Power Charge Indifference Adjustment (PCIA)
Power Charge Indifference Adjustment
The purpose of the PCIA is to hold remaining customers indifferent to the load departure while also ensuring that departed load pays for or benefits from the value of the resource portfolio that was built or contracted for prior to the load departure. The PCIA calculation was originally established in D.11-12-018, pursuant to Public Utilities Code Section 366.2, which requires the Commission to ensure indifference between load that departs and remains with customer service.
The PCIA is the amount by which IOU bundled customers are held indifferent to the energy power costs after load departs from bundled service. The PCIA calculates the above (or below) market costs, which is equivalent to an IOU’s total PCIA eligible portfolio costs minus the portfolio’s market value in a given year. A positive PCIA value translates into a charge to departed load, whereas a negative PCIA value translates into a credit to departed load. The MPBs were defined in D.18-10-019 and refined by multiple decisions, most recently in D.25-06-049.
Figure 1. Calculation of PCIA
|
PCIA Eligible Portfolio Cost minus |
Portfolio’s Market Value equals |
Power Charge Indifference Amount (PCIA) Revenue Requirement |
|
Contracted or Built Resources that represent procurement commitments prior to load departure |
Calculation using Market Price Benchmark based on Commission adopted methodology looking at recent market transactions |
A bill credit or bill charge to departed load based on the vintage (year) of departure |
True Up and Forecast Market Price Benchmark
Investor-owned utilities (IOU) utilize the PCIA computations for the Power Charge Indifference Adjustment (PCIA) Forecast and True Up for their Energy Resource Recovery Account (ERRA) Forecast Updates in early October, as per Energy Division Decision (D.) 22-01-023. PCIA computations include the Resource Adequacy (RA) Adder, Energy Index, and Renewable Portfolio Standard (RPS) Adder, as specified by D.18-10-019 and amended by D.19-10-001, D.22-01-023, D.23-06-006, and D.25-06-049. D.22-01-023 and D.23-06-006 direct the Energy Division to calculate and distribute these data by the first business day of October.
Calculation of the Market Price Benchmarks for the PCIA Forecast and True Up
- October 1, 2025 (.pdf format)
Calculations from 2024
- October 2, 2024 (.pdf format). Document issues the values for the Power Charge Indifference Adjustment (PCIA) Forecast and True Up that investor-owned utilities will use for their 2025 Energy Resource Recovery Account (ERRA),
- October 4, 2024 (.pdf format). Document includes additional information regarding system, flex, and local resource adequacy transaction volumes for transparency purposes. RA transaction volumes are also provided by month for informational purposes.
- October 11, 2024 Errata (.pdf format). Document corrects the RPS Adder for the 2024 and 2025 Final Market Price Benchmarks.
- November 5, 2024 Revised (.pdf format). Document corrects errors and omissions in the Market Price Benchmarks (MPB) for the Calculation of the Market Price Benchmarks for the PCIA Forecast and True Up issued on October 4, 2024.
Previous Years: 2024 | 2023 | 2022 | 2021 | 2020 | 2019
Current PCIA Regulatory Activity
- D.25-06-049 Decision Adopting Changes to the Calculation of the Resource Adequacy Market Price Benchmark, modified the RA MPB methodology adopted in D.19-10-001 to require the calculation of a single unified RA MPB rather than calculate separate system, local, and flexible RA values. The methodology also now requires the use of three years of data to calculate the forecast RA MPB and four years of data to calculate the final RA MPB
Previous PCIA rulemaking R.17-06-026.
- D.18-10-019, Modifying the Power Charge Indifference Adjustment Methodology, outlines the current calculations required for the PCIA charge. D.19-04-003 corrects an error in D.18-10-09.
- D.19-10-001, Refining the Method to Develop and True Up Market Price Benchmarks, further refines the calculations developed in the D.18-10-019.
- D.20-08-004, Adopting a Framework and Evaluation Criteria for the Power Charge Indifference Adjustment Prepayment Agreements, which provided a methodology in which a CCA on behalf of their customers or a DA customer could pre-pay their PCIA obligations as opposed to an ongoing obligation
- D.21-05-030, Phase 2 Decision on Power Charge Indifference Adjustment Cap and Portfolio Optimization, removes the cap on PCIA changes between years and adopts a Voluntary Allocation and Market Offer (VAMO) process for optimizing the IOUs’ Renewable Portfolio Standard portfolios.
- D.22-01-023, Decision Resolving Phase 2 Issues Related to Energy Resources Recovery Account Proceedings, revised the dates for ERRA Forecast Application filings and Market Price Benchmark calculations, resolved certain questions regarding treatment of PABA and ERRA balances, and directed greater consistency in the IOUs’ Master Data Requests and confidentiality designations.
- D.22-07-008, Decision Resolving Phase 2 Issues Related to Data Access and Voluntary Allocations in Market Price Benchmark Calculations, expanded CCA reviewing representatives’ access to confidential data for the purpose of forecasting PCIA changes. Separately, the Decision also clarified that Voluntary Allocations of the IOUs’ RPS portfolios will not be included in RPS Market Price Benchmark calculations.