CPUC Ruling Initiates Phase 2 of Direct Access Reopening Proceedings

On September 20, 2019, the California Public Utilities Commission (CPUC) issued a ruling kicking off a process that will culminate in a recommendation to the California Legislature as to whether and how Direct Access (DA) should be further expanded in the state over time.

The Legislature authorized the reopening of DA in Senate Bill 237. The first step in implementing SB 237 involved the CPUC’s issuance of a decision and clarifying orders that will increase DA capacity by 4,000 gigawatt hours over the next two years. (See CPUC Clarifies Procedures for DA Expansion.) With that Phase 1 activity complete, the CPUC is turning its attention to the next step, in which it will provide recommendations to the Legislature on implementing a further DA transactions reopening schedule.

The September 20th Administrative Law Judge’s Ruling Requesting Comments initiates that Phase 2 process. The new ruling seeks comments from parties to guide the Energy Division in studying whether further DA expansion would: (A) be consistent with the state’s greenhouse gas emission reduction goals, (B) not increase criteria air pollutants and toxic air contaminants, (C) ensure electric system reliability, and (D) not cause undue cost shifting to bundled utility customers.

Opening comments (due September 30) and reply comments (due October 7) will address:

1. What general factors should the Commission consider in this study? This could include comments on the scope of the study, assumptions about the market and participants, phase in timelines, or thresholds that could impact state programs.
2. What specific variables should the study examine? This could include comments on the type of analysis that should be performed, guiding principles or metrics used to determine the optimal reopening schedule for the further reopening of the DA program.
3. Are there additional issues that need to be considered?

We anticipate that the CPUC will provide further guidance on the Energy Division study and next steps after reviewing party comments.

Contact: Andy Brown or Ron Liebert for more information on Direct Access or related issues.