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Mayors urge utilities commission to delay vote on clean energy fees

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The mayors of San Francisco, Oakland and San Jose joined Tuesday in urging the California Public Utilities Commission to delay voting on a proposal that they say could “disrupt the state’s clean energy programs and increase energy fees for utility customers.”

The proposal concerns the so-called exit fees charged to customers who switch from buying electricity from investor-owned utilities to buying it from local governments. The local programs are intended to provide cleaner energy or lower costs or both.

The five-member commission is scheduled to vote on two versions of the exit fee proposal at a meeting at its San Francisco headquarters on Thursday.

But the commissioners could delay the vote to a future meeting. Under its normal procedure, the CPUC is expected to post a list Wednesday afternoon of which agenda items will be postponed, according to CPUC spokeswoman Constance Gordon.

Mayors London Breed, Libby Schaaf and Sam Liccardo urged a delay in a joint statement today, saying that Commissioner Carla Peterman’s version of the proposal could “drastically change” the exit fees.

The mayors said:

“Our cities are working to fight climate change by developing clean power programs that are affordable to customers … Significantly raising exit fees will create price volatility and uncertainty and could threaten the future of our clean power programs.”

They added:

“We strongly believe the CPUC should delay this process to allow for a more transparent public review of these critical issues.”

The two options, a proposal by Administrative Law Judge Stephen Roscow and an alternate version by Peterman, were both made public in August.

But Peterman made some changes in her proposal on Oct. 5, and the three mayors believe the public should have more time to review the revised proposal, according to Lori Mitchell, director of San Jose’s Clean Energy Department.

The exit fee is known as the Power Charge Indifference Adjustment. Its purpose is to ensure that departing customers pay their share of long-term financial obligations the utility incurred on their behalf, while also making sure they don’t pay more than their share.

The CPUC said in a background statement that there are many similarities but some differences between the two proposals.

One difference is that Peterman’s version would allow the costs of legacy facilities, such as the Diablo Canyon nuclear power plant and large hydro facilities, to remain in the calculation of the fees.

Peterman’s proposal would also allow the fees to continue beyond the current 10-year limit.

In September, the three mayors sent the commissioners a comment letter asking them to adopt Roscow’s plan and turn down Peterman’s.

The CPUC said in its background statement that the exit fee accounts for about 15 percent of a departing customer’s bill.

The word “indifference” in the fee name refers to neutrality or fairness in the fee’s effects on departing and remaining consumers, the CPUC indicated in its statement.

The CPUC said:

“Both proposals balance the need for customer indifference on costs with rate predictability, transparency, and customer interest in choice.”

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