California Senate Passes Retail Choice Expansion

The California Senate has passed an amended version of SB 286, reports RetailEnergyX. The bill would increase the cap on retail choice (known in California as “Direct Access”) by 8,000 GWh. Only non-residential customers of investor-owned utilities (IOUs) are eligible for Direct Access. Under the current version of the bill, the additional 8,000 GWh will need to come from renewable sources and would be allocated across different IOU service territories. If enacted, the new rules would take effect January 1, 2016, and with a phase-in period of up to three years.

In March, Retail Energy Buyer explained the background around Direct Access. Under the current system, competitive power is in such high demand among California electricity buyers (relative to the cap) that when enrollment opens each year, it is fully subscribed within seconds.

According to a March blog post from Ecova, the current cap is 12 percent of demand. Data from the Energy Information Administration show that California used 24,193 GWh in 2012. The caps expanded slightly in 2013 based on the planned Direct Access phase-in, according to PG&E. As a rough estimate, that means the 8,000 GWh increase should represent an increase of slightly less than 33 percent from current levels.

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