CalCCA Statement on the CPUC’s Central Procurement Decision

FOR IMMEDIATE RELEASE: 6.11.2020
Press Contact: Leora Broydo Vestel
(415) 999-4757 | leora@cal-cca.org

CalCCA Statement on the CPUC’s Central Procurement Decision

Concord, Calif. – The California Public Utilities Commission (CPUC) today adopted a framework that designates Pacific Gas and Electric (PG&E) and Southern California Edison (SCE) as central buyers to procure local, multi-year resource adequacy. The California Community Choice Association (CalCCA) issued the following response:

CalCCA is disappointed that the Commission has adopted a central procurement framework for local resource adequacy that puts investor-owned utilities (IOUs), rather than an independent entity, in the powerful role of central buyer. We remain concerned, and understandably so, that the playing field will not be level under such a framework, nor will it be transparent and neutral. This is yet another example of the CPUC favoring an outdated centralized energy system where power is concentrated with the IOUs. More specifically, the CPUC decision:

  • Is a significant departure from the current framework for ensuring local reliability.
  • Limits the scope of costs that CCAs can control for their customers.
  • Will have a significant effect on the RA market, moving from a market with many buyers of local RA to one dominated by PG&E and SCE.
  • Will blunt incentives for CCAs to invest in “behind the meter” resource solutions, allocating costs to all customers on the same basis, regardless of the unique efforts of their LSEs .
  • While characterized as a “local RA” mechanism, it allows the CPE to procure any associated system and flexible RA capacity with mandatory allocation of these rights to LSEs without sufficient time to position their portfolios for annual compliance.

CalCCA continues to support the terms of the settlement agreement, which would have established a residual central buyer framework, and put a “competitively neutral, independent and creditworthy entity” in the role of central buyer.

The settlement would achieve the state’s aims by reducing the need for CAISO backstop procurement, maintaining and enhancing a liquid and robust bilateral capacity market, while also preserving the self-procurement autonomy of load-serving entities (LSEs) including community choice aggregators. The settlement has the support of CalCCA, CAISO, Calpine Corporation, Independent Energy Producers Association, Middle River Power, NRG Energy, Inc., San Diego Gas & Electric Company, Shell Energy North America,  Western Power Trading Forum, among others.

Under the settlement agreement, a central procurement entity would be tasked with purchasing residual multi-year resource adequacy capacity on behalf of LSEs on an as-needed basis to ensure RA requirements are met. Energy providers would first have the option to self-procure some or all of their customers’ share of the required resources. If they choose not to self-procure, the central procurement entity would purchase resources to address any deficiencies. More information on the settlement can be found here.

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About CalCCA: Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state Legislature and at regulatory agencies, advocating for a level playing field and opposing policies that unfairly discriminate against CCAs and their customers. There are currently 21 operational CCA programs in California serving approximately 10 million customers.

For more information about CalCCA and community choice, visit www.cal-cca.org. To stay current on CCA in California, sign up for our mailing list here.