity and the applicable Contract Quantity and Expected Contract Quantity (as well as any amounts of Flexible Capacity and Inflexible Capacity, to the extent applicable) for each day of each Showing Month under this Transaction to the SC of the Unit in order for such SC to timely submit accurate Supply Plans; (iii) both Parties may disclose the terms and conditions of the Agreement and any and all written or recorded or oral information, data, analyses, documents, and materials furnished or made available by a Party to the other Party in connection with this Agreement to the Independent Evaluator; and (iv) Buyer and the Independent Evaluator may disclose the terms and conditions of the Agreement and any and all written or recorded or oral information, data, analyses, documents, and materials furnished or made available by a Party to the other Party in connection with this Agreement to the CAISO, the CPUC, and all divisions thereof, the California Energy Commission, and participants of the Procurement Review Group established pursuant to D.02-08-071 and D.03-06-071; provided, that each disclosing Party shall use reasonable

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efforts to limit, to the extent possible, the ability of any such applicable Governmental Authority, CAISO, or SC to further disclose such information. In addition, in the event Buyer resells all or any portion of the Aggregate Contract Quantity to another party, Buyer shall be permitted to disclose to the other party to such resale transaction all such information necessary to effect such resale transaction.

ARTICLE 6 HOLDBACK AND SUBSTITUTE CAPACITY

No later than five (5) Business Days before the deadline for the initial Compliance Showing with respect to a particular Showing Month, Buyer may request that Seller not list, or cause the Unit’s SC not to list, a portion or all of a Unit’s applicable Expected Contract Quantity for such Showing Month on the Supply Plan. The amount of Expected Contract Quantity that is the subject of such a request shall be deemed Expected Contract Quantity provided consistent with Section 2.1 for purposes of calculating a Monthly Payment pursuant to Section 3.1 and calculating any amounts due pursuant to Section 2.4 or 2.5. Seller shall, or shall cause the Unit’s SC to, comply with Buyer’s request under this Article 6.

ARTICLE 7 MARKET BASED RATE AUTHORITY

Seller agrees, in accordance with FERC Order No. 697, to, upon request of Buyer, submit a letter of concurrence in support of any affirmative statement by Buyer that this contractual arrangement does not transfer “ownership or control of generation capacity” from Seller to Buyer as the term “ownership or control of generation capacity” is used in 18 CFR § 35.42. Seller also agrees that it will not, in any filings, if any, made subject to FERC Order Nos. 652 and 697, claim that this contractual arrangement conveys ownership or control of generation capacity from Seller to Buyer.

ARTICLE 8 COLLATERAL REQUIREMENTS

8.1 Counterparty Collateral Requirements

Notwithstanding anything to the contrary contained in the EEI Agreement, Counterparty shall provide to, and maintain with, SCE a Full Floating Independent Amount as long as Counterparty or its Guarantor, if any, does not maintain Credit Ratings of at least (a) BBB- from S&P and Baa3 from Moody’s, if such entity is rated by the Ratings Agencies, or (b) BBB- by S&P or Baa3 by Moody’s if such entity is rated by only one Ratings Agency. The Full Floating Independent Amount shall be equal to $ [________]. {SCE Comment: amount equals twenty percent (20%) of the sum of the expected Monthly Payments for all months of the Delivery Period.} Commencing after the last day of the first Showing Month of the Delivery Period and continuing throughout the Delivery Period, upon Notice, Counterparty may reduce the Full Floating Independent Amount to twenty percent (20%) of the sum of the Monthly Payments for the Current Month, as defined below, and all remaining months of the Delivery Period. For the purposes of the foregoing calculation: (i) each Monthly Payment

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shall be calculated using the Contract Quantity rather than the Expected Contract Quantity; and (ii) the Current Month shall be the next calendar month for which a showing will be made. For the purposes of calculating the Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, the Full Floating Independent Amount for Counterparty shall be added to the Exposure Amount for SCE and subtracted from the Exposure Amount for Counterparty.

8.2 Current Mark-To-Market Value

The Parties further agree that for the purposes of calculating the Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, the Current Mark-to-Market Value for this Transaction is deemed to be zero. If at any time prior to the expiration of the Delivery Period, a liquid market for a resource adequacy Capacity product develops wherein price quotes for such a product can be obtained, the Parties agree to amend the Confirmation to include a methodology for calculating the Current Mark-to-Market Value for this Transaction.

8.3 Credit Terms

The Parties agree that the credit and collateral provisions of the EEI Agreement shall govern this Transaction; provided, however, that for purposes of calculating a Party’s Collateral Requirement pursuant to Paragraph 3 of the Collateral Annex, with respect to this Transaction only (a) if Counterparty has Exposure to SCE, then the amount of Exposure for this Transaction is deemed to be zero dollars ($0), and (b) in no event shall SCE be required to post or maintain an Independent Amount with Counterparty.

ARTICLE 9 OTHER

9.1 Declaration of an Early Termination Date and Calculation of Settlement Amounts

The Parties shall determine the Settlement Amount for this Transaction in accordance with Section 5.2 of the Master Agreement, provided that, with respect to this Transaction only, the following language is added at the end of Section 5.2 of the Master Agreement, with any terms which are defined in this Confirmation being used in the Master Agreement with the definitions given to such terms in this Confirmation:

“If Buyer is the Non-Defaulting Party and Buyer reasonably expects to incur penalties, fines or costs from the CPUC, the CAISO, or any Governmental Authority having jurisdiction, because Buyer is not able to include the applicable Contract Quantity in any applicable Compliance Showing due to Seller’s Event of Default, then Buyer may, in good faith, estimate the amount of those penalties or fines and include this estimate in its determination of the Settlement Amount, subject to accounting to Seller when those penalties or fines are finally

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ascertained. If this accounting establishes that Buyer’s estimate exceeds the actual amount of penalties or fines, Buyer shall promptly remit to Seller the excess amount. The rights and obligations with respect to determining and paying any Settlement Amount or Termination Payment, and any dispute resolution provisions with respect thereto, shall survive the termination of this Transaction and shall continue until after those penalties or fines are finally ascertained.”

[Remainder of Page Intentionally Left Blank]

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In WITNESS WHEREOF, the Parties have caused this Confirmation to be duly executed as of the Confirmation Effective Date first written:

[BUYER’S/SELLER’S NAME],

a [[Buyer’s/Seller’s] jurisdiction of organization and type of organization].

SOUTHERN CALIFORNIA EDISON COMPANY,

a California corporation.

By:

________________________________

[Name]

[Title]

By:

_______________________________

[Name]

[Title]

Date: ___________________________ Date: __________________________

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APPENDIX A

DEFINED TERMS

“Aggregate Contract Quantity” means the aggregate amount of Product associated with the MWs set forth in the table in Section 1.4 which Seller has agreed to provide to Buyer from the Unit throughout the entire term of the Delivery Period.

“Agreement” has the meaning specified in the introductory paragraph of this Confirmation.

“Annual Supply Plan” has the meaning set forth in the CAISO Tariff.

“Applicable Laws” means the CAISO Tariff and all constitutions, treaties, laws, ordinances, rules, regulations, interpretations, permits, judgments, decrees, injunctions, writs and orders of any Governmental Authority that apply to either or both of the Parties, the Project, the Unit or the terms of this Agreement.

“Availability Incentive Payments” has the meaning set forth in the CAISO Tariff.

“Availability Standards” has the meaning set forth in the CAISO Tariff.

“Buyer” has the meaning specified in the introductory paragraph of this Confirmation.

“CAISO” means the California Independent System Operator Corporation, or any successor entity performing the same functions.

“CAISO Control Area” has the meaning set forth in the CAISO Tariff.

“CAISO Controlled Grid” has the meaning as set forth in the CAISO Tariff.

“CAISO Tariff” means the California Independent System Operator Corporation Tariff, Business Practice Manuals (BPMs), Operating Agreements, and Operating Procedures, including the rules, protocols, procedures and standards attached thereto, as the same may be amended or modified from time to time and approved by FERC, if applicable.

“Capacity Attributes” means, with respect to a Unit, any and all of the following, in each case which are attributed to or associated with the Unit at any time throughout the Delivery Period:

(a) resource adequacy attributes, as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward RAR;

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(b) resource adequacy attributes or other locational attributes for the Unit related to a Local Capacity Area, as may be identified from time to time by the CPUC, CAISO or other Governmental Authority having jurisdiction, associated with the physical location or point of electrical interconnection of the Unit within the CAISO Control Area, that can be counted toward a Local RAR; and

(c) other current or future defined characteristics, certificates, tags, credits, or accounting constructs, howsoever entitled, including any accounting construct counted toward any Compliance Obligation;

provided that, notwithstanding the foregoing, Capacity Attributes shall exclude all flexible capacity resource adequacy attributes, characteristics, certificates, tags, credits, or accounting constructs, howsoever entitled associated with the Unit.

“Capacity Procurement Mechanism” has the meaning set forth in the CAISO Tariff.

“CIRA Tool” means the CAISO’s Customer Interface for Resource Adequacy application.

“Collateral Annex” has the meaning specified in the introductory paragraph of this Confirmation.

“Compliance Obligations” means the RAR and Local RAR.

“Compliance Showings” means the (a) Local RAR compliance or advisory showings (or similar or successor showings) and (b) RAR compliance or advisory showings (or similar or successor showings), in each case, a load serving entity is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the CPUC Decisions, to the CAISO pursuant to the CAISO Tariff, or to any Governmental Authority having jurisdiction.

“Confirmation” has the meaning specified in the introductory paragraph of this Confirmation.

“Confirmation Effective Date” has the meaning specified in the introductory paragraph of this Confirmation.

“Contract Price” means, for any Showing Month, the price specified in the Contract Price Table in Section 3.1 for such Showing Month.

“Contract Quantity” means, with respect to any particular Showing Month of the Delivery Period, the amount of Product associated with the number of MWs set forth in the table in Section 1.4, which Seller has agreed to provide to Buyer from the Unit for each day of such Showing Month.

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“Cover Sheet” has the meaning specified in the introductory paragraph of this Confirmation.

“CPM Capacity” has the meaning set forth in the CAISO Tariff.

“CPUC” means the California Public Utilities Commission.

“CPUC Decisions” means CPUC Decisions 04-01-050, 04-10-035, 05-10-042, 06-04-040, 06-06-064, 06-07-031, 07-06-029, 08-06-031, 09-06-028, 10-06-036, 11-06-022, 12-06-025, 13-06-024, 14-06-050, and any other existing or subsequent decisions, resolutions, or rulings related to resource adequacy, including, without limitation, the CPUC Filing Guide, in each case as may be amended from time to time by the CPUC.

“CPUC Filing Guide” is the document issued annually by the CPUC which sets forth the guidelines, requirements and instructions for load serving entities to demonstrate compliance with the CPUC’s resource adequacy program.

“Current Mark-to-Market Value” has the meaning specified in Section 8.2

“Delivery Period” has the meaning specified in Section 1.3(a).

“EEI” has the meaning specified in the introductory paragraph of this Confirmation.

“EEI Agreement” has the meaning specified in the introductory paragraph of this Confirmation.

“Expected Contract Quantity” means, with respect to any particular day of any Showing Month of the Delivery Period, the Contract Quantity of Product for such day of such Showing Month, including the amount of Contract Quantity of Product that Seller has elected to provide Substitute Capacity for such day, and after giving effect to any reductions to Contract Quantity for such day as specified in Section 2.1 with respect to which Seller has not elected to provide Substitute Capacity.

“Good Utility Practice” has the meaning set forth in the CAISO Tariff.

“Governmental Authority” means any: (a) federal, state, local, municipal or other government; (b) governmental, regulatory or administrative agency, commission or other authority lawfully exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power; and (c) court or governmental tribunal.

“Independent Evaluator” has the meaning set forth in CPUC Decision 04-12-048.

“Local Capacity Area” has the meaning set forth in the CAISO Tariff.

“Local RAR” means the local resource adequacy requirements established for load serving entities by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to

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the CAISO Tariff, or by any other Governmental Authority having jurisdiction. Local RAR may also be known as local area reliability, local resource adequacy, local resource adequacy procurement requirements, or local capacity requirement in other regulatory proceedings or legislative actions.

“Master Agreement” has the meaning specified in the introductory paragraph of this Confirmation.

“Monthly Payment” has the meaning specified in Section 3.1.

“Monthly Supply Plan” has the meaning set forth in the CAISO Tariff.

“MW” means megawatt (or 1,000 kilowatts) of alternating current electric energy generating capacity.

“Net Qualifying Capacity” has the meaning set forth in the CAISO Tariff.

“Non-Availability Charges” has the meaning set forth in the CAISO Tariff.

“North” means north of Path 26.

“Outage Schedule” has the meaning specified in Article 4.

“Path 26” has the meaning set forth in the CAISO Tariff.

“Planned Outage” means, an Approved Maintenance Outage (as defined in the CAISO Tariff), but does not include a RA Maintenance Outage With Replacement (as defined in the CAISO Tariff), a Short-Notice Opportunity RA Maintenance Outage (as defined in the CAISO Tariff) or an Off-Peak Opportunity RA Maintenance Outage (as defined in the CAISO Tariff).

“Product” means the Capacity Attributes of the Unit, including any capacity from RMR Contracts for the Unit, or its successor, Capacity Procurement Mechanism, or its successor, and RUC Availability Payments, or its successor; provided that:

(a) Product does not include any right to the energy or ancillary services from the Unit;

(b) any change by the CAISO, CPUC or other Governmental Authority that defines new or re-defines existing Local Capacity Areas that results in a decrease or increase in the amount of Capacity Attributes related to a Local Capacity Area provided hereunder will not result in a change in payments made pursuant to this Transaction; and

(c) the Parties agree that, under this Confirmation, if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Local Capacity Areas whereby the Unit subsequently qualifies for a Local Capacity Area, the

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Product shall include all Capacity Attributes related to such Local Capacity Area.

“RAR” means the resource adequacy requirements established for load serving entities by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction.

“Replacement Capacity” has the meaning specified in Section 2.4.

“Replacement Capacity Price” means the market price for Product with Capacity Attributes reasonably equivalent to the quantity of Product not provided by Seller under this Confirmation, as determined in the manner upon which market prices are determined under Section 5.2(b) of the Master Agreement. For purposes of this Transaction and Confirmation, the “Replacement Capacity Price” shall be deemed to be the “Replacement Price” as defined in Section 1.51 of the Master Agreement.

“Replacement Obligation” has the meaning specified in Section 2.4.

“Replacement Unit” means a generating unit meeting the requirements specified in Section 2.3.

“Resold Product” has the meaning specified in Section 2.6.

“Resource Category” shall be as described in the annual CPUC Filing Guide, as such may be modified, amended, supplemented or updated from time to time.

“RMR Contracts” has the meaning set forth in the CAISO Tariff.

“RUC Availability Payment” has the meaning set forth in the CAISO Tariff.

“SC” has the meaning set forth in the CAISO Tariff.

“SC Replacement Capacity” has the meaning set forth in Section 2.8.

“Seller” has the meaning specified in the introductory paragraph of this Confirmation.

“Showing Month” shall be the calendar month of the Delivery Period that is the subject of the Compliance Showing, as set forth in the CPUC Decisions and outlined in the CAISO Tariff. For illustrative purposes only, pursuant to the CAISO Tariff and CPUC Decisions in effect as of the Confirmation Effective Date, the monthly Compliance Showing made in June is for the Showing Month of August.

“South” means south of Path 26.

“Substitute Capacity” means replacement Product which Seller has elected to provide to Buyer in accordance with the terms of Section 2.3.

“Supply Plan” has the meaning set forth in the CAISO Tariff.

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“Term” has the meaning specified in Section 1.3(b).

“Unit” shall mean the generation assets described in Appendix B (including any Replacement Units), from which Product is provided by Seller to Buyer.

“Unit NQC” means the Net Qualifying Capacity set by the CAISO for the applicable Unit. The Parties agree that if the CAISO adjusts the Net Qualifying Capacity of a Unit after the Confirmation Effective Date, that for the period in which the adjustment is effective, the Unit NQC shall be deemed the lesser of (i) the Unit NQC as of the Confirmation Effective Date, or (ii) the CAISO-adjusted Net Qualifying Capacity.

ADDITIONAL DEFINED TERMS

To the extent that the Parties have selected Flexible Capacity as being “Applicable”, the following definitions shall be utilized in lieu of the corresponding definition, where appropriate, or in addition to the definitions set forth in the above Defined Terms: “Aggregate Contract Quantity” means the aggregate amount of Product associated with the MWs set forth in the table in Section 1.4 which Seller has agreed to provide to Buyer from the Unit throughout the entire term of the Delivery Period and which includes Product which is Flexible Capacity in an amount equal to the aggregate amount identified in Section 1.5. All Product identified in Section 1.4 is Inflexible Capacity except to the extent identified as Flexible Capacity in Section 1.5.

