Michael Shaw

CMTA calls for more customer choice before state energy regulators

By Michael Shaw, VP, Government Relations

Capitol Update, June 22, 2018 Share this on FacebookTweet thisEmail this to a friend

In a joint California Public Utilities Commission (CPUC) and California Energy Commission (CEC) on Friday, June 22nd, I spoke at a gathering of state electricity regulators as the representative of large industrial customers on the issue of customer choice. In my testimony I expressed the challenges and impacts of high electricity rates and called for increased choice that permits manufacturers to find reliable, affordable electricity and stay competitive.

 

 

California industrial electricity rates are 86 percent above the national average and 113 percent above the average of the western U.S. These high rates are the result of policy choices made by elected officials and decisions by regulators in implementing those policies and contribute to lackluster manufacturing sector growth in California.

I presented this argument to the CPUC and CEC commissioners on behalf of CMTA emphasizing that manufacturers and other large energy customers need more options uninhibited by charges and arbitrary limits that take options off the table or make them uneconomical.

Departing Load Charges (DLCs) imposed on manufacturers that choose affordable electricity through onsite generation, such as combined heat and power that uses excess heat from natural gas combustion to generate electricity, discourages investment in a very efficient generation source requiring electricity to be generated by some other source at greater cost.

One area where arbitrary limits constrain affordable energy options for manufacturers is in the program that allows industrial customers to purchase electricity from an electric service provider (non-utility), also known as ‘direct access’. Current law imposes a limit on the amount of direct access available on the market, but SB 237 by Senator Bob Hertzberg (D-Van Nuys) would eliminate the cap over a three-year period permitting California nonresidential electricity customers to seek out more affordable options.

The CPUC and CEC commissioners present at the forum heard the message loud and clear. However, it is clear that there remains some difficulty in understanding the fact that large industrial customers are different than residential customers, so CMTA had more work to do in communicating the practical implications.

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