Michael Shaw

Utilities commission increases fees for non-utility electricity providers

By Michael Shaw, VP, Government Relations

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

Recently, the California Public Utilities Commission (PUC) unanimously approved a proposal, written by Commissioner Carla Peterman, that increases exit fees charged to Community Choice Aggregation (CCA) programs and direct access customers. The exit fees are intended to address the cost of physical infrastructure and electric generation contracts entered into to serve ratepayers in a utility’s service territory. 

CCAs allow local governments to procure power on behalf of their communities while still receiving transmission and distribution service, as well as customer billing, from existing investor-owned utilities (IOUs). Once a CCA is created, the PUC requires that community choice customers pay an exit fee, known as a Power Charge Indifference Adjustment (PCIA), to offset long-term power contracts. A similar arrangement exists for direct access customers in terms of transmission and distribution services provided by the utility. 

Opinions on the recent revisions to the PCIA are varied by interest group. Utilities, who face a significant threat of shrinking service territory and fewer customers, claim that the increase is justified to cover the cost of the infrastructure and other programs supported by the utilities. However, CCAs and direct access customers argue that this move is intended to stifle competition and choice in the electricity market and protect utilities as the default service provider. 

CMTA supports choice and successfully pushed through an increase in the direct access program this year with SB 237 (Bob Hertzberg, D-Van Nuys) that allows more industrial and commercial electricity customers to seek service from a provider other than the utility serving their area.

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