By Karen Villasenor.
Community Choice Aggregation (CCA) programs will remain unaffected following the California legislative session closure on Friday, September 15. The 2017 legislative session’s most disadvantageous bills for CCAs, AB 726 and AB 813, will not be advancing during this legislative session.
“The California Choice Energy Authority monitored approximately 20 bills that could have affected CCAs, but we were primarily concerned with AB 726 and AB 813,” said City of Lancaster Mayor and California Choice Energy Authority Board Member R. Rex Parris. “Under AB 726 and AB 813, operating CCAs and CCAs with a certified implementation plan would have had to undergo some troublesome changes, and a variety of early-stage CCA initiatives developing throughout California would have been discontinued altogether.”
Amendments in AB 726 and AB 813 (Holden – D) would have put CCA program expansion on hold by prohibiting local governments with CCA initiatives to make independent decisions about renewable energy procurement unless the California Public Utilities Commission (CPUC) had certified their implementation plans prior to September 1.
“To develop and submit an implementation plan to the CPUC, local governments must first complete a technical study to determine the CCA’s feasibility. Once submitted, the CPUC has 90 days to certify the implementation plan. The process requires time, and it’s likely that most emerging CCAs in California would have been unable to certify their implementation plans prior to the deadline mandated in the bills,” added Mayor Parris.
Initially, AB 726 and AB 813 were intended to authorize California’s main grid authority, the California Independent System Operation (CAISO), to adopt a governance structure with a fully independent board rather than a governor-appointed board. Under a fully independent board, CAISO would have a greater opportunity to proceed with market regionalization throughout the Western United States.
“The bills’ initial intent to adjust CAISO’s governance structure and facilitate the organization’s expansion throughout the Western market was not necessarily an issue for CCAs,” said Mark Bozigian, City of Lancaster City Manager and Lancaster Choice Energy executive. “CAISO regionalization has been a thought in Sacramento for a while, so the idea has been on our radar. Our concerns were due to the amendments that were made to the bills. They would have been detrimental to CCA program operation.”
Amendments in AB 726 and AB 813 also would have required investor-owned utilities (IOUs) to take advantage of soon-to-expire federal tax credits by purchasing additional renewable energy by the end of 2018. The amount of renewable energy required to be purchased would exceed the amount currently mandated by state law and would be determined by the CPUC. If IOUs were to purchase additional renewable energy, the cost would end up being shared with the IOUs’ customers. This was a key concern for CCAs because those costs would also follow CCA customers through an exit fee, a monthly fee CCA customers are required to pay to the IOU from which they depart.
“Additional renewable energy procurement would have made CCA customers’ exit fees skyrocket,” added Bozigian.
Assemblymember Chris Holden states that the bills will be revisited next year. CCEA will continue to monitor legislation concerning CCA programs.