The California Public Utilities Commission (CPUC) took two actions Thursday related to private-sector utility ratepayer surcharges that can add up to hundreds of millions of dollars. One action most directly affects natural gas utility charges and the other electricity rates.
In both cases, the CPUC was attempting to preserve and scrutinize “public goods” programs — energy-saving and job-creating efforts statewide — for which small monthly surcharges are assessed against every utility customer. In both cases the commission challenged action or inaction by the state legislature, which adjourned Sept. 9.
Regarding the gas programs, the CPUC voted unanimously to tap up to $125 million of unused public purpose funds held by the three major utilities to make up for a move by state lawmakers to transfer the gas funds of the private-sector utilities and put them to use in the state’s deficit-plagued general fund. While the reserves will help continue the gas-related programs, Commissioner Mark Ferron, the assigned regulator on the case at the CPUC, vowed to conduct an audit to probe questions of why utilities have amassed so many unspent dollars under a program considered vital to the state.
While supporting energy efficiency, Ferron said he was dissatisfied with several aspects of the statewide, ratepayer-supported programs, centered on the large pool of unspent funds he found in utility accounts to make up for the state lawmakers taking $155 million from the Gas Consumption Surcharge Fund by passing a state bill (SB 87).
“What really concerns me is that the investor-owned utilities have such large unspent balances in their public purpose accounts,” he said. “Why? Are we giving them too much money?” He said unfunded amounts have been the “rule, not the exception” during the program’s more than 10-year history. “In these lean times, we cannot afford excess in any program.”
On the electric side the CPUC late last month received a direct plea from Gov. Jerry Brown, citing job-creation reasons and asking regulators to restore programs set to expire at the end of this year because state lawmakers failed to pass bills aimed a extending a public goods charge on private-sector utility customer bills (see Daily GPI, Sept. 28).
The monthly surcharge, averaging less than $2 on a typical residential customer bill, supports energy research and development (R&D), including renewable energy programs. Two bills (AB 724 and SB 870) that were shot down in the final days of the legislative session aimed to extend the charge another 10 years (see Daily GPI, Sept. 13).
CPUC President Michael Peevey called the action on the surcharge “the first formal step in response to the governor’s request that there be no hiatus in funding the several vital programs that make up the Public Goods Charge.” Peevey said funding has helped California assume a world leadership role in energy research and energy efficiency.”
What the regulators did was establish a two-phase proceeding to consider whether and how to continue the funding that runs out for lack of a legislative extension at the end of this year. The first phase will examine what appropriate funding levels for renewables and research/development programs should be, and how the funding should be collected. The CPUC would then issue a Phase 1 decision before Jan. 1.
If it is determined to move ahead with some form of the current program, the second phase would go into greater detail on program design, oversight and answer various administrative questions.
In both the gas and the electric programs, the efficiency programs will be the focus of the audit Ferron has committed to pursue. He wants to make sure the regulators are “effectively leveraging ratepayer money.” Commissioner Timothy Alan Simon said the decisions bridge the funding shortages facing both programs. Simon said the CPUC has been mandated to “keep strengthening gas and electric energy efficiency programs.”
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