California Public Utility Commission (CPUC) staff have estimated that “more than 80% of California’s investor-owned utility (IOU) customers will get their electricity from alternative sources by 2025, and at least 30% will have done so by the end of this year.” Among alternative electricity supply options, Community Choice Aggregators (CCAs) are proving exceptionally popular, with growth outpacing expectations. Local governments and municipalities in California are increasingly using CCAs to achieve more control over electricity supplies, driven by the desires of many citizens for cleaner, cheaper sources of electricity and CCAs’ focus on renewable energy supply options.
The implications of large portions of customers migrating from IOUs to alternative providers, which in practice somewhat resembles retail-choice or municipalization, are only beginning to be fully understood. Cost sharing between IOUs and CCAs and recovery of power supply costs that IOUs contend is stranded are of particular concern. Policies and methodologies are still being refined to ensure that stranded resource costs, including some in rate base, are shared fairly and equitably among departing customers and remaining bundled customers. The CPUC further held a joint en banc session on “The Changing Nature of Consumer and Retail Choice” in the state on May 19 to solicit additional input from utilities, regulators, and other stakeholders. As long as the regulatory, economic, and technological environment continue to favor CCAs, migration may continue, assuming no unforeseen challenges.
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Additional Contributing Authors: Rizwan Aslam, Quentin Watkins
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