More authority to the CPUC proposed

By CMTA Staff

Capitol Update, April 18, 2013 Share this on FacebookTweet thisEmail this to a friend

Still waiting for a hearing in its first policy committee, AB 177 (V. Manuel Perez, D-Coachella) intends to provide coordination and integration of energy planning and procurement processes but provides too much authority to the California Public Utilities Commission (CPUC) to establish new electric supply procurement targets over and above the existing targets.  CMTA and others are opposed and asking for amendments.

Existing procurement mandates have been developed by the legislature over the years to balance the interests of utility ratepayers for affordable and reliable electricity while achieving legislatively approved environmental goals.  This has not been without controversy.  Generally, procurement of electric supplies should be a competitive process to encourage the lowest cost supplies for ratepayers – procurement targets reduce competition and increase costs for ratepayers by favoring more costly preferred sources.  This bill would put additional upward pressure on rates by making it the intent of the legislature that existing projects, not only new projects, could qualify for preferential treatment.  

The legislature does not need to authorize, and certainly should not require, the CPUC to establish new procurement targets.  Policies to pay for cost-effective energy efficiency, promote renewable power, ensure resource adequacy and reduce greenhouse gas emissions are in force. Implementation is still underway for the most recently adopted environmental policies that impact electricity supplies – the 33 percent renewable portfolio standard and the cap and trade regulation on electric generation.  Both policies will increase electric rates (to levels we do not yet know) for manufacturers and other utility consumers. Rates for industrial customers are already 50 percent higher than the national average.

State energy policies need to be rationalized but these elements of the bill are potentially harmful to ratepayers. 

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