Our Power, Our Choice

California CCEs on Exit Fee Decision: No Problem

How is the new exit fee affecting community choice? We have gathered comments and statements from operating CCEs in the state, and the conclusion is: not so much. The main takeaway is that an increased exit fee does NOT translate into a dollar-for-dollar increase in a customer’s bill; CCEs have flexibility in how they allocate resources and can decide how much (if any) of the exit-fee increase is added to their net rates.

To recap briefly, the California Public Utilities commission recently adopted new rules for determining the “Power Charge Indifference Adjustment” (PCIA, the official name of the exit fee). The rules were judged by CCEs to favor the utilities, but at least added certainty to the process by establishing limits on how the fee may change in the future.

Here is what the operating CCEs have had to say:

MCE Clean Energy (Dawn Weisz, CEO): MCE has seen sharper increases in the PCIA in past years, and manages its business and rate setting process carefully to factor in a range of potential external costs... The PCIA decision does not impact MCE’s ability to continue to focus on our core mission: providing cleaner power at stable rates to our customers...and investing in targeted energy programs and investments that support our communities’ energy needs.

MCE Solar One, providing 10.5 MW of solar power, is an example of a CCE reinvesting ratepayer dollars into local clean energy projects. (photo: MCE Clean Energy)

Monterey Bay Community Power (from the MBCP October 2018 newsletter): MBCP Customers will receive a 3% rebate and cost-savings Over PG&E, delivered as a credit on your December bill. MBCP remains dedicated to never charging higher rates than PG&E, and will continue to provide both a savings and local investment into the communities we serve. The CPUC’s vote equates to a higher cost for MBCP, not to MBCP customers. The vote simply means that MBCP will not be able to invest as much as desired in both customer savings and local programs for the short term.

Silicon Valley Clean Energy (Don Eckert, SVCE Director of Finance and Administration): We planned for the worst-case scenario in our financial modeling and have been preparing for this unfavorable outcome. SVCE was founded to provide our communities with carbon-free electricity and rates competitive to PG&E, this commitment will not change. This decision will not impact our ability to deliver carbon-free energy to our customers.

Peninsula Clean Energy (Jan Pepper, CEO): In evaluating the decision, we find that we can and will continue to offer rates that are 5% below PG&E for our default product... We are continuing to roll out our local programs, including our EV promotion program. We have also just announced $450,000 in community pilot program grants… And another exciting event was the groundbreaking for the 200 MW Wright Solar Project in Merced County, which will start serving our customers at the end of 2019.

Rancho Mirage Energy Authority (Tiana Mackamul, Management Analyst): We have a viable program that continues to save our residents money.

A few CCEs were not ready to make a public statement until various rate-setting processes were complete:

Valley Clean Energy (Jim Parks, Director, Customer Care and Marketing): The (investor-owned utilities) will issue their PCIA and resource forecasts in November. VCE staff will analyze the forecasts to determine the financial impacts. The PCIA decision will not deter Valley Clean Energy from its mission of providing cleaner power at competitive rates, maintaining local control, improving the environment, and investing in local programs.

East Bay Community Energy EBCE may (issue a statement) after PG&E files their ERRA* update this week, when we have a better sense of 2019 rates. (*ERRA is a reference to an Energy Resource Recovery Account; investor-owned utilities file ERRA applications periodically with the CPUC that include, among other things, the exit fee they may charge)

Pioneer Community Energy (Alexia Retallack, Marketing and Government Affairs Manager): Various filings on Nov 7 (ERRA* and PCIA implementation) need review and as both are continuing, evolving and changing, we cannot... provide any statements.

The upshot is that while the exit fee increases a CCE’s overall expenses for which they have to budget, they still have the ability to set their net rate to customers to be less than or the same as the regional investor-owned utility while purchasing electricity from cleaner sources. All CCEs and CalCCA will continue to make the case with the CPUC to demonstrate that the latest decision is not “indifferent” but favors utility customers over those of CCEs.

But the decision has had a positive effect also: it has removed the uncertainty of how fees may change in the future. Evidence of this includes the City of San Diego’s decision to go ahead with their CCE, two weeks after the CPUC’s vote. CCE expansion in California shows no signs of stopping.