Southern California Edison Company AL 3470-E/AE3

Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3 PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

ENERGY DIVISION RESOLUTION E-4845 April 27, 2017

R E S O L U T I O N

Resolution E-4845. Southern California Edison Company Request for Approval of Deviations to its Net Energy Metering (NEM)1 Interconnection Agreements for the State of California.

PROPOSED OUTCOME:  Approve SCE’s request to (i) approve Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E without modification, and (ii) modify SCE’s List of Contracts and Deviations to offer Proposed Forms 14- 923-A, 14-973-B, 14-974-B, and 16-344-E as interconnection agreement options available solely to the State of California when executing a NEM interconnection agreement as the eligible customer-generator.

SAFETY CONSIDERATIONS:  There is no impact on safety.

ESTIMATED COST:  There is no cost impact.

By Advice Letter 3470-E, Filed on September 13, 2016. ______1. SUMMARY

This Resolution approves SCE’s request to (i) approve Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E without modification, and (ii) add the forms to SCE’s List of Contracts and Deviations. The proposed Forms are interconnection agreements that delete certain standard indemnity provisions that may prevent the State from entering into a NEM interconnection agreement when interconnecting State-owned generating facilities. Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E conform to State law, Commission decisions, and G.O. 96- B, General Rule 8.2.32 addressing the provision of services by energy utilities to the State of California. 1 Pub. Util. Code § 2827 et seq.

1 Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3

2. BACKGROUND

According to the California Governor’s Office of Planning and Research, the State’s interpretation of Article XVI, Section 6 of the California Constitution prevents the State from agreeing to mutual indemnity provisions in the NEM interconnection agreement Forms 14-923, 14-973, 14-974, and 16-344. On that basis, SCE and the State worked together to modify these Forms to delete certain indemnity provisions therein.

Historical Context As discussed below, Commission decisions have identified the need to develop standardized interconnection agreements to serve different market segments.

In 1998, SCE was required to develop a standardized interconnection agreement for NEM customer-generators to implement amendments to the NEM statute.3 SCE filed Form 16- 344 with AL 1349-E on November 20, 1998, which was approved by this Commission and made effective on January 1, 1999.

Shortly thereafter, the Commission set out the terms of a standardized interconnection agreement to be associated with Electric Tariff Rule 21 (Electric Rule 21) in Decision (D.) 00-12-037.4 In D.00-12-037, the Commission stated its interest in standardizing interconnection terms and conditions, including those set out in interconnection agreements.5 However, the Commission did not order SCE to conform its interconnection agreement Forms to the terms of the interconnection agreement attached to D.00-12-037. The Commission did note that as different groups of customers began to participate in distributed generation programs, SCE and the other investor-owned utilities would need to “develop a family of standardized agreements that would accommodate export and non-export arrangements.”6

2 General Rule 8.2.3 defines the State of California as “the State of California and its political subdivisions and municipal corporations, including the departments thereof, and public fairs and celebrations.

3 Assembly Bill (AB) 1755 (Keeley, 1998), amending Calif. Pub. Util. Code § 2827.

4 D.00-12-037 at Attachment B, Decision Adopting Interconnection Standards, issued December 21, 2000 in Rulemaking (R.) 99-10-025, Order Instituting Rulemaking into Distributed Generation, filed October 21, 1999 (D.00-12-037). 5 D.00-12-037 at 16-17. 2 Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3 As customer eligibility for NEM participation expanded and became further specialized, the Commission approved the following standardized interconnection agreements, in addition to Form 16-344:

 In 2012, the Commission approved, via AL 2753-E, Form 14-923, “Southern California Edison Company Net Energy Metering Solar And Wind Generating Facility 10 Kilowatts or Less Interconnection Agreement.”

 In 2016, the Commission approved, via AL 3371-E (supplemented by AL 3371-E-B), Form 14-973 “Virtual Net Energy Metering for Multi-Tenant and Multi-Meter Properties Interconnection Agreement for Generating Facilities Sized Greater Than One Megawatt” and Form 14-974, “Southern California Edison Company Net Energy Metering and Renewable Electrical Generating Facility Sized Greater Than One Megawatt Interconnection Agreement.”

