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The Future of Retail Electric Choice in California

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On May 19, the California Public Utilities Commission (CPUC) and the California Energy Commission will hold a joint hearing to discuss the changing state of retail electric choice in California. 

Here's what the hearing could mean for the future of retail electric choice in the Golden State. 

The Current State of Retail Choice in California

The CPUC uses the term “retail electric choice” to describe retail choice for electricity supplier (direct access is the term in California), community choice aggregation and rooftop solar. Direct Energy Business is a registered electric service provider in California and has been providing energy products and strategic services to commercial and industrial customers in California for several years. 

By the end of 2017, 30-40 percent of California’s investor-owned electric utility customers will be receiving some type of electricity service from an alternative source and/or provider, such as community choice aggregators, rooftop solar or direct access providers. Projections suggest that this number will grow to well past 80 percent by the middle of the next decade. 

Fueling the growth in retail electric choice is the rapid development of community choice aggregation. Direct access in California is currently capped at 20 percent of commercial and industrial customer load in the investor-owned utility territories.

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What to Expect from the Hearing

The CPUC states that the goal of this joint agency hearing is to identify and begin to develop an understanding of the challenges and opportunities that the CPUC and the California Energy Commission must examine as a result of this rapid growth in retail electric choice in order to ensure that affordable, reliable and low-carbon electricity will be available to all California consumers. In a recent interview with Greentech Media, CPUC President Michael Picker indicated that it is time to consider full retail choice to broaden customer options. 

Part of the hearing will also look at the role of the investor-owned utilities in a future in which customer-oriented technologies disrupt the traditional top-down electricity service model. 

The issues discussed at this hearing could lead California policymakers to implement policies in the future that will impact the electric industry in California. Direct Energy Business believes that the best path forward for California is to promote and adopt policies that support competition in the electric industry. The CPUC has posted a hearing agenda and will stream the live webcast here

Want to Learn More About the Benefits of Electric Choice? 

New research shows that businesses in California and Michigan (which are both capped markets) achieved an estimated $3.3 billion in electric savings between 2011 and 2015 simply by switching from the default utility rate to a retail energy provider. 

We've put together a new eGuide to highlight how businesses have saved billions through electric choice. 

Posted: May 18, 2017