Electricity Markets

Calif. CCAs file with PUC to make PG&E wires only company

Community choice aggregators in Northern California have filed a petition asking the California Public Utilities Commission to take action to restructure investor-owned utility, Pacific Gas and Electric, taking it out of the retail energy business and making it a “wires-only” company.

The petitioners expressed their concerns about “safety within PG&E’s operations” and argue that the utility should be restructured to focus solely on its transmission and distribution system.

The petitioners cited the Public Utilities Commission’s recently expanded investigation into PG&E’s future following the utility’s filing for bankruptcy court protection after state investigators found PG&E responsible for some of California’s worst wildfires.

PG&E filed for bankruptcy in the wake of the Camp Fire, which raged for most of November 2018 in Butte County in Northern California and virtually destroyed the town of Paradise. Investigations are still examining whether or not PG&E equipment was responsible for igniting the fire, which is listed as one of the most deadly and destructive on record. The fire caused at least 85 civilian fatalities and an estimated $116.5 billion in damage.

The petitioners say their request is a response to the Public Utilities Commission’s Assigned Commissioner’s Scoping Memo and Ruling (ACR) of Dec. 21, 2018. The petitioners say their filing provides input into the questions the ACR raises about PG&E’s future.

The Public Utilities Commission, among other things, is looking into the possibility that some or all of Pacific Gas and Electric could be reconstituted as a publicly-owned utility or utilities. The investigation will examine several corporate business and governance model options, with an emphasis on drastically improving public safety.

The petitioners comprise the East Bay Community Energy, Peninsula Clean Energy Authority, Pioneer Community Energy, the City of San Jose (for San Jose Clean Energy), Silicon Valley Clean Energy, Sonoma Clean Power, and Valley Clean Energy Alliance.

Community choice aggregators currently serve 46% of the retail electric customer load in PG&E’s current service area, according to the filing.

The petitioners say that the communities they serve are “extremely vulnerable to climate change” and that recent “devastating natural events, such as massive wildfires, statewide drought, and flooding have affected many of these communities.” And they say they have “a strong interest in identifying solutions that could mitigate those catastrophic impacts.”

The petitioners say that community choice aggregators have already provided “detailed recommendations” to the PUC on how California could build a “stronger, greener, and more reliable electric system.” Under the CCAs’ recommended restructuring of PG&E, customers currently receiving retail generation service, would then to an existing or to be formed, CCA or municipal utility serving their community. The CCAs’ encourage the PUC “to facilitate a further discussion to explore options for communities that are not currently served by a CCA or municipal utility.”

The petitioners added that the problems the state faces are not restricted to PG&E’s management but are a “state-wide structural problem.” Although their filing is focused on PG&E, “there is ample evidence” that California’s other vertically integrated investor owned utilities “face similar safety problems.”

In addition to turning PG&E into a wires-only company, the petitioners are urging the commission to work collaboratively with local governments to remove barriers to pursuing full municipalization of the electric system, including retail power supply, distribution and transmission, in communities where there is interest.

The filing also asks the commission to transform the state’s regulatory and legislative framework to concentrate on safety and to put financial stewardship, responsibility and control over programs such as demand response, energy efficiency and transportation electrification under local control.

Moody’s says bankruptcy court PG&E order credit positive for CCAs

A recent bankruptcy court order that maintains existing arrangements between community choice aggregators and PG&E is credit positive for CCAs in California, Moody’s Investors Service recently said.

The U.S. Bankruptcy Court for the Northern District of California on Jan. 31 provided interim approvals, known as “first-day” orders, related to PG&E’s Jan. 29 bankruptcy filing.

Public power utilities working with CCAs

In California, several public power utilities and entities are moving to provide services to CCAs.

In September 2017, SMUD said that it had been selected to negotiate a services agreement to provide Valley Clean Energy Alliance, a new community choice aggregation joint powers agency, with technical and energy services, data management/call center services, wholesale energy services, credit support services and up to five years of business operations support.

Meanwhile, California-based East Bay Community Energy, selected the Northern California Power Agency to provide wholesale energy services.

In November, NCPA in late 2017 said that it will be providing a variety of wholesale energy services to California’s Pioneer Community Energy.

Association offers new CCA program membership category

The American Public Power Association has initiated a new category of membership for community choice aggregation programs.