Changing the California Energy Framework

Wind Generator

Earlier this year the CPUC released a staff white paper to guide the discussion for another CPUC and Energy Commission (CEC) En Banc focused on the expansion of retail choice for California electricity consumers. The paper notes that CCAs, direct access providers, and rooftop solar serve up to 25% of retail load in Investor Owned Utility (IOU) service territories. By the mid-2020s the paper speculates this figure will grow to upwards of 85%.

The white paper notes that the growth in CCAs are challenging the existing utility model and makes it clear that both the CPUC and the Energy Commission envision significant changes to the regulatory model and the utility structure in the future. Although it seems certain that IOUs will be serving less retail load in the future, new regulations and markets to manage a growing number of local energy providers have yet to be developed.

Any changes to the current model will need to address the growing demand for community choice for energy along with energy efficiency, solar, energy storage, demand response, electric vehicles, and other emerging grid technologies, while also also appropriately compensating the IOUs for their previous long-term energy and infrastructure investments. Additionally, the CPUC must also ensure that all customers are paying their fair share for energy service and low-income customers continue to have affordable access to energy.

The proceeding on retail choice could be resolved as early as Spring 2018, but CPUC President Michael Picker cautioned that the timeline could be delayed depending on the amount of litigation from parties in the CPUC’s judicial process during an August 23rd presentation to the Senate Committee on Energy, Utilities, and Communications.

In light of the upcoming proceeding, Gerry Braun of the Integrated Resource Network, provided an alternative framework in response to the En Banc. He believes that CCA’s can be partners for the development of local renewable resources but they are not a substitute for active city and county engagement in system planning and investment in local clean energy resources.

Braun’s framework begins with the integration of local demand and renewable energy supply to provide insight into how a community’s energy needs can be best served through locally sourced renewable resources. With this information communities themselves will be the guide in the development of local infrastructure and resources for providers such as CCAs or others entities. If jurisdictions focus on supporting local economic and infrastructure resiliency, local investments in renewables and infrastructure would occur leading to more rapid decarbonization. Microgrids he believes would be the obvious mechanism for superior integration of renewable energy at the local level.

Local jurisdictions already manage water, waste, transportation, and many other services for their communities so it is not surprising that energy is next on the list.The framework Braun proposes seems to be appropriate given this demand for local control but there are clearly many regulatory issues that the CPUC will need to resolve. Hopefully, the CPUC’s process will lead to a result where all stakeholders can agree.