HomeMy WebLinkAbout1L OCRCITY COUNCIL STAFF REPORT
DATE: October 22, 2020 CONSENT CALENDAR
SUBJECT: LETTER OF SUPPORT FOR CALIFORNIA COMMUNITY CHOICE
ASSOCIATION'S REQUEST FOR CHANGES TO THE POWER CHARGE
INDIFFERENCE ADJUSTMENT
FROM: David H. Ready, City Manager
BY: Anthony J. Mejia, City Clerk
RECOMMENDATION:
Authorize the City Council to sign onto a letter of support for California Community Choice
Association (CalCCA) request for changes to the Power Charge Indifference Adjustment
(PCIA).
BACKGROUND:
Desert Community Energy (DCE) is a member of the California Community Choice
Association (CalCCA), which advocates for legislative changes and regulatory reforms
that support the general goals of its member agencies. In late September, a group of
CCAs submitted a letter to the California Public Utilities Commission (CPUC) requesting
that the Commission take action to reduce volatility and cost impacts of the Power
Charge Indifference Adjustment (PCIA). The PCIA is the "exit fee," or the "departing
load charge," which is charged to CCA customers and other customers to allocate the
costs of power purchased on their behalf prior to their departure from one of the
Investor Owned Utilities. The PCIA is included in the charges that DCE customers see
on their bill from Southern California Edison (SCE).
In June 2017, the CPUC initiated a proceeding to "Review, Revise, and Consider
Alternatives to the Power Charge Indifference Adjustment." In a 2018 decision, the
CPUC adjusted the rules for the PCIA to provide transparency and stability. The CCA
letter expresses the concern that these goals have not been met. It also outlines several
concerns with the status quo regulatory policies. It identifies the need to address not
only a regulatory issue but also a consumer fairness issue.
The CCA letter, which is attached, was circulated as a "sign-on" letter among CCA
agencies statewide. But there was a short turnaround time before it was sent to the CPUC
on September 24. The letter was co-signed by 98 elected officials from 10 CCAs
throughout the state.
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2City Council Staff Report Page2 Since the letter was sent to the CPUC, there has been a request for additional letters to be sent by individual CCAs. They have also offered the opportunity for individual elected officials to be added to the list of supporters, which will be included in a second, updated letter. These letters are designed to demonstrate a groundswell of support for changes needed at the CPUC around the PCIA. The letter makes two specific asks of the CPUC to reduce volatility and cost impacts: 1) Adopt the recommendation proposed by CalCCA and SCE in the public working group that requires utilities to allocate resources to load-serving entities whose customers pay for them, and to encourage the optimization of supply portfolios; and, 2) Adopt transparency measures on exit fees that give consumers more information on what they are paying for. On October 19, 2020, the DCE Board will consider affirming its support for the CCA letter and whether to send a letter to that effect directly to the CPUC. These letters will lay the groundwork for enhanced advocacy at the CPUC and in the State Legislature's next session in 2021. The City Council may also choose to have the City of Palm Springs listed on a second "sign-on" letter that could be sent to the Governor, state legislators, and others. FISCAL IMPACT: None. Attachment: 1. CCA letter to CPUC regarding PCIA, September 24, 2020
3California Public Utilities Commission 505 Van Ness Avenue San Francisco, CA 94102 [Transmitted via Email] September 24, 2020 Dear President Batjer and Commissioners Randolph, Rechtschaffen, Guzman Aceves, and Shiroma: California is a national leader in addressing climate change. We write to you today as leaders of communities rising to meet the climate emergency in partnership with the state. We are engaging in this fight as local public agencies -Community Choice Aggregators -focused on providing affordable, clean, and reliable power through the proven model of community choice aggregation and offering innovative transportation and building-electrification programs. Today, our public agencies provide energy services to more than 10 million Californians across the state from Humboldt County to Southern California and from the coast to the Sierra and deserts. Collectively, our communities reflect the socioeconomic and racial diversity of California. The California Public Utilities Commission plays a critical role in supporting de-carbonization efforts by ensuring regulatory policies support and foster community level engagement in this fight. In your role as a CPUC Commissioner, one of the most important levers you have is to ensure that the investor-owned utilities {IOUs) -PG&E, SCE, and SDG&E -operate and manage their energy portfolios to achieve the lowest possible costs. To date, the framework the IOUs operate under does not achieve that result. For instance, the Power Charge Indifference Adjustment (PCIA), known as the utility "exit fee," now has risen more than 600 percent since 2013 in the PG&E service area, and nearly doubled since the CPUC changed the rules in 2018. Raising exit fees by hundreds of millions of dollars a year, now in the middle of a global pandemic and its accompanying economic crisis, is entirely unacceptable. The 2018 PCIA decision promised stakeholders transparency and stability. Neither outcome has occurred. The heart of the problem is that the current regulatory structures governing exit fees provide no incentive for the IOUs to reduce their portfolio costs -an outcome that hurts all energy consumers in the state, customers of the IOUs and the CCAs. Instead, we need a system that requires IOUs to maximize the value of their energy portfolios and minimize their over-market procurement costs and share the financial risk if this is not accomplished. With that in mind, we call on the Commission to immediately take actions to reduce the PCIA for all customers {IOU & CCA) and smooth PCIA volatility. Affordability and rate certainty are two guiding principles that should apply to all customers equally, and we respectfully ask that the Commission immediately: 1
