Energy, CCAs and the seniors’ cost burden

The Legislature will be reviewing a flurry of bills upon its return from summer recess, but an informational hearing regarding Community Choice Aggregations (CCAs) on Wednesday morning in the Senate Energy, Utilities and Communications Committee warrants equal attention.

A current law that is supposed to protect seniors and all electricity customers from paying for power that was purchased for other customers is not working. A broad coalition of senior groups and dozens of others is encouraging the Senate committee to discuss the fair allocation of costs for clean energy and other long-term contracts that were purchased to meet our state’s clean energy goals and to maintain electric system reliability.

Seniors, like the clear majority of Californians, support the state’s transition to cleaner, renewable energy even if it means paying a bit more to jump-start new technologies and industries until they become market competitive.

We all benefit from these investments in clean energy and electric system reliability, so we should all share equitably in the costs.

But in some parts of the state, customers could end up paying as much as $150 per year more than they should. That amount will increase as more customers join CCAs and fewer and fewer customers are left to pick up the tab for the cost of state-mandated renewable energy contracts and other programs.

Virtually every interested party has acknowledged this is a problem, including the California Public Utilities Commission (CPUC), consumer advocates, utilities and even CCAs. The question becomes what to do about it. Fortunately, the CPUC recently opened a formal proceeding to collect input and will hopefully fix the problem, but time is of the essence.

Seniors, like the clear majority of Californians, support the state’s transition to cleaner, renewable energy even if it means paying a bit more to jump-start new technologies and industries until they become market competitive. We benefit from cleaner air and want to leave the world a better place for our children and grandchildren.

However, when the state passed laws mandating that utilities buy more renewable power, it envisioned the costs being equitably shared among all customers. Regrettably, that is not the case.

An increasing number of communities are forming CCAs and taking over power-purchasing responsibilities from utilities for their residents. That in and of itself is not a problem. In fact, more choices and competition can be a good thing for consumers.

The law that created CCAs was clear — it required a mechanism “to prevent a shifting of costs to an electrical corporation’s bundled customers.” Unfortunately, the current regulatory mechanism in place to protect customers from cost-shifts is not working.

It has been estimated that some customers who now receive power through an alternative energy provider like CCAs may on average only pay roughly 65 percent of the cost of clean energy that was purchased on their behalf.

As a result, many electricity customers, including seniors, are paying not only for power purchased on their behalf, but also for power that was purchased for customers now receiving power from CCAs.

The Congress of California Seniors, California League of United Latin American Citizens, California State Conference NAACP and dozens of other senior, community and small business groups wrote a letter to the full Utilities Commission urging Commissioners to ensure that no customer is left paying for energy purchased on another’s behalf.

It’s time for legislators and the commission to finally address this inequity to protect sustainable customer choice and our clean energy future.
—
Ed’s Note: Gary Passmore is the president of the Congress of California Seniors.