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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.

PG&E Exit Fees? OK, But Let’s Be Fair

In a disappointing decision, the California Public Utilities Commission (CPUC) recently voted to approve increases to the “exit fees” charged to Valley Clean Energy (VCE) customers by PG&E.  Valley Clean Energy is our official locally governed electricity provider, bringing cleaner energy at competitive rates to Davis, Woodland, and unincorporated Yolo County. It began serving 55,000 customer accounts this past June.

The decision by the CPUC to raise the exit fee affects all 19 community choice aggregation (CCA) programs in the state, including VCE.

The exit fee is called the Power Charge Indifference Adjustment, and if you are a VCE customer, you will see it on your PG&E bill. This fee is charged by each of the utilities to all CCA customers to compensate for electricity generation they built or contracted for in past years.

Valley Clean Energy believes a reasonable exit fee is fair as long as these costs are shared equitably by all PG&E and CCA generation customers.  Unfortunately, we don’t find this recent ruling by the CPUC to be fair. It over-compensates PG&E for past investments and leaves out reasonable cost-control measures that would hold the utility accountable for its past business decisions.

Not only did the CPUC allow the utilities to include these costs in the exit fee, it did so before even considering whether these costs were reasonable.  What is even more puzzling is why the CPUC took this action against the advice of its own expert administrative law judge, who had studied the issue for a year and held extensive hearings where evidence was provided by all sides—including representatives for VCE.

The end result of the CPUC ruling is an exit-fee formula that will increase the amount of money PG&E will get from CCA customers by tens of millions of dollars in 2019 alone.  The scale of the new fees and the lack of effort by the CPUC to mitigate costs mean that CCAs are facing significant financial challenges—with parallel threats to California’s renewable energy goals—despite having lower overhead costs than the investor-owned utilities.

Valley Clean Energy’s share of the additional exit-fee costs in 2019 is about $3.5 million. This financial hit has forced your VCE board of directors to make some challenging decisions to help manage program costs wisely while meeting VCE’s long-term goals of service to the communities it serves. Those difficult decisions include reducing staffing costs, delaying enrollment of solar customers, and adjusting electricity rates to be at parity with PG&E’s prices.

It’s disappointing to make these program adjustments so early in the game, but take heart — there are experienced industry organizations, lobbying groups, and 19 CCA programs across the state representing more than 160 cities and counties that are fighting hard to reverse this decision. Should we succeed, VCE will act quickly to reinstate the customer advantages that were offered originally.

In the meantime, remember that VCE is a not-for-profit public energy program that has been created by our communities to benefit all of us. VCE and the other CCA programs operating successfully across California are already saving their customers millions of dollars a year, reducing greenhouse-gas production by tens of millions of tons, and creating jobs as they contract for and build renewable energy facilities in California.

California CCAs are buying and building renewable energy faster than any other type of electric provider in the state. But changing the status quo in a fossil fuel-based economy is a pretty big deal—nobody said it was going to be easy. And even though our growing pains have set in earlier than we would have liked, VCE’s dedication to comprehensive community benefits remains, including:

  • Local control: The VCE board — composed of elected officials from Davis, Yolo County and Woodland — makes decisions with the benefit of constituents in mind as opposed to Wall Street. We welcome your opinions at our public meetings. Consider joining us when you can.
  • Energy choice: VCE ends the electricity monopoly, offering a choice of electricity-generation providers and an option to opt up to 100% renewable energy, or to opt out.
  • Sustainability: VCE provides higher levels of renewable energy. Our current portfolio is 42% renewable compared to 33% for PG&E. We will strive to go higher in the years ahead.
  • Reinvestment in the community: Net revenues will be reinvested in the community in the form of energy projects and programs, including local renewable generation, energy storage, electric vehicle infrastructure, and/or energy efficiency.
  • Competitive rates: We strive to be competitive with the electricity-generation rates offered by PG&E.

