BILL ANALYSIS                                                                                                                                                                                                    

                              Senator Ben Hueso, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 2861           Hearing Date:    6/27/2016
          |Author:    |Ting                                                 |
          |Version:   |4/27/2016    As Amended                              |
          |Urgency:   |No                     |Fiscal:      |Yes             |
          |Consultant:|Jay Dickenson                                        |
          |           |                                                     |
          SUBJECT: Electricity:  distribution grid interconnection dispute  
          resolution process

            DIGEST:    This bill establishes authorizes the creation of an  
          expedited dispute resolution process for distributed generation  
          energy resources attempting to establish a connection to an  
          investor-owned utility's (IOU's) electricity transmission and  
          distribution network.

          Existing law:
          1)Defines "distributed resources" to means distributed renewable  
            generation resources, energy efficiency, energy storage,  
            electric vehicles, and demand response technologies.  

          2)Requires each IOU to submit to the California Public Utilities  
            Commission (CPUC) for it approval or modification a  
            distribution resources plan proposal to identify optimal  
            locations for the deployment of distributed resources. 

            (Public Utilities Code 769)

          This bill:

          1)Authorizes the CPUC to establish an expedited dispute  
            resolution process with the goal of resolving disputes over  


          AB 2861 (Ting)                                      Page 2 of ?
            interconnection applications in no more than 60 days from the  
            time the dispute is formally brought to the CPUC.

          2)Requires the dispute resolution process to have the certain  
            elements, including a distribution grid interconnection  
            technical advisory panel (TAP) of at least eight members  
            selected by the CPUC, four of whom are from IOUs and four of  
            whom are not, and are restricted from participating in the  
            dispute resolution process for an interconnection application  
            for which the member has certain defined conflicts.
          3)Specifies that a review panel of four members shall be  
            selected from the TAP for each dispute.

          4)Directs CPUC to establish a public process in which interested  
            parties to the dispute may file comments with the TAP.

          5)Directs each technical advisory panel to a dispute to make  
            recommendations to the Executive Director of the CPUC, who has  
            30 days to review the recommendation and issue an order to the  

          6)Establishes a process for an interested person to appeal a  
            decision by the dispute resolution panel to the commission of  
            the CPUC for resolution.

          7)Directs the CPUC to provide TAP members that are not from IOUs  
            with an appropriate per diem compensation.


          Fighting to get on:  CPUC's Rule 21 and the Alternative Dispute  
          Resolution Process.  Electric Rule 21 is a tariff that describes  
          the interconnection, operating and metering requirements for  
          generation facilities to be connected to an IOU's distribution  
          system, over which the CPUC has jurisdiction.  Section K of Rule  
          21 establishes a dispute resolution process that first provides  
          a structure for bilateral negotiations between representatives  
          of a generation facility and the IOU, and then directs  
          unresolved disputes to the CPUC's Alternative Dispute Resolution  
          (ADR) process. 

          According to the CPUC, the ADR process is administered by the  
          CPUC's Administrative Law Judge (ALJ) Division.  The CPUC does  
          not have data on how many interconnection disputes have gone  
          through the ADR process.  However, the CPUC describes the  


          AB 2861 (Ting)                                      Page 3 of ?
          process as rarely, if ever, having been used by interconnection  
          applicants.  The CPUC attribute this lack to the time and cost  
          of the ADR process.  The CPUC reports that, instead of the ADR  
          process, developers often raise complaints with CPUC's Energy  
          Division staff, who lack the engineering expertise and  
          decision-making authority to effectively intervene in  
          interconnection disputes.  

          Bill would create an expedited distribution grid interconnection  
          dispute resolution process.  This bill seeks to create a forum  
          by which interconnection disputes between a generator and an IOU  
          can be resolved quickly and fairly.  To that end, this bill  
          authorizes the CPUC to establish an expedited distribution grid  
          interconnection dispute resolution process with the goal of  
          resolving disputes over interconnection applications that are  
          within the jurisdiction of the CPUC in no more than 60 days from  
          the time the dispute is formally brought to the commission.  The  
          idea was proposed as part of last year's budget act but did not  
          appear in the final version of the act.

          If the CPUC chooses to adopt the process, this bill prescribes  
          certain feature and procedures that must be part of the process.  
           Generally, the process would function as follows:

          This bill requires the process that CPUC might adopt to have the  
          following features:

                 The CPUC would establish a distribution grid  
               interconnection technical advisory panel of at least eight  
               members, four of whom work for and IOU and four of whom do  

                 An applicant for interconnection who is unable to  
               resolve a dispute with an IOU may file with the CPUC for  
               expedited dispute resolution.

                 The CPUC would ensure that a technical advisory panel -  
               a four-member body chosen from the distribution grid  
               interconnection technical advisory panel, reviews the  
               dispute via a public process and makes a recommendation to  
               the executive director of the commission within 30 days of  
               receiving the dispute.

                 The CPUC executive director would have 30 days to review  
               the recommendation and to prepare an order to the IOU  


          AB 2861 (Ting)                                      Page 4 of ?
               resolving the dispute.

          The process would provide for alternate decisions by each member  
          of a dispute resolution panel, appeal to the full commission of  
          decisions by the executive director, and per diem for the member  
          of a panel who do not work for an IOU.

          The CPUC reports that, if this bill becomes law, the expedited  
          interconnection dispute resolution process would likely replace  
          the dormant ADR Process.

          It is unknown whether the process this bill would allow to be  
          established would allow disputes between generators and IOUs to  
          be resolved more quickly or to a greater degree of general  
          satisfaction. Many details of implementation are left to the  
          CPUC.  However, stakeholders seem to believe it might help:   
          this bill is supported by many generators and the CPUC and is  
          not opposed by any party, including any IOU.  Seems worth a try.

          Prior/Related Legislation
          SB 106 (Budget and Fiscal Review Committee, 2015) includes a  
          proposal to create a similar dispute resolution process. The  
          bill is pending on the Senate Inactive File.

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


          California Public Utilities Commission (Source)
          California Energy Storage Alliance
          California Solar Energy Industries Association
          OutBack Power Technologies
          Powertree Services Inc.
          Solar Energy Industries Association


          None received

          ARGUMENTS IN SUPPORT:    According to the author:


          AB 2861 (Ting)                                      Page 5 of ?

               Interconnection requests have grown dramatically in  
               California.  Electrical corporations and the CPUC have  
               worked to ensure timely processing of interconnection  
               applications.  However, when a dispute arises between an  
               existing electricity provider (which owns the distribution  
               grid) and a renewable energy or energy storage developer  
               attempting to connect to the grid, projects are  
               unnecessarily delayed or come to a halt. 

               Examples of disputes include wildly differing fee estimates  
               for interconnection upgrades, unreasonable response  
               timeframes from utilities, excessive needs for meetings and  
               re-submittals of materials. 

               Just as the electrical corporation oversees the  
               interconnection processes, the same corporation handles the  
               disputes.  This structure has unduly limited the ability to  
               get an independent review of disputes. 

               The technical nature of interconnections - dealing with  
               electrical engineering, circuitry protection 'schemes',  
               metering configurations, and system upgrades (such as new  
               electrical equipment costs) - render the decision-making of  
               the electrical corporation incoherent to most  
               interconnection applicants.  Additionally, the lack of  
               independence in the current process, where disputes are  
               escalated within the electrical corporation, may not  
               provide sufficient independence in the review of disputes.

               AB 2861 establishes a technical advisory panel to review  
               disputes and to provide recommendations to the CPUC on  
               dispute resolution.  Ultimately, the CPUC has the final  
               decision-making authority to determine the appropriate  


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