Bundled Procurement Plan
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Rulemaking: 13-12-010 (U 39 E) Exhibit No.: Date: May 20, 2021 MAY 20, 2021 COMMISSION APPROVED VERSION PACIFIC GAS AND ELECTRIC COMPANY BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS PUBLIC VERSION BUNDLED PROCUREMENT PLAN PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS Section Title Sheet No. I INTRODUCTION 1 A. PG&E’s Procurement Goals 1 B. Overview of PG&E’s Planning, Procurement and 4 Scheduling/Bidding Activities 1. Planning 4 2. Procurement 5 3. Scheduling/Bidding 5 C. Overview of PG&E’s Bundled Procurement Plan 6 1. Section II – Statutory and Loading Order Requirements 6 2. Section III – Procurement Standards of Conduct 6 3. Section IV – Compliance Filings and Requirements and 6 Cost Recovery 4. Section V – Pre-Approval, Approval, and Filing 6 Requirements 5. Section VI – Process for Updates to the Bundled 6 Procurement Plan 6. Appendices 7 II STATUTORY AND LOADING ORDER REQUIREMENTS 7 A. Compliance With AB 57 7 B. Compliance With the Loading Order 8 1. Energy Efficiency 10 a. PG&E’s Long-Term Commitment to Energy 10 Efficiency b. PG&E’s 2013-2014 Programs 10 c. Post-2014 Programs 11 2. Demand Response 12 a. PG&E’s Adopted 2012-2014 Demand Response 13 Programs b. Regulatory Initiatives and 2015-2016 Bridge 14 Funding c. New Demand Response Programs and Pilots 14 -i- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENTPLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. 3. RPS Eligible Resource Procurement 15 4. Distributed Generation 17 a. California Solar Initiative 17 b. Self-Generation Incentive Program 18 c. Net Metering Programs 19 5. Other Generation Resources 21 III COMPLIANCE WITH THE COMMISSION’S 24 PROCUREMENT STANDARDS OF CONDUCT IV DESCRIPTION OF PG&E FILINGS MADE TO 27 DEMONSTRATE COMPLIANCE AND COST RECOVERY A. Monthly, Quarterly and Annual Filings and Reports 27 B. Additional Reporting Requirements – ERRA Trigger 30 C. Description of Cost Recovery for Bundled Procurement 32 Plan Procurement V PRE-APPROVAL, APPROVAL, AND FILING 32 REQUIREMENTS VI REPORTING OF NONCOMPLIANTTRANSACTIONS 35 VII UPDATES TO THE BUNDLED PROCUREMENTPLAN 36 VIA ADVICE LETTER APPENDIX A PROCUREMENT PRODUCTS 38 A. Electric Products 39 B. Greenhouse Gas Products 42 C. Fuel Products 43 D. Credit Products 45 APPENDIX B PROCUREMENT PROCESSES AND METHODS 46 A. Introduction 47 B. Overview of Procurement Processes 47 1. Market Processes 47 -ii- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. a. Exchanges 47 b. Voice Brokers 48 c. CAISO Markets and Processes 49 d. Electronic Solicitations 51 e. Request for Offers 52 f. Bilateral Negotiations 52 2. Commission Directed or Mandated Procurement 52 Programs a. Qualifying Facility/Combined Heat and Power 52 Standard Program b. Renewable Auction Mechanism Program 53 c. Energy Storage Program 53 d. Renewable Feed-In Tariff Programs 53 3. CARB GHG Auctions and the Allowance Price 54 Containment Reserve C. Approved Procurement Processes and Practices 55 D. Commission-Adopted Limitations and Requirements for 58 Specific Procurement Processes 1. Requirements for Once-Through Cooling Units 58 2. Requirements for Utility-Owned Generation 59 3. Long-Term RFOs 60 4. Loading Order Applicability to Procurement 62 5. Evaluation and Selection of Resources Through RFOs 62 6. Determining the Term of a Contract (“Linkage Rule”) 63 APPENDIX C PROCUREMENT LIMITS AND RATABLE RATES 64 A. Limits 65 1. Electrical Capacity Procurement Limits and Ratable 65 Rates 2. Electric Energy Procurement Limits and Ratable Rates 68 -iii- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. B. Natural Gas Procurement Limits 71 1. Natural Gas Procurement Limits and Ratable Rates 71 2. Pipeline Capacity Procurement Limits 74 3. Natural Gas Storage Procurement Limits 76 C. GHG Procurement Limits 77 1. Maximum Volume Limits 77 2. Financially Hedging Greenhouse Gas Compliance 82 Instrument Price Risk APPENDIX D DESCRIPTION AND EVALUATION OF CPUC 85 APPROVED SCENARIO A. Introduction 86 B. CPUC Approved Scenario 86 1. Load Forecast 87 2. Existing and Planned Resources 90 3. Evaluation of Risk 94 APPENDIX E ELECTRIC PORTFOLIO HEDGING PLAN 96 A. Introduction 97 B. Hedging Plan Structure 97 C. Physical Supply Risks and Financial Risks are Managed 97 Separately D. Hedging Plan 99 1. Tenor 99 2. Hedging Targets and Limits 100 3. Product Mix 105 a. Product Mix Targets 105 106 4. Execution Strategy 108 -iv- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. 