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Utilities commission approves higher fee for local programs

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The California Public Utilities Commission at a meeting in San Francisco Thursday approved a revised fee calculation that will result in higher charges to customers who choose to buy their electricity from local governments instead of investor-owned utilities.

The commission said in a news release that the revised plan will increase bills by 1.68 percent for residential customers who purchase their electricity from local programs within PG&E Co.’s service area in Northern and Central California.

The so-called exit fees are intended to ensure that departing customers pay for their fair share of long-term costs the utility incurred on their behalf, such as the costs of multi-year power contracts and construction of new power plants.

The local programs are known as community choice aggregators, or CCAs, and are intended to provide cleaner energy or lower costs or both.

Commissioner Carla Peterman, who wrote the version of the plan approved by the five-member commission today, said:

“Today’s proposal ensures a more level playing field between customers.”

Peterman said in a statement:

“I support the creation of alternative electric providers to expand customer choice, and our legal obligation is to make sure this happens without increased costs to customers who do not, or cannot, join a CCA.”

San Francisco Mayor London Breed, Oakland Mayor Libby Schaaf and San Jose Mayor Sam Liccardo, whose cities have or will have local programs, had said the extra fees for departing consumers “could disrupt the state’s clean energy program.”

They advocated a different proposal that would have kept the fees lower and unsuccessfully asked the commission earlier this week to delay voting on the fee calculation.

The mayors said San Francisco’s CleanPowerSF has enrolled more than 108,000 customers and is set to enroll 360,000 more in 2019. East Bay Community Energy is set to enroll 555,000 by 2019. San Jose Clean Energy will launch its program in March.

Under the state law authorizing CCAs, people who live in areas with local programs are automatically enrolled in them unless they opt out. Investor-owned utilities such as PG&E continue to deliver the power, maintain the grid and prepare bills for customers.

A group called Equitable Energy Choice for Californians praised the revised formula and said the previous calculation put an unfair financial burden on people who stayed with investor-owned utilities.

Group member Juan Novello, who is senior vice-president of the California Hispanic Chambers of Commerce, said:

“The continued growth of CCAs can’t be dependent upon sheltering their customers from the reality of costs by shifting those cost burdens to power customers of investor-owned utilities … This is not only unfair, but unsustainable.”

The official name of the fee is Power Charge Indifference Adjustment, or PCIA. The word “indifference” refers to the aim of neutrality in the effects on departing and remaining customers of a utility.

Beth Vaughan, executive director of the California Community Choice Association, said the changes “favor the investor-owned utilities and will stifle competition from locally run CCAs.”

Vaughan said:

“However, we remain undeterred in our efforts to support a new PCIA that lowers costs for all consumers and fosters a competitive environment that offers communities more energy options.”

The association said California currently has 19 operational CCA programs serving an estimated 8 million customers.

The fee plan approved by the commission will allow the costs of legacy facilities, such as the Diablo Canyon nuclear power plant and large hydro facilities, to remain in the calculation and will permit the fees to continue beyond the previous 10-year limit.

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