BILL ANALYSIS Ó
AB 2145
Page A
ASSEMBLY THIRD READING
AB 2145 (Bradford)
As Amended April 10, 2014
Majority vote
UTILITIES & COMMERCE 9-0
APPROPRIATIONS 12-1
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|Ayes:|Bradford, Patterson, |Ayes:|Gatto, Bocanegra, |
| |Bonilla, Buchanan, Dahle, | |Bradford, |
| |Roger Hernández, Mullin, | |Ian Calderon, Campos, |
| |Quirk, Rendon | |Eggman, Gomez, Holden, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Linder |
| | | | |
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SUMMARY : Makes specific reforms to the community choice
aggregation (CCA) program.
Specifically, this bill :
1)Requires customers to opt-in to CCA's effective January 1,
2015.
2)Requires CCA implementation plans to include information to
customers about the following:
a) Rates as compared to the incumbent utility.
b) Greenhouse gas emission rate using protocols
established by the California Air Resources Board.
1)Authorizes the California Public Utilities Commission (PUC) to
process complaints against the CCA, as the incumbent utility,
prescribed by law.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)Special fund costs in the $250,000 range for PUC to expand the
expedited complaint process, and review customer solicitations
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and implementation plans, including projected and actual
electricity rates and GHG emissions.
2)Unknown ratepayer impacts.
COMMENTS :
1) Purpose. According to the author, CCAs are intended to
provide communities with lower rates, local renewable energy,
and jobs. However, without transparency and detailed
comparisons, customers are unable to adequately compare
services. The author states this bill promotes consumer
choice and transparency for future community choice customers.
2)Background. Since 2002, cities and counties may arrange to
provide electricity within their jurisdiction through a
contract with an electricity provider other than the
investor-owned utility (IOU) that would otherwise serve that
local area. This is referred to as community choice
aggregation.
CCAs purchase electricity from electric service providers
(ESP) using the transmission and distribution system of the
IOU serving that area. Customers continue to receive their
electric bills from the IOU with a line-item delineating the
CCA charges for generation. The IOU continues to charge for
transmission and distribution services and various regulatory
fees.
Customers automatically get their electricity from the CCA
unless they "opt-out" and instead receive service from the
IOU. Creating and implementing a CCA requires a vote or the
local governing board but does not require local voter
approval.
In 2007, the PUC authorized its first CCA application
submitted by the Kings River Conservation District on behalf
of San Joaquin Valley Power Authority (SJVPA). In 2009, SJVPA
suspended its CCA program activities.
In 2010, the PUC authorized a CCA application for Marin Energy
Authority (MEA/MCE) pursuant to a service agreement between
Pacific Gas and Electric (PG&E) and MEA. Currently, MEA
provides service to over 124,000 accounts in Marin County and
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the City of Richmond located in Contra Costa County.
The PUC authorized Clean Power S.F. to form a CCA in the City
and County of San Francisco in June 2010. The San Francisco
Board of Supervisors authorized Clean Power S.F., but the San
Francisco Public Utilities Commission did not authorize the
rates.
In October 2013, the PUC authorized a CCA application for
Sonoma Clean Power (SCP) to serve cities and the
unincorporated areas of the Sonoma County. SCP is scheduled
to begin offering service to the first group of 20,000
customers this month. Most customers will be eligible for
service in 2015 or 2016.
3)Proposition 16 of 2010. Following the approval of MEA, an
initiative was put on the June 2010 statewide ballot to
require a two-thirds supermajority voter approval before local
agencies could start up electrical services, including
community choice aggregation in a new territory. Proposition
16 was defeated by a vote of 52.8% to 47.2%.
4)Renewable Energy Mandates. The CCA concept was placed in
statute before California's Renewable Portfolio Standard (RPS)
was enacted and four years prior to the California Solar
Initiative. Proponents of CCA argued at the time that a CCA
would allow local communities to choose a greener electricity
supply than was being provided by the IOUs.
Since 2002, California IOUs have dramatically increased their
renewable energy portfolios. According to the PUC's February
2014 RPS Biennial Report, retail sellers are on pace to meet
their Compliance Period 1 (2011-13) RPS requirement of an
average 20% RPS and are on track to achieve the 33% RPS by
2020 with additional future procurement of RPS resources.
5)The Role of the PUC. CCAs are required to file implementation
plans with the PUC who must review and approve the CCA cost
recovery plan. CCA rates and sources of electrical supply are
not regulated by the PUC.
CCAs may bring complaints to the PUC against IOUs using an
expedited complaint procedure. This bill would allow
customers to use the same expedited process for complaints
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against the CCA. Additionally, this bill requires review of
customer solicitations and implementation plans including
projected electricity rates and projected and actual GHG
emissions.
6)Should customers opt-in to CCAs: Current law requires a
customer to affirmatively opt-out of participation in the CCA.
This bill would end the practice of switching customers to a
CCA without the customer's consent, beginning on January 1,
2015. Existing CCA customers are not impacted. Various media
outlets across the state have published articles as recent as
last February regarding problems with opting out of a CCA.
Proponents of this measure assert that most people are unaware
that a CCA was formed and have little understanding of the
implications when they receive a form letter in the mail that
says they don't have to do anything. CCA customers continue
to receive their monthly utility bill from the incumbent IOU
with a line-item that delineates the CCA provider. A recent
survey of approximately 400 residents in the City of Richmond
revealed nearly 75% are largely unfamiliar with the CCA that
serves the region.<1> These residents had no knowledge that
they were already enrolled in a CCA. A vast majority of the
residents believe PG&E is their utility service provider.
7)Support. This bill is supported by a coalition of labor
organizations including the Central Labor Federation, the
State Building and Construction Trades Council and is
sponsored by the Coalition of California Utility Employees
(CCUE). According to CCUE, CCAs routinely promise to build
local renewable energy supplies to create local jobs but the
promise of jobs has not materialized.
8)Opposition. This bill is opposed by a large coalition of
local government agencies, environmental groups, civic
organizations, and community choice advocacy organizations.
Opponents claim IOUs are trying to protect their monopoly
status by destroying any opportunity for competition.
Opponents further argue this bill will prevent new CCAs from
forming and offering consumer choice by placing the default
status with the IOUs.
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<1> Fairbank, Maslin, Maullin, Metz & Associates polling results
- March 27-April 2, 2014
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Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0003679