Direct Access Reopening Report from the CPUC

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On September 20, 2018, Governor Brown signed SB 237, thus expanding the cap on Direct Access (DA) by 4000 GWh, to a total of 28,000 GWh, or by 16% of Investor Owned Utility (IOU) load. The CPUC implemented this first part of the statute in an extremely short timeframe allowing for DA load departure in 2021.

In its second part, SB 237 required that the California Public Utilities Commission (CPUC) provide recommendations on lifting the DA cap entirely and implementing a phase-in for non-residential accounts to the legislature by June 30. Because of the global pandemic, this deadline was extended. This legislation, and the implementation strategy, creates greater retail choice, however potentially at the expense of load departure from CCAs.

The statute requires that any recommendations: 1) not increase greenhouse gas (GHG) emissions, 2) not increase criteria air contaminants and toxic air contaminants and 3) maintain electric system reliability. Analysis by CalCCA, individual CCAs and other stakeholders indicates that the ability for the state and individual CCAs to reach their GHG reduction goals would be jeopardized by DA expansion.

On September 28, the CPUC issued their staff report entitled “Report Providing Recommendations on the Schedule to Reopen Direct Access” (Report) with their recommendations to the legislature on the reopening of DA to all non-residential customers.  The recommendations included a phase-in approach of not more than 10% of eligible customers (approximately 8000 GWh annually), monitoring of DA service provider compliance with mandated reporting obligations, such as Resource Adequacy, Renewables Portfolio Standard and Integrated Resource Plan, as well as a list of other recommendations. Collectively, the recommendations are intended to ensure that a DA reopening does not disrupt the energy market or electric grid reliability.

CalChoice and CalCCA are both actively involved in Phase 2 of the proceeding in order to ensure a fair and open process that is informed by rigorous legal and technical analysis. Many of the recommendations in the Report are the result of that activity.

Next Steps

Comments on the Report are due to the CPUC October 16. The comments will be considered as part of the development of a proposed decision. No timeline is set in the ruling as to when the proposed decision will be issued, however we do expect it will be issued in the January timeframe, and that a final decision can be expected by the revised March 15, 2021, deadline.

CalChoice has a representative on the Working Group, and will continue to engage, along with CalCCA and other stakeholders, to ensure the least disruption to our CCAs.