Financing the clean energy transition

Carlos Ciudad-Real ‘21
Hometown: Fontana, CA
Major: Civil and Environmental Engineering
Intern, Office of Commissioner Shiroma, California Public Utilities Commission

Before this fellowship, I severely underestimated the role of the California Public Utilities Commission (CPUC) in shaping energy policy in the state. From my studies at Stanford, I understood, at least in theory, what the CPUC does. The CPUC is tasked with regulating investor-owned utilities (IOUs). Subsequently, the CPUC determines how much revenue utilities are allowed and how those revenues are collected via rates. However, this initial understanding barely scratches the surface of the breadth of work that occurs at the CPUC. Through this fellowship, I had the opportunity to brief Commissioner Genevieve Shiroma on various occasions and every time, I was surprised by the wide scope these briefings would cover. These briefings ranged from modifying safety standards for renewable natural gas to requiring transportation network companies to switch to electric vehicles and reduce their greenhouse gas emissions. I am walking away from this fellowship with a greater appreciation of the plethora of policy decisions that are being made at the CPUC.

My work in Commissioner Shiroma’s office this summer has focused on a proceeding related to clean energy financing options for all electricity and natural gas IOU customers. I have assisted with two of the three tracks in the proceeding. The first track of the proceeding dealt with short-term issues related to the California Alternative Energy and Advanced Transportation Financing Authority (CAETFA) which is housed in the State Treasurer’s office. CAETFA offers an energy efficiency financing program to IOU customers, but required an extension of the program’s budget to continue. Since Commissioner Shiroma is the assigned commissioner for this proceeding, I advised her on this issue. Earlier this month, the Commission voted to approve our proposed decision to extend the budget and potentially expand the program to non-IOU customers if non-ratepayer funding is used.

The second track of this proceeding deals with expanding the existing financing structures offered by IOUs to create a greater scale of clean energy investment. This expansion will play an important role in meeting California's energy and climate goals. Part of my responsibilities for this track involved briefing Commissioner Shiroma on a summary of existing IOU financing programs that was submitted to the CPUC by the utilities. From this summary, I learned that there is a significant gap in offerings for low- and moderate-income customers. These customers often face credit worthiness issues, which means that financing programs that rely on loans are often inaccessible to them. The challenge for the CPUC going forward is to scale up these programs by making them more accessible while ensuring that these programs offer a net economic benefit to customers. Luckily, I am leaving this task in the hands of a very competent team comprised of individuals who have encouraged and inspired me to continue pursuing public service in my career.

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