We have exciting news for our commercial and industrial customers in California. Direct Access (DA) customers should take note of a change in non-bypassable charges, which may result in significant refunds for many customers.
What Are Non-Bypassable Charges?
Non-by passable charges include utility charges that all customers must pay, including transmission and distribution charges. DA customers must also pay a non-bypassable charge referred to as the Power Charge Indifference Amount (PCIA) – that is the DA customer’s share of “stranded costs” associated with purchases made by the utility before the customer left utility service.
The Change in Non-Bypassable Charges
Constellation, among others, successfully petitioned for changes in the PCIA calculation methodology. As a result of that Petition, the California Public Utilities Commission issued an order on December 7, 2011 that required the utilities to recalculate PCIA charges paid by retail choice customers. This recalculation will result in significant refunds for many customers.
The revised rates are effective retroactively to April 14, 2011 for PG&E, June 1, 2011 for SCE, and September 1, 2011 for SDG&E. Those recalculations and the resulting refunds will be finalized soon. Refunds associated with the Commission’s order are expected to occur in the fall of 2012 and appear on utility bills as a separate line item.
The recalculated PCIA rate and therefore the amount of the refund varies depending on when the customer left utility service. Based on a detailed review of the Order and each utility’s advice letter, it appears that the following customers are likely to receive a PCIA refund:
– Most current SCE DA customers. (The one exception is that SCE GS-1 accounts new to DA prior to 7/1/09 are not likely to receive a refund);
– PG&E customers new to DA after 7/1/09; and
– SDG&E customers new to DA after 7/1/09.
In addition to the PCIA refunds, the Commission’s Energy Division clarified its position that refunds be extended to Competitive Transition Charges (CTC) as well. As a result, the Energy Division directed PG&E and perhaps other utilities in the future to file separate advice letters regarding any rebilling or refunds in connection with the CTC.
We will continue to keep you informed through additional posts regarding the CTC rebilling / refunding. Please feel free to leave me a comment with any questions you may have about these refunds.