Separately, in G.O. 96-B, General Rule 8.2.3, the Commission permits an energy utility to “at all times…provide service…to a government agency or to the public for free, or at reduced rates and charges, or under terms and conditions otherwise deviating from its tariffs then in effect.“ Further under G.O. 96-B, General Rule 8.2.3, where the utility begins service to a government agency without Commission approval, the utility must promptly notify the Commission of the provision of such service, and the Commission “may determine, in an appropriate proceeding, the reasonableness of such service.”

G.O. 96-B, Energy Industry Rule 5.3 (8) specifically requires a utility proposal for service to a government agency pursuant to General Rule 8.2.3 to be submitted with a Tier 3 AL (Effective After Commission Approval).

Under the aforementioned policies guiding the development of tailored interconnection agreements to accommodate different market segments and, more specifically, government agencies, in 2012, the Commission approved, via Resolution E-4531, changes to the indemnity provisions in SCE’s NEM Form 16-344 for federal agencies.7

In accordance with the above, SCE submitted Tier 3 AL 3470-E to seek approval of proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E. The filing was a result of collaboration between SCE and the State to develop interconnection agreement forms that, in the State’s view, would comply with the California Constitution.

6 D.00-12-037 at 6. 7 Resolution E-4531 approved SCE’s Form 16-344-A proposed in Advice Letter 2704-E. 3 Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3

SCE’s Proposal In AL 3470-E, SCE requests modifications to the following NEM interconnection agreement Forms. These modified versions are applicable solely to the State of California when executing the NEM interconnection agreements as the eligible customer-generator. They do not apply to third parties interconnecting facilities pursuant to a contract with the State.

1. Form 14-923-A, “Southern California Edison Company Net Energy Metering Solar and Wind Generating Facility 10 Kilowatt or Less Interconnection Agreement”  Section 7, Indemnity and Liability – This section is retitled “Liability” and the indemnity provisions originally contained within subsections 7.1 and 7.2 are deleted in recognition of CA Constitution Article XVI, Section 6. The remaining liability provisions are renumbered and slightly modified to reflect the deletion of the original subsections 7.1 and 7.2.

2. Form 14-973-B, “Virtual Net Energy Metering for Multi-Tenant and Multi-Meter Properties Interconnection Agreement for Generating Facilities Sized Greater Than One Megawatt”  Section 8, Indemnity and Liability – This section is retitled “Liability” and the indemnity provisions originally contained within subsections 8.1 and n8.2 are deleted in recognition of CA Constitution Article XVI, Section 6. The remaining liability provisions are renumbered and slightly modified to reflect the deletion of the original subsections 8.1 and 8.2.

3. Form 14-974-B, “Southern California Edison Company Net Energy Metering and Renewable Electrical Generating Facility Sized Greater Than One Megawatt Interconnection Agreement”  Section 8, Indemnity and Liability – This section is retitled “Liability” and the indemnity provisions originally contained within subsections 8.1 and 8.2 are deleted in recognition of CA Constitution Article XVI, Section 6. The remaining liability provisions are renumbered and slightly modified to reflect the deletion of the original subsections 8.1 and 8.2.

4. Form 16-344-E, “Southern California Edison Company Net Energy Metering and Renewable Electrical Generating Facility Interconnection Agreement for Generating Facilities Sized One Megawatt and Smaller”  Section 7, Indemnity and Liability – This section is retitled “Liability” and the indemnity provisions originally contained within subsections 7.1 and 7.2 are deleted in recognition of CA Constitution Article XVI, Section 6. 4 Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3 The remaining liability provisions are renumbered and slightly modified to reflect the deletion of the original subsections 7.1 and 7.2.

3. NOTICE

Notice of AL 3470-E was made by publication in the Commission’s Daily Calendar. SCE states that a copy of the Advice Letter was mailed and distributed in accordance with Section 4 of General Order 96-B.

4. PROTESTS

Advice Letter AL 3470-E was not protested.

5. DISCUSSION

Staff Analysis Energy Division staff has reviewed SCE’s proposal, and, as set out below, finds that the terms of Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E: (i) meet the Commission’s expectation that utilities will develop standardized interconnection terms and conditions for groups of customers, and (ii) are a reasonable provision of service to the State of California pursuant to G.O. 96-B, General Rule 8.2.3. Furthermore, because the Proposed Forms include deviations from SCE’s previously established interconnection agreements, it is appropriate for SCE to add these forms to its List of Contracts and Deviations.