“Capacity Attributes” means, with respect to a Unit, any and all of the following, in each case which are attributed to or associated with the Unit at any time throughout the Delivery Period:

(a) resource adequacy attributes, as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward RAR;

(b) resource adequacy attributes or other locational attributes for the Unit related to a Local Capacity Area, as may be identified from time to time by the CPUC, CAISO or other Governmental Authority having jurisdiction, associated with the physical location or point of electrical interconnection of the Unit within the CAISO Control Area, that can be counted toward a Local RAR;

(c) other current or future defined characteristics, certificates, tags, credits, or accounting constructs, howsoever entitled, including any accounting construct counted toward any Compliance Obligations; and

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(d) flexible capacity resource adequacy attributes for the Unit, including, without limitation, the amount of Unit EFC and MWs associated with Unit EFC as may be identified from time to time by the CPUC, CAISO, or other Governmental Authority having jurisdiction, that can be counted toward Flexible RAR.

“Compliance Obligations” means the RAR, Local RAR and Flexible RAR.

“Compliance Showings” means the (a) Local RAR compliance or advisory showings (or similar or successor showings), (b) RAR compliance or advisory showings (or similar or successor showings), and (c) Flexible RAR compliance or advisory showings (or similar successor showings), in each case, a load serving entity is required to make to the CPUC (and, to the extent authorized by the CPUC, to the CAISO) pursuant to the CPUC Decisions, to the CAISO pursuant to the CAISO Tariff, or to any Governmental Authority having jurisdiction. “Contract Quantity” means, with respect to any particular Showing Month of the Delivery Period, the amount of Product associated with the number of MWs set forth in the table in Section 1.4, which Seller has agreed to provide to Buyer from the Unit for each day of such Showing Month, and which includes Product which is Flexible Capacity in an amount equal to the amount identified in Section 1.5. All Product identified in Section 1.4 is Inflexible Capacity except to the extent identified as Flexible Capacity in Section 1.5. “Flexible Capacity” means, with respect to any particular Showing Month of the Delivery Period, the number of MWs of Product set forth in the table in Section 1.5 which Seller has agreed to provide to Buyer from the Unit as part of the Contract Quantity for each day of such Showing Month, and which such MWs of Product are eligible to satisfy a load serving entity’s Flexible RAR and which such MWs of Product are associated with MWs of the Unit that are part of the Unit EFC. “Flexible RAR” means the flexible capacity requirements established for load serving entities by the CPUC pursuant to the CPUC Decisions, the CAISO pursuant to the CAISO Tariff, or by any other Governmental Authority having jurisdiction and includes any non-binding advisory showings which a load serving entity is to make with respect to flexible capacity. “Inflexible Capacity” means, with respect to any particular Showing Month of the Delivery Period, the number of MWs of Product set forth in the table in Section 1.4 minus the number of MWs of Product set forth in the table in Section 1.5, which Seller has agreed to provide to Buyer from the Unit as part of the Contract Quantity for each day of such Showing Month, and which such MWs of Product are not eligible to satisfy a load serving entity’s Flexible RAR and which are Product associated MWs of the Unit that are not part of or outside the Unit EFC. Inflexible Capacity is also known as ‘generic capacity’. “Product” means the Capacity Attributes of the Unit, provided that:

(a) Product does not include any right to the energy or ancillary services from the Unit;

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(b) any change by the CAISO, CPUC or other Governmental Authority that defines new or re-defines existing Local Capacity Areas that results in a decrease or increase in the amount of Capacity Attributes related to a Local Capacity Area provided hereunder will not result in a change in payments made pursuant to this Transaction; (c) any change by the CAISO, CPUC or other Governmental Authority that defines new or re-defines existing Flexible RAR, Capacity Attributes related to Flexible RAR, or attributes of the Unit related to Flexible RAR, that results in a decrease or increase in the amount of Capacity Attributes related to Flexible RAR provided hereunder will not result in a change in payments made pursuant to this Transaction; (d) the Parties agree that, under this Confirmation, if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Local Capacity Areas whereby the Unit subsequently qualifies for a Local Capacity Area, the Product shall include all Capacity Attributes related to such Local Capacity Area; and (e) the Parties agree that, under this Confirmation, if the CAISO, CPUC or other Governmental Authority defines new or re-defines existing Flexible RAR, Capacity Attributes related to Flexible RAR, or attributes of the Unit related to Flexible RAR whereby the Unit, or a portion of the Unit which did not previously qualify to satisfy Flexible RAR, subsequently qualifies to satisfy Flexible RAR, the Product shall include all Capacity Attributes of the Unit related to Flexible RAR, including any Capacity Attributes related to Flexible RAR with respect to any portion of the Unit which previously was not able to satisfy Flexible RAR.

“Unit EFC” means the effective flexible capacity (in MWs) of the Unit pursuant to the counting conventions set forth in the CPUC Decisions and which such flexible capacity may be used to satisfy a load serving entity’s Flexible RAR. The Parties agree that if the effective flexible capacity of the Unit is adjusted pursuant to the CPUC Decisions after the Confirmation Effective Date, then for the period in which the adjustment is effective, the Unit EFC shall be deemed the lesser of (i) the Unit EFC as of the Confirmation Effective Date, or (ii) the effective flexible capacity of the Unit as adjusted by such subsequent CPUC Decisions.

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APPENDIX B UNIT INFORMATION

Name: ___________________

CAISO Resource ID: ______________

Unit NQC (as of the Confirmation Effective Date): ____[Insert applicable number, or in the event Unit NQC varies by month insert table to reflect]______ MW

Unit EFC (as of the Confirmation Effective Date): _[Insert applicable number, or in the event Unit EFC varies by month insert table to reflect]__________ MW

Resource Type: _________________ {SCE Comment: insert technology}

Resource Category (1, 2, 3 or 4): _________

Unit EFC Category (1, 2, or 3): _________

Path 26 (North, South or None): _____

Local Capacity Area (if any, as of Confirmation Effective Date): ________

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APPENDIX C SUPPLY PLAN INFORMATION

Benefitting load serving entity SCID: __________________

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APPENDIX D SUBSEQUENT SALE INFORMATION

Volume (in MW): ____________

Subsequent Sale delivery period: ________

Amount of Inflexible Capacity included in Volume: ________________

New Benefitting load serving entity SC identification number: __________________

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Item 5.A



STAFF REPORT

Subject: Program Launch Update Contact: Tyler Masters, Director of Western Community Energy, [email protected],

(951) 405-6732 Date: October 14, 2020 The purpose of this item is to provide an update on WCE launch activities. REQUESTED ACTION: 1. Receive and file. Background: WCE launched electric service to the Cities of Norco, Perris, and Wildomar in April 2020, and to the Cities of Eastvale, Hemet, and Jurupa Valley in May 2020. Staff is working on a number of post-launch initiatives as identified below. Joint Rate Comparison – October 2020: The Joint Rate Comparison (JRC) is a joint utility (Southern California Edison (SCE) and WCE) effort to provide a side-by-side comparison of generation rates by utility. A JRC is required within 60 days after either utility makes a change to its rates. The JRC must be posted on SCE and WCE’s website within 60 days of the rate becoming active. SCE will be changing its rates effective October 1, 2020. SCE’s rate changes will primarily affect SCE Delivery charges, with only a couple changes in the Generation Charges for two residential Time-of-Use (TOU) rates. The Generation charge rate changes results in a revenue-neutral rate change for WCE, which means that WCE will not have to reflect changes in WCE rates to keep our rate discount goals. While these will impact the total utility bill of SCE and WCE’s joint customers, the rate change will not reflect a rate change needed for WCE Generation rate. October 2020 Net Energy Metering (NEM) Enrollment: In October 2019, the WCE Board adopted Resolution No. 2019-04 establishing a NEM Program Policy. The Policy established the quarterly enrollment processes for NEM customers (solar customers) into WCE service. In addition to the large mass enrollment phases in April (Norco, Perris, and Wildomar) and May (Eastvale, Jurupa Valley, and Hemet), NEM customers are enrolled into WCE in quarterly phases based upon their 12-month true-up cycles with SCE. These quarterly enrollments are intended to mitigate customer confusion by limiting multiple true ups needed for NEM customers’ transition into WCE. NEM quarterly enrollments have occurred in April 2020 and July 2020. The final NEM enrollment will occur in October 2020 and will include enrollment of all remaining eligible NEM customers. WCE Call Center Update: The WCE Call Center went live on February 3, 2020. Every month, Call Center staff produces monthly reports to inform WCE of the Call Center and opt-out activity. The recap below shows the monthly opt-out of the total 126,481 eligible accounts. Total eligible accounts include all community members’ accounts (residential, non-residential, municipal accounts, etc.). The summary illustrates the opt-outs received by month and by member jurisdiction. Staff does expect a slight increase in opt-outs during the October enrollment phase as the remaining NEM customers are enrolled in WCE and they begin receiving mailer notifications.

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PRIOR ACTION: September 9, 2020: The Board of Directors received and filed. FISCAL IMPACT: This item is for informational purposes only; therefore, there is no fiscal impact. ATTACHMENT: None.

Stats by Month Feb March April May June July August September TotalTotal Calls 679 2,381 2,446 1,456 2,643 2,397 3,497 3,868 19,367

Total Calls to IVR 345 1,147 1,190 722 1,486 1,174 1,741 2,044 9,849Total Calls to Agents 337 1,115 1,154 711 1,461 1,163 1,705 2,019 9,665

Average Seconds to Answer 0:00:12 0:00:18 0:00:19 0:00:21 0:00:32 0:00:24 0:00:47 0:00:36Average Call Duration 0:08:15 0:07:23 0:07:29 0:08:44 0:08:21 0:08:51 0:09:07 0:09:02

Total Eligible Customers 40,852 126,481 126,481 126,481 126,481 126,481 126,481 126,481 126,481Monthly Opt-Outs 491 1,960 1,783 791 846 427 1,074 1,238 8,610

Opt-Out Percentage 1.20% 1.55% 1.41% 0.63% 0.67% 0.34% 0.85% 0.98% 6.81%Total Choice Plus Enrollments 17 1 4 4 2 16 4 3 51

Opt-Up Percentage 0.04% 0.00% 0.00% 0.00% 0.00% 0.01% 0.00% 0.00% 0.04%8610

Monthly Summary

Jurisdiction Eligible # Opt-Outs Opt-Out %EASTVALE 18,692 1,715 9.2%HEMET 35,322 2,163 6.1%JURUPA VALLEY 30,234 1,887 6.2%NORCO 8,888 1,031 11.6%PERRIS 21,078 899 4.3%WILDOMAR 12,267 915 7.5%

Total 126,481 8,610 6.81%

Opt-Out % by Jurisdiction

Opt-Out Reason: Total Concerns about Government-Run Power Agency 431

Decline to Provide 1,926Dislike being automatically enrolled 2,194

Have renewable Energy Reliability Concerns 134Other 1,837

Rate or Cost Concerns 1,391Service or Billing Concerns 697

Total 8,610

Opt-Outs by Reason

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Item 5.B



STAFF REPORT

Subject: Non-Residential Client Engagement and Outreach Update Contact: Don Ries, Program Manager, [email protected], (951) 405-6726 Date: October 14, 2020 The purpose of this item is to provide an update on WCE’s non-residential client engagement and outreach. REQUESTED ACTION: 1. Receive and file. Background: The primary purpose of this outreach initiative is to provide a point of contact for general and specific technical questions and concerns unique to the larger industrial and governmental WCE clients. This is accomplished through client outreach introductory and follow-up meetings to reinforce the concept, savings potential, and the benefits 0f participating in WCE. In addition, staff is offering other services such as the Joint Rate Comparison (JRC), cost saving projection, custom usage, and applicable tariff analysis reviews. There are 14,638 eligible accounts in this category. WCE staff is available to all members as a tool to help attract and keep businesses within its city. Program update: Progress contacting clients and updating client lists and jurisdiction priority lists has been hampered by COVID-19 and data disparities; however, the efforts continue. Initial contact calls and emails to the top 50 users are now complete. Staff continues to follow-up on questions and unanswered initial contact efforts with these key clients and the next tier of clients. As of October 5, 2020, the opt-out rate for commercial clients is 3.7% and remains well under the 10% opt-out assumptions used in financial proformas. Since the last report, no additional 50 top-tier clients have opted-out. In order to maintain the specialized services for the larger commercial and industrial clients targeted by WCE’s outreach, the online bill comparison tool, which will be accessible to all WCE clients, will not be applicable to these clients. WCE staff have created and maintain several templates which are used to facilitate the specialized needs of this client segment by providing cost savings projections, custom usage reviews, and tariff analysis reviews. These templates are refined based on rate changes and new client requests. SCE has informed WCE staff that additional rate changes will go into effect on October 1, 2020 and on January 1, 2021. Ongoing efforts: WCE staff will continue to work with city staff to identify the top businesses in its community. Staff will also continue to refine and expand the targeting from the initial parameters of load and tax base size. Each month, staff will report to the Board on how WCE’s customer engagement and outreach campaign is progressing. Once new operational metrics are fully developed, the report will include these statistics. Staff anticipate these new metrics to take effect in January 2021, after mass enrollment is complete. PRIOR ACTION: September 9, 2020: The Board of Directors received and filed.

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FISCAL IMPACT: This item is for informational purposes only; therefore, there is no fiscal impact. ATTACHMENT: None.

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Item 5.C



STAFF REPORT

Subject: Residential Time-Of-Use Transition Update Contact: Tyler Masters, Director of Western Community Energy, [email protected], (951)

405-6732 Date: October 14, 2020 The purpose of this item is to provide an update on customer transition from tiered electric rates to time-of-use rates 2020 through 2022. REQUESTED ACTION: 1. Adopt Resolution No. 2020-17: A Resolution of the Board of Directors of Western Community Energy adopting

a 12-month bill protection to residential customers at Time of Automatic Transition to Time-of-Use Rates. Background: In 2013, Assembly Bill (AB) 327 was enacted into law to reform residential electric rates. It set forth the regulatory pathway to realign rates to reflect 10 guiding principles: 1. Low Income and medical baseline customers should have access to enough electricity to ensure basic needs (such

as health and comfort) are met at an affordable cost; 2. Rates should be based on marginal cost; 3. Rates should be based on cost-causation principles; 4. Rates should encourage conservation and energy efficiency; 5. Rates should encourage reduction of both coincident and non-coincident peak demand; 6. Rates should be stable and understandable and provide customer choice; 7. Rates should generally avoid cross-subsidies, unless the cross-subsidies appropriately support explicit state policy

goals; 8. Incentives should be explicit and transparent; 9. Rates should encourage economically efficient decision making; 10. Transitions to new rate structures should emphasize customer education and outreach that enhances customer

understanding and acceptance of new rates and minimizes and appropriately considers the bill impacts associated with such transitions.

Subsequent to passage of AB 327, the California Public Utilities Commission set forth a number of guiding decisions that direct electric utilities to create a pathway to migrate residential customers from the tiered electric rates to a default time-of-use (TOU) rate. TOU is a rate plan in which the cost of rates vary according to the time of day, season, and day type (weekday, weekend, or holiday). Higher rates are charged during the peak demand hours and lower rates during off-peak demand hours. TOU Transition Status Update Southern California Edison (SCE) will begin transitioning its approximately 2.6 million eligible residential customers to default TOU rates October 2020. SCE is currently planning on transitioning WCE residential customers to TOU in the 4th Quarter of 2021. The transition is estimated to conclude by March 2022. In July 2020, SCE and WCE met to 129


discuss the impacts on WCE customers. This will impact all residential customers except those on Medical Baseline plan, customers that require 3rd party notification or an in-person visit before disconnect, and low income customers in hot climate zones in SCE’s territory. WCE’s service area falls within one of these hot climate zones and as such CARE customers will not be automatically transitioned; however, these customers will have the option to voluntarily choose a TOU rate if they so desire. Additionally, customers that are already on TOU rates will not be affected by this transition. The total number of WCE customers impacted by automatic transition is 26,602. Customers will be provided with direct mail, electronic mail notifications prior to their rate changes. Rate analysis will be performed to educate customer how this change will impact their bill. To mitigate customer confusion and to keep the bill and rates consistent, WCE TOU generation rates will remain consistent with SCE’s TOU delivery rates. SCE will be providing bill protections to customers as it relates to SCE delivery charges. If a customer pays more on a TOU rate plan than they would have paid on the previous tiered rate plan, they will receive bill protection in the form of a one-time credit for the difference after the first 12-months. Monthly bill protection tracking will be provided on the customer’s bill. Currently, this bill protection is offered by SCE for the delivery portion of the bill. If WCE wants to provide a similar bill protection for WCE generation charges, the estimated financial impact of WCE to offer the same bill protection for the first 12-month period would be approximately $273,649 and would be provided as a credit after the first 12-months. This financial impact is an estimate based upon current eligible customer lists and existing customer electricity usage and is subject to change from now until 4th Quarter 2021 transition start date based upon new customer move-ins to the subregion and enrollment of new CARE / FERA customers due to COVID-19. To ensure all billing scenarios related to this TOU transition and applicable bill protections are tested in a timely manner, SCE requests WCE’s decision on providing a bill protection for WCE generation charges by end of October 2020. PRIOR ACTION: None. FISCAL IMPACT: The fiscal impact of the bill protections will not be realized until Fiscal Year 2021/2022. The cost of the bill protection is approximately $273,649. ATTACHMENT: 1. Resolution No. 2020-17; A Resolution of the Board of Directors of Western Community Energy adopting a 12-

month bill protection to residential customers at Time of Automatic Transition to Time-of-Use Rates.

