California Public Utility Commission Insights
California Public Utility Commission's regulatory framework has developed guidelines for the Direct Access (DA) of electricity by consumers through independent electric service providers. Its key regulations cover retail customer restrictions, customer load service caps, notification on ESP sign-up, territory DA load cap restrictions, and user agreements.
ESP RETAIL CUSTOMER RESTRICTIONS
- On 20 September 2001, the California Public Utility Commission suspended enrollment of residential and nonresidential customers to purchase electricity from an ESP.
- In 2010, the California Public Utility Commission in decision D.10-03-022 implemented Senate Bill 695 that allowed nonresidential customers to access Direct Access. Residential customers not enrolled before the 2001 DA suspension are restricted from enrolling for ESP.
- Regulatory gap: Some residential customers still able to access ESP whereas others cannot access it.
MAXIMUM DA LOAD SERVICE CAP
- On the suspension of the DA service restrictions, ESPs' customer load service was capped at 9 to 17% of total IOU load, which was the maximum allowable amount of ESP investor-owned utility load before the 2001 passage of ABx1 that had ranged from 9 to 17% of total IOU load.
- Regulatory gap: Whereas the current maximum DA Load service caps are in line with the 2001 passage of ABx1, the caps do not take into consideration the increase in demand for renewable energy by customers that have contributed to an increase in DA demand since 2001 potentially beyond maximum limits.
TERRITORY DA LOAD SERVICE CAP
- According to the California Public Utility Commission, California's three utility territories have different DA load cap restrictions. Within the Pacific Gas & Electric territory, the DA load cap increased from 5,574 GWh in November 2009 to the maximum allowable DA of 9,520 GWh total cap in November 2013.
- Regulatory gap: ESPs bypass territory load cap restrictions by operating in more than one territory. Currently, ESPs operating in California have operational licenses in all three territories (Pacific Gas & Electric, San Diego Gas & Electric, and Southern California Edison)
NOTIFICATION ON ESP SIGN UP
- Nonresidential customers seeking to sign up for Direct Access have to inform their utility six months in advance. The notification form is available on the utility web page.
- Regulatory gap: Pursuant to California Public Utility Commission regulations decision D.12-12-026, customers applying for ESP access will not join on a first come first serve basis but rather will be accepted on a lottery system. As such, customers face the regulation limits in informing their utility six months in advance yet they may not get approved in the lottery.
ESP USER AGREEMENTS
- The California Public Utility Commission regulations mandate that customers receive on joining an ESP supply. Accordingly, customers have to be issued with a Section 394.5 Notice of Terms and Conditions. The notice provides price, terms, and conditions of ESP service before customer sign-up.
- Regulatory gap: According to the California Public Utility Commission decision no. (D.)99-05-034 and (D.)98-03-072. In (D.)03-12-015, residential and small commercial should have a maximum peak demand of fewer than 20 KWh, which is not indicated the Section 394.5 Notice of Terms and Conditions.
In order to determine insights on the regulatory framework of the California Public Utility Commission with regard to being an independent electric service provider, your research team focused our research on credible sources. In determining credible sources similar to Pacific Gas & Electric, we sought to identify organizations of similar stature. In this regard, we identified the two other utilities in California and their overall regulatory body, California Public Utility Commission, as information sources for this research. Importantly, your research team sought to identify regulatory gaps and operational constraints of the identified insights.