California State Contracting Rules California law requires conformity to state contracting rules. Those rules restrict the state’s ability to enter into contracts in which the state agrees to indemnify its contractors. See, e.g., Public Contract Code 10335(d)(3), and State Contracting Manual, Vol. I, Section 7.86, April 2015 (“A. Unless it has specific statutory authority, a State agency cannot agree to: 1. Indemnify a contractor….”).

G.O. 96-B, Energy Industry Rule 5.3 (8) G.O. 96-B, Energy Industry Rule 5.3 (8) specifically requires a utility proposal for service to a government agency made pursuant to G.O. 96-B, General Rule 8.2.3 to be submitted as a Tier 3 AL (Effective After Commission Approval). SCE has met this requirement here by filing AL 3470-E (Tier 3).

G.O. 96-B, General Rule 8.2.3

5 Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3 G.O. 96-B, General Rule 8.2.3 allows an electric utility to provide a service to a government agency for free, or at reduced rates and charges, or under terms and conditions otherwise deviating from its tariff then in effect.

In Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E, the indemnification provisions are deleted. As a result, California State-owned NEM-interconnected generating facilities assume a lower risk of liability for damages to third parties than entities executing Forms 14-923, 14-973, 14-974, and 16-344.8 In addition, G.O. 96-B, General Rule 8.2.3 permits utilities to provide services to the State of California “under terms and conditions otherwise deviating from its tariffs then in effect,” and we note that the modified text in the proposed Forms resulted from negotiations overseen by State representatives.

6. COMMENTS

This is an uncontested matter in which the resolution grants the relief requested. Accordingly, pursuant to PU Code 311(g)(2), the otherwise applicable 30-day period for public review and comment is being waived.

7. FINDINGS

1. Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E, drafted as a result of collaboration between SCE and the State, are consistent with California State contracting rules. 2. Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E were properly filed by SCE with AL 3470-E (Tier 3), pursuant to G.O. 96-B, Energy Industry Rule 5.3 (8). 3. Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E resulted from negotiations overseen by State representatives, and on that basis, fall within G.O. 96-B, General Rule 8.2.3, which allows SCE to provide services to the State of California under terms and conditions otherwise deviating from its presently effective tariffs.

8 Forms 14-923 (Section 7), 14-973 (Section 8), 14-974 (Section 8), and 16-344 (Section 7) contain mutual indemnification provisions. Separately, in D.00-12-037, we deleted indemnification provisions and adopted a limitation of liability clause as a reasonable means of apportioning risk between utilities and customers with generating facilities. D.00-12-037 is ambiguous as to its applicability to different types of generating facilities, but the Commission did not subsequently require SCE to conform its interconnection agreement to the interconnection agreement attached to D.00-12-037. Thus, the apportionment of risk ordered by the Commission in D.00-12-037 does not apply to an interconnection agreements executed between SCE and a customer participating in the NEM Tariff. 6 Resolution E-4845 April 27, 2017 Southern California Edison Company AL 3470-E/AE3 4. Because Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E are a deviation from Forms 14-923, 14-973, 14-974, and 16-344, it is appropriate for SCE to add them to its List of Contracts and Deviations, and make Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E available to the State of California when executing the NEM interconnection agreement as the eligible customer-generator.

8. THEREFORE IT IS ORDERED THAT:

1. SCE Advice Letter 3470-E is approved. 2. SCE’s request to approve Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E is approved. 3. SCE’s request to add Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E to SCE’s List of Contracts and Deviations is approved. 4. Proposed Forms 14-923-A, 14-973-B, 14-974-B, and 16-344-E shall be available to all State of California entities meeting the eligibility requirements set out therein.

This Resolution is effective today.

I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held on April 27, 2017; the following Commissioners voting favorably thereon:

/s/TIMOTHY J. SULLIVAN TIMOTHY J. SULLIVAN Executive Director

MICHAEL PICKER President CARLA J. PETERMAN LIANE M. RANDOLPH MARTHA GUZMAN ACEVES CLIFFORD RECHTSCHAFFEN Commissioners