CPUC Only Okays Utilities Selling RPS Resources to Community Energy

20 May 2021

Private utilities that purchased renewable resources on behalf of customers that have now switched to community energy must offer that generation to community aggregators and other providers, the California Public Utilities Commission decided May 20. It deferred action on related contentious issues such as how the three investor-owned utilities will sell resources offered for sale but not accepted.

This week’s decision is the second phase of the CPUC proceeding revising the exit fee, which includes the costs of renewable energy contracts and utility-owned generation. This exit fee, or Power Charge Indifference Amount, is imposed on non-utility providers and utility customers.

The commission agreed unanimously on Thursday to have the three private utilities allocate renewable portfolio resources on a proportional basis at the price set by the CPUC market benchmark. But if a community aggregator or other load serving entity decides not to buy its’ share, the utility must offer them for sale in the market. If they remain in the utility portfolio, then are given a zero value. That would result in there being no reduction in PCIA non-utility and utility customers pay.

The decision declined to adopt other fixes from a stakeholder-based working group. The group released a report in February 2020 aimed at ensuring the fairness of utility portfolios.

No allocation of resource adequacy

The decision refused to require the utilities to also offer proportional shares of the resource adequacy (RA).

Guzman Aceves said that is because there is a shortage of these other resources and the private utilities need all the supply cushions in their portfolios.

For community energy, failing to allocate the supply cushion resources proportionally means the market price set for RA is inadequate. Otherwise, the utility would be willing to sell these resources and not insist on holding on to them.

The decision also postponed setting a permanent value on the greenhouse gas-free attributes of the underlying resources. The utilities and community energy agreed to a temporary allocation up to 2023 but unless addressed, it will be valued at zero after that. The market, however, puts a premium on carbon-free attributes as the state seeks to decarbonize the energy sector and economy.

Commissioner Cliff Rechtschaffen noted that greenhouse gas-free resources are “undervalued in the PCIA methodology.”

Pacific Gas & Electric welcomed the decision. “With their decision today, the Commission addressed important topics related to the Power Charge Indifference Adjustment to ensure equity for all customers,” Spokesperson Ari Vanrenen wrote in an email.

Denial of “equitable access”

The California Community Choice Association disagreed. In a May 20 statement, it said it appreciated the commission requiring utilities “to open up access to renewable energy benefits to all customers who pay for those benefits.” But it objected to the denial of “equitable access to resource adequacy benefits” and the commission’s punting of “consideration of a GHG-free benchmark to a future proceeding.”

The Association is pursuing legislation that would allow community energy to count the attributes of the power in private utility legacy resources toward their renewable energy and supply cushion requirements.

SB 612 by Sen. Anthony Portantino (D-La Cañada-Flintridge) passed the Senate Appropriations Committee Thursday and heads to the Senate Floor.

The combined tab of the three investor-owned utilities PCIA this year is a forecast $3.9 billion, according to the California Community Choice Association. It is allocated among utility and non-utility customers. Pacific Gas & Electric’s estimated 2021 PCIA is $2.4 billion, according to the utility.

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