Departing Load Vote Postponed Peevey and Kennedy Propose Alternate

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Feb. 28, 2003 Share this on FacebookTweet thisEmail this to a friend

The California Public Utilities Commission put off a decision on the departing load (DL) issue, setting the stage for a vote on March 13, when the agency is scheduled to consider three competing proposals to establish a "Cost Responsibility Charge" or exit fee for DL (customers installing on-site generators).

The three proposed decisions - the original proposal by an administrative law judge (ALJ) and two alternate decisions - list the cost categories that DL customers are on the hook for and which DL customers are exempt from these charges. The specific DL charges will be determined later this year when the CPUC decides various exit fee implementation issues for direct access customers and DL.

Under all three proposals, distributed generation units existing as of January 17, 2001 (the date the state began procuring power for retail customers of Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric) would be exempt from any charges.

A proposed decision by ALJ Pulsifer would require DL to pay the Department of Water Resources bond charge (for DWR past costs), and continue to be subject to the Southern California Edison Historical Procurement Charge (which goes toward the utility undercollection). Existing on-site generation customers, and new DL up to a megawatt cap, would be exempt from paying on-going DWR power costs (in 2004, 125 MW in the PG&E and Edison service territories and 34 MW in the SDG&E area). The MW cap would vary in future years based on DWR forecasts of available generation.

A proposed alternate decision by Commissioner Loretta Lynch would provide an exemption only for net metering and "clean and ultra clean" DL (as defined by Public Utilities Code 353.2). Lynch's proposal, least generous of the three, is also the least likely to muster the three votes needed for approval.

The third and most recent proposal, an alternate decision by CPUC President Michael Peevey and Commissioner Susan Kennedy, creates separate exemptions for clean and ultra clean projects and exempts other DL from DWR's on-going power costs, with a total cap of 3,000 MW, on a first-come, first-served basis. Additionally, customer generation under one megawatt in size that is eligible for net metering under a California Energy Commission or CPUC self-generation program would not be required to pay a DL charge.

The three proposals impose an unnecessary barrier to entry for new on-site generation projects and fail to fully reflect the benefits associated with investments in new generation at a time when state policymakers should be doing all that they can to encourage new generation.

Read more Energy articles

Capitol updates archive 989898989