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Item 5.C Residential Time-Of-Use

Transition Update

Attachment 1 Resolution No. 2020-17; A

Resolution of the Board of Directors of Western Community Energy

adopting a 12-month bill protection to residential customers at Time of

Automatic Transition to Time-of-Use Rates

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RESOLUTION NO. 2020-17

A RESOLUTION OF THE BOARD OF DIRECTORS OF WESTERN COMMUNITY ENERGY

ADOPTING AN 12-MONTH BILL PROTECTION TO RESIDENTIAL CUSTOMERS AT TIME OF AUTOMATIC TRANSITION TO TIME-OF-

USE RATES WHEREAS, in 2013, Assembly Bill (AB) 327 was enacted into law to reform residential electric rates and set forth a regulatory pathway to realign rates; and WHEREAS, subsequent to the passage of AB 327, the California Public Utilities Commission set forth a number of guiding decisions that direct electric utilities to create a pathway to migrate residential customers from the tiered electric rates to a default time-of-use (TOU) rate; and WHEREAS, TOU is a rate plan in which the cost of rates vary according to the time of day, season, and day type (i.e., weekday, weekend, or holiday). Higher rates are charged during peak demand hours and lower rates during off-peak demand hours; and WHEREAS, Southern California Edison (SCE) will begin transitioning its approximately 2.6 million eligible residential customers to default TOU rates October 2020. SCE is currently planning on transitioning WCE customers to TOU rates in the 4th Quarter of 2021; and WHEREAS, SCE’s TOU transition will impact all WCE residential customers except those on a Medical Baseline plan, customers that require third party notification or an in-person visit before disconnect, and low income customers in hot climate zones in SCE’s territory. WCE’s service area falls within a hot climate zone. As such, CARE customers will not be automatically transitioned; however, these customers will have the option to voluntarily choose a TOU rate; and WHEREAS, WCE customers will be provided with direct mail and email notifications prior to rate changes, and a rate analysis will be performed to educate customers how this change will impact their bill; and WHEREAS, SCE will provide bill protections to WCE customers as it relates to SCE delivery charges; and WHEREAS, WCE will provide bill protection for WCE generation charges if a customer pays more on a TOU rate plan than they would have paid on the previous tiered rate plan; and WHEREAS, WCE will provide bill protection in the form of a one-time credit for the difference between an existing plan and a new TOU plan after the first 12-months. Monthly bill protection tracking will be provided on the customer’s bill; and WHEREAS, the total number of WCE customers impacted by automatic TOU transition that

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may be eligible for bill protection is estimated at 26,602; and WHEREAS, the estimated financial impact for WCE to offer bill protection for the first 12-month period is approximately $273,649. NOW, THEREFORE, THE WESTERN COMMUNITY ENERGY BOARD OF DIRECTORS DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 1. The Board of Directors has determined that the recitals herein are true and correct. 2. The Board of Directors adopts a 12-month bill protection for eligible WCE residential

customers at the time of automatic transition to TOU rates. PASSED AND ADOPTED by the Board of Directors on October 14, 2020. ___________________________ ___________________________ Ben Benoit, Chairperson Rick Bishop, Secretary Western Community Energy Western Community Energy Approved as to form: ___________________________ Steven DeBaun Western Community Energy Legal Counsel AYES: _______ NAYS: _______ ABSENT: _______ ABSTAIN: _______

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Item 5.D



STAFF REPORT

Subject: Arrearage Management Plan Update

Contact: Anirudhha Dhruva, WRCOG Fellow, [email protected], (951) 405-6725

Date: October 14, 2020

The purpose of this item is to provide an update on the Arrearage Management Plan (AMP) proposed by Southern California Edison (SCE).

REQUESTED ACTION:

1. Direct the Executive Director to notify Southern California Edison by October 23, 2020, of WCE’s intent toparticipate in SCE’s Arrearage Management Plan.

Background: The Arrearage Management Plan (AMP) is a program outlined by the California Public Utilities Commission (CPUC) in Decision 20-06-003 released on June 16, 2020, as a potential solution to avoiding disconnections for vulnerable individuals who are behind on their electricity payments. The AMP allows customers who are participating in the CARE / FERA Programs to receive debt forgiveness on their electricity bill if they pay their current bill on time. For every current bill paid on time, the customer will receive 1/12th of their existing total debt forgiven. Eligible customers can erase up to $8,000 of their debt over 12 months. In order to be eligible, customers must be:

• Enrolled in either the CARE or FERA Program,• Must be an SCE customer for six months and have made at least one on-time payment,• Must have a minimum of $500 in outstanding arrearage for at least 90 days to be eligible to apply for the Plan.

Customers may re-apply for the Plan upon successful completion of adhering to a 12-month waiting period. The current Plan is expected to launch in in the fall of 2020 and run for four years, with a CPUC rulemaking to be launched three years after the Plan is successfully launched in order to evaluate its effectiveness. A table containing the 2019 CARE / FERA participation percentage by WCE member agency has been included below:

Jurisdiction CARE / FERA participation percentage (2019)

Eastvale 14%Hemet 46%Jurupa Valley 35%Norco 15%Perris 49%Wildomar 23%

Originally, the Plan was expected to launch in April 2021, as COVID-19 disconnection protections were expected to expire at this time; however, on August 13, 2020, the Investor Owned Utilities (IOUs) received a letter from the CPUC

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strongly encouraging a proposal to start the AMP in 2020, stating that the CPUC would consider an implementation start date in April 2021 as being non-compliant with the Decision. On September 9, 2020, SCE released an Advice Letter outlining the Plan and affirming that it can launch the Plan in 2020 in line with the CPUC Energy Division request, found as Attachment 1 of this document. In the AL, SCE has requested that CCAs develop and submit a letter as to the AL contact list within 45 days of September 9, 2020, notifying a CCAs willingness to participate in the Plan. In response, CalCCA filed a protest to the Advice Letter, requesting clarification on how the IOUs plan on reimbursing CCAs, how it plans on sharing data with the CCA upon request, and what the time frame looks like for CCAs to inform the IOUs about program participation. A copy of the Protest Letter can be found as Attachment 2 of this Staff Report. On September 17, 2020, a Prehearing Conference (PHC) was held by the CPUC where the Commission indicated that it is willing to consider the role and specifics of CCA participation in the AMP in an upcoming but separate rate setting phase. The CPUC has stated it will release a Scoping Memo within 30 to 45 days of the September 17th PHC, indicating whether or not it will include the topic of CCA AMP participation in the next phase of rate setting. On September 27, 2020, a meeting occurred between Cal Choice, Clean Power Alliance (CPA), Desert Community Energy (DCE), SCE and WCE. In the September 27th PHC, SCE had notified the CCAs that it is willing to provide flexibility to the CCAs’ participation decision in the AMP as requested in the September 9, 2020, Advice Letter. However, SCE explained that if it receives a notification on a CCA’s participation after the CPUC releases its Scoping Memo, the CCA’s customers may not be eligible to participate at the launch of the Plan due to no agreement reached between SCE and CCAs regarding the reimbursement mechanism of arrearages. A start date has been agreed to in working groups as either 90 days after the August 13th Advice Letter from the CPUC was received by the IOUs, or 45 days after the CPUC approval of the Advice Letter, whichever date comes first. The SCE Advice Letter proposes that the Plan would be paid for by all customers through the Public Purpose Program Charge (PPPC), a non-by passable surcharge applied to all customers’ bills to pay and recover the generation portion of participating customer’s bill. The PPPC mechanism was agreed upon within the working groups. If a CCA chooses not to participate, SCE will still inform CCA customers that they are eligible for participation in the AMP and will forgive their delivery-related arrears. CalCCA Position CalCCA’s position is the AMP and CCA participation in the AMP within the new rate setting phase is not timely and should instead be deliberated through the Advice Letter process through the usage of working groups to explore solutions. CalCCA has established a list of goals it would like to accomplish through the working groups, addressing the AMP. While in agreement that the PPPC should be used for cost recovery from all customers, both unbundled as well as bundled, other goals that CalCCA would like to see implemented are still not met. A list of CalCCA’s goals can be found below: • CalCCA would like to see more root cause analysis studies of disconnections occurring before creating or

implementing further programs that are aimed at vulnerable customers. • The AMP should initially be an IOU-only pilot that focuses exclusively on bundled customers. • Only upon proving of success should unbundled customers be allowed to participate along with bundled

customers. • CCA customer participation should be optional at the discretion of the CCA. • Cost recovery should be provided for all Load Serving Entities through the PPPC or a similar charge in order to

minimize risk. • Administrative complexity for participating CCAs must be limited and reasonable.

Based on the SCE Advice Letter, some of CalCCA’s goals have not be met. For example, it seems that the AMP will not be an IOU-only pilot due to SCE’s stance that it will contact eligible CCA customers if the CCA decides not to participate. Further, the SCE Advice Letter makes no mention of any future or currently planned root analysis studies of disconnections. In a September 14, 2020, meeting of the CalCCA Regulatory Committee, CalCCA representatives noted that currently there is not a clear understanding between the CCAs and the IOUs about whether CCA customers will still be liable for the PPPC cost shifting if CCAs altogether decide not to participate in the Plan. In its current form, CCA customers will still be liable for the increase in the PPPC, subsidizing the cost of the Plan for bundled customers regardless of participation.

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On September 29, 2020, CalCCA filed a protest to SCE and San Diego Gas and Electric (SDG&E) Advice Letters filed on September 9, 2020. CalCCA is looking for clarification and changes on three topics, listed below: 1) The filed Advice Letters should clarify how often SCE and SDG&E plan to remit amounts recovered for

generation-related (bundled portion of the bill) arrears to the CCA. 2) SCE and SDG&E should be required to provide program information at intervals requested by the CCAs. 3) SCE should clarify whether a CCAs notice of intent to participate in the AMP is requested 45 days from the

approval or release of the Advice Letter.

A response is expected to be filed by the IOUs on October 6, 2020, in response to the CalCCA Advice Letter protest, found in Attachment 2 to this Staff Report.

WCE Impacts: 1) If WCE decides to participate in the AMP in its current form, there will be no upfront monetary cost or deposit

that WCE must make, as the costs for WCE will be paid through the PPPC and will be collected by SCE. 2) In its current form, all WCE customers pay into the PPPC which will be in part allocated to fund the AMP

regardless of a WCE decision to participate. 3) If WCE decides not to participate, SCE has indicated in its Advice Letter that it will prepare marketing materials

and will reach out to eligible WCE customers to cover the delivery portion of their bills. 4) Qualified WCE Net Energy Metering customers will not be eligible to initially participate due to unanimous

concerns about unequal participation in the Plan. 5) The Plan is estimated to launch in 2020 regardless of WCE’s intent to participate. PRIOR ACTION: None. FISCAL IMPACT: This item is for informational purposes only; therefore, there is no fiscal impact. ATTACHMENTS: 1. SCE Advice Letter 4287-E – Southern California Edison’s Arrearage Management Plan. 2. CalCCA Protest to Southern California Edison’s and SDG&E AMP Advice Letters.

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Item 5.D Arrearage Management Plan

Update

Attachment 1 SCE Advice Letter 4287-E – Southern

California Edison’s Arrearage Management Plan

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P.O. Box 800 8631 Rush Street Rosemead, California 91770 (626) 302-9645 Fax (626) 302-6396

1. Gary A. Stern, Ph.D.

Managing Director, State Regulatory Operations

September 9, 2020

ADVICE 4287-E (U 338-E)

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION

SUBJECT: Southern California Edison Company’s Arrearage Management Plan

Southern California Edison Company (SCE) hereby submits to the California Public Utilities Commission (Commission or CPUC) the following changes to its tariffs. The revised tariffs are listed on Attachment A and are attached hereto. PURPOSE

SCE hereby submits this Tier 2 Advice Letter (AL) pursuant to Ordering Paragraph (OP) 83 and 87 of Decision (D.)20-06-003. The purpose of this AL is to provide the implementation parameters and timeline for SCE’s Arrearage Management Plan (AMP) as well as include these parameters in SCE’s residential rate schedules for customers enrolled in either the California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) programs and within Rule 9, Rendering and Payment of Bills. In addition, SCE is modifying its Preliminary Statement Part BBB, Residential Uncollectibles Balancing Account, as further discussed below.

BACKGROUND

On July 20, 2018, the Commission issued Rulemaking (R.)18-07-005 to implement the requirements of Senate Bill 598 in order to address “disconnection rates across California’s electric and gas investor-owned utilities by adopting policies and rules that reduce disconnections and improve reconnection processes and outcomes for disconnected customers.”1 On December 19, 2018, the Commission issued D.18-12-013 as an interim decision in this proceeding, which included provisions regarding Medical Baseline, customers 65 years and older, and customer protections during extreme weather conditions. On June 16, 2020, the Commission issued D.20-06-003 (the Decision), in Phase 1 of this proceeding adopting rules designed to 1 R.18-07-005, Order Instituting Rulemaking (OIR), p.1.

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ADVICE 4287-E (U 338-E) - 2 - September 9, 2020

reduce the number of residential customer disconnections. The Decision adopted, with modifications, the interim provisions included in D.18-12-013.

The Decision also ordered the Investor-Owned Utilities (IOUs) to submit a Tier 2 AL within 90 days of the effective date of the Decision to establish an AMP.2 The Decision requires that the AMP be designed to forgive 1/12 of a customer’s total arrearage each month in exchange for the customer making on-time payments on their current bill. The customer would effectively have all arrears forgiven after one year of on-time payments. Furthermore, the Decision also established an AMP Working Group (WG) to discuss the AMP implementation plan and cost recovery between the IOUs and Community Choice Aggregators (CCAs). In July and August of 2020, an AMP WG comprised of stakeholder representatives3 met four times4 to work through the various AMP implementation and timing matters. On August 13, 2020, the IOUs received a letter from Deputy Executive Director for Energy and Climate Policy, Edward Randolph, strongly encouraging a proposal to start the AMP in 2020 and stating Energy Division (ED) would consider an implementation start date in April 2021 as being non-compliant with the Decision.5

Once approved by the Commission, the AMP will sunset after four years unless the Commission issues a decision extending, reauthorizing, modifying, or rescinding the AMP.6 The CPUC will also open a proceeding three years after the adoption of the Decision to reauthorize the program.7 After three years, the IOUs may also jointly file a Tier 3 AL with recommendations for improving the AMP.8

DISCUSSION

I. Implementation Timing for the AMP

SCE’s proposes to start the AMP in 2020, consistent with the letter sent to the IOUs from the Commission’s Energy Division Director Edward Randolph on August 13, 2020. However, SCE recognizes that time is required for approval of the AL and resolution of 2 D.20-06-003, OP 83 and 87. 3 The WG meetings included representatives from the CPUC, California Public Advocates

(PAO), The Utility Reform Network (TURN), National Consumer Law Center (NCLC), California Department of Community Services & Development (CSD), Utility Consumers’ Action Network (UCAN), Central Valley Urban Institute, Pacific Gas and Electric (PG&E), SCE, Southern California Gas (SoCalGas), San Diego Gas and Electric (SDG&E), California Community Choice Association (CalCCA), San Jose Clean Energy, Peninsula Clean Energy, East Bay Community Energy, Clean Power Alliance, Clean Power SF, Solana Energy Alliance, Clean Energy Alliance, and San Diego Community Power.

4 WG meetings were held on July 7, July 30, August 13, and August 28 of 2020. 5 Letter regarding AMP Implementation per D.20-06-003, from Deputy Executive Director

Randolph dated August 13, 2020. 6 D.20-06-003, OP 86. 7 Id., OP 85. 8 Id., OP 84.

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any protests that may arise. During the fourth WG meeting on August 28, 2020, stakeholders in attendance agreed to a start date for AMP based upon whichever is later between:

1. 90 days post August 13, 2020 letter from Energy Division; or 2. 45 days after approval of this AL9

Regulatory approval of the AL and the AMP parameters should precede implementation. In addition, the earliest start date of November 12, 202010 (90 days after the August 13, 2020 letter) provides SCE with necessary time to take into account any additional necessary factors that may arise through this AL process, finalize internal procedures, create outreach materials, and complete training of staff to create a better customer experience based on the final parameters of the AMP approved through the AL process. As such, the implementation time proposed above is reasonable, as the stakeholder agreement to this schedule demonstrates.

