Community Choice Aggregation Proposed Decision Released

On October 29^th Administrative Law Judge Kim Malcolm released a proposed decision on the first phase of the Community Choice Aggregation (CCA) rulemaking (R.03-10-003). This rulemaking implements AB117, CCA legislation.

The California Public Utilities Commission (CPUC) hopes this decision provides the type of guidance CCAs and prospective CCAs will need in determining whether to pursue energy procurement efforts in advance of its final order in Phase 2. The order should also provide some guidance to the parties about how The CPUC envisions the CCA energy procurement program in the broadest sense, and the costs that CCAs will have to incur as customers of and partners with the utilities. 

This order adopts the following:

• Department of Water Resources' (DWR) methodology for estimating the cost recovery surcharge (CRS), which will allow the utilities to recover from CCAs the costs of DWR bonds and contracts, utility power procurement contracts and other items in a way that remaining bundled utility customers are indifferent to the CCA program;
• A temporary CRS in the amount of $.022/kWh, which will be trued up in 18 months or sooner, if final utility estimates of CRS are 30% lower or higher than $.022/kWh, and thereafter will be trued up annually;
• A requirement that the utilities provide CCAs an opportunity to take delivery of power from DWR contracts through a physical allocation of these power purchase contracts;
• Principles for setting prices for utility services offered to CCAs;
• Ratemaking and cost allocation principles for utility services offered to CCAs, implementation costs and the CRS;
• A method to allocate amounts related to the CRS exception for baseline customers;
• An exception from the CRS for certain load attributable to Norton Air Force Base;
• Requirements for and conditions under which CCAs can acquire customer information from utilities needed to manage energy procurement by CCAs;
• Application of AB 117 as it relates to CCA program phase-ins, boundary metering and the use of CCA-specific load profiles.

Comments are due on this proposed decision by November 18, 2004. This may end up on the CPUC agenda in early December.

Highlights of the decision include:

• Investor Owned Utilities' (IOU) costs for general CCA program development should be allocated to the ratepayers and not the first CCA; only costs directly related to a particular CCA should be charge to it.
• IOU transaction costs currently covered under rates such as billing costs, and call center costs, will not be charged to a CCA.
• IOU infrastructure costs for CCA 'opt out' procedures are a general CCA cost not specific to a particular CCA and therefore covered by ratepayers.
• Cost for customers returning to IOUs from a CCA program are IOU costs.
• An initial Cost Responsibility Surcharge (CRS) of $.022/kWh will be charged for CCA customers and trued up after the first 18 months and annually thereafter.
• CCA customers, not the CCA itself, will be charged the CRS.
• Department of Water Resources (DWR) power contracts can be allocated to CCAs paying the CRS for it.
• CCAs or their customers will have to pay the subsidy for baseline customers who are exempt from CRS.
• DWR's model for determining the CRS in the Direct Access case shall be used in the CCA case.
• Phasing-in CCA implementation is not prohibited by AB117.
• IOUs should propose CCA tariffs within 30 days of the adoption of a Phase 1 decision for consideration in Phase 2.
• IOU customer information will be made available to CCAs for the purpose of resource planning, and notification. Confidential customer information will be protected by CCAs signing nondisclosure agreements.

We expect a schedule for Phase 2 to be released shortly. Check the LGC Community discussion board for updates.

Administrative Law Judge Kim Malcolm's Proposed Decision
(http://www.cpuc.ca.gov/PUBLISHED/COMMENT_DECISION/40913.htm)

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