Mayors of SF, SJ, Oakland Oppose Commissioner’s Proposal for Energy Exit Fee

September 5, 2018 Updated: September 5, 2018

The mayors of San Francisco, San Jose, and Oakland called on the California Public Utilities Commission on Sept. 4, to reject a proposal that they claim would increase the exit fees for customers who opt to buy electricity from local governments instead of investor-owned utilities.

Mayors London Breed, Sam Liccardo, and Libby Schaaf argued in a comment letter to the commission that the proposal by Commissioner Carla Peterman would cost consumers more and hinder efforts to promote clean energy.

“This proposal makes it more expensive for San Franciscans to choose clean energy over dirty fossil fuels,” Breed said in a statement announcing the letter.

Oakland Mayor Libby Schaaf said, “This proposal would raise energy prices for all Oaklanders, but it would cost our most vulnerable customers the most.”

Peterman’s proposal and an earlier proposal by an administrative law judge that the mayors prefer are on the agenda of the commission’s Sept. 13 meeting in San Francisco and could be voted on by the agency’s five commissioners at the date.

The vote could be postponed, however; the commission announces agenda postponements the day before a meeting.

Local-government electricity providers are known as Community Choice Aggregators. They are established by cities or counties and were authorized by a 2002 state law. The local entities buy or generate electricity for participating customers, usually with the aim of providing cleaner energy or lower costs or both.

San Francisco, San Jose, and Oakland are among about 19 California cities and counties that are either operating or soon to operate such programs.

Under the law, a utility can charge departing customers for their fair share of the costs of energy generation the utility bought for customers through means such as long-term contracts or acquisition of power plants.

Such a fee is called a Power Charge Indifference Adjustment.

The issue before the CPUC is how to revise a previous formula to provide a fairer way of allocating those costs among the departing customers, remaining customers and the utilities themselves.

Peterman’s Aug. 14 proposal is an alternative to an Aug. 1 proposal prepared by Administrative Law Judge Stephen Roscow.

The mayors’ letter urges the commission to adopt Roscow’s proposal and turn down Peterman’s.

They wrote, “We believe (Roscow’s) proposed decision is balanced for all parties, encouraging the investor-owned utilities to prudently manage their existing resources and plan future procurement for the benefit of all ratepayers, while allowing the Community Choice Aggregators to continue to grow and develop innovative local energy programs.”

A San Francisco-based consumer group, The Utility Reform Network, took a different position, telling the commission in an Aug. 21 filing that it considered Peterman’s proposal to be fairer to remaining utility customers.

By Julia Cheever