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Growth of Customer Supply Options to Be Examined at Upcoming San Francisco Conference
In the late 1990s, California restructured its electric industry, allowing customers to choose their power supplier. But in the early 2000s, the restructured market collapsed, and the California legislature reconfigured the large investor-owned utilities (IOUs) as the dominant providers of retail electric service. Fast forward nearly 20 years, customers are moving toward procuring power under a variety of programs that don’t include traditional regulated retail supply.
CalCCA, a trade association for community choice aggregation (CCA), anticipates that there will be over 32,000 GWh of customer load enrolled in CCA programs by the end of 2018. This capacity represents nearly 20% of the California IOU customer load of 160,000 GWh, with over 2 GW of utility-scale solar and wind under CCA contracts. Further, as of June 2018, per the California Public Utilities Commission (CPUC), California customers are now receiving power from 6,746 MW of rooftop solar PV. And under California’s Direct Access program, customers already procure nearly 24,000 GWh of electricity from registered electric service providers.
On another policy front, distributed energy resources (DER) in California have grown impressively over the last 4 years, led by the customers’ need for cleaner, more reliable, and affordable wholesale electricity, as shown in the table below:
The Growth of DER in California
(Source: California Energy Commission)
Looking at the evolution of these programs, one can certainly understand the viewpoint shared by California Public Utilities Commission (CPUC) President Michael Picker. In a recent brief, California Customer Choice: An Evaluation of the Regulatory Framework Options for an Evolving Electricity Market (known as the Choice Paper), Picker highlighted that, while California had a plan (however flawed) in the previous restructuring effort, now California is operating outside of any plan—deregulating electric markets through dozens of different decisions and legislative actions.
The Choice Paper highlights the following key questions:
- How does the CPUC protect safe delivery of electricity to meet customer demand in an increasingly fragmented market?
- How will the CPUC ensure that increasing fragmentation of suppliers and buyers will add up to meet California’s ambitious clean energy goals?
- How will the CPUC make sure that different players are meeting their responsibilities to provide all the energy resources needed to make the grid work?
- How will the CPUC protect customers from the unfair practices seen in other deregulation efforts?
- What preparations should the CPUC make for customers who might become stranded without service if their electric provider fails?
- What is the best way for a fair, affordable, and durable transition?
There are key challenges ahead for the California legislature, the CPUC, the California Energy Commission, and the California Independent System Operator. Challenges include meeting customer needs for cleaner, more reliable, and affordable wholesale electricity across the growth of CCA, and these will be examined at the Infocast Community Choice Energy Summit in San Francisco from November 28-30, 2018. Navigant attendees at this conference will include William Tokash, Andrea Romano, and Trina Horner.