Notably, in a webinar hosted by Eversource11 to provide the California IOUs with a better understanding of how AMP could be implemented, Eversource estimated that it took six to twelve months for their pilot program to be coded into their system. Under the proposed implementation timeline agreed to by the working group participants, SCE would be implementing a full program using a far more aggressive schedule that is less than half the low-end of the Eversource estimate for its pilot. In addition, SCE’s AMP must be implemented using manual processes, necessitating additional training for employees. Thus, a request for an AMP start date to be the later between November 12, 2020, or 45 days after AL approval is reasonable and should be approved.

II. AMP Program Details

As required by the Decision, SCE’s AMP will consist of a 12-month payment plan that forgives 1/12 of a customer’s arrearage after each on-time payment of the current

9 Stakeholders in the fourth WG meeting reached agreement on an overall AMP

implementation plan, which included this start date and the other agreed-upon parameters as discussed and proposed herein. For example, as discussed in Section II.B., stakeholders agreed to postpone the availability of AMP to NEM customers so that AMP could be implemented sooner and within this proposed time frame. Thus, this proposed timeline must be considered collectively with—and as SCE explained during the WG, its feasibility depends on—other proposed parameters that were agreed upon by the WG as part of an aggregate AMP implementation plan. Should ED or the Commission substantially revise these parameters, SCE may need to revisit feasibility of the proposed implementation timelines.

10 Pushed back one day from November 11, 2020 due to Veteran’s Day holiday. 11 Webinar on October 25, 2019, with summary attached to the Administrative Law Judge’s

(ALJ) Ruling on November 14, 2019. Webinar was also attended by the CPUC.

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bill.1213 After 12 on-time payments of their current monthly bills, the customer’s pre-existing debt, up to the AMP limit, would be fully forgiven.14 Customers can receive up to $8,000 in arrearage forgiveness for each instance they enroll in AMP.15 Additionally, customers can request to be on a Level Pay Plan (LPP), which would levelize their monthly payments and make them more predictable.16 Both bundled and unbundled customers are eligible for the program.17 For any AMP customer receiving assistance from the Low Income Home Energy Assistance Program (LIHEAP), the assistance will be applied to the customer’s current monthly bills, not the arrearage.18 Eligible customers currently on other payment plans can opt-in and have their payment plan replaced by AMP.19

To qualify for AMP, customers must: • be enrolled in California Alternative Rates for Energy (CARE) or Family Electric

Rate Assistance (FERA);20 • have total arrears $500 or greater, which are at least 90 days old;21 and • have been a customer of SCE for at least six months and have made an on-time

payment.22

While participating in AMP, enrolled customers are protected from disconnection even after the current disconnection protections expire.23 AMP customers can miss up to two non-sequential payments provided that the customer makes the missed payment on the next billing due date with an on-time payment of both the current bill and past bill.24 If a customer misses two sequential or three non-sequential payments, they will be removed from the AMP. A customer who is removed from the AMP can reenroll, assuming they meet the eligibility requirements, after a 12-month waiting period, starting the month after they were removed from the program.25 Customers who successfully 12 Current bill refers to current monthly charges and does not include any previous unpaid

arrears prior to enrollment in AMP. 13 D.20-06-003, OP 61. 14 Id., OP 62. 15 Id., p.105. SCE recognizes that OP 69 places an $8,000 cap per calendar year, and SCE’s

approach to forgive a maximum of $8,000 per customer per successful completion of AMP is consistent with that OP, the rest of the Decision, and discussions in the WG. Additionally, the customer will remain liable for any amounts above the $8,000 AMP forgiveness cap.

16 Id., OP 68. 17 Id., p.105. 18 Id., OP 67. 19 Id., OP 88. 20 Id., p.108. 21 Id., OP 52. 22 Id. 23 Id., p.104. However, we note that currently broader disconnection protections are in place

due to the COVID-19 pandemic. 24 Id., OP 64. 25 Id., OP 66.

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complete the program may also enroll again if they meet the eligibility requirements and have completed the 12-month waiting period, starting the month after completing the initial AMP.26 Any customers who are removed from CARE/FERA while on AMP will be given the opportunity to complete their AMP but would be unable to re-enroll in the future unless they met the eligibility requirements.

SCE will calculate the arrearage forgiveness each month after a customer’s bill payment. This means if a customer exits AMP early, the customer will still receive debt forgiveness equal to the number of months they made current bill payments in the program. 27

A. Proposed Program Parameters

The Decision does not explicitly state or define several program parameters for the AMP program, including arrearage requirements, what constitutes “on-time” payments, treatment of arrearage balances if customers exit the AMP early, and eligibility for customers with multiple service accounts receiving combined bills. Through collaboration with stakeholders through the WG process, SCE proposes the following program parameters.

• Customers are eligibile for the AMP even if only some (not all) of customers’ $500 in arrears is at least 90 days old.

• Customers must have made, within the past 24 months prior to AMP enrollment, at least one payment that equals or exceeds their most current customer bill at the time of payment and that the payment was made prior to the due date of that bill.28 SCE will review up to the past 24 months of the customer’s billing history to make this determination.

• Customers who exit the AMP early may enroll in a 12-month payment plan for the remainder of the arrears.

• For customers that enroll in AMP with more than $8,000 in arrears, the customer would not be required to pay anything towards the balance greater than $8,000 while in the program. Once the customer exits the AMP, the customer would also be given the option to enroll in a 12-month payment plan for the remainder of the arrears.

• Customers with multiple service accounts (addresses) combined into a single bill (customer account) will be allowed to participate as long as any one of their service accounts qualifies for the AMP.29

26 Id., OP 63. 27 Id., OP 65. 28 SCE bill payment process requires that a customer pay their bill within 19 days of the bill

issuance date to be considered on-time. 29 SCE cannot separate the amount paid between the service accounts. Any resulting arrears also cannot be attributed to a single service account and are tracked at the customer account level.

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B. Proposed Delay for Net Energy Metering (NEM) Customers to Enroll in AMP

NEM customers are those that have solar or other clean energy generation at their home. The energy that is produced minus the energy that is consumed equals the “net energy,” or the customer’s billed energy. Currently some of SCE’s NEM customers choose to be billed annually rather than monthly. Under this Annual Billing Option (ABO), the customer receives a monthly bill comprised of non-usage related and non-bypassable charges. These charges reflect the miminum amount due each month to support the cost of maintenance and operation for providing electricity. Once a year, the customer receives a “true-up” bill based on the net energy usage for the year.

Based on data from June 30, 2020, SCE estimates approximately one out of eight AMP-eligible customers are also NEM customers. For this subset of customers, being enrolled in AMP would allow for 1/12 arrearage forgiveness while paying a de minimis monthly bill. Compared to other CARE/FERA customers, NEM customers would similarly receive 1/12 arrears forgiveness for each monthly bill paid on-time while on AMP. But the NEM customer can defer any energy usage charges until their annual “true-up” bill, resulting in the NEM customer only being required to pay the minimum monthly charges each month. In contrast, CARE customers must cover their energy usage each month to get 1/12 arrears forgiven. The disparity for the NEM customer becomes evident at month 12 when the annual “true-up” bill is assessed. However while enrolled in AMP, the NEM customer would have already received up to 11 months of arrears forgiveness while paying far smaller monthly bills.

For example, in Table 1 (below), using illustrative customer bills to clarify the potential inequality between customers, the CARE customer and NEM customer both have an equal $1,200 in arrears. If both customers were to fall off AMP after month 11, the NEM customer would have received $1,100 in arrears forgiveness while being required to pay $55 in monthly bills. The CARE customer would have received the same $1,100 in arrears forgiveness but would have paid $1,100 in monthly bills. The CARE customer would have paid 20 times more than the NEM customer paid in monthly bills to receive the same amount of arrears forgiveness.

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Table 1: CARE vs NEM (ABO) Customer AMP Comparison CARE/FERA AMP

Eligible CustomerNEM & CARE/FERA

Eligible Customer Formula

Monthly Bill** $100 $5* AArrearage Balance** $1,200 $1,200 BArrearage Forgiven Per Month

$100 $100 C

Total Arrears Forgiven at Month 11 on AMP

$1,100 $1,100 D=C*11

Total Amount of Bills Paid at Month 11 on AMP

$1,100 $55 E=A*11

$ in Arrears Forgiven Per $1 in Bills Paid

$1 $20 F=D/E

Arrears Remaining if Customer Exits AMP After Month 11

$100 $100 G=B-D

* Monthly bill does not include annual “true-up” bill for NEM customers. ** Bill amounts are illustrative. Actual monthly bills will vary by customer.

The WG discussed extensively in multiple meetings how to address this potential inequality, but was unable to arrive at an immediately viable solution that would allow NEM customers to enroll in AMP. The WG thus agreed to postpone the availability of AMP for NEM customers. Accordingly, and understanding that Emergency Consumer Protections30 have suspended all residential customer disconnections for nonpayment until April 16, 2021, SCE proposes to delay enrollment of all NEM customers until the end of these protections.

During the delay, SCE intends to continue to collaborate with the WG and explore options that would address the inequality for NEM customers. One such option could be to require NEM customers that wish to enroll in AMP to switch from the ABO to the Monthly Billing Option (MBO). The MBO would require that the NEM customer pay off any outstanding balances monthly and is more aligned with the intent of AMP to promote good customer behavior for making on-time payments while also mitigating the potential inequality between NEM and non-NEM customers in AMP.

III. AMP Operational Impacts, Enrollment Facilitation

SCE is in the final stages of preparing for its Customer Service Re-Platform (CSRP) implementation and has constraints on making system changes. Specifically, a system freeze is currently in effect as part of the readiness efforts for CSRP. In addition to the “Go-Live” expected in the early second quarter of 2021, the new systems and operations will undergo a stabilization period for approximately six months. During this

30 Resolution M-4842.

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period, system changes will be focused on defect correction and other stabilization needs.

Thus, SCE will be implementing the AMP through manual processes until after the CSRP stabilization period. Enrollment and monthly billing will both be performed manually until automation can be set up in the new customer service system. SCE estimates up to 6 full time equivalent (FTEs) per 10,000 customer enrollments will be necessary to enroll customers and perform the monthly billing and milestone notifications required for manual implementation of AMP. Because the program is entirely new to the state, SCE will adjust its staffing needs and estimates accordingly after the program starts.

As of June 2020, SCE estimates that more than 18,000 CARE/FERA customers are eligible for AMP. Table 2 below provides SCE’s preliminary estimate regarding the total number of eligible customers and the customers’ average monthly bills and total AMP-eligible arrears. SCE forecasts that these numbers will increase as the COVID-19 pandemic continues, however the total financial impact is currently unknown.

Table 2: Aggregated Customer Data as of June 30, 2020 Total AMP-Eligible Customers 18,267

CCA AMP-Eligible Customers 4,715

Percentage of CCA Customers

26%

Average (mean) Monthly Bill for AMP-Eligible Customers

$236

Median Monthly Bill for AMP-Eligible Customers

$146

Average (mean) Arrears for AMP-Eligible Customers

$967

A. Enrollment Facilitation

The Decision orders SCE to facilitate eligible customers’ enrollment in AMP in a variety of ways. Namely, it requires that SCE provide eligible CARE and FERA residential customers with all information concerning AMP,31 maintain a frequently asked questions (FAQ) section on SCE.com detailing how CARE and FERA customers can participate,32 and offer eligible customers the opportunity to enroll in AMP when the customers call 31 D.20-06-003, OP 54. 32 Id., OP 55.

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the IOU for any reason.33 It also orders that in every communication with an eligible CARE and FERA customer, SCE must inform the customer of the AMP plan rules, regulations, and how the AMP plan could help them.34

SCE recognizes that AMP is an entirely new program in the state of California. Given the unique features of the program, SCE anticipates that customers will likely have questions regarding the program. The Customer Service Representatives (CSR) in SCE’s Customer Call Center (CCC) will play a critical role in the implementation of the program. They will be trained to inform eligible customers of the program details and benefits, address any customer questions, and handle customer enrollments in AMP. The CSRs will also be trained to verify eligibility and enroll eligible customers immediately on the plan when a customer calls in for any reason, including with additional questions on AMP, establishing payment arrangements, enrolling in other customer programs, etc.35

Additionally, SCE will provide eligible customers with all information concerning the AMP in its communications. SCE’s website will be an important channel to help build program awareness. A FAQ page will be maintained on SCE.com containing information regarding customer eligibility, enrollment, maximum arrearage, program parameters, and rules on AMP and future re-enrollment. The customer would be directed to call the CCC with any additional questions. Also, SCE will assess opportunities to integrate AMP messaging into other relevant communications for eligble CARE and FERA customers.

As an additional avenue to facilitate enrollment, the Decision also requires SCE to allow eligible CARE and FERA residential customers the opportunity to enroll in the AMP when checking their account online or communicating with a CSR online.36 When customers check their accounts online, SCE will direct customers to the FAQ page for the details regarding the AMP program. All of SCE’s outreach materials regarding AMP would direct the customer to call in and enroll through a CSR. In addition, SCE understands that eligible customers may not use English as their primary household language. Therefore, SCE will provide enrollment assistance in the same additional languages as its CARE program: Spanish, Korean, Chinese, Vietnamese, and Cambodian.

B. Additional Customer Support once Enrolled in AMP

The Decision also requires that SCE provide customers with ongoing encouragement and support once enrolled in AMP.37 If a customer misses a payment, a letter will be sent to the customer indicating the missed payment and providing the CCC number to 33 Id., OP 58. 34 Id., OP 60. 35 Id., OP 58. 36 Id., OP 59. 37 Id., OP 56.

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call should the customer require help understanding their options and identifying any programs and/or resources that may help them get back on track with their payments.38 Customers in AMP will also receive acknowledgement from SCE when they reach 3, 6, and 9 months of on-time payments.39 As discussed above, should a customer exit AMP early, the customer would be offered a 12-month payment plan for the remainder of their arrears.

IV. AMP Reporting Requirements

SCE’s annual reporting will support the Commission’s assessment of impacts of the AMP as required by the Decision.40 As outlined in the Decision,41 SCE’s annual AMP reporting would contain the following data:

Enrollment • number of participants enrolled by customer group (CARE, FERA, Non-

CARE/FERA, Medical Baseline, Total)42 • location of these customers (zip codes)43

Payment • AMP success rate for customers44 • average arrearage amount for customers who successfully completed the AMP45 • average arrearage amount for customers who failed to complete the AMP46 • percentage of customers who missed one payment and made up the payment47 • percentage of customers who missed two payments and made up the

payments48 • percentage of customers who missed two payments, did not make up the

payments, and were removed from AMP49 • percentage of customers who made on-time payments during the six months

following the end of their AMP (split by those who completed and failed to complete the AMP)50

38 Id., p.109. 39 Id., OP 57. 40 Id., OP 70. 41 Id., pp.96-97. 42 Id., OP 71. 43 Id., OP 72. 44 Id., OP 73. 45 Id., OP 74. 46 Id., OP 75. 47 Id., OP 76. 48 Id., OP 77. 49 Id., OP 77. 50 Id., OP 78 and 79.

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Post-AMP Payment Behavior • percentage of customers that acrrued new arrears within six months of

completing the AMP51 • percentage of customers that accrued new arrears within six months of dropping

out of the AMP52

Disconnection Eligibility Impacts • number of customers accounts eligible for disconnection53

In addition to the annual reporting requirements for AMP, the Decision also requires the IOUs to file a status report, within 120 days of the beginning of each calendar year, regarding their compliance with the disconnection cap for the previous year.54 Combining the reporting requirements for AMP and the disconnection cap would increase efficiency and simplify the timing for both requirements. With a start for AMP in the last months of 2020, there is unlikely to be much, if any, relevant data in 2020. Thus, SCE proposes the AMP reporting requirements to start in 2022 and be combined into a single report with the disconnection cap. The report would be filed within the 120 days of the beginning of the calendar year for the previous year.

V. Cost Recovery of AMP Debt Forgiven and CCA Concerns

In comments to the Proposed Decision, CalCCA raised concerns over cost recovery allocations between the CCAs and the IOUs.55 During the first WG meeting on July 13, 2020, CalCCA presented and described its concerns to be that the CCAs will be disadvantaged in AMP due to the current partial payment allocation process, and CCA territories with higher AMP participation will bear a larger portion of costs than IOU customers in a similar position.56 CalCCA proposed two cost recovery options to address these concerns. Option A would permit the recovery of all AMP debt forgiveness—both IOU and CCA—through the Public Purpose Programs (PPP) Charge, while Option B would have the IOU and CCA each bear responsibility for recovery of their share of the bad debt forgiven through AMP and modify the partial payment process to allocate those proportionally between the IOU and CCA.

