California decision means higher costs for community choice programs
- The California Public Utilities Commission on Thursday voted unanimously to raise costs on Community Choice Aggregation (CCA) programs and direct access customers in a move aimed at avoiding cost shifts that may arise when consumers switch electricity providers.
- The changes to the Power Charge Indifference Adjustment (PCIA) will result in varying impacts depending on customer class, service provider, energy usage and more. In Pacific Gas & Electric's (PG&E) territory, CCA residential customers departing in 2018 would pay an additional 1.68% on their bills. In San Diego Gas & Electric's (SDG&E) territory, the increase would top 5%.
- Opinions on the decision varied by interest group. While CCAs say the higher bills could destroy the business case for aggregation, customers remaining with an investor-owned utility's (IOU) supply say all customers must contribute equitably to clean energy investments.
After more than a year spent collecting testimony, California regulators say they have made a decision that ensures customers of IOUs are not left holding the bag when community choice groups defect. But proponents of the movement, which aims to give customers more control over a greener energy supply, say the decision could spell doom for the growing trend.
The decision could "shift past and future utility costs upon CCAs in an onerous, destructive manner," Local Power Inc. founder Paul Fenn told Bloomberg. His group works with California CCAs.
While bills for CCA defectors this year could be 1.68% higher in PG&E's territory, that is the low end of the impacts. For Southern California Edison, departing customers would see bills rise 2.5% and on SDG&E's system the increases would reach 5.24%, regulators said.
Regulators adopted a decision by Commissioner Carla Peterman that included legacy generation in the PCIA, and did not place limits on when that generation could be added.
"We are updating the PCIA formula now because everyone agrees it is broken," Peterman said in a statement. "I support the creation of alternative electric providers to expand customer choice, and our legal obligation is to make sure this happens without increased costs to customers who do not, or cannot, join a CCA."
The decision, she said, "ensures a more level playing field between customers."
Supporters of the decision agreed. Millions of electricity customers in California pay more than they should for clean energy investments due to customers departing the system, according to the California Hispanic Chambers of Commerce (CHCC). They called it an "important issue" for many senior, low-income, business and veteran customers, among other groups.
"The continued growth of CCAs can't be dependent upon sheltering their customers from the reality of costs by shifting those cost burdens to power customers of IOUs. This is not only unfair, but unsustainable," CHCC Senior Vice President Juan Novello said in a statement.
Follow Robert Walton on Twitter