This order resolves outstanding issues in Phase 2 of this proceeding, the purpose of which is to implement a program to permit purchases of power by Community Choice Aggregators (CCA) for local residents and businesses. This order is issued in compliance with Assembly Bill (AB) 117 (2002 Stats., ch. 838), enabling cities and counties to form CCAs.

I. Summary and Background

CCAs are governmental entities formed by cities and counties to serve the energy requirements of their local residents and businesses. The state Legislature has expressed the state's policy to permit and promote CCAs by enacting AB 117.1 AB 117 authorizes the creation of CCAs, describes essential CCA program elements, requires the state's utilities to provide certain services to CCAs, and establishes methods to protect existing utility customers from liabilities that they might otherwise incur when a portion of the utility's customers transfer their energy services to a CCA.

Cities and counties have become increasingly involved in implementing energy efficiency programs, advocating for their communities in power plant and transmission line siting cases, and developing distributed generation and renewable resource energy supplies. The CCA program takes these efforts one step further by enabling communities to purchase power on behalf of the community. Already, several cities and counties have either formed CCAs or have stated an intent to create them.²

Today's decision is the second decision issued in this proceeding to address ways to create a CCA program in compliance with AB 117. The Commission issued D.04-12-046 in Phase 1 of this proceeding that addressed rates and certain tariff and cost allocation issues. That order stated our intent to protect bundled utility customers from the possible cost impacts of CCA programs while seeking to establish reasonable costs for the utility services CCAs and their customers would require. We find that AB 117 does not confer general jurisdiction over CCAs but requires the Commission to take certain actions to protect utility bundled customers and assure reasonable service to CCAs, actions that are incidental to our regulatory oversight of public utilities.

Phase II considers the following broad issues:

1. Commission jurisdiction over CCAs and CCA programs. "Vintaging" the Cost Responsibility Surcharge (CRS). We establish a way to calculate the CRS for each generation of CCA in a way that recovers costs incurred on behalf of the CCA's customers but not more, also known as "vintaging". We adopt a calculation for each vintage of the CRS that is not controversial and do not permit the utilities to restrict a CCA's option to phase-in service to customer groups ;

2. The CCA's notification to the utility of its intent to serve customers. We adopt an "open season" and discuss other ways of notifying the utility of the CCA's intent to purchase power for local customers and committing to relieving the utility and its remaining ratepayers of liability for power costs. Generally, we find that CCAs must make a binding commitment to be assured that the utility will stop purchasing power on behalf of its customers, that the utility may not transfer its liability for load forecasting to the CCA and that we expect the utilities to work cooperatively with CCAs to minimize stranded power purchase liabilities. We also establish a collaborative process for refining departing load forecasts;

3. The regulatory process for considering CCA implementation plans and registration. Generally, we find that AB 117 does not provide us with authority to approve or reject a CCA's implementation plan or to decertify a CCA but to assure that the CCA's plans and program elements are consistent with utility tariffs and consistent with Commission rules designed to protect customers. We adopt a simple procedure for the filing of an implementation plan and a method of facilitating disputes between the utility and a CCA;

4. Customer protections. We adopt various customer protections, including how to treat service termination, partial payments and deposits, and customer notifications;

5. Implementation rules and utility services to CCAs. We adopt policies and rules for customer enrollment, scheduling coordination, call center operations, boundary meters, and customer switching,

6. Service fees for utility services to CCAs. We adopt utility charges and fees for such activities as opt-out processing, customer transfers of service, billing services, customer contacts, data processing and management, and confirmation letters to customers. Consistent with our order in Phase 1 of this proceeding, we adopt cost-based rates for services that impose costs on utilities that would not otherwise occur and which are not otherwise being recovered;

7. Ratemaking for the CARE program. We find that CCA customers should continue to receive the benefits of the CARE program and establish accounting for these subsidies;

8. Application of Renewable Portfolio Standard (RPS). We find that the Commission should decide in R.04-04-026 how to apply the RPS to CCAs.

Attachment A summarizes this order in more detail. Attachment C is a copy of relevant portions of AB 117.

This decision permits the complete implementation of the CCA program in California. We also state our commitment to refining the rules for the program as we gain experience with it.

¹Pub. Util. Code §§ 218.3, 331.1, 366.2, 381.1, and 394.25.

² AB 117 refers to "CCAs" as the legal entities that are the subjects of its provisions. For some reason, the utilities have referred to CCAs as "CCA Providers." Because that term has no relevance to the statute and is not defined either by the utilities or the statute, we do not use it here and it may not be used in tariffs.