Posts

Regulatory Update for June 25, 2020

The CPUC is holding its meetings remotely. See the COVID19 information page on the CPUC’s website for more COVID19-related info.

Remote Meeting Notice from CPUC:

Pursuant to Executive Order N-29-20, Commissioners may participate in CPUC meetings remotely. The public may observe, provide public comments during the public comment period, and otherwise participate remotely pursuant to the Bagley-Keene Open Meeting Act as follows: 1. For each agenda item, a summary of the proposed action is included on the agenda as well as a link to the related electronic document; the Commission’s decision may, however differ from that proposed. 2. Public Comments are taken up at the beginning of the meeting (10am).

  • To listen or make comments not to exceed three minutes by phone, dial 1-800-857-1917, passcode: 9899501
  • Alternatively, you mail email brief written comments (which do not exceed three minutes when read aloud) to 06252020VotingMeetingComments@cpuc.ca.gov and our Public Advisor may read your comments out loud to the meeting if time permits. Written comments must be received prior to 10am to be read aloud. Comments that are not able to be read aloud, or are received after the deadline, will be circulated to the Commissioners. Individuals wishing to observe the meeting can do so by visiting http://www.adminmonitor.com/ca/cpuc/

Brief Notes:

  • The big news out of the June 11 Commission meeting was the Resource Adequacy Decision and the SB 1339 microgrid proceeding Track 1 Decision. Details in those updates below
  • The next CPUC voting meeting takes place TODAY June 25 @ 10am. See AGENDA. For the livestream, click HERE.
  • We continue to monitor wildfire and PG&E bankruptcy-related proceedings but no longer report on those items on a regular basis. We will report occasionally on any significant developments.

Updates on proceedings we are tracking

Below is a numbered list of the regulatory proceedings we are tracking, followed by a brief summary of background information, new or recent developments, and Climate Center filings, if any, for each of the proceedings.

Note that the following summaries are intended as very brief highlights of selected key actions and activities. For details on any of these proceedings, we suggest logging in to the relevant proceeding page on the CPUC’s website. An expedient way to do that is to click on the proceeding number below or visit CPUC’s Documents Page. Please contact us at info[at]cleanpowerexhange.org to report any errors or broken links.

  1. SB 1339 Microgrid Rulemaking 19-09-009
  2. Self Generation Incentive Program (SGIP) 12-11-005
  3. Power Charge Indifference Adjustment (PCIA)  17-06-026
  4. Resource Adequacy (RA) 17-09-020
  5. Integrated Resource Plans (IRP) 16-02-007
  6. Renewables Portfolio Standard (RPS) 18-07-003
  7. Integrated Distributed Energy Resources 4-10-003
  8. NEM Successor Tariff 14-07-002

Closed proceedings that matter:

  • CCA Rulemaking 03-10-003– This was the rulemaking that defined all the rules pursuant to AB 117, the original California CCA law
  • CCA Bond and Re-Entry Fees 18-05-022– This is the proceeding that re-set the bond required to be posted by CCAs in the event that the CCA fails and customers are returned to the incumbent utility

Summaries:

 

  1. Microgrid Rulemaking 19-09-009 pursuant to SB 1339 (Stern, 2018)

Recent Developments:

June 11 Decision adopting Short-Term (Track 1) Actions to Accelerate Microgrid Deployment and Related Resiliency Solutions. The Climate Center is a Party to this proceeding. The Decision directs the State’s Investor Owned Utilities to:

  • Conduct meetings to educate and inform local government agencies on vulnerable electric transmission and distribution infrastructure as well as critical operations that service local jurisdictions;
  • Develop a resilience project guide;
  • Assist local governments in navigating interconnection processes for deploying a resilience project;
  • Dedicate staff to manage the intake of local resilience projects;
  • Create a data portal for local governments to review data essential for microgrid and resilience project development.

The Commission did not reject use of diesel fuel as a near-term back up generation choice. However, with this Decision in place it should become easier for local governments to access the data they need to engage in Community Energy Resilience planning, part of The Climate Center’s Climate-Safe California campaign.

