California’s three big utility companies stand in the way of consumer choice

San Francisco Chronicle

“With great power comes an even greater electricity bill.”

— Anonymous

One planet, dozens of cities and 10 million Californians collectively benefited during the past decade from the creation of community choice aggregators, or CCAs, in local communities throughout the state.

More commonly known as community choice energy programs, locally controlled CCAs give residents and businesses the ability to select greener, renewable sources of electricity often at a lower cost than provided by California’s three investor-owned utilities: Pacific Gas and Electric Co., San Diego Gas & Electric Co., and Southern California Edison.

In recent weeks, Californians have endured a heat wave, rolling blackouts, lightning storms and more than 500 wildfires, making clearer the imperative to confront our existential threat of climate change by embracing the clean energy future that CCAs enable.

CCAs aren’t just good for the Earth, but good for the pocketbooks: as nonprofit local agencies, they can secure better deals for their ratepayers by prudently managing their portfolio and keeping operating costs low, and they avoid the burden of compensating shareholders and C-suite officers. If utility executives and investors continue to have their way, however, recession-battered ratepayers could endure rapidly escalating bills in the months ahead. By approving hikes of an obscure exit fee charged to customers, state regulators have shifted hundreds of millions of dollars in the utilities’ costs to local residents and businesses. In theory, this exit fee, known as the Power Charge Indifference Adjustment, ensures that CCA ratepayers bear their fair share of the more expensive electricity supply contracts that utilities signed on their behalf many years ago. As ratepayers leave those investor-owned utilities to join CCAs — the logic goes — they shouldn’t saddle PG&E, San Diego Gas & Electric and Southern California Edison and their remaining customers with the entire burden of those costly legacy contracts.

In practice, however, exit fees hardly resemble a fair share.

Since 2013, exit fees have risen more than 600% in the PG&E service area, all for the financial benefit of a criminally convicted and chronically mismanaged utility. It will increase another 35% this fall, boosting an average customer’s exit fee in PG&E’s territory to $220 annually. PG&E is hardly unique; San Diego Gas & Electric recently proposed a larger increase to its exit fee this fall, and we’ve seen similar increases in Southern California Edison’s territory as well.

Exit fees lack guardrails. The fees adjust annually through the California Public Utilities Commission’s regulatory process, based upon opaque cost data provided by — wait for it — the big utilities. Those same utilities have blocked CCA efforts to obtain their cost data, even though that information underlies every commission rate-making decision, and even after PG&E was caught committing hundreds of millions of dollars in “calculation errors.”

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