The latest update on PG&E’s exit fee will be discussed at Valley Clean Energy’s next Board meeting, at 5:30 p.m. Thursday, Dec. 13, in the Community Chambers at Davis City Hall, 23 Russell Blvd. Unlike the investor-owned utilities, our board meetings are public; you’re welcome to attend.

Regular board meetings are on the second Thursday of the month from 5:30 to 7:30 p.m. The meeting location alternates between Davis City Hall and the Woodland City Council Chambers, 300 First St. in Woodland.

Please visit our website for additional information at valleycleanenergy.org.

—Lucas Frerichs is a Davis City Council member and the Valley Clean Energy board chair. Tom Stallard is a Woodland City Council member and the board vice chair.

About Valley Clean Energy: Valley Clean Energy is a not-for-profit public agency formed to provide electrical generation service to customers within the cities of Woodland, Davis and unincorporated areas of Yolo County. Its mission is to deliver cost-competitive clean electricity, product choice, price stability, energy efficiency, greenhouse gas emission reductions, and reinvestment in the community.

 

PG&E Exit Fees? OK, But Let’s Be Fair, by Lucas Frerichs and Tom Stallard, The Davis Vanguard, December 8, 2018.

PG&E fee hike to cost CleanPowerSF $20M in one year, ‘slow down’ renewable energy projects

A fee hike from PG&E will cost San Francisco’s renewable energy program an additional $20 million over the next year and “slow down” construction of local green energy projects.

The impacts to CleanPowerSF, a community choice aggregation program allowed under state law, comes after the the California Public Utilities Commission voted last month to allow PG & E to increase the fee it charges their customers who leave to enroll in the renewable energy program.

To offset the fee increase and ensure existing and future CleanPowerSF customers have bills that “meet or beat” what PG&E charges, the San Francisco Public Utilities Commission plans to use the program’s reserve funds to provide a credit.

Barbara Hale, the San Francisco’s Public Utilities Commission’s assistant general manager for power, told the San Francisco Examiner that plan will cost $20 million over the next 12 months, beginning in January.

There are other impacts.

One of the hopes in launching CleanPowerSF was that it would help fund the construction of renewable energy projects within San Francisco, creating jobs and boost assets producing green energy.

Hale warned that the credit means “we won’t have as much money to do the more local creative build like we’ve been talking about.”

“We’re going to have to slow that down,” Hale said.

Hale will present a more detailed financing plan to offset the costs and the impacts it will have on CleanPowerSF to the SPFUC on Dec. 11. The program’s current budget is $155 million. The exact PG&E exit fee and generation rates won’t be known until January.

Despite the fee increase and impact to the program, the agency still intends to enroll 280,000 mostly residential accounts in April 2019.

The program, which provides energy from 43 percent renewable sources, currently serves 109,000 accounts since it launched in 2016 and has had an opt-out rate of 3.2 percent. That’s about 30 percent of electricity accounts citywide, comprising an average demand of 230 megawatts.

About 4,800 businesses and households have chosen to pay a higher rate to obtained the program’s 100 percent renewable energy service called SuperGreen. PG&E’s electricity comes from 33 percent renewable energy sources.

With April’s enrollment, CleanPowerSF is expected to expand to around 365,000 accounts with an average demand of 340 to 350 megawatts.

The City will continue to discuss the program with several larger commercial accounts such as server farms, in an effort to interest them in the program.

On Friday, the San Francisco Local Agency Formation Commission, on which members of the Board of Supervisors sit, will hear a briefing on ClearPowerSF.

Meanwhile, San Francisco and a group of other municipalities have filed an appeal with the CPUC seeking to overturn its decision.

Among the arguments made in the appeal of CPUC’s decision on the exit fee, known as the Power Charge Indifference Adjustment (PCIA), is that PG&E should have planned ahead and avoided cost impacts of departing customers. The fee is meant to cover the impacts on utilities like PG&E that have invested in the procurement of energy for customers.

