PG&E & Other California Energy Companies Propose Reforms to Support the State’s Clean Energy Goals, Protect Customer Choice...
April 25 2017 - 4:19PM
Business Wire
Pacific Gas and Electric Company (PG&E) joined other
California energy companies today in proposing a plan that supports
the state’s clean energy goals, protects customer choice and
ensures that all customers are treated equally.
Together with Southern California Edison and San Diego Gas and
Electric, PG&E filed a proposal with the California Public
Utilities Commission (CPUC) on how to address costs associated with
long-term contracts for clean energy in a manner that ensures all
customers are treated equally. The contracts were entered into in
support of the state’s clean energy policy objectives.
At issue is how communities that choose to implement Community
Choice Aggregation (CCA) power arrangements and Direct Access (DA)
customers pay for these clean energy purchases. Today, they are not
paying their full share of costs associated with the long-term
contracts, forcing other customers to pay more.
The proposed approach would replace the current system, which is
known as the Power Charge Indifference Adjustment (PCIA), with an
updated system known as the Portfolio Allocation Methodology
(PAM).
“We can achieve the state’s clean energy goals while also
supporting customer choice and treating all customers fairly and
equally,” said Steve Malnight, senior vice president of Strategy
and Policy for Pacific Gas and Electric Company.
Why the System Needs Reforms
Over the past 15 years, state leaders, regulators and energy
companies made a joint commitment to invest in clean energy and the
infrastructure needed to deliver it, and all customers and
communities have benefited from this investment. These responsible
choices laid the foundation and forged a path forward for the
state’s continued leadership in clean energy.
In a determined effort to help keep energy costs stable over
time for all Californians, a commitment was made to purchase
long-term energy contracts and investments, which must be paid for
over the next 20 years.
Under the current formula, the cost allocations from these
long-term commitments have become distorted and unbalanced over
time due to the growth of CCAs; currently, CCA customers pay
approximately 65 percent of these costs. This year, the cost shift
for PG&E associated with the current system is projected to be
$180 million. Assuming this trend continues, in 2020 this shift
will grow to half a billion dollars, which is equal to the current
PG&E low income subsidy.
This disparity was not significant when CCAs served only
two-tenths of one percent of the state’s energy requirements.
However, CCAs will serve 13 percent by the end of this year and are
expected to serve at least 38 percent by 2020 in PG&E’s service
area.
The Proposed Portfolio Allocation Methodology
Today’s filing represents the first step towards the energy
reform California needs to support the state’s clean energy future
and to protect all customers. California’s energy companies believe
this is the best path forward and remain committed to working with
all parties to find the right balance for the state’s energy
future.
The Portfolio Allocation Methodology will replace the PCIA with
a system that supports continued CCA growth without burdening other
customers. The new PAM proposal:
- Prepares for even more CCAs in the
future by allocating resource adequacy and renewable energy credits
to the CCAs to start or enhance their portfolios;
- Improves upon the current system by
eliminating cost estimates, replacing it with actual costs of
energy resources;
- Enables true-up forecasts so customer
costs reflect actual energy prices;
- Ensures that low-income customers are
treated fairly and aren’t disproportionately impacted by the
evolving energy landscape over the next decade or longer; and,
- Protects customers who choose to remain
with their energy company from paying much more than their fair
share.
The full filing can be read here.
About PG&E
Pacific Gas and Electric Company, a subsidiary of PG&E
Corporation (NYSE:PCG), is one of the largest combined natural gas
and electric energy companies in the United States. Based in San
Francisco, with more than 20,000 employees, the company delivers
some of the nation’s cleanest energy to nearly 16 million people in
Northern and Central California. For more information, visit
www.pge.com/ and pge.com/news.
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Pacific Gas and Electric CompanyDonald Cutler, 415-973-5930
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