Key Documents:

  • The Climate Center and Vote Solar Opening Comments filed on May 19 and Reply Comments, filed on May 26.
  • April 29 – Proposed Decision Adopting Short-Term Actions to Accelerate Microgrid Deployment and Related Resiliency Solutions. A special note here: This Proposed CPUC Decision reflects a formal embrace by the CPUC of several key ACE principles that The Climate Center and partner organizations have been advocating for regarding the pivotal role of local governments.
  • March 19 – The Climate Center participated in an Ex Parte communication with CPUC staff
  • January 30 – Climate Center Opening Comments in the Track 1 Proceeding
  • December 20, 2019: Scoping Ruling.
  • October 21, 2019: The Climate Center Opening Comments.
  • September 19, 2019: Order Instituting Rulemaking.

Next Steps: Summer 2020 – Track 1 concludes. Track 2 for longer term measures begins.


  1. Self-Generation Incentive Program (SGIP)

Recent Developments:

  • April 1 – The application window for the new SGIP incentives levels opened, following up on the CPUC’s Decision in January (see below) authorizing adding funds to SGIP’s energy storage budgets. Of particular note, the newly-created Equity Resiliency Budget ($513M) provides enhanced SGIP incentives for on-site residential and non-residential storage systems for low-income, vulnerable customers in high-risk fire threat districts (HFTD) or those who have been affected by PSPS events. The new SGIP Decision also created a $0.15/Wh resiliency adder for non-residential customers with critical resilience needs such as police stations, fire stations, hospitals, etc. Additional information is available in the new SGIP Handbook.

Next Steps: The current proceeding is now closed. A new proceeding is expected to be opened later this year.

Key Documents:


  1. Power Charge Indifference Adjustment (PCIA) 17-06-026

Recent Developments:

  • June 22 – Protect Our Communities Foundation in San Diego is challenging the PCIA in state appellate court in San Diego. We will continue to provide updates on this case as it proceeds.
  • May 22, 2020 – Proposed Decision Denying Petition for Modification of Decision 18-07-009. Opening Comments, which shall not exceed 15 pages, are due no later than June 11, 2020. Reply Comments, which shall not exceed 5 pages, are due no later than 5 days after the last day for filing Opening Comments.
  • March 26, 2020 – Final Decision 20-03-019 on Load Departure and PCIA line on bills. Adopts no changes to load forecasts. CalCCA advocated for a probabilistic approach to load forecasts. Changes in specific proceedings possible. CPUC acknowledges that IOUs utilize the Clean Power Exchange map/database but declines to order its use citing the need for further scrutiny of the sources and reliability of the data in this database. CalCCA opposes use of CPX data because it is maintained by a third party, may not be up-to-date, and does not reflect binding CCA commitments.
  • March 17 – CalCCA Opening Comments on Proposed Decision
  • February 25 Proposed Decision
  • January 22, ALJ Ruling to modify the proceeding schedule for Working Group Three

Next Steps:

  • Q2 2020 – Resolution of Working Group 3 issues

Key Documents:


  1. Resource Adequacy (RA) 17-09-020 and 19-11-009

Recent Developments:

  • June 11 – Decision empowering PG&E and SCE to have procurement authority over RA for CCAs.  This is a very bad decision that impinges on the statutory right of CCAs to procure electricity for their customers. Designating PG&E and SCE as central procurement entities for RA creates a situation where for-profit IOUs that are directly in competition with not-for-profit CCAs for customers, get to procure electricity for the CCA and charge them for costs. This is not an acceptable outcome and The Climate Center along with others will be evaluating strategies for overturning the Decision.
  • May 22, 2020 – Proposed Decision issued adopting local capacity obligations for 2021-2023, adopting flexible capacity for 2021, and refining the RA program.
  • April 2, 2020 – Ruling modifying Track 2 schedule for local capacity a flexible capacity requirement issues
  • January 22, 2020 Commissioner’s Scoping Ruling