“The utilities have, from the outset of CCA formation, continued to procure on behalf of CCA customers until the last possible moment such customers remain with bundled service, even when the utilities know or should have known that such customers were soon departing,” the appeal said, “The result is costs that could have been avoided and that cannot be attributed to CCA departing load.”

The CPUC has 90-days to decide whether to act, otherwise the vote stands. Afterwards, San Francisco could file a lawsuit.

 

PG&E fee hike to cost CleanPowerSF $20M in one year, ‘slow down’ renewable energy projects, by Joshua Sabatini, The San Francisco Examiner, November 27, 2018.

SF’s city-run power program challenges state board’s decision to raise customer fees

The San Francisco Public Utilities Commission and other municipal power providers are challenging a controversial decision by state energy regulators to raise the fees customers pay when they switch from investor-owned utilities like Pacific Gas and Electric Co. to programs like CleanPowerSF.

Last month, the California Public Utilities Commission voted unanimously to tinker with an arcane but important formula that determines the size of so-called exit fees — permanent charges that show up on electricity bills of customers who enroll in government-run energy services.

After that decision, the SFPUC estimated that CleanPowerSF’s monthly costs could rise by around $5 per customer, but the agency stressed that cost predictions will remain highly uncertain until PG&E finalizes its rates next month.

However, the SFPUC, which runs CleanPowerSF, has said it will absorb the impact from the fee increase, so customers’ electric bills won’t actually rise as a result of the CPUC’s decision. But that still means the agency would be on the hook for an extra $11 million in exit-fee payments to PG&E between Jan. 1 and July 1 next year — unless, of course, the decision gets reversed.

Barbara Hale, SFPUC assistant general manager for power operations, said the agency believes regulators misapplied and overlooked portions of state law in ways that artificially inflate the exit fees for government-run energy programs.

The CPUC has until mid-February to decide whether it will grant the requests for another hearing. If the state board denies it, the SFPUC and other municipalities could take their case to court. Hale said the agency and its attorneys are waiting to make any decisions about taking legal action.

“Is it worth the investment? We’ll have to figure that out,” Hale said.

The CPUC did not respond to requests for comment Friday.

San Francisco’s utility agency contends that the added costs could seriously imperil its ability to grow CleanPowerSF over time. The agency is gradually enrolling the city in CleanPowerSF automatically, but customers can choose to opt out.

About 43 percent of the energy mix in the program’s baseline comes from renewable sources, and there’s also a 100 percent renewable option. A planned mass enrollment push next year aimed at signing up 280,000 new business and residential customers is still on track, despite the CPUC decision.

The fees that the CPUC voted to raise last month are meant to offset the costs that utility companies incurred to purchase long-term energy contracts and other investments. PG&E, for instance, has spent billions of dollars buying and generating renewable energy since the early 2000s.

As government-run programs like CleanPowerSF continue to mushroom across the state, PG&E and other utilities say the rate increases are essential to ensure that the costs of those prior investments don’t fall unfairly upon customers who choose to stay, or have no energy alternatives to turn to.

But the SFPUC — as well as CalCCA (CalCommunity Choice Aggregation), which lobbies on behalf of the state’s “community choice aggregation” local energy programs — contends that state regulators are mistakenly factoring costs into the fee formula that make PG&E’s and other utilities’ expenses seem greater than they really are.

“We have to say what they’re doing isn’t consistent with the law,” Hale said. The SFPUC made similar arguments prior to the regulators’ vote last month, so their petition for a rehearing could be a long shot.

“Many of us — members of the Legislature, mayors of large cities, environmental groups — we all asked the CPUC to take a more balanced approach, and the CPUC essentially ignored our concerns,” said state Sen. Scott Wiener, D-San Francisco, a longtime proponent of CleanPowerSF and similar programs.

Wiener said he and a “sizable group of senators and Assembly members” are in the early stages of discussions about a “legislative strategy” in 2019 aimed at ensuring that “CCAs can exist and function and grow and thrive.”

“I hope the CPUC takes this petition for a rehearing seriously,” he said.

