January 8, 2019
By: Thomas Elias
Until damages and liabilities from wildfires rose from mere hundreds of millions into the multi-billion-dollar range over the past 18 months, California’s big private utilities had no greater fear than the steady expansion of a phenomenon best known by the initials CCA.
That’s short for Community Choice Aggregation, a means allowing electricity consumers in some places to opt out of being served by the likes of Pacific Gas & Electric Co., Southern California Edison and San Diego Gas & Electric Co. Municipally-owned and-operated CCAs generally charge a little less per kilowatt hour than the private companies and provide more energy from renewable sources like wind and solar. They use existing transmission lines to fetch power for their customers.
It’s a nightmare for the utilities, which have already lost cities big and small to CCAs, cutting into their profits a bit. San Francisco Clean Power is a CCA. Marin, Sonoma and Mendocino counties also offer CCA service. Starting next month, customers in 31 Southern California cities plus the unincorporated areas of Los Angeles and Ventura counties will join the biggest-ever CCA unless they opt out in favor of sticking with Edison.
That one will include cities like Ventura and Thousand Oaks, Santa Monica, Manhattan Beach and Calabasas, to name just a few. About one-third of those locales have chosen to give customers 100 percent renewable power unless they deliberately choose dirtier options priced a bit lower. Los Angeles itself won’t join the CCA because it already has the state’s largest municipally-owned utility, the Department of Water and Power.
The latest significant city wanting a CCA is San Diego, where Republican Mayor Kevin Faulconer the other day announced support for an alternative to SDG&E as the best means to fulfill the city’s pledge of running on 100 percent renewable energy by 2025.
Not surprisingly, California’s Public Utilities Commission, which regulates the big utilities and has long favored them over their customers, keeps throwing obstacles in the path of CCA expansion. In January 2018, it passed new rules that essentially delayed establishment of new CCAs for a year. As that time expired, the commission adopted new, higher levies on CCA customers as a way to compensate the existing utilities for expenses of previous power plant construction and long-term power purchase contracts they signed during the energy crunch almost 20 years ago. Never mind that consumers actually paid for all that via their monthly bills.
“We are updating the formula because everyone agrees it is broken,” newly termed-out Commissioner Carla Peterman, a Jerry Brown appointee, said at the time of the vote.
But not everyone agrees. Some activists, especially in the San Diego area, believe the new, higher charges — significantly more there than what’s paid by consumers leaving PG&E and Edison — are excessive.
“This is dangerous because it defeats the aim of better prices by CCAs than established utilities,” said Bill Powers, a San Diego energy engineer who helped California fight off utility plans to import high-priced foreign-sourced liquefied natural gas through Ventura County in the early 2000s. “In San Diego, it could set up an almost impossible burden for any new agency.”
The compensation cost for former customers of PG&E and Edison is somewhat lower because their energy-crunch-era contracts priced lower than what SDG&E agreed to.
Powers and the consumer groups Protect Our Communities Foundation and United Consumers Action Network maintain SDG&E deliberately paid vastly more than the going rate when it signed those pacts. “The exit fee should be one-quarter of the current level of 4.25 cents per kilowatt hour,” said Powers.
Before the PUC’s unanimous October fee increase vote, that rate had been 2.5 cents.
Consumer groups see this as the latest effort by the PUC to protect the utilities from losing thousands more customers than they already have. It’s part of the picture that has also seen commission President Michael Picker (another Brown appointee and a onetime Brown aide) promise the utilities he won’t let them go bankrupt even if their negligence caused at least some of the recent wildfires.
It’s all part of the longtime pattern of state regulators favoring the utilities over their customers, a practice that new Gov. Gavin Newsom can begin changing if he names a consumer advocate to replace Peterman and demotes Picker from his current powerful post.
Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” now available in an updated third edition. His email address is email@example.com