The California Public Utilities Commission (CPUC) opened a rulemaking Thursday to implement a provider of last resort (POLR) framework for the state, to ensure customers will receive electricity even if their power provider goes under or isn’t able to continue service.
Investor-owned utilities in the state currently serve as the POLR in each of their service territories. But in a second phase of the new rulemaking, regulators intend to focus on other entities that could take on that role.
A POLR, essentially a utility or entity that is obliged to serve all customers, isn’t specific to the electric sector — telecommunications carriers of last resort, for instance, have existed since the 1990s. In California, the concept has become especially relevant since the state restructured its electricity markets and transitioned away from vertically-integrated utilities that controlled generation, transmission and distribution, to a more competitive landscape.
Now, a host of other entities — like community choice aggregators (CCAs) and direct access providers, can provide customers with electricity. Moreover, customers have increasingly been turning to distributed solar and storage resources. As a result, a large chunk of load in the state is no longer in the hands of investor-owned utilities.
The California Community Choice Association (CalCCA) welcomes the discussion around improving the POLR process and “believes policies should be updated to reflect the reality of today’s electricity market in California, one in which CCAs serve the vast majority of customers in their service territories”, the group said in an emailed statement.
“We look forward to engaging in the CPUC rulemaking to ensure CCAs have a clear pathway to be designated as POLR,” CalCCA added.