ORIGINAL REPORTING: The Critical Factor for California Customer Choice
California customer choice at a crossroads: Regulators to weigh 3 key issues next week; The California Public Utilities Commission will consider two proposals Sept. 27 on how to calculate the price customers moving from IOUs to CCAs must pay.
Herman K. Trabish, Sept. 18, 2018 (Utility Dive)
Editor’s note: The turmoil in California’s power sector caused by the rise of customer choice continues.
California regulators continue to work on how to calculate the exit fee charged to customers moving away from California’s investor-owned utilities (IOUs) to new electricity providers. The calculation could determine the near-term viability of California’s budding customer choice movement. Regulators face three big questions on how to calculate the Power Charge Indifference Adjustment (PCIA), a small per-kWh amount added to the bill of a departing customer that compensates the utility for investments made in anticipation of serving that customer. The first question is whether the PCIA should include the cost of high-priced utility-owned generation the IOUs might long ago have sold off. The second question is whether it should include the cost of somewhat newer but still high-priced utility-owned generation added to IOU portfolios largely for reliability purposes. And, finally, regulators must decide how, if at all, to limit the size of changes in the value of the PCIA.
The answers could make the PCIA too high for new customer choice-inspired load serving entities (LSEs), including Community Choice Aggregators (CCAs) and direct access providers, to fulfill commitments to deliver cleaner energy at a lower cost. Or it could put the state's IOUs at financial risk. Two approaches to updating the PCIA calculation were laid out in a proposed decision by California Public Utilities Commission (CPUC) Administrative Law Judge Stephen C. Roscow and an alternate proposed decision by CPUC Commissioner Carla Peterman. Both found that the CPUC's current PCIA methodology cannot prevent cost shifts between customers. The final ruling between them left many of the questions raised by them undecided until the next phase of the process… click here for more