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The California Public Utilities Commission unanimously approved reopening the utility procurement door to small renewable energy developers. At the same Oct. 8 meeting, regulators agreed to increase ratepayer protections in the event that a community energy organization fails, requiring their customers to go back to the utility.

The five commissioners voted to revive a part of the renewable portfolio standard that deals with small producers, under 3 megawatts, called the Renewable Market Adjusting Tariff. The RPS requires that 60% of electricity come from eligible green supplies by 2030.

The program was stuck in limbo over what price the small producers should fetch. There also was a question of compliance with the federal Public Utility Regulatory Policies Act of 1978, which expanded grid access beyond oil and gas resources, according to Commissioner Cliff Rechtschaffen.

This last July, federal regulators revised the law , giving state regulators more authority to determine utilities so-called “avoided costs” when buying resources from renewable and/or cogeneration projects 20 MW or less. Solar energy advocates balked, saying the changes to PURPA will stifle competition. Backers of the change disagreed, saying it will lower customers' costs.

Going forward, the price under the new CPUC tariff will be based on the average cost of what investor-owned utilities spent on buying resources elsewhere to fill that renewable resource niche.

Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric are required to buy a total 500 MW from green resources under standard contracts, i.e., those with feed-in-tariffs. Municipal utilities are required to buy 250 MW from these kinds of resources. Resources under this tariff count toward those requirements.

The tariff will set prices for three categories. Those are resources to meet high demand (peaking), such as rooftop solar, resources used during average demand (non-peaking), including wind and small hydropower, and round the clock resources (baseload), which include land fill gas projects, said Cheryl Lee with the CPUC Energy Division.

IOUs & CCAs back financial deposit terms

The commission also approved Thursday a resolution increasing financial protections for ratepayers if a community energy provider were to go belly up, which would mean their customers return to the utility. That would add costs, both administrative and for any additional supplies to cover the increased load.

Community choice organizations largely support the changes, including higher bonds, letters of credit or other security instruments.

The new rules are “balanced,” and avoid unnecessarily burdening community choice aggregators, the California Community Choice Association said. The rules prevent the investor-owned utilities from ending community energy service or unilaterally mandating types of financial assurance. Instead these must be mutually agreed upon by IOUs and aggregators.

There is still disagreement over aggregator customer liability if the security deposit doesn’t fully cover the costs of their reentry to private utility service. Those former CCA customers, like returning direct access provider customers, would have to pay any uncovered costs.

“We think they got that piece wrong,” Michael Callahan, Marin Clean Energy senior policy counsel, who is representing community energy, told Current . He said the law does not treat CCA and direct customers the same. Callahan said whether community energy will challenge that issue is undecided.

Community energy agreed to raise the minimum financial security amount from $100,000 to $147,000. The amount will be reassessed every six months.

The resolution is closely tied to an ongoing Commission proceeding on which entities would be required to provide power in the event a utility or other provider was unable to do so.

The ongoing Provider of Last Resort proceeding is expected to include the resolution’s financial security terms. A related and far larger cost still being disputed is the hefty exit fees charged to community energy customers when they switch from private utility service. In addition, the CPUC is grappling with how to allocate fees included in the Power Charge Indifference Adjustment that cover power a utility bought on behalf of the customer prior to their departure.