CPUC Opens Door to Community Aggregation

By Published On: December 16, 2005

Communities came a step closer to being able to provide their own electricity services with the California Public Utilities Commission’s unanimous approval of the second half of aggregation ground rules December 15. “This will provide energy security, move us towards renewables, away from fossil fuels, and create jobs,” said Rebecca Pearl, representing the Apollo Alliance chapter in San Diego. The decision is “overall very positive and is a framework for an equitable start,” added Michael Meacham, director of conservation and environmental service for the city of Chula Vista. The city passed an ordinance three years ago that committed it to community-choice aggregation. CPUC president Mike Peevey said the decision allows utilities to recover costs incurred on behalf of aggregation customers “but not more.” He added that in spite of controversies over how much and how long utility exit fees are imposed on aggregators and the extent of commission jurisdiction, the order was one “that most parties can live with.” Pearl, however, raised concerns that Chula Vista could be saddled with “excess costs,” making aggregation for the city “infeasible.” San Diego Gas & Electric and the two other investor-owned utilities with community aggregators in their midst would continue to provide distribution and billing services to the cities and counties that launch aggregation programs. In addition to Chula Vista, San Francisco, which also passed an aggregation ordinance, and Santa Monica are among those planning to provide power to their constituents (Circuit, Dec. 9, 2005). “Cities and counties have become increasingly involved in implementing energy-efficiency programs, advocating for their communities in power plant and transmission line siting cases, and developing distributed generation and renewable resource energy supplies,” states the adopted decision. As urged by governmental agencies, the commission agreed to restrict its authority over community aggregators in accordance with the statutory language in AB 117 that authorized their creation. The details of exactly when and how electric service is handed off to public entities will likely be contentious, but the parties are required to work together in good faith. Under the order, exit fees will be calculated yearly and trued up every two years. If a city or county causes a delay in the launch of its aggregation plan, the aggregator must pay the costs arising from a postponement in transferring utility service. If the utility is the cause of any delay, it or its ratepayers must bear the associated costs. Aggregators’ customers will also be able to access the discounts of the low-income assistance program paid for by utility ratepayers. In other news, the commission approved a step for the Lathrop Irrigation District to annex a portion of PG&E territory. However, the vote led regulators to consider whether they should ask the Legislature for permission to assess the cumulative impacts of municipal annexation. State regulators agreed that the specific impact of a public agency or irrigation district taking away investor-owned utilities’ customers is “always very small.” Peevey worried, however, that fewer ratepayers will be bearing the cost of programs such as $2 billion energy-efficiency plans and a $2.8 billion solar initiative expected to be approved next month. It puts the state on a ” self-defeating path,” he said, because of resulting inequity for investor-owned utilities’ customers.

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