By Hudson Sangree
A California State Senate hearing illustrated the rift over community choice aggregators, with some lawmakers warning of blackouts and one lashing the top state regulator for his alleged “hostility” toward the groups.
“Frankly, with all respect, Mr. Picker, your comments here today further bolster my belief that I don’t want to see the CPUC having a greater role [regulating CCAs],” Sen. Scott Wiener told Public Utilities Commission President Michael Picker at the March 19 hearing of the Energy, Utilities and Communications Committee. “I think the CPUC would pretty quickly move to kill off CCAs. I’m just being super blunt.”
Wiener said he thought the PUC was attempting to “double down on this hyper-centralized model that has not worked well for California” and had displayed hostility toward CCAs and distributed energy resources such as solar power.
The San Francisco Democrat next took aim at Picker’s testimony in a recent State Assembly hearing, where he said the commission had received 11 resource adequacy (RA) waiver requests last year from CCAs and electricity service providers (ESPs), when in fact 10 of the waivers were from ESPs, which provide electricity directly to commercial and industrial customers, and another was from one of the state’s large investor-owned utilities. (See Calif. CCAs, Decarbonization Provide Reliability Challenges.)
Picker responded during the testy exchange with Wiener by saying, “I will apologize for the way I characterized the problem, but I will not say there’s not a problem.”
During his Senate testimony, and in his earlier Assembly testimony, Picker expressed concern that CCAs may be unable to meet the state’s local RA requirements. Some serve areas with limited transmission capacity to import electricity, he said, and might not be able to compete for electricity from generators within their load pockets during times of high demand.
Picker said it may be necessary to designate an entity to serve as a central buyer of electricity to backstop CCAs and other load-serving entities. That entity could be an IOU, such as Southern California Edison, or an independent agency created by lawmakers. A bill, AB 56, to establish a central procurement entity was introduced in December.
Picker’s sentiments were echoed by several lawmakers who expressed concerns about a repeat of the state’s 2000/01 energy crisis, when rolling blackouts afflicted California.
Sen. Robert Hertzberg (D) this year introduced a bill, SB 520, that would authorize the PUC to develop threshold attributes for an LSE to serve as a provider of last resort if other LSEs fail to deliver electricity to retail customers. It would also instruct the commission to develop a method, such as an auction, for selecting the provider of last resort and to determine how that entity would benefit from its role.
“If the perfect storm happens, there has to be a backup plan,” Hertzberg told the committee.
The state’s IOUs are currently the de facto providers of last resort, but as customers migrate away from IOUs and the utilities become poles-and-wires companies, they may be unable to fulfill that function, he said.
Hertzberg, a veteran state lawmaker who served as Assembly speaker during the energy crisis, said lawmakers created CCAs in the early 2000s as an interim step to deliver renewable energy to local communities.
The state’s first, Marin Clean Energy, launched in 2010. There are now 19 CCAs, primarily in wealthy coastal California, with a dozen more under consideration by city and county governments statewide. CCAs are expected to serve more than 10 million customers, or about a quarter of California’s population, this year, according to the California Community Choice Association.
Hertzberg said the shift away from IOUs, the proliferation of renewable energy and other seismic shifts represent a “new world order” in terms of electricity delivery and reliability that still must be sorted out by policymakers.
“They’ll continue to survive,” Hertzberg said of CCAs, “but I think we’re all in for a significant change to make sure we have reliability for the people of California.”