108 E. Liquidity Management Strategy 109 1. Liquidity Management Structure 109 2. Liquidity Measurement and Reporting 112 3. Liquidity Mitigation Strategies 112 F. Operating Outside of the Hedging Plan 113 1. Transition Plan 113 2. Unusual Events, Market Dislocations, and Emergencies 113 APPENDIX F NUCLEAR FUEL PROCUREMENT PLAN 114 A. Background on Nuclear Fuel Procurement 115 1. The Nuclear Fuel Cycle 115 2. Diablo Canyon Power Plant Operations Plan 116 B. PG&E’s Nuclear Fuel Procurement Plan 118 1. Forward Contracting and Price Terms 119 2. Nuclear Fuel Strategic Inventory Management 121 3. Proposed Risk Management Measures 122 4. Nuclear Liability and Insurance Issues Regarding 122 Nuclear Fuel Contracts 5. Capped Liability Under Some Contracts 124 C. Issues Affecting the Plan 124 1. Regulatory and Political Outlook Not Specific to PG&E 124 2. Transactions Outside the Scope of the Plan 125 D. Conclusion 125 -v- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. APPENDIX G GREENHOUSE GAS PROCUREMENT PLAN 126 A. Background 127 1. California Air Resource Board’s Cap-and-Trade 127 Regulations 2. Greenhouse Gas Compliance Instruments and CARB 130 Auctions B. PG&E’s Allowance Consignment 130 C. PG&E’s Potential Greenhouse Gas Risks 130 1. Greenhouse Gas Obligations 130 a. Tolling & other Power Purchase Agreements (PPAs) 130 2. Cap-and-Trade Penalties 131 3. Offset Credits 131 D. PG&E’s GHG-Related Product Procurement 132 1. Greenhouse Gas Obligations 133 2. Greenhouse Gas-Related Products 133 3. Greenhouse Gas-Related Processes 133 4. Greenhouse Gas Procurement Strategy 133 134 134 134 135 136 136 137 h. GHG Procurement Limits 137 5. Procurement Review Group Consultation 137 -vi- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. 6. Cost Recovery 137 7. Approval for Contract Term Duration 137 8. Independent Evaluator 138 APPENDIX H CONVERGENCE BIDDING 145 A. Background 146 B. CPUC Authorization 146 C. PG&E’s Convergence Bidding Participation 147 D. Utility Convergence Bidding Reporting 148 E. Stop Net-Loss 149 F. California Independent System Operator Notification 150 Requirements G. Future Convergence Bidding Strategies 150 APPENDIX I CONGESTION REVENUE RIGHTS 151 A. Introduction 152 B. Congestion Revenue Rights and Long-Term Congestion 153 Revenue Rights Procurement Objectives C. Congestion Revenue Rights Procurement 153 1. Congestion Revenue Rights Source Sink Pairs and Paths 153 2. Procurement Review Group Consultation 153 D. Volume Limits 154 154 F. Congestion Revenue Rights Auction Participation 155 G. Transactions in Secondary Congestion Revenue Rights 156 Market -vii- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. APPENDIX J BROKERAGES AND EXCHANGES 157 A. Brokerages 158 B. Exchanges and Futures Commission Merchants 159 1. Exchanges 159 2. Futures Commission Merchants 159 C. GHG Product Authorized Exchanges and Futures 159 Commission Merchants 1. Exchanges 159 2. Futures Commissions Merchants 160 APPENDIX K BIDDING AND SCHEDULING PROTOCOLS 161 A. Introduction 162 B. Overview of CAISO Markets 162 1. Day-Ahead Markets 162 2. Real-Time Markets 162 C. Scheduling and Bidding Principles 164 D. Scheduling/Bidding Processes 165 1. Incremental Costs 166 a. Greenhouse Gas 167 2. Opportunity Cost 168 3. Self-Scheduling 168 Attachment 1 170 171 171 171 172 172 173 -viii- PACIFIC GAS AND ELECTRIC COMPANY 2014 BUNDLED PROCUREMENT PLAN ORDER INSTITUTING RULEMAKING TO INTEGRATE AND REFINE PROCUREMENT POLICIES AND CONSIDER LONG-TERM PROCUREMENT PLANS TABLE OF CONTENTS (CONTINUED) Section Title Sheet No. APPENDIX L CAISO OPERATING ORDER PROTOCOLS 174 A. Introduction 175 B. PG&E Protocols During CAISO-Declared System 176 Emergencies 1. CAISO Description of System Emergency