PCIA Rulemaking, Phase 2: Proposed Decision on Working Group 3 Matters

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The California Public Utilities Commission (CPUC or Commission) opened Rulemaking R.17-06-026 on June 26, 2017 to review, revise, and consider alternatives to the Power Charge Indifference Adjustment (PCIA).  On October 11, 2018, in Decision D.18-10-019, the Commission implemented an annual 0.5 cent/Kilowatt-hour (kWh) cap on PCIA rate increases and opened a second phase of this proceeding. Phase 2 was organized with three working groups:  1) benchmarking issues; 2) prepayment; and 3) portfolio optimization.  The Commission resolved the first two issues in Decision D.19-10-001, D.20-03-019, and D.20-08-004.  On April 5, 2021, the Commission published the proposed Phase 2 Decision on PCIA Cap and Portfolio Optimization (Proposed Decision).  This proceeding remains open to consider Phase 2 issues related to other PCIA related matters.

The Proposed Decision:

  • Removes the cap and trigger for PCIA rate increases.
  • Approves a process for transparency of investor-owned utilities’ (IOUs) Resource Adequacy (RA) resources.
  • Authorizes voluntary allocations through market offerings of RPS contracts subject to the PCIA (from IOUS to other load serving entities, such as CCAs that pay the PCIA).
  • Authorizes Southern California Edison (SCE) to continue to apply their current approach of allocating GHG-free resources through December 2023.

While the Proposed Decision on its face appears to favor and incorporate many CCA provided recommendations through the regulatory proceeding process, there are serious errors and concerns in the details.

Specification of error:

  • The PD misinterprets and misapplies D.02-01-022 in concluding that unbundled customers (CCA and Direct Access customers) are not entitled to a share of PCIA portfolio resources.
  • The PD denies unbundled customers the full range of benefits of PCIA resources — including GHG-free energy attributes and the “right of first refusal” to scarce PCIA resources — contrary to Public Utilities Code §366.2(g).
  • By retaining important RA and GHG-free energy benefits for bundled customers while requiring unbundled customers to pay for them, the PD unlawfully shifts costs from bundled to unbundled customers contrary to §365.2.
  • The PD’s reasoning for adopting the voluntary allocations through market offerings for RPS, while rejecting for RA and GHG-Free energy allocation, is internally inconsistent and not supported by substantial evidence.

Next Steps

CalChoice is engaged through CalCCA in this proceeding. CalCCA, on behalf of CalChoice and its other members, will provide comments to the Proposed Decision on April 26 to recommend solutions for the above identified errors. CalChoice and CalCCA will remain very actively engaged in this proceeding.