PG&E, other energy companies propose changing cost allocation with local energy providers

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PG&E and other major California energy companies have proposed a new method to allocate long-term energy contract costs that could affect whether consumers choose to purchase energy from major or local providers, as first reported by the East Bay Times.

This proposal was submitted to the California Public Utilities Commission, or CPUC, and calls for local energy providers or community choice aggregation programs, or CCAs, to share more of the long-term infrastructure and contract costs that major energy providers currently cover. According to a San Diego Gas & Electric press release, a new system is essential to ensure long-term feasibility of customer choice energy programs in California.

“This proposal is a better system ensuring that customers pay for what they get and get what they paid for,” said Donald Cutler, a PG&E spokesperson.

Under the current system, PG&E covers 35 percent of the contract and infrastructure costs for CCAs, Cutler said. He added that PG&E compensates by charging their customers higher rates, with an additional $180 million in costs being incurred by PG&E customers. Cutler stressed this proposal ensures equal treatment of all customers.

Cutler noted he expects the proposal to take a long time to pass, as the timeline for when this proposal will go into effect is entirely up to the CPUC. Cutler said PG&E and other major energy providers are working with CCAs and CPUC parties to look for solutions that benefit all customers.

“Our customers work hard for their income and we’re working just as hard to keep them in control of how they want to spend it,” said Emily Shults, vice president of energy procurement for San Diego Gas & Electric, in a press release. “Our proposal ensures that all Californians receive the clean energy future they expect and deserve.”

Alan Suleiman, a spokesperson for Silicon Valley Clean Energy, said he disagreed that CCAs are causing prices for customers at major energy companies to go up. Suleiman said his company pays high costs to ensure that major energy provider customers are not negatively affected by those moving to CCAs.

He added that customers enrolled at their agency pay less for their services and receive carbon-free energy.

According to Suleiman, a local energy provider in the East Bay will be emerging soon and customers living in the East Bay will soon have a choice of their energy provider.
“CCAs bring local control to the area they are serving and provide a choice to customers,” Suleiman said. “They create more ways to help customers locally and … respond to the needs of the community.”

Contact Ananya Sreekanth at [email protected] and follow her on Twitter at @asreekanth_dc.