Dominic Fracassa is a San Francisco Chronicle staff writer. Email: dfracassa@sfchronicle.com Twitter: @dominicfracassa

SF’s city-run power program challenges state board’s decision to raise customer fees, by Dominic Fracassa, San Francisco Chronicle, November 23, 2018.

California CCAs Seek Rehearing of CPUC’s Inequitable ‘Exit Fee’ Decision

Concord, Calif. – The California Community Choice Association (CalCCA) and two of the state’s community choice aggregators, CleanPowerSF and Solana Energy Alliance, filed an application for rehearing today with the California Public Utilities Commission in response to the CPUC’s October 11 decision to revise the Power Charge Indifference Adjustment (PCIA).

The PCIA is an “exit fee” charged by the state’s investor-owned utilities (IOUs) to community choice aggregation (CCA) and other departing load customers to compensate for electricity generation built or contracted in the past at prices that are now above-market. The CPUC’s decision is expected to result in a sharp increase in PCIA rates for CCA customers and may make it uneconomic for new CCAs to launch.

“The PCIA decision fails to ensure equitable treatment of all market participants in California,” said Beth Vaughan, executive director of CalCCA. “It favors incumbent utilities by shifting costs, including recovery of shareholder returns, from IOU bundled customers to CCA customers.”

In the application, the CCA parties request that the Commission correct a number of legal errors in the PCIA decision that run afoul of the California Public Utilities Code, California Code of Civil Procedure, as well as other statutes. The errors include:

  • Failing to exclude the costs of utility-owned generation (UOG) in the PCIA imposed on CCA departing load customers
  • Failing to reduce the net PCIA portfolio costs of the IOUs by the value of any benefits that remain with bundled service customers
  • Failing to exclude from the PCIA portfolio costs that are not “unavoidable” or “attributable to” departing load customers

The parties are seeking expedited review of the application on the basis that the decision will in some cases result in PCIA rates that prevent CCAs from serving their customers at the same total generation rates that an IOU can charge its customers. The PCIA rates may also cause CCAs to suspend or cancel the launch of service to new customers.

There are 19 CCA programs serving approximately 8 million customers in California. The higher PCIA rates will have local as well as statewide impacts, particularly when it comes to energy decarbonization. CCAs have signed long-term contracts with new renewable energy facilities totaling more than 2,000 megawatts, and they serve their customers with electricity that is cost-competitive, and in many cases greener, with the supplies of investor-owned utilities.

As UCLA’s Luskin Center for Innovation notes in a 2018 study, “the rise of CCAs has had both direct and indirect positive effects on overall renewable energy consumed in California, leading the state to meet its 2030 RPS targets approximately ten years in advance.”

The precise effects of the new PCIA on 2019 rates will ultimately depend on the outcome of Energy Resource Recovery Account proceedings that are now underway at the CPUC. ERRA proceedings are where the PCIA methodology is combined with an IOU’s actual cost and contract data to calculate the PCIA that will go into effect at the beginning of each year (January 1).

CalCCA is preparing for Phase 2 of the PCIA proceeding and remains undeterred in its efforts to support a new PCIA that lowers costs for all consumers and fosters a competitive environment that offers communities more energy options.

###

About CalCCA: The California Community Choice Association supports the development and long-term sustainability of locally-run Community Choice Aggregation (CCA) electricity providers in California. CalCCA is the authoritative, unified voice of local CCAs, offering expertise on local energy issues while promoting fair competition, consumer choice, and cost allocation and recognizing the social and economic benefits of localized energy authorities

For more information visit www.cal-cca.org.

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.

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.

Marin-based energy aggregator decries state-approved fee hike

An MCE official calls the California Public Utilities Commission’s decision last week to require customers to pay more in exit fees to investor-owned Pacific Gas & Electric Co. a flawed approach that unfairly shifts costs to customers.

