Hundreds of thousands of electric utility customers in California are paying more than they should to cover the cost of power purchased for other customers. These extra costs are hurting low-income, minority and working families who can least afford higher bills.
Current law is supposed to prevent this from happening, but the regulatory mechanism is broken. The California Public Utilities Commission has the authority to fix this problem and has opened a formal proceeding, but it needs to act quickly.
At issue is the divvying up of costs among customers, primarily for the long-term clean energy contracts mandated by the Legislature. The state’s three major energy providers – Southern California Edison, Pacific Gas and Electric and San Diego Gas & Electric – purchased the energy for all customers they served at the time they signed the contracts.
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Since then, many customers are now receiving their power from non-utility providers, such as community choice aggregators. These entities take responsibility for purchasing power while the utility continues to maintain poles and wires, and provide customer service. When the Legislature authorized CCAs, it took steps to ensure that customers continue to pay their share of the power previously purchased by a utility on their behalf.
But the existing regulatory mechanism does not accurately allocate these costs. So some electricity customers served by CCAs are only paying 65 percent of their share of these long-term contracts, while some others are paying roughly $150 more a year than they should be paying.
The Senate Energy, Utilities and Communications Committee recently held a hearing on regulations that haven’t yet caught up with the rapid growth of CCAs. Consumer advocates, seniors, community groups, energy providers, labor and others agreed that the current rules to protect customers aren’t working.
Minority communities and working families, especially those in more economically vulnerable areas of the state, should not continue to be left behind by lapses in regulations. The PUC needs to take swift action to ensure compliance with the intent of the current law.
Dave Rodriguez is president of the California League of United Latin American Citizens. He can be contacted at email@example.com.