Key Documents:

  • Track 1: Revisions to RA import rules
  • Track 2: 2021 System and Flex RA. 2021-2023 Local RA
  • Track 3: Structural changes to RA program
  • Track 4: 2022 System and Flex RA. 2022-2024 Local RA
  • October 2017 – Order Instituting Rulemaking

Background: The RA program is designed to provide adequate electric resources to CAISO to ensure safe and reliable operation of the grid, and to provide appropriate incentives for the siting and construction of new resources needed for reliability. This proceeding has been divided into three Tracks due to the complexity of the issues involved.


  1. Integrated Resource Plans (IRP) 16-02-007

Recent Developments:

  • May 26, 2020 – Proposed Decision Granting Intervenor Compensation to Friends of the Earth for Substantial Contribution to Decision 19-04-040 and Decision 18-02-018. Opening Comments, which shall not exceed 15 pages, are due no later than June 15, 2020. Reply Comments, which shall not exceed 5 pages, are due 5 days after the last day for filing Opening Comments.
  • April 6, 2020 – Decision 20-03-26 adopts an optimal portfolio, known as the Reference System Portfolio (RSP), to be used by all load-serving entities (LSEs) required to file individual integrated resource plans (IRPs) in 2020.
  • January 3, 2020 – Administrative Law Judge’s Final Baseline Ruling finalizing a baseline for purposes of procurement required by Decision 19-11-016

Next Steps:

Key Documents:

Background: The IRP proceeding is an umbrella planning proceeding to consider all of the CPUC’s electric procurement policies and programs. The goal is to provide a safe, reliable, and cost-effective electricity supply while complying with SB 350 mandates for LSE energy resource portfolios. LSEs will be required to file individual IRPs, which will then be considered in developing a Preferred System Plan (PSP).


  1. Renewables Portfolio Standard (RPS) 18-07-003

Recent Developments:

  • May 13 – E-mail Ruling Modifying Schedule of Review for 2020 RPS Procurement Plans Issued in the May 6, 2020 RPS Plan Ruling
  • February 27, 2020 – Ruling on confidentiality rules for the RPS program.

Key Documents

Background: The RPS proceeding implements Senate Bills 350 (2015) and 100 (2018) that requires all load serving entities to increase their procurement of renewable power to 33% 2020, 44% by 2024, 52% by 2027, and 60% by 2030. The current proceeding is the successor to R.15-02-020.


  1. Integrated Distributed Energy Resources 4-10-003

Recent developments: None at this time

Key Documents:

Background: Since 2007, the Commission has sought to integrate demand-side energy solutions and technologies through utility program offerings. Decision (D.07-10-032) directs that utilities “integrate customer demand-side programs, such as energy efficiency, self-generation, advanced metering, and demand response, in a coherent and efficient manner.” The Commission’s IDER Action Plan published in 2016 remains in draft form.


  1. Net Energy Metering (NEM) Successor Tariff 14-07-002

Recent Updates: No recent updates. The NEM successor tariff had been expected to be initiated in 2019. It wasn’t.

Key Documents:

Background: Pursuant to direction in the NEM Successor Tariff Decision, the Commission was supposed to have reviewed the NEM successor tariff some time in 2019, when the proceedings related to distributed energy resources were to have been completed and after default TOU rates were implemented. Energy Division staff had planned to explore compensation structures for customer-sited distributed generation other than NEM, as well as consider an export compensation rate that takes into account locational and time-differentiated values. On April 26, 2019, the Energy Division distributed a Revised Solar Information Packet to service list R.14-07-002 and R.12-11-005.  The Energy Division asked for written comments about the content of the Revised Solar Information Packet and implementation approach.  The deadlines for submitting written comments has passed. If you have questions contact Kerry Fleisher at the CPUC Energy Division: Kerry.Fleisher@cpuc.ca.gov

Four Bay Area Aggregators Speak Out on “Short-Sighted” CPUC Decision

Oakland, Calif. – Four of California’s community choice aggregators serving the Bay Area stated their deep disappointment in a decision of the California Public Utilities Commission regarding resource adequacy program refinements made at the Commission’s Thursday, June 11 voting meeting.