A. Partial Payment Allocation

In response, SCE provided an overview of its Partial Payment Allocation process in the second WG meeting on July 30, 2020. SCE’s process, which, under most circumstances, is different from the process described by CalCCA in its July 13, 2020 presentation and is informally known as the “zig-zag approach,” alternating partial 51 Id., OP 80. 52 Id., OP 81. 53 Id., OP 82. 54 Id., OP 5. 55 Id., p.107. 56 CalCCA July 13,2020 presentation slides 3 and 8.

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payments between the CCA and IOU based on the payment posting priority. SCE’s current approach appropriately and equitably allocates partial payments between SCE and CCAs. As such, SCE is not proposing to make any changes to its Partial Payment Allocation process.57

B. Cost Recovery of Bad Debt Forgiven Through AMP

SCE agrees with CalCCA’s assessment that customers served by load serving entities (LSEs) with higher AMP participation will bear a larger proportion of program costs relative to LSEs with lower AMP participation58 under “Option B.” CalCCA notes that “each governing board must approve a CCA’s participation in the AMP”59 —an approach that is consistent with the position in its December 13, 2019 reply comments that CCA participation in a CPUC-established payment plan program is “optional.”60 It would be sub-optimal, from a customer communication and equity standpoint, for AMP availability to differ between similarly situated customers because certain LSEs view their participation as optional. During the fourth WG meeting, parties reached a consensus on a preference for “Option A.” Thus, SCE proposes that the CPUC adopt “Option A” cost recovery for the bad debt forgiven through AMP to ensure that eligible customers of all LSEs have the program available to them. This policy is consistent with the cost recovery policy for the CARE program.61

SCE proposes that the costs from all bad debt forgiven through the AMP (AMP subsidies), which will include bundled service customers’ generation-related forgiven bad debt, CCA (and other LSEs’) customers’ generation-related forgiven bad debt,62 and delivery-related forgiven bad debt for all customers, be recorded in a new AMP sub-account of the Residential Uncollectibles Balancing Account (RUBA).63 SCE also proposes that the balance in the AMP sub-account be transferred to the Public Purpose Programs Adjustment Mechanism (PPPAM) annually, allocated to customer classes using the currently-effective functional revenue allocation factors adopted for the PPP charge in the most recent General Rate Case Phase 2,64 and recovered from all customers through the PPP charge.

SCE believes that this proposal, including the cost recovery of the AMP subsidies through the PPP charge, is properly submitted as part of this Tier 2 AL, because the Commission’s Decision directs the implementation of AMP and specifically orders that

57 D.20-06-003, OP 87. 58 CalCCA July 13,2020 presentation slides 8. 59 Id. presentation slides 11, emphasis added. 60 CalCCA Reply Comments to November 14, 2019 ALJ Ruling, pp.3-4. 61 D.05-12-041, p.4 and pp.52-53. 62 SCE will render amounts recovered for CCAs’ generation-related AMP subsidies to the

CCA. 63 SCE proposed establishment of the RUBA in Advice 4284-E. 64 Advice 3957-E Table 2-B for SCE’s current effective PPP revenue allocation factors.

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CalCCA’s issue of concern relating to the allocation of proportional recovery shall be discussed in the WG and a proposed resolution shall be set forth in this Tier 2 AL.65

C. CCA Notification of Intent to Participate in AMP

As mentioned in the previous section, the CCAs assert that each individual CCA must approve the CCA’s participation in AMP. At this time, SCE has not received confirmation from the CCAs regarding their individual participation in AMP. Due to the rapid start of the AMP later this year, coupled with the need to create procedures and outreach materials for customers, SCE requests that the CCAs notify SCE within 45 days of this AL submittal regarding their intent to participate. Should a CCA decline to participate in AMP, SCE would allow the customer to receive forgiveness for the distribution related arrears. This would result in a separate set of communications for these specific customers. Thus SCE believes it necessary to quickly distinguish between which CCAs would participate and adjust accordingly.

D. Additional Reporting Support for CCAs

During the fourth WG meeting on August 28, 2020 the CCAs requested additional information be shared by the IOUs. Specifically, the CCAs requested the information listed below on a daily or weekly basis.

1. AMP Eligibility / Ineligibility Flag (requested weekly) 2. AMP Enrollment Flag (requsted weekly) 3. AMP Start / End Date (requested weekly) 4. Missed Payments Tracking (requested daily) 5. Total Expected AMP Dollar Amount (requested daily)

a. Total Expected Generation Dollar Amount b. Total Expected Distribution Dollar Amount

6. Processed AMP Dollar Amount (requested daily) a. Processed Generation Dollar Amount b. Processed Distribution Dollar Amount

SCE understands the need for CCAs to be able to track the status of their customers while enrolled in AMP. However, it is largely expected that any change to a customer account would be occurring on a monthly cadence. The added benefit of using the PPP charge to recover all debt forgiven should help alleviate some of the concerns from the CCAs regarding how much debt is being forgiven on a daily basis.

While this additional reporting is not required by the Decision, SCE will continue working with its CCAs to work through any customer data privacy issues and to reach agreement on providing information in a timely manner. However, with SCE 65 D.20-06-003, OP 87. Of course, should the Commission direct another approach for cost

recovery, SCE will abide by Commission orders.

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implementing AMP through manual processes, any reports will need to be gathered manually and will necessitate additional resources. In order to minimize the impact to ratepayers, SCE proposes to provide any reports to the CCAs on a monthly basis until SCE can automate AMP into its new customer service system, at which point SCE can consider requests to change the cadence of providing the information, if appropriate.

PROPOSED TARIFF CHANGES

In compliance with OPs 52, 61 through 66, and 69, a new AMP Special Condition is being added to SCE’s residential rate schedules for customers enrolled in either the CARE or FERA program. Rule 9 is also revised with the same language. Schedules D-CARE, D-FERA, TOU-D and TOU-D-T

Arrearage Management Plan (AMP): AMP is a debt forgiveness payment plan option for eligible residential Customers. An eligible Customer is a Customer who has been an SCE Customer for a minimum of six months, enrolled in the CARE or FERA program, made at least one on-time payment,66 and has a past due bill (i.e., arrearage) balance of $500 or greater which is 90 days or older. Once enrolled in the AMP, SCE shall forgive 1/12 of an eligible residential Customer’s arrearage after each on-time payment. After 12 on-time payments, SCE shall forgive the remaining arrearage debt up to a maximum of $8,000 per instance of enrollment. After successfully completing the AMP plan, a customer can re-enroll after a 12-month waiting period beginning the first month after the AMP was successfully completed. A Customer can miss up to two non-sequential payments if the Customer makes up the payment on the next billing due date with an on-time payment of both the current and missed payments. On the third instance, the Customer will be removed from the AMP. If a Customer is removed from AMP before reaching 12 on-time payments, there will be no impact on the 1/12th debt forgiven for previous on-time payments. Customers who are removed from the AMP program may re-enroll after a 12-month waiting period, assuming they meet the eligibility requirements, beginning the first month after the eligible Customer was removed. Any Customers who are removed from CARE/FERA while on AMP will be given the opportunity to complete their AMP but will be unable to re-enroll in the future unless they met the eligibility requirements. Low-Income Home Energy Assistance Program assistance will be applied to the monthly bills, not the arrearage.

In addition, and as discussed above, in this advice letter SCE modifies Preliminary Statement Part BBB, RUBA, to add a AMP subaccount for the recovery of AMP-related forgiven debt. 66 An on-time payment is defined as payment that equals or exceeds the current monthly bill

within 19 days of the bill date.

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TIER DESIGNATION

Pursuant to OP 83 of D.20-06-003, SCE submits this advice letter with a Tier 2 designation.

EFFECTIVE DATE

This advice letter will become effective on the later of November 12, 2020 or 45 days after approval.

NOTICE

Anyone wishing to protest this advice letter may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received no later than 20 days after the date of this advice letter. Protests should be submitted to:

CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102 E-mail: [email protected]

Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above).

In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of:

Gary A. Stern, Ph.D. Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770

Telephone: (626) 302-9645 Facsimile: (626) 302-6396 E-mail: [email protected]

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Diana Gallegos Senior Advisor, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5544 E-mail: [email protected]

There are no restrictions on who may submit a protest, but the protest shall set forth specifically the grounds upon which it is based and must be received by the deadline shown above.

In accordance with General Rule 4 of GO 96-B, SCE is serving copies of this advice letter to the interested parties shown on the attached GO 96-B and R.18-07-005 service lists. Address change requests to the GO 96-B service list should be directed by electronic mail to [email protected] or at (626) 302-4039. For changes to all other service lists, please contact the Commission’s Process Office at (415) 703-2021 or by electronic mail at [email protected].

Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by submitting and keeping the advice letter at SCE’s corporate headquarters. To view other SCE advice letters submitted with the Commission, log on to SCE’s web site at https://www.sce.com/wps/portal/home/regulatory/advice-letters.

For questions, please contact Eric Lee at (626) 302-0674 or by electronic mail at [email protected].

Southern California Edison Company

/s/ Gary A. Stern, Ph.D. Gary A. Stern, Ph.D.

GAS:el:jm Enclosures

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ADVICE LETTER S U M M A R YENERGY UTILITY

Company name/CPUC Utility No.:

Utility type:Phone #:

EXPLANATION OF UTILITY TYPE

ELC GAS

PLC HEAT

MUST BE COMPLETED BY UTILITY (Attach additional pages as needed)

Advice Letter (AL) #:

WATERE-mail: E-mail Disposition Notice to:

Contact Person:

ELC = ElectricPLC = Pipeline

GAS = GasHEAT = Heat WATER = Water

(Date Submitted / Received Stamp by CPUC)

Subject of AL:

Tier Designation:

Keywords (choose from CPUC listing):AL Type: Monthly Quarterly Annual One-Time Other:If AL submitted in compliance with a Commission order, indicate relevant Decision/Resolution #:

Does AL replace a withdrawn or rejected AL? If so, identify the prior AL:

Summarize differences between the AL and the prior withdrawn or rejected AL:

Confidential treatment requested? Yes NoIf yes, specification of confidential information:Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information:

Resolution required? Yes No

Requested effective date: No. of tariff sheets:

Estimated system annual revenue effect (%):

Estimated system average rate effect (%):

When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting).

Tariff schedules affected:

Service affected and changes proposed1:

Pending advice letters that revise the same tariff sheets:

1Discuss in AL if more space is needed.

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CPUC, Energy DivisionAttention: Tariff Unit505 Van Ness AvenueSan Francisco, CA 94102 Email: [email protected]

Protests and all other correspondence regarding this AL are due no later than 20 days after the date of this submittal, unless otherwise authorized by the Commission, and shall be sent to:

Name:Title:Utility Name:Address:City:State:Telephone (xxx) xxx-xxxx:Facsimile (xxx) xxx-xxxx:Email:

Name:Title:Utility Name:Address:City:State:Telephone (xxx) xxx-xxxx: Facsimile (xxx) xxx-xxxx:Email:

Zip:

Zip:

158

mailto:EDTariffUnit%40cpuc.ca.gov?subject=

ENERGY Advice Letter Keywords

Affiliate Direct Access Preliminary StatementAgreements Disconnect Service ProcurementAgriculture ECAC / Energy Cost Adjustment Qualifying FacilityAvoided Cost EOR / Enhanced Oil Recovery RebatesBalancing Account Energy Charge RefundsBaseline Energy Efficiency ReliabilityBilingual Establish Service Re-MAT/Bio-MATBillings Expand Service Area Revenue AllocationBioenergy Forms Rule 21Brokerage Fees Franchise Fee / User Tax RulesCARE G.O. 131-D Section 851CPUC Reimbursement Fee GRC / General Rate Case Self GenerationCapacity Hazardous Waste Service Area MapCogeneration Increase Rates Service OutageCompliance Interruptible Service SolarConditions of Service Interutility Transportation Standby ServiceConnection LIEE / Low-Income Energy Efficiency StorageConservation LIRA / Low-Income Ratepayer Assistance Street LightsConsolidate Tariffs Late Payment Charge SurchargesContracts Line Extensions TariffsCore Memorandum Account TaxesCredit Metered Energy Efficiency Text ChangesCurtailable Service Metering TransformerCustomer Charge Mobile Home Parks Transition CostCustomer Owned Generation Name Change Transmission LinesDecrease Rates Non-Core Transportation ElectrificationDemand Charge Non-firm Service Contracts Transportation RatesDemand Side Fund Nuclear UndergroundingDemand Side Management Oil Pipelines Voltage DiscountDemand Side Response PBR / Performance Based Ratemaking Wind PowerDeposits Portfolio Withdrawal of ServiceDepreciation Power Lines

159

Public Utilities Commission 4287-E Attachment A

Cal. P.U.C. Sheet No. Title of Sheet

Cancelling Cal. P.U.C. Sheet No.

1

Revised 69530-E Preliminary Statements BBB Original 69497-ERevised 69531-E Preliminary Statements BBB Original 69499-EOriginal 69532-E Preliminary Statements BBB Original 69499-E Revised 69533-E Schedules D-CARE Revised 69009-E Original 69534-E Schedules D-FERA Revised 69535-E Schedules TOU-D Revised 66103-ERevised 69536-E Schedules TOU-D Revised 69016-ERevised 69537-E Schedules TOU-D Revised 69017-ERevised 69538-E Schedules TOU-D Revised 69018-ERevised 69539-E Schedules TOU-D Original 69019-E Revised 69540-E Schedules TOU-D-T Revised 69114-ERevised 69541-E Schedules TOU-D-T Revised 66114-ERevised 69542-E Schedules TOU-D-T Revised 69020-ERevised 69543-E Schedules TOU-D-T Revised 69021-ERevised 69544-E Schedules TOU-D-T Revised 69022-ERevised 69545-E Schedules TOU-D-T Original 69023-E Revised 69546-E Rule 9 Revised 52692-E Revised 69547-E Table of Contents Revised 67482-ERevised 69548-E Table of Contents Revised 69312-ERevised 69549-E Table of Contents Revised 69225-ERevised 69550-E Table of Contents Revised 68918-E

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Southern California Edison Revised Cal. PUC Sheet No. 69530-E Rosemead, California (U 338-E) Cancelling Original Cal. PUC Sheet No. 69497-E

PRELIMINARY STATEMENT Sheet 1

(Continued) (To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 4287-E Carla Peterman Date Submitted Sep 9, 2020 Decision 20-06-003 Senior Vice President Effective 1P8 Resolution

BBB. Residential Uncollectibles Balancing Account (RUBA)

1. Purpose

The Residential Uncollectibles Balancing Account (RUBA) is established pursuant to Decision 20-06-003. The RUBA will record the difference (positive or negative)between the recorded uncollectibles expense for all customer groups and the total authorized uncollectibles revenue collected from all customers subject to a cap equal to the actual recorded uncollectibles expense for residential customers.

The RUBA will separately record in the Arrearage Management Plan (AMP) Subaccount all bad debt forgiven through the AMP which will include bundled service customers’ generation-related forgiven bad debt, Community Choice Aggregators (CCA) and other load serving entities (LSEs’) customers’ generation-related forgiven bad debt, and delivery-related forgiven bad debt for all customers.

2. Definitions a. Recorded Uncollectibles Expense for Residential Customers:

The recorded uncollectibles expense will include current year estimated residential bad debt expense (based on amounts recorded in SCE’s general ledger) for write-offs associated with existing accounts receivable amounts and will be adjusted to reflect the actual write-off amounts in the following year.

b. Authorized Uncollectibles Expense:

The authorized uncollectibles expense is determined by applying the current General Rate Case (GRC) authorized uncollectibles factor1 to SCE’s total net customer revenues2 resulting from SCE’s annual consolidated rate change and all other rate changes that may occur in a year.

c. Energy Resource Recovery Account Balancing Account (ERRA BA)-Related

Uncollectibles Sub-Account:

The ERRA BA-Related Uncollectibles Sub-Account records the incremental residential uncollectibles expense associated with ERRA revenues, which are the responsibility of SCE’s Bundled Service customers.

d. Public Purpose Programs Adjustment Mechanism (PPPAM), Related

Uncollectibles Sub-Account:

The PPPAM-Related Uncollectibles Sub-Account records the incremental residential uncollectibles expense associated with Non-ERRA revenues, which are the responsibility of all SCE customers (both Bundled Service and Departing Load customers).

1. The current GRC authorized uncollectibles factor is set forth in Preliminary Statement Part YY, Base Revenue

Requirement Balancing Account (BRRBA). 2. Total net customer revenues are billed revenues, excluding uncollectibles, franchise fees, and estimates of

unbilled revenues associated with customer usage in the month that will not be billed until the following month.

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PRELIMINARY STATEMENT Sheet 3

(Continued)


BBB. Residential Uncollectibles Balancing Account (RUBA) (Continued)

3. Operation of the RUBA (Continued)

a. PPPAM-Related Uncollectibles Sub-Account

Monthly entries to the PPPAM-Related Uncollectibles Sub-Account shall be determined as follows:

i. A debit or credit entry equal to the monthly amount of the difference,

positive or negative, between the recorded uncollectibles expense for all customer groups and the total authorized uncollectibles revenue collected from all customers, subject to an annual cap equal to theannual recorded uncollectibles expense for residential customers,multiplied by the applicable UAF (as determined in Section 2.e.ii.above);

Interest shall accrue monthly to the PPPAM-Related Uncollectibles Sub-Account of the RUBA by applying the interest rate to the average of the beginning-of-month and end-of-month balances in the PPPAM-Related Uncollectibles Sub-Account of the RUBA.

