Fact Sheet

Common Sense Energy Policy Update #1

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Correct Answer(s): D. (Both A & B)

Explanation: More and more California local governments are forming Community Choice Aggregators (CCAs) and taking over power purchasing responsibilities from investor-owned utilities (IOUs). The rapid growth of CCAs has exposed flaws in regulations that must be addressed to preserve statewide energy reliability and protect against customer cost shifts.

One of these flaws is that under current rules, some new and expanding CCAs are not required to procure enough Resource Adequacy (RA) capacity to meet their share of statewide electricity demands. As a result, IOUs are buying, and IOU customers are paying, for power capacity that should be the responsibility of CCAs.

The California Public Utilities Commission (CPUC) will be voting on Resolution E-4907 on February 8 to address this regulatory flaw. According to CPUC staff, the resolution simply “addresses a gap in the state’s rules to ensure all retail electricity sellers buy enough electricity to meet their demand.”
Surprisingly, some CCA advocates are calling this resolution “a substantial burden.”

Over 50 members of Equitable Energy Choice for Californians (EECC) including senior, low-income, veteran, labor, community and small business groups have joined together to urge the CPUC to act quickly to approve Resolution E-4907 to ensure electricity customers are not forced to pay for power purchased for others.

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It’s the Law

Common Sense Energy Policy Update #2

Legislative Directives vs. Reality

When the California Legislature passed legislation authorizing the formation of Community Choice Aggregators (CCAs) to take over power purchasing responsibilities from investor-owned utilities (IOUs), specific language was included to preserve systemwide reliability and the California Public Utility Commission (CPUC) was to “determine a cost-recovery mechanism to prevent a shifting of costs” from customers of CCAs to customers of IOUs. Changes are needed to ensure regulations comply with those laws.

The Goal

Protect Customers from Paying for Someone else’s power: No cost shifting

The Law

“…implementation of a CCA program shall not result in a shifting of costs between the customers of the CCA and the bundled service customers.”
Source: PUC Section 366.2.a.4

Today’s Reality According to CPUC Staff Q&A*

“To date, the known impact is a cost shift to bundled utility customers since the utility is not able to pass all of the costs of this capacity procurement on to the new CCAs.” *

“Therefore, such costs are borne by the remaining (non-CCA) utility customers”*


The Goal

Ensure all energy providers comply with resource adequacy rules: Statewide system reliability

The Law

“The plan of a community choice aggregator shall be submitted to its governing board for approval and provided to the commission for certification… and shall achieve … The resource adequacy requirements established pursuant to Section 380.”
Source: (SB 350 – de León, 2015)

Today’s Reality According to CPUC Staff Q&A*

“Currently a CCA can start serving new customers without complying with all statutory and regulatory requirements, particularly requirements involving ‘Resource Adequacy.” *

… many emerging and expanding CCAs are not participating in the required annual Resource Adequacy program because the timelines for CCA creation are not coordinated with annual Resource Adequacy program 
timelines.” *

*CPUC staff Q&A 1-10-2018


The CPUC will be voting on Resolution E-4907 on February 8 which “addresses a gap in the state’s rules to ensure all retail electricity sellers buy enough electricity to meet their demand.”

If action is not taken soon, more electricity customers who buy power from their utility will be forced to pay for power capacity bought for other customers.

Over 50 members of Equitable Energy Choice for Californians (EECC) including senior, low-income, veteran, community and small business groups have joined together to urge the CPUC to act quickly to approve Resolution E-4907 to ensure electricity customers are not forced to pay for power capacity purchased for others.

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