Utility "Neutrality" toward Community Choice:
Background November 20, 2015, San Diego Gas and Electric (SDGE) put San Diego on notice that they intended to up-end the playing field under community choice. See coverage by KPBS and UT here.
Per an "Advice Letter" (AL 2822-E) with the California Public Utilities Commission (CPUC), SDGE stated its intent to create an "independent marketing division" (IMD) to address community choice programs. The objective: "to ensure that the ongoing dialogue on issues key to the future of the energy industry is able to benefit from a full range of expert input."
Per law (SB 790), SDGE must file a Plan when it "... wishes to engage in activity that could be deemed to constitute lobbying or marketing activity against any community choice aggregation program."
The intent was clear. SDGE and parent Sempra Energy want to tell their side of the CCA discussion. By forming an IMD, SDGE and Sempra are stating that they will no longer remain within the boundaries of "factual and neutral".
December was Round One. SDED and many others filed Protest Letters in December. CPUC took the 120-180 days allotted look into the matter. The result: a Draft Resolution proposing to approve SDGE/Sempra's IMD.
Round Two is NOW.
Ancient History When CCA first passed in 2002, there were no restrictions on utility action. No surprise, then, that no CCA formed for six years, until Marin Clean Energy in 2008.
In 2010, PG&E sponsored Proposition 16. Prop 16 required a 2/3 'supermajority' for a jurisdictional vote to enact Community Choice. PG&E spent over $48M yet Prop 16 lost by a decisive 5-point margin. Thanks to the statewide campaign mounted by thousands of volunteers, advocates and organizations for about $100,000.
Prop 16 convinced the Assembly that IOUs can and do exercise undue "market power" on CCA formation. The result: SB 790 (2011) to require a Code of Conduct for IOU activities concerning community choice programs. The Code says:
Legislative Intent - as expressed in
Senate Bill 790, Introduction
(a) It is the policy of the state to provide for the consideration, formation, and implementation of community choice aggregation programs authorized in Section 366.2 of the Public Utilities Code.
(b) Since community choice aggregation programs were first authorized in 2002, only one community choice aggregation program has been implemented.
(c) Electrical corporations have inherent market power derived from, among other things, name recognition among customers, longstanding relationships with customers, joint control over regulated operations and competitive generation services, access to competitive customer information, and the potential to cross-subsidize competitive generation services.
(d) The Public Utilities Commission has found that conduct by electrical corporations to oppose community choice aggregation programs has had the effect of causing community choice aggregation programs to be abandoned.
(e) The Public Utilities Commission has made considerable progress in identifying and addressing the conduct that has hindered the creation of community choice aggregation programs, and it is now appropriate to further address these issues in statute.
(f) The exercise of market power by electrical corporations is a deterrent to the consideration, development, and implementation of community choice aggregation programs.
(g) California has a substantial governmental interest in ensuring that conduct by electrical corporations does not threaten the consideration, development, and implementation of community choice aggregation programs.
(h) It is therefore necessary to establish a code of conduct, associated rules, and enforcement procedures, applicable to electrical corporations in order to facilitate the consideration, development, and implementation of community choice aggregation programs, to foster fair competition, and to protect against cross-subsidization by ratepayers.