Higher PG&E exit fees jeopardize Central Coast Community Energy



A recent move by the California Public Utilities Commission (CPUC) to raise fees on PG&E customers bolting for locally run energy programs may jeopardize San Luis Obispo and Morro Bay's plan to launch Central Coast Community Energy.

In a highly anticipated Oct. 11 decision, the CPUC unanimously voted to tweak the formula used to calculate the monthly fees charged to Community Choice Energy (CCE) customers. The decision will result in higher bills and tighter margins for CCE agencies, like the budding Central Coast Community Energy, which formed last month as a partnership between the cities of SLO and Morro Bay.

The rationale for the fee increase—which was supported by PG&E, Southern California Edison, and San Diego Gas & Electric but opposed by CCE advocates—is to better compensate the private utilities for having purchased energy for customers who end up leaving their ecosystems for a local CCE.

But it puts the future of Central Coast Community Energy in limbo.

"[The decision] has a significant impact on the overall financial viability for all the scenarios we've looked at," said Bob Hill, SLO's natural resources manager. "This is true not only for us but anybody in the state that is looking at launching a new CCE program."

In the coming days, SLO and Morro Bay will be consulting with their contracted technical expert, The Energy Authority, to better understand the implications of the commission's decision.

"We don't have those answers today," Hill said on Oct. 16.

The fee increase is a blow to SLO, as the city moves forward on a goal to reach net-zero carbon emissions status by 2035. Participating in a CCE program is viewed as critical for cities trying to dramatically reduce their carbon footprints. With nearly 20 agencies operating statewide, CCE allows regional governments to make power purchasing choices and invest in more renewable energy sources.

But the growing number of CCEs has concerned California's three legacy utility companies, leading to new regulatory actions. In addition to the recent fee increases on CCE customers, the CPUC has also required that new CCE programs wait one calendar year before going into operation.

For Central Coast Community Energy, that means it must submit an implementation plan to the commission by January 2019 in order to launch in 2020—a tight timeframe. Its first official board of directors meeting will be on Nov. 7.

"I am incredibly disappointed and concerned that even in light of the IPCC's [Intergovernmental Panel on Climate Change] report on the urgent nature of climate change that the CPUC has put corporate interests before the health, safety, and economy of the people of California," SLO Mayor Heidi Harmon said in an email statement to New Times. "We are hopeful that we will be able to honor the will of the people of SLO by proceeding with our CCE program."


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