“This is a short-sighted decision by the CPUC. It directly undermines current and future value streams from investments in local community-supported energy investments we are making and creates unnecessary regulatory uncertainty for all future investments,” said East Bay Community Energy, Peninsula Clean Energy, San José Clean Energy, and Silicon Valley Clean Energy in a joint statement.

The CPUC decision designates Pacific Gas and Electric (PG&E) and Southern California Edison as central buyers for resource adequacy. By doing so, the decision favors investments in large-scale gas procurement rather than in the innovative and clean local reliability resources that our public agencies are making. This change in direction leaves value on the table that threatens to raise customer costs.

The statement continued, “The CPUC’s action undermines our ability to make long-term planning decisions, while undercutting incentives to speed up clean energy innovation. Creating a process to examine ways to mitigate this decision’s harmful impacts does little to address the harm today. It represents a lost opportunity to support local clean energy investments being made today.”

###

Good news for The Climate Center’s Community Energy Resilience program

by Ellie Cohen

The last few weeks have brought good news related to The Climate Center’s Community Energy Resilience program, part of The Climate Center’s Climate-Safe California campaign.

On April 29th, the California Public Utilities Commission (CPUC) issued a Proposed Decision in its microgrid proceeding which included recommendations The Climate Center had filed with the CPUC. The Proposed Decision directs utilities to provide information and assist local governments in developing energy resilience projects. Final CPUC approval — expected in June – should make it easier for local governments to access the utility data they need to engage in Community Energy Resilience planning.

On May 14th, Governor Newsom issued his updated budget proposal for the upcoming FY 2020-2021 fiscal year.  Notwithstanding severe state budget cutbacks due to the COVID-19 pandemic, the Governor’s latest budget proposal retained $50M in funding for community energy resilience which The Climate Center and Partners have been advocating for.  The Climate Center and Partners will continue to urge State leaders to retain these funds in the final budget.

On May 28th  the California Senate Energy, Utilities and Communications Committee passed SB 1215, legislation to promote the development of microgrids.

The Climate Center is hosting multiple upcoming energy resilience events, including a May 29th webinar as well as a Community Energy Resilience webinar series to provide practical information regarding the immediate need to keep critical facilities powered during the upcoming fire season as well as the long-term opportunities to simultaneously advance local resilience and climate goals.

There remains a huge amount of work ahead in our effort to transform California’s electricity system to becoming clean, affordable, reliable, equitable, and safe – and we have seen some promising forward progress in recent weeks.

If you would like to support our efforts, click here.

Commissioner Guzman Aceves: Low-income Valley towns get pilot projects for clean energy at 2,000 households

In California, we know climate change is real. We also know that methane and carbon emissions are some of the leading culprits in this accelerating change. And according to the state’s 4th Climate Assessment released last August, San Joaquin Valley residents as a result face more intense and frequent heat waves, increased and prolonged droughts, greater risks of natural disasters such as floods and wildfires and are more vulnerable to a number of likely public health threats.

San Joaquin Valley residents also face the most extreme energy burdens in the state, paying a much larger percentage of their income for energy. But there is another population in the San Joaquin even more burdened with high energy costs and direct, daily exposure to air pollution because — in this extraordinarily productive agricultural region — people live in communities and neighborhoods that haven’t had access to clean, affordable energy, relying instead on wood and propane to heat their homes and cook their food.

Last summer, at well-attended workshops in schools and gymnasiums in communities like Allensworth, Alpaugh, Le Grand, La Vina, Ducor, West Goshen and more, we heard from many of these residents.

We heard from hard-working people who endure icy showers and cold food when the propane or wood run out. We heard stories about people being manipulated and taken advantage of by unregulated propane suppliers. We heard stories about putting kids to bed cold and hungry because the fuel was gone. In this extraordinarily productive agricultural region, we heard about bad health and other impacts, particularly in winter when so many people don’t have clean energy options the rest of us enjoy.

