Community Choice Aggregation and Direct Access
Retail choice allows customers the option to select a different provider than their electric utility to provide their generation, while the IOU would continue to provide delivery services along their transmission and distribution lines. By having options for their energy provider, customers can have pricing and renewable/green choices for the electricity they consume.
There are two types of retail choice: Community Choice Aggregation and Direct Access
Community Choice Aggregation (CCA )
Community Choice Aggregation allows cities, towns, and counties to become the default energy provider for customers in their jurisdictions. A CCA can be a single jurisdictional entity such as a city or town, or it may be a collection of cities and counties joined together as its own jurisdictional entity called a Joint Powers Agency (JPA). Customers have the choice to opt out of the CCA as their provider and remain/return to the IOU.
Direct Access provides retail choice to customers by allowing them to purchase electricity directly from an Electric Service Provider (ESP) while the IOUs continue to supply the transmission and distribution services needed to transport power to the customer.
Direct Access is available only to non-residential customers and registration is limited to a load cap. Customers interested in joining an ESP must register in the lottery wait list process with their utility.
Key Proceedings for Community Choice Aggregation and Retail Choice
Power Charge Indifference Adjustment (PCIA)
The Power Charge Indifference Adjustment (PCIA) is a charge to ensure that both utility customers and those who have left [utility] service to purchase electricity from other providers pay the above market costs for generation resources that were procured by the utility on their behalf. “Above market” refers to expenditures for electric generation resources that cannot be fully recovered through sales of these resources at current market prices. “Above market” refers to the difference between what the utility pays for electric generation and current market prices for the sale of those resources.
Since the IOUs need to plan their energy requirements years in advance, they will have contracted out for future energy supply to supply their expected customer’s needs energy When those customers leave for a CCA or an ESP IOUs still have generation costs of contracted energy purchased on their behalf. In order to prevent the shifting of these costs, retail choice customers must pay a Power Charge Indifference Adjustment (PCIA).
For more information see: PCIA website
Provider of Last Resort (POLR)
If a CCA or an ESP were to fail to provide for it's customers the IOUs are then responsible to continue to service as the Providers of Last Resort (POLR). SB 520 ordered the CPUC to set requirements for the POLR. R.21-003-011 is the current POLR rulemaking to insure cost recovery and reliability for the POLR. The potential adoption of third-party POLRs will be considered at a later date as part of the same rulemaking.
For more information see: POLR page
- California Customer Choice - An Evaluation of Regulatory Framework Option for an Evolving Electricity Market (2018)