But CEO Dawn Weisz said it won’t deter the community-choice aggregator from its core mission of “providing cleaner power at stable rates, reducing greenhouse gas emissions, and investing in local programs.”

Formerly known as Marin Clean Energy, MCE has seen sharper increases in the exit fee in past years, Weisz said. In January 2016, the PUC approved nearly a doubling of the fee.

“We’ve always maintained competitive rates with a lot of stability,” Weisz said, “and we’ll continue to do that.”

Supervisor Damon Connolly, who formerly served as chairman of MCE’s board, wrote in an email, “At a time when we are seeking to incentivize people to sign up for clean energy sources like MCE Clean Energy to meet Marin and California’s ambitious climate goals, this decision goes in the opposite direction by making it harder to do so.”

Richmond Mayor Tom Butt, an MCE board member, said, “All the community-choice aggregators are trying to do the right thing. They are on the front line addressing climate change and to get whacked down by a public agency, particularly in California, is really disappointing.

“The CPUC is basically a surrogate of the investor-owned utilities,” Butt said. “They have huge power over the CPUC commissioners, and I don’t know why. These people all get appointed by the governor, and the governor is supposed to be friendly to people who are trying to do something about climate change.”

When a PG&E customer switches to MCE or another community choice supplier, PG&E is permitted to charge that customer an exit fee to compensate it for the power contracts it previously entered into to supply that customer electricity. The fee was imposed by the California Public Utilities Commission to ensure that customers remaining with the utilities do not end up footing the entire cost of the contracts.

Weisz, however, says that PG&E shareholders should bear more of the cost for the utility’s poor decisions in building power plants and purchasing power. For example, Weisz said that in the early 2000s PG&E built a number of natural-gas-fired power plants that now might not be needed.

 

Marin-based energy aggregator decries state-approved fee hike, by Richard Halstead, Marin Independent Journal, October 15, 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.

CalCCA Statement on CPUC Approval of Controversial ‘Exit Fee’ Reforms

Concord, Calif. – The California Community Choice Association (CalCCA) today released the following statement from Beth Vaughan, executive director of CalCCA, after the California Public Utilities Commission (CPUC) voted to approve controversial revisions to the Power Charge Indifference Adjustment (PCIA).

“CalCCA is very disappointed that the Commission approved changes to the PCIA that favor the investor-owned utilities and will stifle competition from locally-run CCAs,” Vaughan said. “However, we remain undeterred in our efforts to support a new PCIA that lowers costs for all consumers and fosters a competitive environment that offers communities more energy options. We will consider all avenues going forward.”

The PCIA is an “exit fee” charged by the state’s investor-owned utilities (IOUs) to CCA and other departing load customers to compensate for electricity generation built or contracted in the past at prices that are now above-market.

Today’s action by the CPUC will result in a sharp increase in PCIA rates for CCA customers. This devastating blow to the flourishing CCA movement in California could deter further market entry by CCAs.  At a minimum, the action will impair CCAs’ abilities to accelerate the state’s decarbonization and economic justice policy goals and to better tailor electric service to meet the needs of local communities.

CalCCA thanks Administrative Law Judge Stephen Roscow for putting forth common sense, legally-supportable reforms to the PCIA based on the hearing record, that would have provided a more balanced result. The rejection of Roscow’s proposal by the Commission is at the expense of both CCA and IOU ratepayers in California.

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About CalCCA: The California Community Choice Association supports the development and long-term sustainability of locally-run Community Choice Aggregation (CCA) electricity providers in California. CalCCA is the authoritative, unified voice of local CCAs, offering expertise on local energy issues while promoting fair competition, consumer choice and cost allocation and recognizing the social and economic benefits of localized energy authorities. There are currently 19 operational CCA programs in California serving an estimated 8 million customers in 2018.

For more information about CalCCA, visit www.cal-cca.org.

Press release is here.

FOR IMMEDIATE RELEASE: October 11, 2018

Press Contact: Leora Broydo Vestel

(415) 999-4757 | leora@cal-cca.org