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Calif. PUC Staff Releases Energy Choice White Paper Ahead Of En Banc Hearing
May 10,2017 Staff of the California PUC have released a white paper on energy choice in the state ahead of a joint PUC-California Energy Commission en banc hearing reviewing energy choice in the state See background on the new review of retail choice here The white paper does not offer any recommendations or positions, and rather gives an overview of energy choice in the state and its history (direct access, CCAs, etc.) and poses certain questions to be explored in the proceedings The white paper notes that, "One question which may need to be addressed is: which service -- competitive retail or POLR service -- becomes the default. This arises in consideration of whether non-Utility LSE service is an 'opt in' or an 'opt out' choice. Only Texas has adopted a retail-choice model in which all customers must still affirmatively decide which retail commodity supply is the one to provide them with electricity service." "Another issue arises from IOUs’ historical obligation as the sole default providers of bundled retail service, for which they were required to make long-term investments in generation resources and long-term financial commitments through purchased power contracts. This has created (and if unaddressed may continue to create further) a cost legacy that must be addressed during a transition to retail choice," the white paper states "As retail electric choices expand, the CPUC will need to adapt its capabilities to protect consumers from predatory marketing, misinformation and fraudulent behavior. In California, competition in telecom and natural gas have demonstrated that the CPUC must have robust consumer protection programs, otherwise residential customers face risks," the white paper states The white paper noted that the CPUC intends to open a rulemaking to examine, and coordinate among other open proceedings, an examination of the future role(s), structure(s), fiscal and other functions of the three large California electric IOUs. "This, in turn, requires a discussion of the scope and scale of the current framework for regulation of competition – including customer centered technologies - and the structure of the retail electric market, and the transition from IOUs’ responsibilities today and their responsibilities in the future," the white paper states "As part of this process, the CPUC will likely examine a variety of different retail market and customer choice constructs to assess what best practices and lessons learned can be applied in California given our unique set of public policy goals," the white paper states The white paper reports that, in 2016, electric service providers served 12.9% of IOU Load under direct access For CCAs, estimated retail sales are 7.4 GWh Furthermore, the white paper notes that 915,000 customers currently take retail service from a CCA. "This number is set to grow significantly in the coming years as cities and counties with populations in excess of 15,000,000 people consider launching CCAs," the white paper notes, with counties actively in the process of forming, expanding or considering the formation of CCAs including Los Angeles County, Alameda County, Santa Clara County, City of San Diego, and the City of San Francisco Among the questions posed by the white paper are: • What are the roles of the incumbent electric distribution utilities in the future, and what are the means for them to finance their core functions (e.g., distribution service, transmission service, POLR retail service) where some of these services are provided to all electricity customers and some are provided to only some customers (and in some cases may be provided because no other supplier is willing and/or able to provide them)? • Who will be the provider of last resort for customers who don’t seek to make key decisions for themselves, but prefer a simple and reliable bundled service? What agencies are best designed to provide customer protection in this new electric industry structure? What policies and/or authorities are necessary for utility regulators (or others) to assure that all customers - regardless of their supplier of generation and/or delivery service) have access to reliable and efficient electricity supply that also supports California’s economic and environmental goals? • How does the State of California ensure that the many different players work together to ensure that the State’s electric supply is not only clean but is also reliable, efficient and resilient? For example in light of the changes underway in the State’s electric system, how should the State provide such products and services as ramping power, voltage support, frequency control and managing over-generation? How should the State’s electric system become more resilient (e.g., capable of fending off attacks from physical and cyber threats, as well as speedy recovery from disasters)? How will California’s consumers pay for the many mandated public goods programs, ranging from energy research to providing energy efficiency upgrades and rate discounts for low income customers, which the California legislature has determined are core elements of the State’s electric system? • How will the State of California provide protection for consumers against predatory actions by providers of electric service or energy technologies in these new policy settings? Link to whitepaper
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