Now, working with utilities regulated by the California Public Utilities Commission, we can finally offer about 2,000 San Joaquin Valley households cleaner and safer energy alternatives, and we can reach more families in the future.

At our last CPUC meeting of 2018, the commission approved a $56 million investment for pilot projects in 11 San Joaquin communities. In addition to the benefits from cleaner energy and healthier air, the program has a big economic development component. With more energy alternatives and infrastructure to deliver them, it should become easier to attract other investments, housing and jobs.

I am proud of the CPUC’s decision to bring cleaner, affordable energy to communities in California long unserved and overlooked. I am even prouder of these communities themselves, and of their tenacity and commitment. It has been a long road, and these pilots are just another step. But they will provide energy efficiency upgrades, electric heating, solar benefits, job training and more — while reducing energy costs and pollution.

When then-Gov. Jerry Brown signed Assembly Bill 2672 in 2015, the CPUC was directed to find ways to increase affordable access to energy for disadvantaged communities in the San Joaquin Valley. But we first had to identify eligible towns and households and meet with residents to determine which clean-energy strategies would work best. Collectively, we’ll learn from the different experiences as we move forward and seek to replicate the successes in other communities during the next phase of our still-open CPUC proceeding.

The pilots will allow eligible households to replace at no cost their propane- or wood-burning appliances with new energy-efficient appliances — either electric or natural gas — and will allow some minor home upgrades if necessary. The pilot communities will also benefit from a Community Energy Navigator program established to inform, engage and assist participating residents. And we’ll build in basic bill protections to ensure that energy costs do not go up for participants.

Everyone involved knows a lot of work remains. But we are excited about the positive impacts and value of investing in communities that have long been bypassed.

As California continues reducing methane or carbon emissions, we must also meet the challenge of our current heating needs — for water and for living and work spaces — with cleaner energy so no one is left behind. These pilot projects, in addition to improving the quality of life for several thousand residents, will give us the experience and reliable data needed to determine the best ways of continuing to reduce greenhouse gas emissions while also keeping monthly bills affordable for so many other hard-working Californians.

Martha Guzman Aceves was appointed to the California Public Utilities Commission by then-Gov. Jerry Brown in December 2016. She previously served as deputy legislative affairs secretary in the Office of the Governor, focusing on natural resources, environmental protection, energy and food and agriculture.

 

Low-income Valley towns get pilot projects for clean energy at 2,000 households, by Martha Guzman Aceves, The Fresno Bee, January 11, 2019.

PUC again tries to help utilities fight their fear

Until damages and liabilities from wildfires rose from mere hundreds of millions into the multi-billion-dollar range over the past 18 months, California’s big private utilities had no greater fear than the steady expansion of a phenomenon best known by the initials CCA.

That’s short for Community Choice Aggregation, a means allowing electricity consumers in some places to opt out of being served by the likes of Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric Co. Municipally-owned and-operated CCAs generally charge a little less per kilowatt hour than the private companies and provide more energy from renewable sources like wind and solar. They use existing transmission lines to fetch power for their customers.

It’s a nightmare for the utilities, which have already lost cities big and small to CCAs, cutting into their profits a bit. San Francisco Clean Power is a CCA. Marin, Sonoma and Mendocino counties also offer CCA service. Starting next month, customers in 31 Southern California cities plus the unincorporated areas of Los Angeles and Ventura counties will join the biggest-ever CCA unless they opt out in favor of sticking with Edison.

That one will include cities like Ventura and Thousand Oaks, Santa Monica, Manhattan Beach and Calabasas, to name just a few. About one-third of those locales have chosen to give customers 100 percent renewable power unless they deliberately choose dirtier options priced a bit lower. Los Angeles itself won’t join the CCA because it already has the state’s largest municipally-owned utility, the Department of Water and Power.

