**URGENT ALERT**
A bill being voted on in the Calif. Senate any time this week (SB695) would seriously threaten Community Choice and raise rates for low-income and low-use energy customers. Please email, fax and/or call Senators if you possibly can; you're welcome to adapt WEM's letter (pasted below). Look in read more for contact info.

June 1, 2009

Dear Legislators:

Women’s Energy Matters (WEM) is a California non-profit that works for a rapid transition to a renewable, efficient energy system. WEM represents customers in energy proceedings at the California Public Utilities Commission (since 2001) and supports Community Choice Aggregation (CCA).

We strongly oppose SB 695 because it fundamentally threatens Community Choice and undermines CCAs’ efforts to address climate change. We also object to the bill because it would raise rates for low-income and low-energy-use customers, create disincentives for conservation and solar, and permanently require CCAs to pay for utilities’ energy choices. The bill requires a 2/3 vote. It is an “urgency statute” that would take effect immediately. It claims to avert a rate crisis but would actually raise rates for low-income and low-energy-use customers. We regret that we just learned about this bill at the end of last week; we urge you to vote against it or support amendments to remove all of these problems.

SB695 Threatens Community Choice Aggregation (CCA). SB695 would place a severe cap on the number of communities that would be allowed to escape their utilities. (See Cap, below. For more information on CCA and Direct Access, see Background – last paragraph.) Only one of the three CCAs that expect to begin serving customers within the next year or two would be able to proceed (San Joaquin Valley Power Authority, Marin, or San Francisco). That sole surviving CCA would be required to phase in customers on a schedule to be set by the CPUC, forcing it to renegotiate agreements.

Undermines CCA Efforts to Address Climate Change. Marin and San Francisco CCAs plan to offer two or three times as much renewable energy as utilities are currently offering and more energy efficiency, at the same or lower rates as utilities — a major breakthrough in addressing climate change. Other cities and counties in both N. and S. CA are also developing similar CCA programs; SB695 would shut most of them down.

Imposes a Cap on Direct Access/ Community Choice. SB 695 would limit the market share of non-utility energy providers to the maximum level achieved under Direct Access. This is about 50% more than the current level, or a total of approximately 8% to 12% of customers in IOU territories. That is only enough to accommodate one of the CCAs in PG&E territory (possibly not even one if there were a rapid surge in Direct Access).

Requires Phase-In of Customers. CCA or Direct Access customers would be required to phase in over a 3 to 5 year period, according to a schedule to be created by the CPUC. This would create complications in CCA financing and energy negotiations.

Increases Rates for Low-Income Customers; Discourages Conservation. SB695 would allow rate increases of 3% a year for the poorest customers (those eligible for the CARE program), and would allow rates for other low-tier customers to climb 3-5% a year (low-tier is up to 130% of “baseline” energy use). This weakens provisions enacted during the energy crisis to protect low-income customers and encourage low energy use.

The net effect on residential rates is supposed to be neutral because the higher tier residential rates would be reduced. However, the current rate structure is one of the state's most important methods of encouraging conservation as well as protecting low-income ratepayers. Customers who use little electricity pay lower rates per kilowatt, while those who use a lot of electricity must pay higher rates. This bill would make CARE customers and low usage customers subsidize high use customers — who tend to also have high incomes, according to research in SCE territory.

Discourages Solar. If high tier rates are cut, then the incentive to go solar in the residential sector will also be reduced — a significant blow to residential solar installers as well as the environment.

Permanently Requires CCAs to Pay for Utilities’ Energy Choices. The bill makes permanent a “Cost Recovery Mechanism” imposed by the CPUC in 2006 as a temporary measure to encourage power plant construction that was stymied by utilities’ refusal to sign reasonable contracts with third parties. The mechanism required all costs for capacity that utilities decide to purchase for reliability to be borne by all customers through a non-bypassable charge. Thus, DA and CCA customers must pay for new power plants whether or not they use — or want to use — the energy from those plants — and even though they are required to provide the same level of reliability as utilities. SB695 would eliminate the requirement for an auction of the energy produced by the subsidized power plants — which currently provides CCAs and DA customers the possibility of recovering some of the costs of the mechanism.

Background. The legislation imposes limits on Direct Access as well as Community Choice. Direct Access, created by AB1890 in 1996, refers to any customer that purchases electricity directly from an Electricity Service Provider (ESP) rather than an Investor-Owned Utility (“IOU” - referred to as an “electrical corporation” in the legislation). New signups for Direct Access were suspended until the 2001 emergency contracts with Dept. of Water Resources (DWR) are paid off (in approximately 2010-2012).

Community Choice, created by AB117 in 2002, is a special form of Direct Access whereby cities and counties are empowered to become the default purchaser of energy for local residents and businesses (who may “opt-out” and stay with the utility if they prefer). CCAs were not impacted by the suspension of new customers for Direct Access.

Conclusion. We respectfully request that you vote against SB695 or amend it to remove all the above problems. Thank you,
Sincerely,

/s/ Barbara George
Executive Director
Women’s Energy Matters
P.O. Box 548, Fairfax CA 94978
(O) 415-457-1737 (C) 510-915-6215
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www.womensenergymatters.org

Here is a list of Senators' fax numbers & email addresses:
Senators Fax # Represents
Aanestand Sam 916-445-7750 Grass Valley
Ackerman Dick 916-445-9754 Tustin
Alquist Elaine 916-324-0283 Santa Clara
Ashburn Roy 916-322-3304 Bakersfield
Battin Jim 916-327-2187 Palm Desert
Calderon Ronald 916-327-8755 Montebello
Cedillo Gil 916-327-8817 Los Angeles
Cogdill Dave 916-327-3523 Fresno
Corbett Ellen 916-327-2433 San Leandro
Correa Lou 714-558-4111 Santa Ana
Cox Dave 916-324-2680 Fair Oaks
Denham Jeff 916-445-0773 Merced
Ducheny Denise Moreno 916-327-3522 San Diego
Dutton Bob 916-327-2272 Inland Empire
Florez Dean 916-327-5989 Shafter
Harman Tom 916-445-9263 Orange
Hollingsworth Dennis 916-447-9008 Murrieta
Kehoe Christine 916-327-2188 San Diego
Kuehl Sheila 916-324-4823 Santa Monica
Lowenthal Alan 916-327-9113 Long Beach
Machado Mike 916-323-2304 Linden
Maldonado Abel 916-445-8081 Santa Maria
Margett Bob 916-324-0922 Glendora
McClintock Tom 916-324-7544 Thousand Oaks
Migden Carole 916-445-4722 San Francisco
Negrete Mcleod Gloria 916-445-0128 Chino
Oropeza Jenny 916-323-6056 Long Beach
Padilla Alex 916-324-6645 Paicoma
Perata Don 916-327-1997 Oakland
Ridley-Thomas Mark 916-445-8899 Los Angeles
Romero Gloria 916-445-0485 Los Angeles
Runner George C Jr. 916-445-4662 Antelope Valley
Scott Jack 916-324-7543 Pasadena
Simitian Joe 916-323-4529 Palo Alto
Steinberg Darrell 916-323-2263 Sacramento
Torlakson Tom 916-445-2527 Antioch
Vincert Edward 916-445-3712 Los Angeles
Wiggins Patricia 916-323-6958 Santa Rosa
Wyland Mark 916-446-7382 Escondido
Yee Leland 916-327-2186 San Francisco/San Mateo

emails
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