SCE shall transfer at year-end any (over)/undercollection recorded in this sub-account as of December 31 to the PPPAM, to be recovered from or returned to all customers through Public Purpose Programs Charge (PPPC).

b. AMP Sub-Account

Monthly entry to the AMP Sub-Account shall be determined as follows: A debit entry equal to the monthly amount of recorded forgiven bad debt Interest shall accrue monthly to the AMP Sub-Account of the RUBA by applying the interest rate to the average of the beginning-of-month and end-of-month balances in the AMP Sub-Account of the RUBA. The balance in the AMP sub-account will transfer to the Public Purpose Programs Adjustment Mechanism (PPPAM) annually, allocated to customer classes using the currently-effective functional revenue allocation factors adopted for the Public Purpose Programs (PPP) charge in the most recent General Rate Case Phase 2 , and recovered from all customers through the PPP charge.

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162

Southern California Edison Original Cal. PUC Sheet No. 69532-E Rosemead, California (U 338-E) Cancelling Original Cal. PUC Sheet No. 69499-E

PRELIMINARY STATEMENT Sheet 4 (N)

(Continued)

(To be inserted by utility) Issued by (To be inserted by Cal. PUC) Advice 4287-E Carla Peterman Date Submitted Sep 9, 2020 Decision 20-06-003 Senior Vice President Effective 4P9 Resolution

BBB. Residential Uncollectibles Balancing Account (RUBA) (Continued)

4. Review Procedures

In SCE’s annual year-end true-up advice letter for 2020, SCE intends to include the operation of the RUBA so that the recorded amounts can be verified to ensure that the entries made in the RUBA are stated correctly and are consistent with Commission decisions. The recorded operation of the ERRA BA and PPPAM (which will include the RUBA subaccount transfers) are reviewed in SCE’s annual ERRA Review proceeding to review the entries for purposes of confirming that they are stated correctly and are consistent with Commission decision(s).

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163

Southern California Edison Revised Cal. PUC Sheet No. 69533-E Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No. 69009-E

Schedule D-CARE Sheet 7 CALIFORNIA ALTERNATE RATES FOR ENERGY DOMESTIC SERVICE

(Continued)


12. Residential California Climate Credit: A semi-annual credit from the State of California to fight climate change. The credit is applied on an equal basis, per household, to the April and October billing statements of customers receiving service under this schedule at the time the California Climate Credit is disbursed (April 1st and October 1st). Any California Climate Credit not consumed in the billing period in which the credit is applied will roll over to each subsequent billing period until the credit is fully consumed. In response to the COVID-19 pandemic, the October 2020 California Climate Credit of $37 per residential household will be advanced and divided into two equal credits of $18.50. The first credit will be applied to either the May or June 2020 billing statement of customers receiving service under this schedule depending on the customers’ billing cycle. The second credit will be applied to either the June or July 2020 billing statement of customers receiving service under this schedule depending on the customers’ billing cycle. As a result, a California Climate Credit will not be applied to customers’ October 2020 billing statements.

13. Arrearage Management Plan (AMP): AMP is a debt forgiveness payment plan option for

eligible residential Customers. An eligible Customer is a Customer who has been an SCE Customer for a minimum of six months, enrolled in the CARE or FERA program, made at least one on-time payment,1 and has a past due bill (i.e., arrearage) balance of $500 or greater which is 90 days or older. Once enrolled in the AMP, SCE shall forgive 1/12 of an eligible residential Customer’s arrearage after each on-time payment. After 12 on-time payments, SCE shall forgive the remaining arrearage debt up to a maximum of $8,000 per instance of enrollment. After successfully completing the AMP plan, a customer can re-enroll after a 12-month waiting period beginning the first month after the AMP was successfully completed. A Customer can miss up to two non-sequential payments if the Customer makes up the payment on the next billing due date with an on-time payment of both the current and missed payments. This can occur twice during the 12 months a Customer is on AMP. On the third instance, the Customer will be removed from the AMP. If a Customer is removed from AMP before reaching 12 on-time payments, there will be no impact on the 1/12th debt forgiven for previous on-time payments. Customers who are removed from the AMP program may re-enroll after a 12-month waiting period, assuming they meet the eligibility requirements, beginning the first month after the eligible Customer was removed. Any Customers who are removed from CARE/FERA while on AMP will be given the opportunity to complete their AMP but will be unable to re-enroll in the future unless they met the eligibility requirements. Low-Income Home Energy Assistance Program assistance will be applied to the monthly bills, not the arrearage.

1. An on-time payment is defined as payment that equals or exceeds the current monthly bill within 19 days of the bill

date.

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164

Southern California Edison Original Cal. PUC Sheet No. 69534-E Rosemead, California (U 338-E) Cancelling Cal. PUC Sheet No.

Schedule D-FERA Sheet 7 Family Electric Rate Assistance

(Continued)


SPECIAL CONDITIONS (Continued)

13. Arrearage Management Plan (AMP): AMP is a debt forgiveness payment plan option for eligible residential Customers. An eligible Customer is a Customer who has been an SCE Customer for a minimum of six months, enrolled in the CARE or FERA program, made at least one on-time payment,1 and has a past due bill (i.e., arrearage) balance of $500 or greater which is 90 days or older. Once enrolled in the AMP, SCE shall forgive 1/12 of an eligible residential Customer’s arrearage after each on-time payment. After 12 on-time payments, SCE shall forgive the remaining arrearage debt up to a maximum of $8,000 per instance of enrollment. After successfully completing the AMP plan, a customer can re-enroll after a 12-month waiting period beginning the first month after the AMP was successfully completed. A Customer can miss up to two non-sequential payments if the Customer makes up the payment on the next billing due date with an on-time payment of both the current and missed payments. This can occur twice during the 12 months a Customer is on AMP. On the third instance, the Customer will be removed from the AMP. If a Customer is removed from AMP before reaching 12 on-time payments, there will be no impact on the 1/12th debt forgiven for previous on-time payments. Customers who are removed from the AMP program may re-enroll after a 12-month waiting period, assuming they meet the eligibility requirements, beginning the first month after the eligible Customer was removed. Any Customers who are removed from CARE/FERA while on AMP will be given the opportunity to complete their AMP but will be unable to re-enroll in the future unless they met the eligibility requirements. Low-Income Home Energy Assistance Program assistance will be applied to the monthly bills, not the arrearage.

1. An on-time payment is defined as payment that equals or exceeds the current monthly bill within 19 days of the bill

date.

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Schedule TOU-D Sheet 19 TIME-OF-USE DOMESTIC

(Continued)


SPECIAL CONDITIONS (Continued) 9. Arrearage Management Plan (AMP): AMP is a debt forgiveness payment plan option for eligible

residential Customers. An eligible Customer is a Customer who has been an SCE Customer for a minimum of six months, enrolled in the CARE or FERA program, made at least one on-time payment,1 and has a past due bill (i.e., arrearage) balance of $500 or greater which is 90 days or older. Once enrolled in the AMP, SCE shall forgive 1/12 of an eligible residential Customer’s arrearage after each on-time payment. After 12 on-time payments, SCE shall forgive the remaining arrearage debt up to a maximum of $8,000 per instance of enrollment. After successfully completing the AMP plan, a customer can re-enroll after a 12-month waiting period beginning the first month after the AMP was successfully completed. A Customer can miss up to two non-sequential payments if the Customer makes up the payment on the next billing due date with an on-time payment of both the current and missed payments. This can occur twice during the 12 months a Customer is on AMP. On the third instance, the Customer will be removed from the AMP. If a Customer is removed from AMP before reaching 12 on-time payments, there will be no impact on the 1/12th debt forgiven for previous on-time payments. Customers who are removed from the AMP program may re-enroll after a 12-month waiting period, assuming they meet the eligibility requirements, beginning the first month after the eligible Customer was removed. Any Customers who are removed from CARE/FERA while on AMP will be given the opportunity to complete their AMP but will be unable to re-enroll in the future unless they met the eligibility requirements. Low-Income Home Energy Assistance Program assistance will be applied to the monthly bills, not the arrearage.

10. Billing Calculation: A Customer’s bill is calculated according to the rates and conditions above. The charges listed in the Rates section are calculated by multiplying the total Delivery Service

rates and the Generation rates, when applicable, by the billing determinants (e.g., per kilowatt [kW], kilowatt-hour [kWh], etc.).

As of January 1, 2012, all generation supplied to Bundled Service Customers is provided by

SCE. The DWR Energy Credit provided to Bundled Service Customers is determined by multiplying the DWR Energy Credit rate component by the Customer’s total kWhs.

a. Bundled Service Customers receive Delivery Service and Generation service from

SCE. The Customer’s bill is the sum of the charges for Delivery Service and Generation service determined, as described in this Special Condition, and subject to applicable discounts or adjustments provided under SCE’s tariff schedules.

b. Direct Access Customers receive Delivery Service from SCE and purchase energy

from an Energy Service Provider. The Customer’s bill is the sum of the charges for Delivery Service determined as described in this Special Condition except that the DWRBC rate component is subtracted from the total Delivery Service rate before the billing determinants are multiplied by such resulting total rate; plus the applicable charges as shown in Schedule DA-CRS and subject to applicable discounts or adjustments provided under SCE’s tariff schedules.

1. An on-time payment is defined as payment that equals or exceeds the current monthly bill within 19 days of the bill date.

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166



(Continued)


SPECIAL CONDITIONS (Continued) 10. Billing Calculation (Continued)

c. CCA Service Customers receive Delivery Service from SCE and purchase energy from their Community Choice Aggregator (CCA). SCE will read the meters and present the bill for both Delivery Service and Generation to the CCA Service Customer. The Customer’s bill is the sum of the charges for Delivery Service as displayed in this Rate Schedule and Generation charges determined by the CCA plus the applicable charges as shown in Schedule CCA-CRS, and subject to applicable discounts or adjustments provided under SCE’s tariff schedules.

11. Residential California Climate Credit: A semi-annual credit from the State of California to fight

climate change. The credit is applied on an equal basis, per household, to the April and October billing statements of Customers receiving service under this schedule at the time the California Climate Credit is disbursed (April 1st and October 1st). Any California Climate Credit not consumed in the billing period in which the credit is applied will roll over to each subsequent billing period until the credit is fully consumed.

12. Customer-Owned Electrical Generating Facilities:

a. For customers not eligible for service under Schedule NEM, Net Energy Metering, or its successor, Schedule NEM-ST, and where customer-owned electrical generating facilities are used to meet a part or all of the customer's electrical requirements, service shall be provided concurrently under the terms and conditions of Schedule S and this Schedule. Parallel operation of such generating facilities with SCE’s electrical system is permitted. A generation interconnection agreement is required for such operation. In response to the COVID-19 pandemic, the October 2020 California Climate Credit of $37 per residential household will be advanced and divided into two equal credits of $18.50. The first credit will be applied to either the May or June 2020 billing statement of customers receiving service under this schedule depending on the customers’ billing cycle. The second credit will be applied to either the June or July 2020 billing statement of customers receiving service under this schedule depending on the customers’ billing cycle. As a result, a California Climate Credit will not be applied to customers’ October 2020 billing statements.

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(Continued)


SPECIAL CONDITIONS (Continued) 12. Customer-Owned Electrical Generating Facilities: (Continued)

b. For customers of record on Schedule D-PG as of April 30, 1996, who were subsequently transferred by SCE to an applicable Domestic rate schedule, who have a valid Qualifying Facilities (QF) contract with SCE, and who are not eligible for service under Schedule NEM, Net Energy Metering, or its successor, Schedule NEM-ST, the Energy Charges for such parallel generation Customers shall be determined using kWh of Net Energy as defined and set forth below:

(1) Net Energy: Net Energy is ES minus EF where ES is energy supplied by SCE

and EF is energy generated by the Customer and fed back into SCE's system at such times as Customer generation exceeds customer requirements. Only if Net Energy is positive shall Net Energy charges be applied at the rates specified above except that the Minimum Charge will be applied in any case. If the calculation of Net Energy yields a negative result, all such negative Net Energy shall be considered Net Energy transmitted and shall be treated as stated in Section (2), below. The components of Net Energy, ES and EF shall be separately recorded unless SCE and Customer agree that energy fed back, EF, is negligible or zero, and so specify by waiver in the generation interconnection agreement.

(2) Net Energy Transmitted: Net Energy transmitted occurs when the cumulative

value of EF exceeds the cumulative value of ES during an entire billing period and is the amount by which the energy generated by the Customer and fed back into SCE’s system exceeds the energy supplied by SCE over an entire billing period. Such Net Energy transmitted will be purchased by SCE at a rate for payment equal to SCE’s applicable standard offer energy payment rate filed with the Commission. A new rate for payment shall be effective for Net Energy transmitted on and after the effective date of each such filing.

(3) Billing: Payment by SCE to the customer for Net Energy transmitted shall be

included as a component of the Customer's bill for service rendered under this tariff.

(4) Standby: Exempt from the charges of Schedule S.

c. Customer-owned electrical generating facilities used solely for auxiliary, emergency, or

standby purposes (auxiliary/emergency generating facilities) to serve the customer’s load during a period when SCE’s service is unavailable and when such load is isolated from the service of SCE are not subject to Schedule S. However, upon approval by SCE, momentary parallel operation may be permitted to allow the Customer to test the auxiliary/emergency generating facilities. A Momentary Parallel Generation Contract is required for this type of service.

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(Continued)


SPECIAL CONDITIONS (Continued) 13. TOU Period Grandfathering: Pursuant to D.17-01-006 and D.17-10-018, BTM solar

Customers who meet the eligibility criteria described below are eligible to continue receiving service on a TOU Option with Legacy TOU Period outlined below.

a. Customer Eligibility:

(1) Customers must have been served on a TOU rate as of July 31, 2017.

(2) Customers must have submitted their initial solar Generating Facility interconnection application by January 31, 2017.

(3) Customers served on Schedules NEM-ST, MASH-VNM-ST or NEM-V-ST are not eligible. Alternate TOU period grandfathering provisions for those Customers are included in those respective schedules and differ from what is included in this Special Condition.

b. System Eligibility:

(1) This provision is only applicable to BTM solar Generating Facilities.

(2) The solar Generating Facility must have been designed to offset at least 15 percent of the Customer’s current annual load, as determined by SCE.

c. Duration:

(1) Customers are permitted to remain on this rate schedule and be billed under the Legacy TOU Periods for a period of five years from their solar Generating Facility’s original permission to operate date.

(2) In no event shall the duration of this TOU Period Grandfathering extend

beyond July 31, 2022 for any Customers served on this Schedule, regardless of whether the Customer has received the full five years of TOU Period Grandfathering. Customers will be transitioned to Options with current TOU periods upon expiration of their Legacy TOU Periods at the start of the next billing period that occurs immediately on or after the Annual Migration Date (expected to be in November), as outlined in Advice 3582-E-A.

(3) Customers that elect a Change of Rate Schedule to Option 4-9 PM, Option

4-9 PM-Critical Peak Pricing (CPP), Option D-5-8 PM, Option D-5-8 PM-CPP, Option PRIME, Option PRIME-CPP, or another applicable Rate Schedule with updated TOU Periods, will no longer be eligible to return to an Option with Legacy TOU Periods.

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(Continued)


SPECIAL CONDITIONS (Continued) 13. TOU Period Grandfathering: (Continued)

d. Attributes:

The TOU Period Grandfathering described herein allows the Customer to maintain Legacy TOU Periods for the duration. Other changes in rate design, including allocating marginal costs to TOU periods and setting specific rate levels, will be litigated in utility-specific rate proceedings.

e. Legacy TOU Periods: Applicable rate time periods are defined as follows:

On-Peak: 2:00 p.m. to 8:00 p.m. summer and winter weekdays except holidays. Super Off-Peak: 10:00 p.m. to 8:00 a.m. - all year, every day. Off-Peak: All other hours - all year, every day.

Holidays are New Year's Day (January 1), Presidents’ Day (third Monday in February), Memorial Day (last Monday in May), Independence Day (July 4), Labor Day (first Monday in September), Veterans Day (November 11), Thanksgiving Day (fourth Thursday in November), and Christmas (December 25). When any holiday listed above falls on Sunday, the following Monday will be recognized as a holiday and off-peak period. No change will be made for holidays falling on Saturday. The summer season shall commence at 12:00 a.m. on June 1 and continue until 12:00 a.m. on October 1 of each year. The winter season shall commence at 12:00 a.m. on October 1 of each year and continue until 12:00 a.m. on June 1 of the following year.