The latest significant city wanting a CCA is San Diego, where Republican Mayor Kevin Faulconer the other day announced support for an alternative to SDG&E as the best means to fulfill the city’s pledge of running on 100 percent renewable energy by 2025.

Not surprisingly, California’s Public Utilities Commission, which regulates the big utilities and has long favored them over their customers, keeps throwing obstacles in the path of CCA expansion. In January 2018, it passed new rules that essentially delayed establishment of new CCAs for a year. As that time expired, the commission adopted new, higher levies on CCA customers as a way to compensate the existing utilities for expenses of previous power plant construction and long-term power purchase contracts they signed during the energy crunch almost 20 years ago. Never mind that consumers actually paid for all that via their monthly bills.

“We are updating the formula because everyone agrees it is broken,” newly termed-out Commissioner Carla Peterman, a Jerry Brown appointee, said at the time of the vote.

But not everyone agrees. Some activists, especially in the San Diego area, believe the new, higher charges — significantly more there than what’s paid by consumers leaving PG&E and Edison — are excessive.

“This is dangerous because it defeats the aim of better prices by CCAs than established utilities,” said Bill Powers, a San Diego energy engineer who helped California fight off utility plans to import high-priced foreign-sourced liquefied natural gas through Ventura County in the early 2000s. “In San Diego, it could set up an almost impossible burden for any new agency.”

 

PUC again tries to help utilities fight their fear, by Thomas Elias, Chico Enterprise-Record, January 8, 2019.

Community choice energy backers file for CPUC rehearing, say proposed exit fees are too high

Backers of community choice energy programs want the California Public Utilities Commission to take another look at a recent decision that supporters say is tilted too much in favor of traditional power companies and will discourage potential customers from switching to CCAs.

Last month, the commission voted 5-0 to increase the exit fees that Community Choice Aggregation, or CCA, customers must pay to utility companies in their respective service territories, effective next year.

Late Monday afternoon, the state’s CCA trade association and a pair of San Diego-based groups filed paperwork calling on the commission to hear the case again.

“This is an added fee that will increase the cost for customers to move over” to CCAs, said April Maurath Sommer, executive director and lead counsel for the Protect Our Communities Foundation, an environmental group based in San Diego County. The Utility Consumers’ Action Network joined Protect Our Communities in its filing.

The CalCCA trade group submitted its own application, saying the state’s decision “artificially inflates” the exit fees.

The utilities commission did not respond to a request for comment on the filings.

Largely formed as a way to offer customers power from cleaner energy sources, CCAs have grown rapidly across the state. The first CCA was established in 2010 in Marin County and since then 18 others have sprung up.

San Diego mayor Kevin Faulconer last month announced his support for creating a CCA that, under a joint powers authority, could also include multiple cities around the county.

Under the CCA model, utilities like San Diego Gas & Electric still maintain transmission and distribution lines (such as poles and wires) and handle customer billing. But decisions regarding what kind of power is purchased in a given community are made by government officials.

Once a CCA is formed, its customers must pay an exit fee — called a Power Charge Indifference Adjustment — to the legacy utility serving that particular region. The fee is included in customers’ monthly bills.

The fee is required to offset the costs of investments utilities have made over the years for things like natural gas power plants, renewable energy facilities and other infrastructure.

Utilities argue if the exit fee is set too low, it does not fairly compensate them for their investments; if it’s too high, CCAs complain it reduces the financial incentive for their potential customers.

In October, state commissioners unanimously voted for an adjusted exit fee backed by commissioner Carla Peterman. While expressing support for CCAs, Peterman said the commission had a “legal obligation” to make sure increased costs are not shouldered by “customers who do not, or cannot, join a CCA” and said the adjustment “ensures a more level playing field between customers.”

The fees vary, depending on the service territories of the three investor-owned utilities across the state (SDG&E, Southern California Edison and Pacific Gas & Electric). According to estimates from the commission, the new exit fee in San Diego will be raised from 2.5 cents per kilowatt-hour to about 4.25 cents.

