Direct Access and CCAs Will Provide the Greater Choice That Customers Want

By AReM, DACC, RESA, and Shell Energy

The passage in 2018 of Senate Bill (“SB”) 237 will provide greater customer choice and more renewable power options that California consumers want.  The Alliance for Retail Energy Markets (AReM), Direct Access Customer Coalition (DACC), Retail Energy Supply Association (RESA), and Shell Energy North America (US), L.P. (“Shell”) would like to address statements made during the debate over SB 237 which mischaracterize the role and behavior of Direct Access (DA) providers:

  • Comparisons to the 2000-2001 Energy Crisis are Misguided:  The Energy Crisis was a failure of the restructured wholesale market and mandated utility rates, not the competitive retail market.  The wholesale market design did not have the necessary protections in place to guard against market manipulation; the state has since put the appropriate measures in place.
  • Direct Access Providers Meet the Same Requirements as All Other Load Serving Entities, Including IOUs and CCAs:   DA providers are committed to meeting all statutory obligations and are under full regulatory oversight of the state.  Existing California law provides regulators with access to specific information that enables them to determine whether direct access providers are complying with state law to assure clean and reliable electricity delivery.  State regulators have a range of enforcement mechanisms available to ensure this will happen up to and including revocation of registrations to serve customers.   
  • Direct Access and Societal Benefits:  There is a lengthy list of current customers (with more on the waiting list) served by DA with affordable energy that meets all state requirements for being reliable and clean.  Those customers have often stated that being on DA brings and keeps jobs in California and supports customer clean energy goals; studies have shown the economic benefits of electric competition and the positive correlations between economic growth and low energy prices.  

DA provides the opportunity for businesses that have environmental and sustainability goals that exceed the state’s targets to do so in a manner that best meets their needs.  The University of California, which has committed to 100 percent clean energy by 2025, uses DA as one of the pathways for meeting its goals economically.

Many DA providers are partners with CPX, with CPX rightfully stating on its website that we are “committed to advancing the clean energy economy”.  The theme of this year’s CalCCA Annual Meeting, the “Power of Partnerships”, reflects the efforts taken by CalCCA to partner with a range of suppliers and leaders to achieve state goals.  We are proud to be partners with CCAs and will continue to support the efforts of all CCAs.

California is moving to a future of greater consumer choice.  DA providers agree with CCA supporters that this is a positive step, and, just like CCAs, DA providers take direction from our customers for the services and products they want.  DA has continued to exist throughout the years not because DA suppliers want choice, but because customers want choice; that premise is the same for CCAs as well.  

The passage of SB 237 requires the state to develop a pathway to expand the DA program, while assuring that state environmental goals are met.  This legislation provides additional flexibility to help meet those goals in an efficient manner. The authors of this article support a constructive, respectful, and civil dialogue regarding the expansion of DA and its role in helping the state achieve the overarching goals outlined by the CPUC in the Customer Choice Project of affordable, reliable, and clean electricity.   

 

AReM is a California non-profit mutual benefit corporation formed by electric service providers that are active in the California’s direct access market.  This represents the position of AReM, but not necessarily that of a particular member or any affiliates of its members with respect to the issues addressed herein.

The comments expressed herein represent the position of the RESA as an organization but may not represent the views of any particular member of the Association.  Founded in 1990, RESA is a broad and diverse group of twenty retail energy suppliers dedicated to promoting efficient, sustainable and customer-oriented competitive retail energy markets.  RESA members operate throughout the United States delivering value-added electricity and natural gas service at retail to residential, commercial and industrial energy customers.  More information on RESA can be found at www.resausa.org.

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