Fees may hit users of power programs

A fast-growing number of California cities and counties, including San Francisco, are buying electricity for their citizens, taking over a job formerly filled by utility companies such as as Pacific Gas and Electric Co.

Now the utilities have proposed a change in the way such civic power programs operate — a change that could raise costs for the new programs’ customers.

California’s three large investor-owned utilities on Monday filed a proposal with state regulators to change the way customers of such programs as CleanPowerSF compensate the companies for long-term power purchase contracts that the utilities signed years ago on their behalf.

Customers of “community choice aggregation” programs all face a small monthly fee intended to pay their share of such long-running contracts. But in Monday’s filing with the California Public Utilities Commission, PG&E, Southern California Edison, and San Diego Gas & Electric said the state’s formula for calculating this “power charge indifference adjustment,” or PCIA, fee no longer works.

Instead, it has dumped excess costs on utility customers who don’t belong to a community choice program, the companies say. According to PG&E, community choice customers last year paid only 65 percent of the costs associated with such contracts, many of which date back to the mid-2000s and involve large-scale solar power plants and wind farms. As a result, PG&E customers who do not also belong to a community choice program paid $180 million more than they should have, effectively subsidizing those programs, according to the utility.

“We can achieve the state’s clean energy goals while also supporting customer choice and treating all customers fairly and equally,” said Steve Malnight, PG&E’s senior vice president of strategy and policy, in a press release.

PG&E did not offer an estimate of how much the PCIA fee would change under the utilities’ proposal. For customers of CleanPowerSF, it is currently less than 2.3 cents per kilowatthour.

Community choice program administrators in general agree that the PCIA formula needs changes, although they disagree that other utility customers are subsidizing their programs. On Monday, the California Community Choice Association, which represents such programs, filed its own proposed changes with the commission.

“As more communities embrace the opportunity to achieve their climate and economic goals through the purchase and development of power, concern has grown about the lack of transparency and predictability of the power charge indifference adjustment,” said Beth Vaughan, the group’s executive director, in a statement.

Authorized by the state Legislature in 2002, community choice aggregation works as a kind of buyers’ club for electricity. City and county governments band together to buy electricity — often renewable — in bulk on behalf of their citizens. The incumbent utility company continues to distribute that electricity and provide natural gas service, while owning all the infrastructure.

The first such program, Marin Clean Energy, launched in 2010, and 10 others are now operating in the state.