For a prospective CCA residential customer who uses 500 kilowatt-hours per month, that works out to about $21.25 per month.

The groups filing for a re-hearing said the state ruling contained legal errors. Among them:

  • allowing utilities to pass along the costs of generation the power companies themselves own onto the exit fees
  • not properly taking into account the value of cleaner energy sources, and
  • saying there is “substantial evidence” that utilities executed contracts for renewable energy at inflated prices.

Protect Our Communities also called on the commission to issue an immediate stay on its decision because it will go into effect in little more than six weeks — Jan. 1, 2019. The group projected the new exit fees would be 50 percent higher than the existing fee.

“If this decision is allowed to stand there’s going to be huge numbers of San Diegans who will be getting their electricity from a (CCA) at rates that are unfairly high,” Maurath Sommer said. “This is a gift to the utilities … and does not encourage good management because they can turn those costs over to the new (CCA) customers.”

A spokeswoman for SDG&E said the utility had no comment because it had not yet had a chance to review the filings.

The commission has scheduled a second phase of discussions to fine-tune the exit fees.

Maurath Sommer said the commission is under no specific deadline to announce whether it will rehear its decision. In addition, plaintiffs cannot lodge an appeal in court until the commission issues a decision on a rehearing.

“In an ideal world the commission would expediently respond to all applications for rehearing and unfortunately the commission has a long history and a continuing history of electing to ignore applications for rehearing, in some cases up to two or three years,” she said.

The only existing CCA in San Diego County, the Solana Energy Alliance out of Solana Beach, joined Cal CCA in its request. Voicemail messages left to the mayor and deputy mayor at the Solana Beach City Council by the Union-Tribune went unreturned.

 

Community choice energy backers file for CPUC rehearing, say proposed exit fees are too high, by Rob Nikolewski, The San Diego Union-Tribune, November 19, 2018.

Local government energy-buying idea bruised by ruling

The effort of Butte County and Chico to form an agency to buy electrical power for their citizens suffered a blow Thursday, but it’s unclear just how severe a blow it was.

The state Public Utilities Commission approved a set of costs for customers who leave PG&E or the state’s other investor-owned utilities (IOUs) to receive power from providers like the community choice aggregator that is being pursued locally.

“The ruling was favorable for the IOUs, so it’s not favorable for CCAs,” said Butte County Assistant Chief Administrative Officer Brian Ring.

Under a community choice aggregation program, a government entity buys power on the open market, which locally is estimated to result in savings of at least 2 percent. PG&E would still deliver the power and retain ownership of the power lines and other electrical infrastructure, but it would be delivering power provided by the county and city.

The other municipalities in Butte County could join in, but a study found in the minimum Chico and the county would both have to participate to provide the necessary customer base.

What the PUC approved on a 5-0 vote largely involves long-term power purchasing contracts PG&E and the other utilities have. The contracts were signed to provide power for a customer base that is shrinking as more and more CCAs and other alternatives form.

The utilities argue the people who leave owe a share of the costs of the contracts that were purchased partially for them. There hasn’t been much disagreement on that, but how much that cost would be has been contentious for more than a year.

The vote Thursday put the charge at an average of 1.68 percent for residential customers in PG&E’s service area. The costs for customers who leave Southern California Edison or San Diego Gas & Electric are even higher: 2.50 percent and 5.24 percent respectively.

Locally, that could still mean savings if the CCA is formed. The 2 percent figure was a conservative estimate, and savings could easily be more than that.

But Ring said it would mean less money coming to the CCA, and lengthen the time it will take to pay off the debt it will have to incur to form. Paying off the debt would give the CCA flexibility to reduce rates or pursue other initiatives.

He said the county’s consultant would be rerunning the data through the model used for the study to see if the CCA was still feasible here. “We’re crunching the numbers,” Ring said.

“It’s going to have an adverse impact on our study,” he said, “to what degree we haven’t determined.”

 

Local government energy-buying idea bruised by ruling, by Steve Schoonover, Chico Enterprise-Record, October 14, 2018.