Draft Decision In Phase 2 Of CPUC's CCA Rulemaking

On November 2^nd Administrative Law Judge Kim Malcolm issued a draft decision (DD) in Phase 2 of the Community Choice Aggregation (CCA) Rulemaking (R.032-10-003). The DD is mostly consistent with the arguments put forth by the CCA community.

Below are highlights of the DD. Parties will now have an opportunity to comment on the DD before the Commission makes a final decision. It is important to let the commissioners know your thoughts on this DD. The full text of the decision is available at http://www.CPUC.ca.gov/PUBLISHED/COMMENT_DECISION/50869.htm.

Commission Jurisdiction over CCAs and the CCA Program

The CPUC’s role in overseeing a CCA is incidental to its regulation of the utility Nothing in the statute directs the CPUC to regulate the CCA’s program except to the extent that it may affect utility operations and the rates and services to other customers.

Existing law protects CCA customers. To the extent that a CCA fails to consider the interests of its customers – who are local citizens – there is recourse in subsequent elections, the courts and before local government agencies.

The CPUC does have the authority to subpoena information and witnesses, to require information from a CCA and to require its involvement in any relevant CPUC inquiry, as it does over any individual or entity whose acts or knowledge are germane to its regulatory obligations.

CCA Implementation Plan and Registration

There is nothing in the statute that directs the CPUC to approve or disapprove an implementation plan or modifications to it. Nor does the statute provide explicit authority to “decertify” a CCA or its implementation plan. It is not the job of the CPUC to determine what information a CCA’s implementation plan should disclose to its customers, but rather for the CCA to comply with state statute.

Because of the limited jurisdiction the statute provides for the CPUC to oversee CCAs, it will not require CCAs to follow the advice letter process suggested by the utilities.

The CPUC Executive Director will be directed to develop and publish steps of an informal process of review for the CCA and the utility to understand the CCA’s implementation plans and assures that the CCA is able to comply with utility tariffs.

Consumer Protection

The CPUC will not act as a forum for CCA customer complaints as they will have the same recourse as they have for other utility services provided by local agencies. Utility tariffs are not the appropriate place to govern relationships between a CCA and its customers.

Customer Notices

With regard to the type of information to be provided to customers in notices, there is no reason to assume an agency of local government is incapable of complying with the statute and providing reasonable notice to potential customers. The CPUC appreciates the CCAs’ willingness to work with its Public Advisor to help assure the notices are clear, complete and easy to understand.

The utilities are directed to include a cost-based service fee to include CCA notices to customers in their utility bills.

If a customer notice is returned to the utility unopened, the customer will become a CCA customer. Returned mail does not constitute a positive opt-out of service.

Customers with utility commodity contracts are also CCA customers unless they opt out.

Utilities may not provide information about CCA rates or services, or affirmatively contact customers in efforts to retain them.

CRS Vintaging

The Department of Water Resources (DWR) method of calculating the Cost Responsibility Surcharge (CRS) based on the difference between the hourly average cost of power in the utility’s procurement portfolio and the market price will be used. No party objected to it.

CCA customers will be responsible for the Renewable Portfolio Standard (RPS) liabilities incurred on their behalf before the date of a binding notice of intent, or the date customers are actually cut-over to CCA service.

The statute does not restrict phase-in in any way, therefore, the utilities’ tariffs may not include any language limiting phase-ins (they wanted it to be a six month process at most).

The CRS should include no costs related to resource adequacy other than those incurred on the behalf of CCA customers before the date of a binding notice of intent, or the date customers are actually cut-over to CCA service.

Open Season

A CCA that declines to participate in the open season is liable for any power commitments made on behalf of its customers up to the date the CCA begins operations, unless the CCA and the utility can craft a binding commitment outside the open season that is tailored to the CCA’s circumstances.

CCAs will not be required to assume the risk of utility load forecasts for five years. The utilities are adept at forecasting customer load and the departure of CCA customers is no different from any other change in the system load except that it may be larger. The utility should assume responsibility for the final forecast of its total load, and the CCA retains responsibility to forecast its total load.

Utilities and CCAs should work together to determine the load that would be transferred to the CCA. The utilities should propose default opt-out percentages for the first year of a CCA’s operation to account for the possible failure of the collaborative forecasting process.

The CCA and the utility may and should mitigate risk associated with forecasts by agreeing in advance that the party with too much power will sell the power to the party that is short on power.

If a CCA fails to transfer customers on the date to which it commits, if the CCA is at fault, it should pay the utility’s incremental cost of delay that is related to power purchases, and if the utility is at fault, it should credit the CCA with the incremental cost of its power purchases losses.

Renewable Portfolio Standard

It is appropriate for the CCAs to identify in their implementation plans how they intend to comply with RPS requirements, although that is not in the statute. The matter of RPS and CCAs is being considered under R.04-04-026.

continued…

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