California Bill to Remove Cap on Direct Access Currently In Senate Committee

Ben Faulkinberry

The recently introduced California Senate Bill 286, if enacted, would completely remove the current 12 percent demand cap on the state’s Direct Access program, which allows lottery-drawn commercial & industrial utility customers to receive electricity supply from a non-utility energy service provider (ESP).

The bill would enable all non-residential customers in the footprints of PG&E, Southern California Edison, and San Diego Gas & Electric to receive electricity supply service from an ESP as of July 1, 2016 if they so choose.

Proponents of the bill include existing ESPs and entities such as Apple and Google which have made large commitments to renewable generation projects in the state. Owners of electricity generation infrastructure could sell any surplus energy in the marketplace by becoming registered ESPs.

Proponents argue organizations which desire a 100 percent renewable energy portfolio cannot achieve this by receiving default utility-provided generation service, and expanding Direct Access would not only make this possible but hopefully reduce the cost to do so by way of increased competition.

Opponents of the bill argue the change in legislation would result in revenue loss for utilities, which may then recoup those losses from non-participating ratepayers. Additionally, some opponents argue the bill should not be passed because there is no language requiring ESPs to exceed the state-mandated 33 percent renewable generation portfolio target by 2020.

The bill was referred to the California Senate Committee on Energy, Utilities and Communications on March 5, 2015.

Read the proposed changes and follow the status of the bill on the California Senate’s website.

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The information in this page is offered only for general informational and educational purposes. It is not offered as and does not constitute legal advice.

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