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.