California’s Public Utilities Commission: a Threat to Community Choice Energy?
Posted March 22, 2018
By Alexandra Wheatley
The California Public Utilities Commission (CPUC) is a public agency tasked with regulating the state’s utilities, protecting the environment, and ensuring Californians have access to safe, reliable utility services. So why has it consistently favored utilities that fail to provide these services over ones that provide more benefits to millions?
What is Community Choice Energy?
Community Choice Energy (CCE), also known as Community Choice Aggregation (CCA), gives cities and counties throughout California an alternative model for buying and selling electricity — one that that allows cities and counties to take direct control over their power. Unlike the traditional for-profit Investor Owned Utilities (IOUs), CCEs are public agencies that can offer lower rates, cleaner energy, and many other benefits to local families and businesses. Under CCE, the IOUs continue to provide service, billing, and transmission and maintenance of power lines while the CCE oversees electricity sales and any additional local programs offered. California has the fastest-growing — and greenest — CCE market in the country, offering significant reductions in greenhouse gas emissions as well as greater economic benefits to communities.
Why is Community Choice Energy Important?
“Current state law requires utilities to reach 33% renewables by 2020 and 50% by 2035, but currently active CCEs already exceed those targets.” - Ben Paulos: analyst, thought leader, strategist, writer, and advocate for clean energy.
Community Choice Energy revolutionizes the current model for energy production and delivery by providing affordable access to renewable energy. By redirecting revenue that would normally go to IOU shareholders into local benefit programs, CCEs can incentivize consumers to opt for cleaner electricity by providing viable, sustainable, and affordable options.
In addition, CCEs can uniquely benefit communities that need it most by offering lower prices and a more direct way for community members to make their voices heard in decisions that affect them. Across the state, underserved, low-income, and/or minority communities are often hit hardest by utility rate increases and disproportionately suffer environmental injustices. CCEs gives customers the choice to keep their hard-earned money within their own communities rather than giving it to private corporations that favor shareholder profits over public safety.
"Current state law requires utilities to reach 33% renewables by 2020 and 50% by 2035, but currently active CCEs already exceed those targets."
Ben Paulos: analyst, thought leader, strategist, writer, and advocate for clean energy.
On a national level, Community Choice Energy offers a tried and true way for California to continue to lead the country on climate action while boosting local economies — right now. We have limited time to reduce our collective greenhouse gas emissions and prevent climate chaos. Cities must transition away from fossil fuels by first powering their grid with carbon-free electricity and then electrifying their transportation sector; CCEs allow this change to happen much more quickly than an IOU.
Under state law, both the IOUs and the CPUC must comply and cooperate with CCE programs. However, that didn’t stop a recent threat from the CPUC to the implementation process for CCE. When it introduced Draft Resolution E-4907 on Friday, Dec. 8, 2017, the CPUC proposed a waiting period of up to two years for registration for new CCE programs — and a new set of procedures required to establish a program. The resolution applied to Community Choice Energy programs that had not filed implementation plans by December 8, 2017, the same date it was announced. Furthermore, timing the announcement during the holiday season forced CCE programs and advocates to rush to coordinate a response before it came to a vote on Jan. 11, 2018. Essentially, the draft created a “freeze” on CCE formation without notifying emerging CCE programs, leaving very little time for programs and the public to provide input or make adjustments.
Organizations and individuals across California were alarmed by E-4907 and sent a flood of thousands of letters to the CPUC commissioners in opposition. The main concern was that the resolution could potentially set a precedent for other public utility commissions to engage in a similar process. It was a hasty response to a perceived technical issue, with far-reaching regulatory changes and limited time for public input and participation.
After receiving thousands of complaints on the resolution, the CPUC amended the resolution on Feb. 2, 2018, and proposed an alternative. The new proposal came before commissioners for a vote on Feb. 8. It extended the submission date of Resource Adequacy Implementation Plans to March 1, 2018, to allocate more time for prospective or expanding CCEs to serve customers in 2019. It also created two waiver options by which any CCE may request to begin prior to January 1, 2019.
Although the amended resolution is better for emerging CCE programs than the original draft, it still requires extra steps for CCEs to start within their projected timelines. CCEs must now adhere to the newly proposed submission deadlines or apply for waivers if they do not make the submission date, which delays implementation and expected revenue.
This is not the first example of the CPUC threatening CCE. The CPUC, under current president Michael Picker, has engaged in explicit bias against Community Choice Energy. He stated that the purpose of the CPUC is to serve monopolies, regardless of community efforts for cleaner energy options:
"That's what my agency does. We award monopolies where there's not a market and then we protect them against ruinous or calamitous competition."
CPUC President Michael Picker
Although the revised resolution addressed some of the public’s initial concerns, it still failed to include an appropriate timeline and process for public review and input. By releasing the amended resolution E-4907 less than four business days before the scheduled vote, the CPUC gave California community members very little time to adjust and review their statements. This attempt to push a major decision through without adequate public input shows the low regard the agency has for CCE programs and the millions of Californians they serve every day. Such ignominious actions have the potential to create a dangerous precedent with real consequences for millions of people across California. It could even impact populations already feeling the effects of climate change now across the world.
What Are Communities Doing?
Day of Action at CPUC Headquarters
On February 8, 2018, people gathered at the California Public Utilities Commission (CPUC) headquarters in San Francisco. Roughly sixty people came together in support of Community Choice Energy, holding a news conference and rally before the meeting. Over forty speakers in public comment urged the CPUC to reject the resolution, expressing their concerns about the amended resolution and the process the CPUC took to propose it. Only one commenter supported E-4907.
As a result of the combined efforts by local governments, organizations, and grassroots organizers across California, over ten CCE programs currently operate throughout California, and at least five more are in the process of launching.
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