California CCA data

Author:

 

Publication August 9, 2018

Community choice aggregators in California bought 57.1% more electricity from wholesale suppliers in the first quarter of 2018 compared to the same period in 2017, according to an S&P Global Platts analysis of filings with the Federal Energy Regulatory Commission.

CCAs are county-level entities that buy electricity and supply it to county residents.

The FERC data covers power sales by 20 power suppliers to 10 CCAs. A year ago, FERC filings showed only 13 power suppliers and five CCAs.

Silicon Valley Clean Energy was the biggest purchaser, accounting for 39% of total purchases. Marin Clean Energy was second at 15.9%.

Exelon was the biggest supplier, accounting for 36.5% of total sales. It sold power to seven of the 10 CCAs.

Six new CCAs have launched this year, bringing the total number in California to 18. The staff of the California Public Utilities Commission estimates that as much as 25% of the electricity load in California will have shifted to CCAs and other suppliers by the end of this year, increasing to as much as 85% by the mid-2020s.

Meanwhile, the utilities commission has been wrestling with what exit charges to require customers who abandon the regulated utilities to pay to help cover the cost of stranded assets that the utilities are left holding.

A final decision is expected in September. The CCAs will be permitted to prepay the exit charges on behalf of their customers on a one-time basis in order to be relieved of the burden going forward.

Deanne Barrow, a Norton Rose Fulbright lawyer in Washington who follows the CCAs, said that lenders and investors in private power projects that have power contracts to sell electricity to CCAs are aware of the risk that the exit charges could drive customers back to the regulated utilities.

While the commission’s recommendations appear favorable to the CCAs, there is more to come. The commission will now turn to considering longer-term solutions to redistribute excess power supply held by the utilities. Several proposals are on the table, including allowing the utilities to securitize or borrow against a special rate component that would be added to utility bills and then use the borrowed funds to buy down the electricity prices in contracts with independent generators. These contracts would then be auctioned to CCAs.


Practice area:

Industry:

Recent publications

Subscribe and stay up to date with the latest legal news, information and events...