41) Adopt the recommendation proposed by the California Community Choice Association (CalCCA) and SCE in the public working group requiring utilities to allocate resources to load serving entities whose customers pay for them, and to encourage the optimization of supply portfolios; and, 2) Adopt transparency measures on exit fees that give consumers more information on what they are paying for. The goal is to take actions immediately to reduce volatility and cost impacts for all customers. Climate change is not a problem for tomorrow; it already is here. Just this summer we have experienced extreme heat storms and electric blackouts, thunderstorms, and firestorms. California has been a leader on clean energy for decades. It is time to continue that work by fully partnering with CCAs and the equitable, resilient, and clean-energy future they are building. Sincerely, London Breed Shamann Walton Mayor of San Francisco Supervisor, City and County of San Francisco Norman Yee Sam Liccardo San Francisco Board of Supervisors President Mayor, City of San Jose Matt Haney Debra Lucero Supervisor, City and County of San Francisco Butte County Board of Supervisors Rafael Mandelman Don Saylor Supervisor, City and County of San Francisco Yolo County Board of Supervisors Gordon Mar Gary Sandy Supervisor, City and County of San Francisco Yolo County Board of Supervisors, Chair Aaron Peskin Gloria Partida Supervisor, City and County of San Francisco Mayor and City Councilmember, City of Davis Dean Preston Lucas Frerichs Supervisor, City and County of San Francisco Vice Mayor, City of Davis Sandra Lee Fewer Dan Carson Supervisor, City and County of San Francisco City Councilmember, City of Davis Hillary Ronen Tom Stallard Supervisor, City and County of San Francisco Woodland City Council, Mayor Pro Tern Ahsha Safai Bruce McPherson Supervisor, City and County of San Francisco Santa Cruz County Supervisor, Fifth District Catherine Stefani Jane Parker Supervisor, City and County of San Francisco Monterey County Supervisor, Fourth District 2
5Das Williams Santa Barbara County Supervisor, First District Joan Hartman Santa Barbara County Supervisor, Third District Mark Medina San Benito County Supervisor, First District Ryan Coonerty Santa Cruz County Supervisor, Third District Ariston Julian Mayor, City of Guadalupe Ian Oglesby Mayor, City of Seaside Justin Cummings Mayor, City of Santa Cruz Jeff Lee Mayor, City of Grover Beach Alice Patino Mayor, City of Santa Maria Kyle Richards Mayor Pro Tempore, City of Goleta Trina Coffman Mayor Pro Tempore, City of Watsonville Alan Haffa Vice Mayor, City of Monterey Derek Timm Vice Mayor, City of Scotts Valley Jack Dilles Vice Mayor, City of Scotts Valley Steve Mcshane Councilmember, City of Salinas John Freeman City Councilperson of San Juan Bautista 3 Todd Rigby Councilmember, City of Eastvale Ted Hoffman Councilmember, City of Norco Russ Brown Mayor, City of Hemet Nancy Smith Vice Mayor, City of Sunnyvale Gustav Larsson Councilmember, City of Sunnyvale Jon Robert Willey Councilmember, City of Cupertino Rod Sinks Councilmember, City of Cupertino Margaret Abe-Koga Mayor, City of Mountain View Javed Ellahie Councilmember, City of Monte Sereno Liz Gibbons Vice Mayor, City of Campbell Rob Rennie Councilmember, City of Los Gatos George Tyson Councilmember, City of Los Altos Hills Yvonne Martinez Beltran Mayor Pro Tern, City of Morgan Hill Neysa Fligor Vice Mayor, City of Los Altos Greg Janda Mayor of Rocklin Cheryl Maki Auburn City Council
6Kirk Uhler Chair, Placer County Board of Supervisors Jim Holmes Placer County Supervisor Peter Gilbert Lincoln City Councilmember Jeff Duncan Loomis Town Councilmember Jesse Loren Winters City Councilmember Bruce Okrepkie Council member, Town of Windsor Jonathan Torrez Councilmember, City of Point Arena Patrick Slayter Mayor, City of Sebastopol Una Glass Vice Mayor, City of Sebastopol Dave King Councilmember, City of Petaluma Jack Tibbetts Councilmember, City of Santa Rosa Melanie Bagby Councilmember, City of Cloverdale Mark Landman Councilmember, City of Cotati Pradeep Gupta Former Mayor, City of South San Francisco Michael Salazar Vice Mayor, City of San Bruno Sheri Woo Director, Humboldt Bay Municipal Water District 4 John Goodwin Mayor, Town of Colma Jeff Aalfs Mayor, Town of Portola Valley Catherine Carlton City Council Member, Menlo Park Dr. Rod Daus-Magbual Council Member, Daly City Deirdre Martin Councilmember, City of Pacifica Rick DeGolia Mayor, Town of Atherton Flor Nicolas Councilmember, City of South San Francisco Harvey Rarback Councilmember, Half Moon Bay Giselle Hale Councilmember, Redwood City Betsy Nash Councilmember, City of Menlo Park Julia E. Mates Councilmember, City of Belmont Ian Bain Councilmember, City of Redwood City John Keener Former Mayor, Pacifica Laura Parmer-Lohan Vice Mayor, City of San Carlos Carole Groom San Mateo County Supervisor Mike Wilson Vice Chair, Humboldt County Board of Supervisors
7Daniel Yost Councilmember, Town of Woodside Estelle Fennell Chair, Humboldt County Board of Supervisors Sam Hindi Councilmember, City of Foster City Chris Curran Councilmember, City of Blue Lake Summer Daugherty Councilmember, City of Blue Lake Michael Winkler Mayor, City of Arcata Michael Sweeney Mayor, City of Ferndale Stephen Avis Councilmember, City of Ferndale David Grover Councilmember, City of Trinidad Frank Wilson Councilmember, City of Rio Dell Austin Allison Councilmember, City of Eureka Kim Douglass Colfax City Council Joe Mosca Councilmember, City of Encinitas 5