Regulatory Framework for Electric Service Providers

Part
01
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Part
01

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

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

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.

RESEARCH STRATEGY

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.
Part
02
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Part
02

Alameda Municipal Power Operation Insights

In fiscal year 2020, Alameda Municipal Power claims that its customers will save about 16% or $12 million, in total, on their utility bills, when compared to Pacific Gas & Electric customers since the former can keep rates lower than neighboring utilities due to a non-profit structure. Additional insights on the operations of Alameda Municipal Power vs. Pacific Gas & Electric are presented below.

1. Difference in Rates

  • Alameda Municipal Power guarantees that its customers will save about 16% or $12 million, in total, on their utility bills in fiscal year 2020, when compared to Pacific Gas & Electric.
  • Alameda Municipal Power can keep rates lower than neighboring utilities as it is a not-for-profit electric utility.
  • In the commercial class, the A-1 rate schedule is 15.7% less, the A-2 rate schedule is 18.9% less, and the A-3 rate schedule is 11.3% less than Pacific Gas & Electric rates.
  • In the residential class, the D-1 rate schedule is 14.9% less and the D-2 rate schedule is 31.5% less than Pacific Gas & Electric rates.

2. Sustainable Resources

  • Alameda Municipal Power will have 100% clean energy, with a mix of geothermal, hydroelectric, wind and landfill gas, starting in 2020.
  • "Alameda Municipal Power claims to be a leader in the promotion of sustainable and renewable power decades before global warming became a household term."
  • Alameda Municipal Power exceeds California’s mandated renewable portfolio requirement of 50% by 2030.
  • The renewable generation portfolio includes Western Large Hydro (18 MW), Butte Landfill (1.9 MW), Graeagle Hydro (0.4 MW), High Winds - Solano County (10 MW), Calaweras Hydro (24 MW), Santa Cruz Hydro (1.2 MW), Half Moon Bay Landfill (5.5 MW), Pittsburg Landfill (1.9 MW), Richmond Landfill (2.1 MW), and Geysers Geothermal (16 MW).

3. Awards and Recognition

  • Alameda Municipal Power's voluntary renewable energy program earned "top 10" rankings from the National Renewable Energy Laboratory in 2017 and 2018.
  • Alameda Municipal Power also earned an AA-rating from Standard & Poor in March 2019 and Fitch Ratings in February 2018.
  • The ESP has also been awarded the American Public Power Association’s (APPA) platinum Reliable Public Power Provider (RP3).

4. Local Facilities

  • Alameda Municipal Power operates on 178.1 circuit miles of underground distribution lines, 86.1 pole miles of overhead distribution lines, 6.8 miles of overhead transmission lines, and 1.9 circuit miles of underground transmission lines.
  • Among 34,790 total customer accounts served by Alameda Municipal Power, 30,625 are residential accounts and 4,153 are commercial accounts.

5. History of Operations

  • In 1887, the city of Alameda paid $20,000 for the installation of 13 streetlights and a 90-kilowatt generating station to power the town; since then, it has contributed more than $75 million to the City of Alameda’s General Fund.
  • The oldest municipal electric utility, governed by an independent public utilities board, Alameda Municipal Power was created in 1930 with a mission to provide safe, reliable, cost-effective and environmentally responsible electricity.
  • The idea was to ensure that the utility would remain under local control and generate a return to the community.

Sources
Sources