California utilities propose update to Power Charge Indifference Adjustment framework

Pacific Gas and Electric Company (PG&E), Southern California Edison and San Diego Gas & Electric proposed this week a new plan to replace the Power Charge Indifference Adjustment (PCIA) framework.

The proposal, PG&E said, offers a replacement for the Power Charge Indifference Adjustment (PCIA) framework, supports continued Community Choice Aggregation (CCA) growth and ensures equity among all customers.

“We can achieve the state’s clean energy goals while also supporting customer choice and treating all customers fairly and equally,” Steve Malnight, senior vice president of Strategy and Policy for PG&E, said.

CCAs allow cities and counties to purchase or generate electricity for their residents and businesses. Customers can also choose to receive their electricity from other third-party suppliers called Energy Service Providers (ESPs).

Communities that implement CCA programs or customers that choose ESPs are responsible for the PCIA charge associated with energy resources procured on their behalf. Utilities do not make money from PCIAs. The PCIA charge is designed to ensure that all customers are treated equally and do not pay for other customers’ share of costs.

“However, the current PCIA formula has become unbalanced over time due to the growth of CCAs,” PG&E said.

In 2017, according to PG&E, CCA customers only paid approximately 65 percent of the costs associated with the energy resources procured on their behalf, which caused customers who were not part of a CCA to pay approximately $180 million to subsidize CCA customers.