Utility Exit Fees Vex CPUC

California Public Utilities Commission members further clarified which municipal utility customers must contribute to investor-owned utilities" coffers when municipal agenices annex territory. This is another in a string of decisions on the issue, and commissioners were clearly unhappy about it. It stems from investor-owned utilities' "unwillingness to concede even the smallest point to munis," said Mike Peevey, CPUC president. "We took a fairly simple concept of new load" and created complicated rules around it, he added. The issue arises because utilities fear there will be an ever-shrinking number of customers to pay utilities' costs because they either become annexed by munis or choose direct access to other suppliers. The commission came up with the concept of exit fees to make it less attractive to leave bundled service and to avoid shifting costs to utilities' remaining customers. Yet munis claim to make the economics still work in their favor ( Circuit , Jan. 1, 2005). In the July 21 decision, muni customers with "standalone" transactions, that is, ones that bypass investor-owned utilities' power lines, were not allowed exemptions. "It's too large a loophole," said Peevey. However, brand-new customers were allowed exemptions, according to a CPUC spokesperson. An earlier decision, in November 2004, exempted new muni customers from the charge if a muni starts serving customers in an area that was not previously served by any utility. In other action, Pacific Gas & Electric lost its bid for more flexibility in meeting its renewables portfolio goal. "PG&E should focus on procurement," not flexible deadlines, said Peevey. However, if utilities need flexibility in meeting deadlines later in the process, Peevey assured them that the commission would consider it. Utilities did get flexibility in renewables procurement, however, because the commission allowed developers to bid for projects that deliver the electricity outside a utility's service territory. This is expected to make it easier for renewable power project operators in locations that lack transmission into load centers to enter power sales agreements with utilities. Without discussion, the CPUC approved seven renewables contracts for PG&E and Edison, totaling 180 MW. The commission also ordered utilities to submit a transmission cost-ranking report for hooking up new renewable power for 2005. For the second year running, the reports are to provide cost information on transmission upgrades for potential projects. The information is to be used in least-cost, best-fit evaluations. Utilities" varying methods of determining least-cost, best-fit were the subject of a California Energy Commission workshop earlier this month Circuit , July 8, 2005). Finally, commissioners exempted the Bay Area Rapid Transit District from having to pay a surcharge to finance the bonds PG&E sold to lift itself out of bankruptcy proceedings. Since 1996, BART has not been on PG&E's native load "buying its electricity instead from federal sources. Thus, commissioners agreed that the agency should not be subject to the utility's extra costs stemming from the 2000-01 energy crisis.

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Utility Exit Fees Vex CPUC

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