Revised PG&E ‘exit fee’ impact to vary on MB community power, customers

MONTEREY — Despite statewide and local warnings about the potential impact of a revised Pacific Gas & Electric Co. “exit fee” approved by the California Public Utilities Commission last week, Monterey Bay Community Power officials said the relatively new power agency is sticking to its promise to keep their bills lower than PG&E’s and is well-positioned to absorb the change.

On Thursday, the CPUC approved an alternate proposal backed by Commissioner Carla Peterman that gave PG&E more leeway on charging former customers, including those now signed up for a growing number of community choice aggregation agencies such as Community Power, an annual exit fee (also known as a power charge indifference adjustment fee) for contracts and other investments the corporation made in anticipation of its power needs before millions of customers fled to community choice aggregation agencies. The fee is designed to ensure PG&E’s customers don’t pay more than their fair share of those costs.

Ahead of last week’s vote, Community Power issued a press release that featured local community leaders speaking out against the alternate proposal, arguing it could “derail” the state’s clean power programs and increase energy fees for residents, businesses and families, and inviting people to send letters to the CPUC opposing the alternate proposal and in favor of a proposed decision seen as friendlier to community choice aggregation agencies.

In the wake of the CPUC’s decision, Community Power director of communications and external affairs J.R. Killigrew said the agency’s customers will still see lower bills than they would have under PG&E due to an agency rebate that is actually supposed to increase next year along with the exit fee, which could rise by as much as 25 percent, according to Community Power.

“We are still fully committed to matching and lowering PG&E rates,” Killigrew said.

And Killigrew said the agency’s strategic planning has it poised to absorb the increased exit fee and the uncertainty associated with future related costs while continuing to invest in local clean energy programs.

“We won’t see as much impact as others because we planned,” Killigrew said.

Where the revised exit fee could directly affect Community Power and its customers is in its future revenue, which could be reduced by about $40 million annually, falling from about $260 million to about $220 million and cutting the agency’s surplus — estimated at $30 million for next year but potentially $6-$7 million higher without the revised exit fee — for programs like customer bill rebates, local clean power programs and reserves, which help build the agency’s credit rating and borrowing capacity for clean power projects.

“It makes it harder for Community Power to set aside reserves for local energy generation programs,” Killigrew said. “It’s harder for us to re-invest in the region like we’d like to.”

Longer term, Killigrew said the CPUC decision greatly expanded how long PG&E can continue charging community choice aggregation agency customers the exit fee and for what, as well as leaving unaddressed a potential buyout of the fee-associated costs, all of which leaves Community Power and other similar agencies in a state of uncertainty that hampers long-range planning.

“It’s more difficult to plan when you’re in a reactive state,” he said. “It’s better to have a fixed (exit fee).”

In the final analysis, Killigrew dismissed the idea that the revised exit fee is the beginning of the end of community choice aggregation agencies in the state, which has been suggested by some.


Revised PG&E ‘exit fee’ impact to vary on MB community power, customers, by Jim Johnson, Monterey Herald, October 15, 2018.

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