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Schedule TOU-D-T Sheet 7 TIME-OF-USE TIERED DOMESTIC

(Continued)



4. Change of Rate Schedule: There is no minimum length of time that a Customer must take service under this Schedule. In the event a Customer desires to transfer to another applicable rate schedule, the change will become effective for service supplied after the next regular meter reading following the date of notice to SCE. The Customer shall not be allowed to make an additional change in rate schedule until 12 months of service has been provided under the rate schedule then in effect.

Customers eligible for TOU Period Grandfathering as detailed in Special Condition 9 who elect a change of rate schedule will no longer be eligible for this Schedule.

5. California Alternate Rates for Energy CARE Discount: Customers who meet the definition of a

CARE Household, as defined in Schedule D-CARE, may qualify for a 28.9 percent discount off of their electric bill prior to the application of the Public Utilities Commission Reimbursement Fee (PUCRF) and any applicable user fees, taxes and late payment charges in full. Eligible CARE Customers are required to pay the PUCRF and any applicable user fees, taxes, and late payment charges in full. In addition, eligible CARE Customers are exempt from paying the CARE Surcharge of $0.00569 per kWh and the Department of Water Resources Bond Charge of $0.00580 per kWh. The 28.9 percent discount in addition to these exemptions result in an average effective CARE Discount of 32.5 percent. An application and eligibility declaration is required for service under this Special Condition. Eligible Customers shall have the CARE Discount applied to this Schedule commencing no later than one billing period after receipt and approval of the Customer's application by SCE. Customers may be rebilled for periods in which they do not meet the eligibility requirements for the CARE Discount.

6. Arrearage Management Plan (AMP): AMP is a debt forgiveness payment plan option for

eligible residential Customers. An eligible Customer is a Customer who has been an SCE Customer for a minimum of six months, enrolled in the CARE program, made at least one on-time payment,1 and has a past due bill (i.e., arrearage) balance of $500 or greater which is 90 days or older. Once enrolled in the AMP, SCE shall forgive 1/12 of an eligible residential Customer’s arrearage after each on-time payment. After 12 on-time payments, SCE shall forgive the remaining arrearage debt up to a maximum of $8,000 per instance of enrollment. After successfully completing the AMP plan, a customer can re-enroll after a 12-month waiting period beginning the first month after the AMP was successfully completed. A Customer can miss up to two non-sequential payments if the Customer makes up the payment on the next billing due date with an on-time payment of both the current and missed payments. This can occur twice during the 12 months a Customer is on AMP. On the third instance, the Customer will be removed from the AMP. If a Customer is removed from AMP before reaching 12 on-time payments, there will be no impact on the 1/12th debt forgiven for previous on-time payments. Customers who are removed from the AMP program may re-enroll after a 12-month waiting period, assuming they meet the eligibility requirements, beginning the first month after the eligible Customer was removed. Any Customers who are removed from CARE while on AMP will be given the opportunity to complete their AMP but will be unable to re-enroll in the future unless they met the eligibility requirements. Low-Income Home Energy Assistance Program assistance will be applied to the monthly bills, not the arrearage.

1. An on-time payment is defined as payment that equals or exceeds the current monthly bill within 19 days of the bill date.

(N) | | | | | | | | | | | | | | | | | | | | (N)

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(Continued)



7. Billing Calculation: A Customer’s bill is calculated according to the rates and conditions above.

The charges listed in the Rates section are calculated by multiplying the total Delivery Service

rates and the Generation rates, when applicable, by the billing determinants (e.g., per kilowatt [kW], kilowatthour [kWh], etc.).

As of January 1, 2012, all generation supplied to Bundled Service Customers is provided by

SCE. The DWR Energy Credit provided to Bundled Service Customers is determined by multiplying the DWR Energy Credit rate component by the Customer’s total kWhs.

In order to determine the allocation of baseline kWh to each Time-of-Use (TOU) period, the Customer’s baseline allowance for the billing period is first allocated to each TOU period based on the ratio of the metered seasonal kWh in the TOU period to the total metered seasonal kWhs in the billing cycle. TOU kWhs are then assigned to each tier by applying the existing tiering parameters. Baseline allowance for distribution to TOU periods is the minimum of the standard allocation as set forth in Preliminary Statement, Part H, or total metered kWh for the billing cycle.

a. Bundled Service Customers receive Delivery Service and Generation service from

SCE. The Customer’s bill is the sum of the charges for Delivery Service and Generation service determined, as described in this Special Condition, and subject to applicable discounts or adjustments provided under SCE’s tariff schedules.

b. Direct Access Customers receive Delivery Service from SCE and purchase energy

from an Energy Service Provider. The Customer’s bill is the sum of the charges for Delivery Service determined as described in this Special Condition except that the DWRBC rate component is subtracted from the total Delivery Service rate before the billing determinants are multiplied by such resulting total rate; plus the applicable charges as shown in Schedule DA-CRS and subject to applicable discounts or adjustments provided under SCE’s tariff schedules.

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(Continued)



7. Billing Calculation: (Continued)

c. CCA Service Customers receive Delivery Service from SCE and purchase energy from their Community Choice Aggregator (CCA). SCE will read the meters and present the bill for both Delivery Service and Generation to the CCA Service Customer. The Customer’s bill is the sum of the charges for Delivery Service as displayed in this Rate Schedule and Generation charges determined by the CCA plus the applicable charges as shown in Schedule CCA-CRS, and subject to applicable discounts or adjustments provided under SCE’s tariff schedules.

8. Residential California Climate Credit: A semi-annual credit from the State of California to fight

climate change. The credit is applied on an equal basis, per household, to the April and October billing statements of Customers receiving service under this schedule at the time the California Climate Credit is disbursed (April 1st and October 1st). Any California Climate Credit not consumed in the billing period in which the credit is applied will roll over to each subsequent billing period until the credit is fully consumed. In response to the COVID-19 pandemic, the October 2020 California Climate Credit of $37 per residential household will be advanced and divided into two equal credits of $18.50. The first credit will be applied to either the May or June 2020 billing statement of customers receiving service under this schedule depending on the customers’ billing cycle. The second credit will be applied to either the June or July 2020 billing statement of customers receiving service under this schedule depending on the customers’ billing cycle. As a result, a California Climate Credit will not be applied to customers’ October 2020 billing statements.

9. Customer-Owned Electrical Generating Facilities:

a. For Customers not eligible for service under Schedule NEM, Net Energy Metering, or its successor, Schedule NEM-ST, and where Customer-owned electrical generating facilities are used to meet a part or all of the Customer's electrical requirements, service shall be provided concurrently under the terms and conditions of Schedule S and this Schedule. Parallel operation of such generating facilities with SCE’s electrical system is permitted. A generation interconnection agreement is required for such operation.

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(Continued)


SPECIAL CONDITIONS (Continued) 9. Customer-Owned Electrical Generating Facilities: (Continued)

b. For Customers of record on Schedule D-PG as of April 30, 1996, who were subsequently transferred by SCE to an applicable Domestic rate schedule, who have a valid Qualifying Facilities (QF) contract with SCE, and who are not eligible for service under Schedule NEM, Net Energy Metering, or its successor, Schedule NEM-ST, the Energy Charges for such parallel generation Customers shall be determined using kWh of Net Energy as defined and set forth below:

(1) Net Energy: Net Energy is ES minus EF where ES is energy supplied by SCE

and EF is energy generated by the Customer and fed back into SCE's system at such times as Customer generation exceeds Customer requirements. Only if Net Energy is positive shall Net Energy charges be applied at the rates specified above except that the Minimum Charge will be applied in any case. If the calculation of Net Energy yields a negative result, all such negative Net Energy shall be considered Net Energy transmitted and shall be treated as stated in Section (2), below. The components of Net Energy, ES and EF shall be separately recorded unless SCE and Customer agree that energy fed back, EF, is negligible or zero, and so specify by waiver in the generation interconnection agreement.

(2) Net Energy Transmitted: Net Energy transmitted occurs when the cumulative

value of EF exceeds the cumulative value of ES during an entire billing period and is the amount by which the energy generated by the Customer and fed back into SCE’s system exceeds the energy supplied by SCE over an entire billing period. Such Net Energy transmitted will be purchased by SCE at a rate for payment equal to SCE’s applicable standard offer energy payment rate filed with the Commission. A new rate for payment shall be effective for Net Energy transmitted on and after the effective date of each such filing.

(3) Billing: Payment by SCE to the Customer for Net Energy transmitted shall be

included as a component of the Customer's bill for service rendered under this tariff.

(4) Standby: Exempt from the charges of Schedule S.

c. Customer-owned electrical Generating Facilities used solely for auxiliary, emergency, or

standby purposes (auxiliary/emergency generating facilities) to serve the Customer’s load during a period when SCE’s service is unavailable and when such load is isolated from the service of SCE are not subject to Schedule S. However, upon approval by SCE, momentary parallel operation may be permitted to allow the Customer to test the auxiliary/emergency generating facilities. A Momentary Parallel Generation Contract is required for this type of service.

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(Continued)


SPECIAL CONDITIONS (Continued) 10. TOU Period Grandfathering: Pursuant to D.17-01-006 and D.17-10-018, behind-the-meter

(BTM) solar Customers who meet the eligibility criteria described below are eligible to continue receiving service on this rate schedule for the Duration outlined below even after this rate schedule is closed to new Customers. a. Customer Eligibility:

(1) Customers must have been served on a TOU Option as of July 31, 2017.

(2) Customers must have submitted their initial solar Generating Facility

interconnection application by January 31, 2017.

(3) Customers served on Schedules NEM-ST, MASH-VNM-ST or NEM-V-ST arenot eligible. Alternate TOU Period Grandfathering provisions for thoseCustomers are included in those respective schedules and differ from what isincluded in this Special Condition.

b. System Eligibility:

(1) This provision is only applicable to BTM solar Generating Facilities.

(2) The solar Generating Facility must have been designed to offset at least 15 percent of the Customer’s current annual load, as determined by SCE.

c. Duration:

(1) Customers are permitted to remain on this rate schedule and be billed under the Legacy TOU Periods for a period of five years from their solar Generating Facility’s original permission to operate date.

(2) In no event shall the duration of this TOU Period Grandfathering extend beyond July 31, 2022 for any Customers served on this Schedule, regardless of whether the Customer has received the full five years of TOU period grandfathering. Customers will be transitioned to Options with current TOU periods upon expiration of their Legacy TOU Periods at the start of the next billing period that occurs immediately on or after Annual Migration Date (expected to be in November), as outlined in Advice 3582-E-A.

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(Continued)



10. TOU Period Grandfathering: (Continued) d. Attributes:

The TOU Period Grandfathering described herein allows the Customer to maintain Legacy TOU Periods for the duration. Other changes in rate design, including allocating marginal costs to TOU periods and setting specific rate levels, will be litigated in utility-specific rate proceedings.

e. Legacy TOU Periods: Applicable rate time periods are defined as follows:

On-Peak: 12:00 p.m. to 6:00 p.m. summer and winter weekdays except holiday

Off-Peak: All other hours - all year, every day.

Holidays are New Year's Day (January 1), Presidents’ Day (third Monday in February), Memorial Day (last Monday in May), Independence Day (July 4), Labor Day (first Monday in September), Veterans Day (November 11), Thanksgiving Day (fourth Thursday in November), and Christmas (December 25). When any holiday listed above falls on Sunday, the following Monday will be recognized as a holiday. No change will be made for holidays falling on Saturday. The summer season shall commence at 12:00 a.m. on June 1 and continue until 12:00 a.m. on October 1 of each year. The winter season shall commence at 12:00 a.m. on October 1 of each year and continue until 12:00 a.m. on June 1 of the following year.

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Rule 9 Sheet 5 RENDERING AND PAYMENT OF BILLS

(Continued)


H. Credit/Debit Card Payment Option.

SCE shall accept credit/debit card, pinless debit card, and/or electronic checks payments from customers for payment of their residential electric bill or Summary Bill and deposit.1/ Payments will be accepted through the use of a vendor, and a $1.65 convenience fee per transaction shall apply. Credit/debit card and pinless debit card payments will be accepted for energy-related charges and deposits. Customers are limited to one transaction per each assessed fee. If a residential customer has more than one customer account, a separate card transaction is needed for each account. A convenience fee will apply for each transaction completed and will be added as a charge to the credit/debit card and not the SCE Energy Statement. Customers who are scheduled for disconnection (i.e., a bill or Summary Bill that is not paid within the time required by such disconnection notice) are able to make a payment using a credit/debit, pinless debit card, and/or electronic check. In addition, customers who have had their residential service disconnected will be able to make a payment using a credit/debit, pinless debit card, and/or electronic check for reconnection of service, and will be able to pay a deposit that is necessary due to being scheduled for disconnection or disconnected. This payment option is not available to customers who have had two or more returned credit and/or debit payments within the last 12 months or who have made a fraudulent payment.

I. Arrearage Management Plan (AMP): AMP is a debt forgiveness payment plan option for eligible residential Customers. An eligible Customer is a Customer who has been an SCE Customer for a minimum of six months, enrolled in the CARE or FERA program, made at least one on-time payment,1 and has a past due bill (i.e., arrearage) balance of $500 or greater which is 90 days or older. Once enrolled in the AMP, SCE shall forgive 1/12 of an eligible residential Customer’s arrearage after each on-time payment. After 12 on-time payments, SCE shall forgive the remaining arrearage debt up to a maximum of $8,000 per instance of enrollment. After successfully completing the AMP plan, a customer can re-enroll after a 12-month waiting period beginning the first month after the AMP was successfully completed. A Customer can miss up to two non-sequential payments if the Customer makes up the payment on the next billing due date with an on-time payment of both the current and missed payments. This can occur twice during the 12 months a Customer is on AMP. On the third instance, the Customer will be removed from the AMP. If a Customer is removed from AMP before reaching 12 on-time payments, there will be no impact on the 1/12th debt forgiven for previous on-time payments. Customers who are removed from the AMP program may re-enroll after a 12-month waiting period, assuming they meet the eligibility requirements, beginning the first month after the eligible Customer was removed. Any Customers who are removed from CARE/FERA while on AMP will be given the opportunity to complete their AMP but will be unable to re-enroll in the future unless they met the eligibility requirements. Low-Income Home Energy Assistance Program assistance will be applied to the monthly bills, not the arrearage.

1/ The service accounts associated with a Summary Bill must also be for residential service. 2/ An on-time payment is defined as payment that equals or exceeds the current monthly bill within 19 days of the bill

date.

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TABLE OF CONTENTS Sheet 1


Cal. P.U.C. Sheet No.

TITLE PAGE ............................................................................................................................. 11431-E TABLE OF CONTENTS - RATE SCHEDULES .... 67547-67339-67548-69549-67342-67343-67344-E ........................................................................................................... 67467-67346-67468-E TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS ................................... 66863-E TABLE OF CONTENTS - RULES ................................................................................. 69550-64043-E TABLE OF CONTENTS-INDEX OF COMMUNITIES, MAPS, BOUNDARY DESCRIPTIONS 62213-E TABLE OF CONTENTS - SAMPLE FORMS.. .................. 62213-64447-61576-65710-63318-61631-E

........................................................................................................... 67483-61971-63296-E

PRELIMINARY STATEMENT:

A. Territory Served ......................................................................................................... 22909-E B. Description of Service ................................................................................................ 22909-E C. Procedure to Obtain Service ..................................................................................... 22909-E D. Establishment of Credit and Deposits ....................................................................... 22909-E E. General .......................................................................... 45178-45179-45180-53818-45182-E F. Symbols ..................................................................................................................... 45182-E G. Gross Revenue Sharing Mechanism ....... 26584-26585-26586-26587-27195-27196-54092-E

.................................................................................................. 51717-53819-27200-27201-E H. Baseline Service ........................................................... 52027-52028-52029-52030-52031-E I. Charge Ready Program Balancing Account ................................................... 65510-65511-E J. Not In Use ............................................................................................................................. -E K. Nuclear Decommissioning Adjustment Mechanism ........................................ 36582-57779-E L. Purchase Agreement Administrative Costs Balancing Account ........... 55207-51922-55208-E M. Income Tax Component of Contributions ....................................................... 58419-58420-E N. Memorandum Accounts .... 21344-65676-61164-58221-49492-61165-61166-61167-53821-E

........ 50418-42841-61168-64869-64870-44950-44951-44952-44953-42849-42850-42851-E ........ 65677-65678-55623-61171-42856-61172-61173-52033-50419-55048-61174-42863-E ........ 42864-56204-56205-51235-45920-51236-61175-50209-42872-42873-50421-46539-E ........ 42876-42877-42878-42879-42880-42881-42882-54534-53371-56253-44959-42887-E ........ 53321-53322-61176-52551-52552-49928-56235-56236-56237-55144-55145-44029-E

........ 53016-57156-57157-51163-51164-51165-51166-51167-51168-51169-51170-51171-E ................................ 51244-55806-56393-56394-56395-56396-56397-56398-56399-58978E O. California Alternate Rates for Energy (CARE) Adjustment Clause ................. 34705-41902-E .................................................................................................. 36472-38847-56788-67026-E P. Tree Mortality Non-Bypassable Charge Balancing Account………...65929-65930-65931-E

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(Continued)


Cal. P.U.C. Sheet No.

