Commission Approves Significant Increase to PCIA

Published On: March 3, 2020

The California Public Utilities Commission (CPUC) unanimously approved an increase to the exit fees that community choice aggregators (CCA) must pay to leave PG&E. The 5-0 vote was taken on February 27 with no discussion. Community choice organizations whose customers left PG&E to join CCA programs in 2017 and 2018 will see about a 60% increase in their Power Charge Indifferent Adjustment (PCIA).

The CCA Association released a statement in reaction to the decision. “We are very concerned about the volatility of the PCIA and will continue to advocate for solutions that provide more stability and minimize impacts to ratepayers.”

The fee will not be charged all at once. In the short term, it is likely to be closer to a 19% increase, thanks to a temporary cap. The balance of this new fee is set aside, accumulating interest, and is due after the cap expires later this year.

Prior to the vote, the PCIA fee was 2.67 cents per kilowatt-hour (kWh). For “vintage” 2017 and 2018 customers, the new decision adds around 1.7 cents per kWh, totaling approximately 4.4 cents per kWh. But the temporary cap on the PCIA limits increases to .05 cents a kWh. In the short term, the capped cost to certain CCAs is around 3.17 cents per kWh, representing roughly a 19% rise in the exit fee for 2020.

How the increased exit fee will be covered by the impacted CCA programs––whether it will be absorbed, added to utility bills, or a mix of the two—remains to be seen. However, it may impact how much money they have on hand to buy new power. The other challenge for CCAs will be maintaining any cost savings versus current and future PG&E rates.

About the Author: Jesus Arredondo

Jesus Arredondo is an Energy Industry Analyst and former State of California official. He can be reached at jesus at govreport.org