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California PUC Opens Rulemaking To Review Power Charge Indifference Adjustment (PCIA), Alternatives

Says Utilities' Portfolio Allocation Methodology Proposal Premature

PUC Proposes "Guiding Principles" For PCIA


June 30, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The California PUC has opened a rulemaking to review the current Power Charge Indifference Adjustment (PCIA) and potential changes and alternatives

The PCIA is a nonbypassable charge applied to customers leaving bundled service (such as through competitive retail supply aka direct access), intended to make utility supply customers indifferent to such migration, by having departing customers assume supply costs which the utilities ostensibly planned for and undertook to serve such departing customers when such customers were still with the utility

Topics will include:

• Improving the transparency of the existing PCIA process;

• Revising the current PCIA methodology to increase stability and certainty;

• Reviewing specific issues related to inputs and calculations for the current PCIA methodology; and

• Considering alternatives to the PCIA.

The rulemaking will consider recent legislation on the treatment of bundled retail customers of investor-owned utilities (IOUs) and customers departing IOU service made by Senate Bill 350 (De León), Stats. 2015, ch. 547 (adding Pub. Util. Code Sections 365.2 and 366.3). The utilities have said that SB 350, which became effective January 1, 2016, requires that remaining utility customers, "shall not experience any cost increase," as a result of customers departing for CCA or DA service

The rulemaking will also examine the concerns raised by several parties in other proceedings about the status of exemptions from the PCIA for customers using California Alternative Rates for Energy (CARE) and Medical Baseline rates.

Additionally, in light of the rulemaking, the PUC found that a proposal from the utilities to revise the PCIA with a new Portfolio Allocation Methodology (PAM) is premature (see discussion of the utilities' proposal here)

Parties are invited to address these proposed "guiding principles" in their comments

1. Bundled IOU customers should be neither worse off nor better off as a result of customers departing the IOU for other energy providers (“bundled customer indifference”).

2. Any methodology to ensure bundled customer indifference should be transparent and verifiable, including the most open and easily accessible treatment of input data, while maintaining confidentiality of information that should remain confidential.

3. Any methodology to ensure bundled customer indifference should have reasonably predictable outcomes that promote certainty and stability for all customers within a reasonable planning horizon.

4. Any methodology to ensure bundled customer indifference should be flexible enough to maintain its accuracy and stability if the number of departing customers changes significantly.

5. Any methodology to ensure bundled customer indifference should not create unreasonable obstacles for customers of non‑IOU energy providers.

6. Any methodology to ensure bundled customer indifference should be consistent with California energy policy goals and mandates.

R.17-06-026

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