The topic of fairness among California electric customers seems to once again be up for debate. Recently, San Jose Mayor Sam Liccardo and Los Angeles County Supervisor Sheila Kuehl encouraged the state to relitigate a regulatory decision made to ensure equity among the state’s electric customers.
If they are successful, it would allow Community Choice Aggregators to potentially skip out on paying their fair share of early investments made by all California ratepayers to develop and deliver clean power in the Golden State.
That isn’t fair. Attempting to get a better deal for themselves while punishing California’s electric customers for making crucial – and yes, expensive – early investments in wind and solar is counterproductive and opportunistic. California’s progress toward a clean energy future shouldn’t come with winners and losers, and the CCAs should be working alongside all stakeholders toward shared solutions that benefit everyone.
Decades ago, the Legislature recognized that California’s ambitious clean energy goals required massive investments in solar, wind and other renewables. These investments required long term contracts of 10 and 20 years be put in place by utilities that are still being paid off. These investments jump-started the renewable power industry, drove prices down and made clean energy the mainstream, affordable option it is today.
Everyone benefited from these actions – particularly the CCAs that are now attempting to market themselves as alternatives to utilities. But in the wake of COVID-19 and the accompanying recession, they sensed an opportunity, and recruited politicians to argue that CCAs shouldn’t be required to hold up their end of the deal.
The Power Charge Indifference Adjustment, which critics like to routinely mischaracterize as an “exit fee,” was put in place by regulators to ensure that customers who are automatically enrolled in a CCA (many against their will) pay their fair share of investments that utilities have already made on their behalf. Without it, California’s remaining utility customers would be left to shoulder the cost alone — and that is what Liccardo and Kuelh are advocating for.
This isn’t a new problem in California, and it’s certainly not one that should catch policymakers off-guard.
The legislation passed in 2002 authorizing communities to form CCAs and begin purchasing power for their residents specifically prohibits costs being shifted from customers of one provider to customers of another. This prohibition has been upheld by both lawmakers and regulators in the years since, including in the decision that CCAs are now asking regulators to revisit. But it only makes sense that everyone should pay their fair share.
Unfortunately, this isn’t the first time that CCAs have skirted doing their part to advance California’s shared energy obligations. California’s first CCA — Marin Clean Energy (MCE) — spent years being heavily reliant on fossil fuel power, which it procured from Shell Oil of Texas. It used unbundled Renewable Energy Certificates (RECs) to pass it off as “clean” energy, while failing to invest in local clean power generation and create the local jobs it promised.
The advocacy group Clean Climate described their RECs approach this way: “While RECs may offer the opportunity to own the property rights of a given amount of green energy attributes, such rights are – from the perspective of reducing emissions – worthless. Accordingly, claiming that such purchases offset carbon emissions is at best an empty boast based on ignorance, at worst a calculated and concerted greenwash effort.”
Meanwhile, the CCAs outsourced frontline, union utility and customer service jobs to poverty-wage contractors. These were family sustaining, community sustaining Bay Area jobs – the jobs of our neighbors and friends – that were thrown away. Those who ventured to point out the flaws in this approach were immediately labeled as being anti-clean energy.
CCAs are here to stay — they have become part of California’s energy community and represent a huge portion of the energy consumed by the state. But with power comes responsibility. It’s past time that they begin living up to that role, and put our shared climate goals – not themselves – first.
Tom Dalzell is the business manager of IBEW Local 1245.
