CPUC Issues Proposed Decision in Power Charge Indifference Adjustment Proceeding

On August 1, 2018, the CPUC issued a Proposed Decision in R.17-06-026 (the Procurement Charge Indifference Adjustment (“PCIA”) proceeding). The PCIA is a charge that gets applied to the bills of Community Choice Aggregators (“CCAs”) and Energy Service Providers (“ESPs”). The PCIA is paid to the Investor Owned Utilities and serves as the mechanism for ensuring that customers departing from IOUs continue to pay their fair share of costs from the procurement the IOUs undertook on behalf of the departing customers. Nearly all of the parties in this proceeding agreed that the existing PCIA methodology is flawed. CCAs and ESPs have expressed concerns about the lack of certainty and transparency in the calculation of the PCIA. They are also concerned that the existing PCIA methodology does not provide a mechanism for transferring attributes of the IOUs' portfolios to departing customers (for example, Renewable Energy Credits). The IOUs have asserted that the existing PCIA is flawed because it results in inequitable cost shifts to the remaining “bundled customers” of the IOUs.

The Proposed Decision would adopt short term changes that would alter how the existing PCIA benchmarks are calculated (particularly for RPS and Resource Adequacy resources) by considering contract prices for these generation resources. The PD would also include a price cap and limits on collecting costs from certain IOU “Utility Owned Generation”. The IOUs have expressed concerns with these aspects of the PD. The PD would direct longer term reductions in PCIA “eligible costs” by enabling CCAs and other market participants to purchase some of the IOUs’ portfolios on a voluntary basis. These changes will be considered in a subsequent track of the rulemaking and may take effect as soon as 2020. The PD will be considered at the Commission’s September Business Meeting.

If you have questions about this development, please contact Brian Biering at bsb(at)eslawfirm.com or (916) 447 – 2166.