One week after a state commission dealt a financial blow to clean energy programs, city officials are weighing options including a possible appeal of the decision or subsidies of expected new costs for consumers.
“At this point, all options are on the table,” Michael Hyams, director of CleanPowerSF, said at a Local Agency Formation Commission meeting on Friday.
Run by the San Francisco Public Utilities Commission, CleanPowerSF has provided customers with electricity from renewable sources since 2016 as an alternative to purchasing electricity from PG&E.
But the California Public Utilities Commission voted unanimously on Oct. 11 to change a key formula that determines how much utilities can charge customers who buy electricity through such alternative programs. Those fees, called Power Charge Indifference Adjustments, are often referred to as “exit fees.”
“With this decision, we expect the PCIA will have increased by more than 200 percent since San Francisco committed to beginning [CleanPowerSF] service in 2015,” Hyams said.
Current estimates are CleanPowerSF customers will collectively pay somewhere between $40 and $50 million more per year, Hyams said, but exact figures would not be available until the CPUC sets rates next month. The updated fees are expected to take effect on Jan. 1.
One possibility is for CleanPowerSF to absorb the additional costs, but doing so would be a substantial financial obligation.
“That’s equivalent to about 25 percent of our forecasted revenue,” he said. “So it’s a big, big chunk.”
The city could also appeal the ruling, or even sue.
“There is a re-hearing process at CPUC that would go before the CPUC initially,” Hyams said. “That would go through a CPUC process that could take several months.
“Depending on the outcome…the next step would be to take it to the courts,” he said.
State legislation could also be passed to more strictly define how PCIA fees may be structured, Hyams said.
The four commissioners were visibly unhappy with the CPUC decision and the impact it may have on CleanPowerSF.
“This is very upsetting,” said Supervisor Hillary Ronen, who sits on the commission.
Mayor London Breed and the mayors of Oakland and San Jose released a joint statement last week condemning CPUC vote.
“Coming just days after Governor Brown signed Senate Bill 100, this decision flies in the face of California’s new commitment to reach 100 percent renewable energy by 2045,” they wrote.
Gov. Jerry Brown signed SB 100 ahead of the Global Climate Action Summit held in San Francisco last month. It requires all electricity in the state to be generated by zero emission sources by 2045.
Despite the challenges and uncertainties, Hyams said SFPUC remains committed to the program.
“CleanPowerSF will continue to provide clean, reliable, affordable service for our customers,” he said.