Big Bucks Hinge on Upcoming PG&E Exit Fees

2 Jan 2019

How much Pacific Gas & Electric competitors will pay for the higher exit fee approved by state energy regulators last fall should be clearer at the end of next week.

Big numbers are in play.

Just how much of a hit there is on community choice aggregators’ customers this year from the higher Power Charge Indifference Adjustment is to be largely determined by the California Public Utilities Commission’s vote on PG&E’s 2019 Electric Resource Recovery Account set for Jan. 10. It incorporates the final PCIA update.

There appears to be more than $100 million at play, at least according to comments filed by East Bay Clean Energy at the end of last month on the PG&E rate proposal. East Bay claims $109 million is at issue.

To date, few of the aggregators have publicly released estimates of the 2019 exit fee tab because things are in flux.

But, CleanPower SF projected its exit fee tab for this year at $25 million. That figure will be adjusted following the Commission’s approval of PG&E’s 2019 rate case.

Monterey Bay Community Power roughly estimated an increase of $9 million in the 2019 exit fee, raising it from 2.8 cents/kWh to about 3.1 cents/kWh, according to J.R. Killgrew, MBCP spokesperson.

Because of the amount of money at stake, a number of community energy providers, besides East Bay Community Energy, have intervened in the utility rate case.

Sonoma Clean Power, for example, argues PG&E should not be allowed to include new categories of costs and change the way it allocates the PCIA to different departed customer classes.

Elsewhere, the PCIA ruling is being challenged by the California Community Choice Association. The association’s petition for rehearing argues the exit fee improperly includes the cost of utility-owned generation and utility contracts dating back to the 2000-01 energy crisis.

CleanPower SF, like a number of other community energy programs, plans to absorb the higher exit fee to avoid raising its generation charges to maintain a competitive advantage over PG&E.

Peninsula Clean Energy passed a resolution in December to maintain its 5 percent discount compared to PG&E’s electricity generation rates in 2019 for all its customers, according to Kirsten Andrews-Schwind.

Marin Clean Energy stated that it anticipates PCIA rates will increase on average across all rate classes with the impact varying across customer groups. But that rise won’t impact Marin’s “ability to continue to focus on its core mission: providing cleaner power at stable rates to its customers, reducing GHG emissions, and investing in targeted energy programs and investments that support our communities energy needs,” said spokesperson Heather Shepard.

Monterey Bay Community Power rates equal PG&E’s when factoring in the exit fee. Because Monterey’s cost of generation is currently below PG&E’s it, too, is still able to absorb the beefier exit fee.

To give it an edge, Monterey issues rebates to its customers. In December, it provided $4 million in customer bill credits. Residential customers get an annual rebate, while non-residential customers received rebates in June and December. Big commercial and agricultural customers receive rebates quarterly.

Whatever the final PCIA tab, the competitive margin between the private utilities and community energy programs is getting slimmer. Some of the aggregators expect to know by March 1, which is the start of the rate setting process, by just how much to tighten their belts.

Elizabeth McCarthy

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