Community Choice Aggregation Process Update

As part of the Local Government Commission's Public Interest Energy Research (PIER) contract with the California Energy Commission, we will be following the California Public Utilities Commission's (CPUC) process to establish rules and procedures for implementing community choice aggregation (CCA) in California. We will be providing regular updates in CURRENTS, on our local government discussion board and eventually through fact sheets, a guidebook, and workshops.

CPUC Rulemaking

The CPUC opened Rulemaking 03-10-003 to implement AB 117 to permit cities and counties to purchase and sell electricity to utility customers within their jurisdictions. An earlier rulemaking (03-089-007) was rescinded due to typographical inaccuracies. CPUC President Michael Peevey is the Assigned Commissioner and Kim Malcolm is the Administrative Law Judge (ALJ) assigned to the rulemaking.

CPUC Workshop

The first workshop on R.03-10-003 took place September 29^th at CPUC headquarters in San Francisco. The purpose of the workshop was to familiarize interested parties with two areas of existing CPUC decisions for direct access (DA) customers, Cost Responsibility Surcharges (CRS) and utility tariffs for implementation services, that will need to be addressed in the CCA proceeding. Participants included representatives of CPUC staff, investor owned utilities (IOU), cities and counties, energy service providers, and others.

Participants acknowledged differences between DA and CCA in two areas. First, DA is an opt in system where DA customers may choose to leave the utility for another service provider, while CCA is an opt out system where CCA customers may choose to leave the CCA service to stay with their existing utility. Second, because of the opt out nature of CCA, the numbers and types of customers will be greatly different. A CCA may acquire thousands or tens of thousands of customers all at once and, unlike DA, they will include residential customers. Therefore, the rules for DA, while a starting point, will need to be adjusted for CCA. The CPUC and IOUs stressed consumer protections, especially in the need to keep the remaining bundled IOU customers from paying higher rates due to the loss of customers to CCAs.

The Cost Responsibility Surcharge (CRS) for DA customers consists of:

• Historical costs for bond charges for DWR power purchases for IOUs (all IOU customers are responsible for this)
• Historical costs from 9/2001 to 12/31/02 for DA customers (who were not charged for DWR costs during this period)
• Prospective DWR costs from January 2003 on
• IOUs' uneconomic resources (stranded assets)

The CRS is capped at 2.7¢ per kWh for DA customers.

Utility Tariffs for Direct Access Customers are charged for such things as:

• initial notification
• customer switching
• meter installation, testing, removal, reading set-up
• billing, rate changes, billing messages, and programming

LGC's notes from the first workshop are available on the local government discussion board, a summary of the topics identified at the workshop for further discussion is below.

Cost Responsibility Surcharge issues

• CCAs need certainty with the CRS amount
• How are CRS components for DA Customers to be applied to CCA, and who carries the responsibility for it (the CCA or its customers)?
• Should the CRS be capped or not for CCAs?
• CRS as an impact on the remaining bundled customers
• CRS as it applies to switching and reentry customers
• Should CRS be determined based on date of CCA establishment (date of leaving bundled service) or be uniform for all CCAs within an IOU's territory?
• Resolve the baseline issue, customers using up to 130% of the baseline amount don't pay the DWR charges.
• IOU implementation costs
• Should there be a smaller CRS for CCAs taking DWR contract loads?
• Is dual billing allowed (CCA bill for power, IOUs for everything else)?
• Can CCAs phase in implementation?

Tariffs, DA's Rule 22 and Rule 25 issues:

• Will interval metering for > 50kW accounts be required? What about upstream metering for a CCA territory?
• The Direct Access Service Request (DASR) process will differ because of the opt out vs. opt in nature of CCA, although may be appropriate for churning
• CCA, DA & IOU are possible service provider options
• Is the 60-day opt out provision good only for the initial 60 days of CCA life, or for each new account subsequent?
• Metering and billing may be open questions
• Information exchange between IOUs and CCAs

ALJ Malcolm will issue a ruling on the reply comments for the initial rulemaking and this workshop, and will schedule the next workshop soon.

To get on service list for this proceeding, contact the CPUC Process Office at 415-703-2021 or process_office@cpuc.ca.gov

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