CCAs, Others Oppose IOU Effort to Reallocate Renewables Contract Costs

California Energy Markets

Community choice and others are opposing a request by investor-owned utilities to shift the allocation of costs for certain renewable-energy contracts from IOU customers to departing customers.

CCAs, Shell Energy North America and Alliance for Retail Energy Markets told state regulators they oppose the Feb. 11 petition by two IOUs regarding contracts for the Renewable Market Adjusting Tariff, or ReMAT, program. Pacific Gas & Electric and Southern California Edison filed the petition for modification with the California Public Utilities Commission, saying there are cost-allocation inequities around the contracts.

Under current rules, ReMAT contract costs are allocated to bundled utility service customers only, while customers that depart to CCAs or direct access pay only the above-market costs of the ReMAT contracts signed when they were under utility service. Those above-market costs are recovered in the Power Charge Indifference Adjustment fee that departing utility customers pay [R11-05-005].

“Departing load customers do not pay for any ReMAT contracts signed after their departure, even though the IOUs procure these small distributed generation resources to serve California’s broader public policy goals and irrespective of the Utilities’ customers’ needs. The resulting cost shift can be significant,” the IOUs said in their petition for modification.

The California Community Choice Association in March 15 comments told the CPUC it is concerned about continued eroding of the PCIA methodology by shifting IOU costs onto departing customers. The IOUs’ customers would retain the prime benefits of the contracts, including resource-adequacy and RPS attributes, CalCCA said.

“To ask all customers to pay the costs of the resources without sharing equally in the benefit effectuates a cost shift from bundled to departing load customers,” CalCCA said, asking the CPUC to reject the petition.

If the CPUC grants the request, it should clarify that recovery of ReMAT costs through the Public Policy Program charge would recover all ReMAT costs, not just the above-market costs, and the commission should ensure that all customers paying the costs of the resources benefit equally, the group said.

CalCCA argued that the ReMAT contracts serve public-policy goals as the IOUs state, but the benefits are not unique and are not the only benefits of the resources. CCA customers bear sole cost responsibility for unique requirements such as RPS and greenhouse gas-free energy procurement requirements that also have broad public-policy goals, CalCCA said.

“Beyond a doubt, bundled customers alone receive the direct benefits of these contracts,” it said.

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