PRELIMINARY STATEMENT: (Continued) RR. New System Generation Balancing Account ................................ 68389-57976-64244-64245-E SS. Not In Use .................................................................................................................................. -E ................................................................................................................................................... -E TT. Not In Use .................................................................................................................................. -E UU. Not In Use .................................................................................................................................. -E VV. Medical Programs Balancing Account ....................................................... 60662-57978-44979-E WW. Portfolio Allocation Balancing Account…………….65241-65242-69094-68390-65245-67030-E …………………………………………………………………………………………65247-65248-65249-E XX. Low Carbon Fuel Standard Revenue Balancing Account .................................... 56447-56448-E YY. Base Revenue Requirement Balancing Account .......................... 68391-65251-54112-51724-E .................................... 65252-65253-65254-65255-66067-68159-68160-57984-58088-57986-E ZZ. Energy Resource Recovery Account .......... 65259-65260-65261-65262-66628-65264-65265-E ................................................................................. 68600-68072-68484-55221-56259-55223-E AAA. Post Test Year Ratemaking Mechanism. ................................................ 57988-60665-57990-E BBB. Residential Uncollectibles Balancing Account ……….................. 69530-69498-69531-69532-E CCC. Cost of Capital Mechanism ...................................................................... 68392-68393-62453-E DDD. 2010-2012 On Bill Financing Balancing Account .......................................................... 55859-E EEE Not in Use ................................................................................................................................ -E FFF Electric Program Investment Charge Balancing Account-California Energy Commission .......... ............................................................................................................................ 50176-50177-E GGG Electric Program Investment Charge Balancing Account-Southern California Edison ............... ............................................................................................................................ 50178-50179-E HHH Electric Program Investment Charge Balancing Account-California Public Utilities Commission ....................................................................................................................................... 50180-E III New Solar Homes Partnership(NSHP) Program Balancing Account (NSHPPBA)……..59581-E JJJ Not Used……………………………………………………………....69307-69308-69309-69310-E ……………………………………………………………………………………...…...59849-59850-E RRR Integrated Distributed Energy Resources Shareholder Incentive Award Balancing Account (iDERSIABA)……………………………………………………………………………...……61284-E LLL Integrated Distributed Energy Resources Contract Costs Balancing Account (iDERCCBA)…… ……………………………………………………………………………………….………….61285-E MMM Distributed Resources Plan Demonstration Balancing Account (DRPDBA)……61982-61983-E NNN Transportation Electrification Portfolio Balancing Account (TEPBA)…….64055-64056-64057-E ………………………………………………………………………………………….64058-64059-E OOO Aliso Canyon Energy Storage Balancing Account (ACESBA)…………………....64073-64074-E PPP Disadvantaged Communities-Green Tariff Balancing Account (DACGTBA)……64152-64153-E VVV Community Solar Green Tariff Balancing Account (CSGTBA)……………………64154-64155-E WWW Disadvantaged Communities - Single-family Solar Homes Balancing Account (DACSASHBA) …………………………………………………………………………………………..64733-64734-E XXX Statewide Energy Efficiency Balancing Account (SWEEBA)……………………………..68438-E ZZZ Net Energy Metering Measurement and Evaluation Balancing Account (NEMMEBA)…65128-E

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(Continued)


Schedule Cal. P.U.C. No. Title of Sheet No.

SERVICE AREA MAPS:

Index to Maps of Service Area ............................................................................................... 20557-E Map A - Service Area ............................................................................................................. 27223-E Map B - Service Area ............................................................................................................... 7865-E Map C - Service Area ............................................................................................................. 27224-E Map D - Service Area ............................................................................................................... 5697-E

RATE SCHEDULES:

RESIDENTIAL

D Domestic Service .......................... 63140-69095-69096-63143-63144-63145-63146-E D-CARE Domestic Service, CARE ............. 63147-69097-69098-66914-63150-63151-69533-E DE Domestic Service to Utility Employees ............................................................ 52049-E D-FERA Domestic Service, Family Electric Rate Assistance ................... 63153-69099-69100-E ........................................................................................ 63156-65141-65098-69534-E D-SDP Domestic Summer Discount Plan ........................ 68466-68467-63161-63162-60797-E DM Domestic Service Multifamily Accommodation ......................... 59033-52051-67037-E DMS-1 Domestic Service Multifamily Accommodation Submetered ................. 59035-59036-E .......................................................................................................................... 45191-E

DMS-2 Domestic Service Mobilehome Park Multifamily Accommodation Submetered ........................................ 59037-59038-49026-49027-E DMS-3 Domestic Service Qualifying RV Park Accommodation Submetered ... 64253-64254-E ............................................................................................................... 64255-64256-E DS Domestic - Seasonal ................................................................................................... E ESC-OO Edison SmartConnect Opt-Out ............................................................ 64257-58894-E MB-E Medical Baseline – Exemption ......................................................................... 58244-E PEVSP Plug-In Electric Vehicle Submetering Pilot (Phase 1) .... 55109-56565-56566-56567-E ............................................................................................................... 56568-56569-E SEP Smart Energy Program ............................................................... 65789-65790-65791-E TOU-D Time-of-Use Domestic .........…………......63166-69101-69102-69103-69104-69105-E

..................... 69106-69107-69108-69109-69110-65361-65362-63179-63180-63181-E …………………………...…..68052-69111-69535-69536-69536-69537-69538-69539-E

TOU-D-T Time-of-Use Domestic Tiered ........ …..63188-69112-69113-67051-65367-63193-69540-E .................................................................. 69541-69542-65943-65944-69545-63200-E

TOU-EV-1 Domestic Time-Of-Use Electric Vehicle Charging …...................... 69115-55918-49362-E

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(Continued)


RULESRule Cal. P.U.C. No. Title of Sheet Sheet No.

1 Definitions .......... 59339-58936-55551-60125-58779-66544-66545-55556-57629-55558-E ...................................................................................................................... 55559-55560-E

............................................................................................... 66546-66547-55563-55564-E 2 Description of Service ......................... 22926-22927-22928-25264-22930-22931-22932-E ............................ 22933-22934-67817-67818-47145-47146-47147-47148-47149-47150-E 3 Application for Service ................................................................................. 50441-22943-E 4 Contracts .......................................................................................... 55734-39859--55679E 5 Special Information Required on Forms ............................... 65949-27743-51306-31052-E 6 Establishment and Re-establishment of Credit ........................................... 55074-68874-E 7 Deposits ........................................................................................... 64425-55077-47771-E 8 Notices ......................................................................................................... 55078-27747-E 9 Rendering and Payment of Bills ................................ 56607-58024-68825-52504-69546-E 10 Disputed Bills ............................................................................................... 65951-55079-E 11 Discontinuance and Restoration of Service .............. 55680-64426-22966-22967-22968-E ......................................................................... 56590-64427-51311-65952-63533-68826-E 12 Rates and Optional Rates ................................................................ 64428-65953-51311-E 13 Temporary Service ................................................................................................. 51312-E 14 Shortage of Supply and Interruption of Delivery ......................................... 53899-26339-E 15 Distribution Line Extensions .... 24684-47151-47152-47153-47154-68371-47156-47157-E ................ 47158-67820-47160-47161-47162-47163-47164-67821-51853-47167-47168-E 16 Service Extensions ............................... 24700-49672-48155-24703-24704-47169-47170-E ..... 47171-47172-47173-47174-47175-47176-47177-47178-47179-47180-48156-48157-E 17 Adjustment of Bills and Meter Tests .......................... 19616-47773-47774-19619-19620-E 18 Supply to Separate Premises and Use by Others ............... 47472-45543-51854-45545-E 20 Replacement of Overhead With Underground Electric Facilities ...... 31867-23019-23020-E ........................................................................................................... 31868-26177-31869-E 21 Generating Facility Interconnections .... 58780-54719-54720-54721-54722-56118-56119-E ..... 56120-54726-64429-54728-56121-54730-54731-54732-54733-54734-64038-64039-E ..... 56122-58781-58782-54740-56125-56126-56127-54744-54745-54746-58783-65306-E ..... 57537-54750-58784-54752-54753-58785-58786-58787-54757-54758-54759-67970-E ..... 54761-54762-58789-54764-58790-58791-58792-54768-64430-58793-65954-54772-E ..... 54773-54774-54775-54776-54777-54778-54779-54780-54781-54782-54783-54784-E ..... 54785-54786-54787-54788-54789-54790-54791-54792-54793-54794-54795-54796-E ..... 54797-54798-54799-54800-54801-54802-54803-54804-54805-54806-54807-54808-E ..... 54809-54810-54811-54812-58796-54814-54815-54816-54817-54818-54819-54820-E ..... 54821-54822-54823-54824-54825-54826-54827-54828-54829-54830-54831-54832-E ..... 54833-56129-54835-54836-54837-54838-54839-54840-54841-54842-54843-54844-E ..... 56130-56131-56132-56133-56134-56135-56136-56137-56138-56139-56140-56141-E

. 56142-56143-56144-56145-56146-58797-58798-62070-56150-63988-63989-63990-E 64882-64883-68420-68913-68914-68422-68915-68916-62082-62083-62084-62085-E 62086-62087-62088-62089-62090-62091-62092-62093-62094-62095-62096-62097-E 62098-62099-62100-62101-62102-62103-62104-62105-62106-62107-62108-62109-E 62110-62111-62112-62113-64040-62115-62116-62117-62118-62119-E

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Item 5.D Arrearage Management Plan

Update

Attachment 2 CalCCA Protest to Southern

California Edison’s and SDG&E AMP Advice Letters

183

September 29, 2020 CPUC Energy Division Attn: Tariff Unit and Edward Randolph, Director 505 Van Ness Avenue San Francisco, CA 94102 By email: [email protected] Re CalCCA Protest to Southern California Edison’s and San Diego Gas and Electric’s AMP Advice Letters in response to Decision 20-06-003 Dear Tariff Unit and Mr. Randolph:

Pursuant to General Order 96-B, CalCCA1 submits this protest to Southern California Edison Advice Letter 4287-E and San Diego Gas and Electric Advice Letter 3602-E / 2902-G (“Advice Letters”).

Southern California Edison (SCE) and San Diego Gas and Electric (SDG&E) filed their

Advice Letters on September 9, 2020 in response to Decision (“D”) 20-06-003, Ordering Paragraph (“OP”) 83 and OP 87.

OP 83: To implement the arrearage management payment (AMP) plan, Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Edison Company, and Southern California Gas Company must each file a Tier 2 Advice Letter within 90 days of this decision to implement the AMP plan. OP 87: The issue of concern raised by CalCCA as it relates to the allocation of proportional recovery shall be discussed in the AMP working group and a proposed resolution shall be set forth in the Tier 2 Advice Letters that Pacific Gas and Electric Company, San Diego Gas & Electric Company, Southern California Edison Company, and Southern California Gas Company file.

1 CalCCA was formed in 2016 as a trade organization to facilitate joint participation in certain

regulatory and legislative matters in which members share common interests. CalCCA’s voting membership includes CCAs serving load and others in the process of implementing new service, including: Apple Valley Choice Energy, Baldwin Park Resident Owned Utility District, Central Coast Community Energy, CleanPowerSF, Clean Energy Alliance, Clean Power Alliance, Desert Community Energy, East Bay Community Energy, Lancaster Choice Energy, MCE, Peninsula Clean Energy, Pioneer Community Energy, Pico Rivera Innovative Municipal Energy, Pomona Choice Energy, Rancho Mirage Energy Authority, Redwood Coast Energy Authority, San Diego Community Power, San Jacinto Power, San José Clean Energy, Silicon Valley Clean Energy, Solana Energy Alliance, Sonoma Clean Power, Valley Clean Energy, and Western Community Energy.

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2

While the Advice Letters adequately addresses the requirements established in D.20-06-

003, certain provisions require further clarification. 1. The Advice Letters should clarify how often SCE and SDG&E plan to remit

amounts recovered for generation-related arrears to the CCA.

CalCCA is supportive of SCE and SDG&E’s proposals to have all debt forgiven through the AMP, including third-party charges, tracked in the residential uncollectibles balancing account and then recovered through the public purpose programs charge.2 Additionally, SCE states that it “will render amounts recovered for CCAs’ generation-related AMP subsidies to the CCA”3 but does not clarify how often (e.g., on a monthly basis or quarterly basis) the amounts recovered would be transmitted to the CCA. SCE’s Advice Letter should be re-filed to clarify this detail.

Furthermore, CalCCA is concerned that SDG&E does not make any statement that it

plans to render amounts recovered for forgiven CCA arrears to CCAs in its Advice Letter. Thus, the Advice Letter should be re-filed to clarify SDG&E intends to render all amounts recovered for third-party charges that are forgiven to the third party to which they were owed, and clarify the frequency and process through which such amounts will be rendered. Specifically, SDG&E should clarify whether it plans to remit funds collected to recover debt-forgiveness costs to CCA programs using the same process and with the same frequency, i.e., daily, that it uses to process CCA program charges under SDG&E Rule 27. To the extent that the remittance process deviates from the process described in Rule 27, SDG&E should provide a detailed explanation regarding how its plan differs from that process.

2. SCE and SDG&E should be required to provide program information at the

intervals requested by the CCAs, and SDG&E should clarify what information it will provide CCAs that notify it that they intend to participate in the AMP.

As described in the Advice Letters, SCE and SDG&E’s proposals for additional information to-be reported to CCAs about the AMP differ significantly. SCE correctly describes that CalCCA requested the following information to-be able to track the status of unbundled customer who are enrolled in the AMP:

1. AMP Eligibility / Ineligibility Flag (requested weekly) 2. AMP Enrollment Flag (requested weekly) 3. AMP Start / End Date (requested weekly) 4. Missed Payments Tracking (requested daily) 5. Total Expected AMP Dollar Amount (requested daily)

a. Total Expected Generation Dollar Amount

2 SDG&E Advice Letter at pp. 6-7 and SCE Advice Letter at p. 12. 3 SCE Advice Letter at p. 12.

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3

b. Total Expected Distribution Dollar Amount 6. Processed AMP Dollar Amount (requested daily)

a. Processed Generation Dollar Amount b. Processed Distribution Dollar Amount.4

Although CalCCA requested the information on a daily or weekly basis, CalCCA understands that both SCE and SDG&E will be implementing AMP through manual processes until SCE can automate the AMP in its customer service system and SDG&E completes deployment of its customer information system (“CIS”). SCE and SDG&E should clarify when they plan to automate the AMP program in their customer service systems, and provide the requested information at frequencies requested as much as possible.5 The information described above should be regularly provided to CCA programs on at least a weekly basis to provide timely information about AMP participation and avoid costly and time consuming account reconciliations that would be required if the data is provided on a less frequent basis.

Furthermore, SDG&E states that it “does not intend to deviate from any of the reports currently provided to its CCAs” and that it “will work with its current CCA, Solana Energy Alliance, to accommodate data requests prior to implementation of the new CIS system.”6 CalCCA find this troublesome because having to formally data request information for an ongoing program is not only slow and inefficient but also does not allow a CCA to have any visibility into which of its customers are eligible for or enrolled in the AMP because eligibility is determined based on both IOU and third-party arrears. Additionally, the dollar value of arrears that are expected to be forgiven, the value of forgiven amounts that have been processed, and whether a customer has made the monthly payment it was supposed to make and is still in good standing in the program must be communicated to the CCAs that participate in the program. It is essential for a CCA to have access to data about the arrearage amounts it is owed that will be forgiven in order to update its billing system logic and billing system reporting to coordinate the third-party billing side of an unbundled customer’s bill.

3. SCE should clarify whether a CCAs notice of intent to participate in the AMP is

requested 45 days from the date of approval of the Advice Letters.

SCE states that it “requests that the CCAs notify SCE within 45 days of this AL submittal regarding their intent to participate” in the AMP.7 CalCCA requests that SCE modify the Advice Letter to state that it requests notification 45 days after the approval of the Advice Letter. CalCCA finds it unreasonable that CCAs are being asked to determine whether or not they will participate in the AMP without knowing exactly what the final Advice Letters that are approved by the Commission will state about the how the AMP will be implemented.

4 SCE Advice Letter at p. 13. 5 SCE Advice Letter at p. 13. 6 SDG&E Advice Letter at p. 7. 7 SCE Advice Letter at p. 13.

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We thank the Commission for its consideration of this protest and urge the Commission to require SCE and SDG&E to re-file their Advice Letters to clarify the abovementioned issues.

Respectfully submitted,

Evelyn Kahl General Counsel to the California Community Choice Association

cc: [email protected] [email protected] SDG&[email protected] [email protected] Service List R. 18-07-005

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