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On May 19, 2017, the California Public Utilities Commission (“CPUC”) and the California Energy Commission (“CEC”) will hold a joint en banc hearing to discuss the changing state of retail electric choice in California, including non-traditional electricity services such as Community Choice Aggregators (“CCAs”).

According to the CPUC and the CEC, by the end of 2017, thirty to forty percent of California’s investor-owned electric utility customers will be receiving some type of electricity service from an alternative source and/or provider, such as CCAs. These trends prompted both commissions to identify and understand the challenges and opportunities that lie ahead for California as a result of this market change.

In 2002, the California legislature passed AB 117 allowing all cities, counties, or groups of cities and counties to provide an electric power supply source to customers within their jurisdictions that are currently served by the three California investor-owned utilities (“IOUs”), namely Pacific Gas and Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company.

A CCA is a customer opt-out program in which the CCA provides power supply and behind the meter services to retail customers, whereas the incumbent IOUs continue to provide transmission and distribution service. Under the California community choice model, local governments can form energy agencies that buy electricity from sources other than the incumbent utilities and use that electricity to provide retail service. The benefits of such a model include, increasing competition and consumer choice, lower retail rates, use of tax-exempt financing, a higher mix of renewable energy, or simply local control.

To date, five CCAs are already in operation in California: 1) Marin Clean Energy; 2) Sonoma Clean Power; 3) Lancaster Choice Energy; 4) Clean Power San Francisco; and 5) San Mateo County. More jurisdictions are in the process of launching CCAs in 2017, such as Silicon Valley Clean Energy and Apple Valley Choice Energy.

The CPUC and CEC’s news release regarding the en banc hearing is available here.

Further information on CCAs is available here.