CPUC Seeks Comment on Expanding Direct Access

The California Public Utilities Commission (CPUC) has issued a Staff Report Providing Recommendations on the Schedule to Reopen Direct Access, and Ruling scheduling comments on the Staff Report. The Staff Report, authorized in 2018 by Senate Bill 237 (Hertzberg), is the next step toward reopening expanded customer access to direct access, which allows procurement of electricity from third party electricity service providers (ESPs) instead of the local electric utility. SB 237 required the CPUC to increase the cap on the amount of demand that can be served by ESPs, and provide recommendations to the California Legislature on implementing further expansion of DA, including the phase-in period over which DA will be made available for all remaining non-residential customer accounts in each utility’s service territory. The Staff Report recommends the following:

Prior to Further DA Reopening:

Staff recommends that reopening be conditioned on ESPs’ demonstrated compliance with existing obligations to:

• Submit integrated resource planning (IRP) filings and meet all procurement requirements pursuant to CPUC Decision 19-11-016.
• Meet their renewables procurement standards (RPS) obligations for the 2021-2024 compliance period.
• Comply with all resource adequacy (RA) requirements, including multi-year, year ahead flexible and system, and month ahead system and flexible RA obligations.

Recommended Schedule if DA is Reopened:

If the Legislature directs further reopening of non-residential DA, the legislation should allow the CPUC to:

• Set an initial re-opening schedule in ten percent increments per year, in order to minimize planning disruptions associated with load departure and allow time for development of regulatory and market structures to ensure long-term resource development in a fragmented retail market.
• Condition each annual expansion on CPUC review and approval of compliance with IRP, RA, and RPS requirements.
• Order annual expansion to take place on a schedule that will allow load-serving entities (which include utilities, ESPs and community choice aggregators) the ability to fully comply with RA requirements.

Recommendations for Legislative Action:

If the Legislature establishes a schedule to reopen DA to all non-residential customers, the Staff Report recommends legislative actions to ensure that the greenhouse gas (GHG) emissions, reliability and cost shifting provisions of SB 237 are met:

• Provide CPUC clear authority to enforce compliance with IRP GHG goals.
• Ensure continued CPUC authority to enforce RA goals.
• Provide CPUC authority to revoke ESP licenses and CCA registration for repeated non-compliance with RA, RPS or IRP requirements.
• Consider equitable provisions to ensure no cost shifting as result of moving between customer retail service options.

Parties are invited to file formal comments and reply comments on the Staff Report recommendations.Opening comments are due October 16, 2020. Reply comments are due October 26, 2020.

After reviewing the Staff Report and comments, the CPUC will issue a proposed decision for further comment and vote.

Contact: Lynn Haug or Andy Brown