FINANCE PILOT ROLLOUT SCHEDULE

Frank Spasaro, SoCalGasSaul Gomez, CAEATFA

CPUC Workshop: August 16, 2013

CAEATFA BACKGROUND

Board Members:• Bill Lockyer, State Treasurer and Chair• John Chiang, State Controller• Ana J. Matosantos, Department of Finance• Michael R. Peevey, California Public Utilities Commission• Dr. Robert B. Weisenmiller, California Energy Commission

Phone: (916) 651-8157Email: caeatfa@treasurer.ca.govWebsite: http://treasurer.ca.gov/caeatfa/

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APPROACH USED TO DEVELOP PILOT ROLL-OUT SCHEDULE

We developed the schedule based on the following approach.

Identify the requirements laid out in the PD and in CAEATFA policies and procedures to implement finance pilots.

Identify mechanisms to speed up as much as possible the pilot roll-out, given inter-dependencies.

Overlay the first two steps with operational requirements for a successful pilot roll-out.

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PROPOSED DECISION REQUIREMENTS

The PD required a series of 9 Advice Letters as follows:

Draft RFPs (Master Servicer, Technical Consultant & Lease Pilot)

Start-Up EEFE

Final EEFE Program Plan

InterAgency Agreement IT Budgets

On-Bill Financing OBR Tariff

Incremental Savings Filing

The PD also referenced filings related to a marketing plan and revisions to the Emerging Technologies program, which may be filed through an advice letter.

AGREEM

ENTS

CAEATFA BUDGETARY AND CONTRACTING REQUIREMENTS

Agreement Type RFP required? CAEATFA Board approval required?

DGS approval required?

Interagency Agreement with CPUC

No Yes No

Contracts with IOUs No Yes Yes

Contracts with Master Servicer, Trustee, etc.

Yes Yes Yes

Lender Service Agreements

Process and approvals will depend on content of LSA

Budgetary Authority CAEATFA must obtain to serve as EEFE Joint Legislative Budget Committee decision expected

within 45 days of CPUC Final Decision

REGU

LATION

SCAEATFA RULEMAKING PROCESS

Development Includes public workshops and public comment opportunities

CAEATFA Board approval Emergency rulemaking

Submitted to Office Administrative Law (OAL); approval 15 days after submission

Effective for 180 days; plus two 90 day readoptions Regular rulemaking

Submitted and approved by OAL Must be completed prior to expiration of emergency

regulations

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MECHANISMS TO SPEED UP FINANCE PILOT ROLL-OUT (1)

We identified several mechanisms that will speed roll-out of the Pilots, while considering interdependencies among many process steps.

Avoid process duplication o One procurement process should take place for all

contracts required to roll out pilots. A single procurement implies that SCG not serve as a Start-Up EEFE, but instead act in a consultative role to CAEATFA.

o CAEATFA is not allowed to assume a contract that has been entered in to by another party.

o This mechanism assumes that CAEATFA receives all approvals necessary to become the final EEFE.

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MECHANISMS TO SPEED UP FINANCE PILOT ROLL-OUT (2)

Adopt a phased approach to the pilots. A phased roll-out enables some pilots to launch more quickly than others,

recognizing that some pilots are more complex than others. The phased approach enables early roll-out of pilots that do not require:

o High volume on-bill capabilities. o A Master Servicer

We recommended bundling the pilots in three phases:1. Pre-Development Pilots

a. Multi-Family Pilot with no ratepayer funded credit enhancement b. Energy Financing Line Item Charge

2. Fast-Track Pilots a. Single Family pilot b. Off-utility bill lease pilot [Not approved in PD]

3. Regular Track Pilots a. Remaining On-Bill Repayment Pilots

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MECHANISMS TO SPEED UP FINANCE PILOT ROLL-OUT (3)

Minimize and Speed Up Approval Processes Minimize Approvals required by allocating roles and

responsibilities in a way that leverages existing authority. For example:o Place marketing and outreach capacity with IOUs because

CAEATFA, by statute, cannot conduct direct public outreach o Place contractor approvals with IOUs to leverage existing IOU

contractor relationships and management capacity. Speed up approvals by preparing all relevant parties

(CAEATFA board, DoF) to receive approval requests.

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MECHANISMS TO SPEED UP FINANCE PILOT ROLL-OUT (4)

Reduce number of required advice letters and/or PIPs Some advice letters may not be necessary or required, and others

may be able to be combined. Eliminating or combining advice letters will reduce time required to

approve and then release RFPs or other program elements. We have suggested:

Draft RFPs (Master Servicer, Technical Consultant & Lease Pilot)

Suggest Eliminating

Start-Up EEFE

Suggest Eliminating Final EEFE

Program PlanSuggest Combining & Split Program Plan Bwtn Fast/Regular Track Plans

InterAgency AgreementNo Change

IT Budgets

On-Bill Financing No Change

OBR Tariff No Change

Incremental Savings FilingNo Change

In addition, Qualifying Measures may be Posted Earlier than Required in PD

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OPERATIONAL REQUIREMENTS FOR PILOT ROLL-OUT

Operational requirements include: Master servicer:

o Establish all data and cash interface with financial product originators and utilities.

o Establish data collection mechanisms pursuant to CPUC/CAEATFA guidance.

Develop all required IT system build-out (after selection of Master Servicer)

Develop financial institution qualification requirements Develop credit enhancement protocols Develop and begin marketing, education and outreach

program. Develop contractor qualification process.