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GreentechMedia: How a New California Law Will Expand the State’s Competitive Energy Market

Posted by Jeff St. John on Oct 3, 2018

This GreentechMedia piece examines what SB 237 means for the future of Direct Access in California for commercial and institutional customers as well as regulators. AEE’s perspective is included, quoting both Amisha Rai, senior director of California policy and Caitlin Marquis, federal and state policy manager on how the bill evolved, its impact, and implications for the next Calif. Governor. Link to the full article here.

Excerpts below:

California has put multiple major energy policies into law this year: SB 100 and its new 100 percent clean energy mandate, SB 700 and its extension of behind-the-meter energy storage incentives, and wildfire utility relief bill AB 901. So it was easy to overlook another piece of legislation, signed into law last week, that will expand the state’s competitive energy market, known as direct access. 

To be sure, SB 237 only slightly increases the cap in place since the state’s 2001 energy crisis on how much energy big commercial, industrial, government or institutional customers can buy from competitive energy providers, instead of their local investor-owned utility. 

But it also sets a course for the California Public Utilities Commission (CPUC) to start a proceeding on whether to expand the direct access program. This will bring it under the direct focus of regulators like CPUC President Michael Picker, who has identified direct access (DA), along with the burgeoning community-choice aggregation (CCA) movement, as key challenges facing the state…

“Direct access really gives our customers both access and control over their energy choices,” said Caitlin Marquis, federal and state policy manager for Advanced Energy Economy (AEE), which represents major corporations and energy companies. “Whether that’s renewable energy, energy storage or other pieces, every customer is different, and direct access gives them the flexibility to meet their goals on their own timeframe. That’s the primary appeal.”…

Most critically, investor-owned utilities have opposed DA and CCA expansion in the past didn’t put their lobbying energy behind opposing SB 237 this year, said Amisha Rai, AEE’s senior director of California policy. “The utilities had their eye on wildfires, wildfires, wildfires, so they were not weighing in on this bill,” she said. “That’s a change — in previous years, this was a very difficult conversation to have with IOUs.”   

“The constraints on DA in California stem from historic concerns around the energy crisis,” Rai noted. The program was suspended in 2001, and was only reopened on a limited basis with the 2009 passage of SB 695. “There’s always been concern at the Capitol and amongst the regulatory community that there have to be some restraints on DA, and if it’s opened, it has to be narrow and measured…”

The more lasting effect of SB 237 will be its directive to the CPUC to submit to the legislature by July 2020 a report on whether it should consider a reopening of the DA program, she said. That’s where the potential conflict between expanding DA, maintaining a reliable and financially stable utility sector, and meeting the state’s wide-ranging energy and environmental policies will come into play, according to Rai. 

ESPs already have to comply with the state’s renewable portfolio standard, which has now been boosted to 60 percent by 2030 under SB 100, Marquis noted. The companies making up AEE’s membership are interested in DA largely to seek out competitive offers that can increase their share of renewable and low-carbon energy, and “there are definitely companies that are using direct access to sign long-term renewable contracts and to make purchases like that through direct access.”…

SB 237 sets several additional requirements for the CPUC to consider in making its recommendations on reopening DA. Those include assuring that it’s consistent with the state’s greenhouse gas emission reduction goals, doesn’t increase air pollution, ensures electric system reliability, and doesn’t cause undue shifting of costs to “bundled service customers,” or those customers who remain with investor-owned utilities. 

These are the same concerns that CPUC President Picker has expressed about CCAs, which along with DA are expected to serve a stunning 80 percent of the state’s load by 2030, according to CPUC projections. As Rai noted, AEE’s members “do business with [investor-owned utilities], they do business with CCAs. We don’t have a ball in either court. But it’s our job to figure out how this will all work, and how it fits into our members’ energy futures.”…

 See the complete GreentechMedia story here.




Topics: AEE In The News