ORIGINAL REPORTING: The unfolding fate of California utilities and the customer choice movement

Exit fee: Deciding the fate of California's utilities and customer choice movement; The future of California's biggest utilities may depend on how much customers have to -pay to leave them.

Herman K. Trabish | Aug. 14, 2018, Updated Aug 16, 2018 (Utility Dive)

Editor’s note: The final CPUC ruling increased the charge described here, leaving the customer choice movement dissatisfied.

Promised more renewables and lower utility bills, customers in California are flocking to newly-emerging Community Choice Aggregation (CCA) programs and Direct Access (DA) providers. But the transition — and the savings — are not that simple. Someone has to pay for the power that investor-owned utilities (IOUs) procured to serve the customers moving to new load serving entities (LSEs). The California Public Utilities Commission (CPUC) determines how ratepayers should compensate utilities for procured generation if they move to customer choice organizations. The Aug. 2 CPUC proposed decision redefined the charge CCAs and DAs have to pay when customers migrate to them from traditional investor-owned utilities. It did resolve the impasse in procurement of new renewables that has existed since customer migration to new LSEs accelerated over the last two years.

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State law requires departing customers to pay IOUs a cost for moving to new LSEs. That cost, known as the Power Charge Indifference Adjustment (PCIA), promises to be intensely disputed between choice advocates and the IOUs. The PCIA is intended to "equalize cost sharing" between customers who leave their IOUs for new LSEs, called "departing load," and those that stay with their IOUs, called "bundled load," California Public Utilities Commission (CPUC) administrative law judge Stephen C. Roscow wrote on issuing the proposed decision. Direct Access providers must similarly maintain fairness to all customers, he added. If the PCIA is too high, the new LSEs are not certain they can fulfill promises of lower customer bills. But the IOUs say a lower PCIA would not compensate them fairly for generation procured in the expectation it would be needed to serve customers who now are moving to new LSEs… click here for more

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