All PG&E added fees – the Power Charge Indifference Adjustment, or PCIA, and Franchise Fee Surcharge – are factored into SJCE’s rate setting process so that, in total, SJCE service is priced competitively with PG&E. Both fees are calculated based on the number of kilowatt-hours used each month. All electricity customers in PG&E territory pay the PCIA fee, which PG&E uses to cover its above-market energy costs from its power plants and legacy energy contracts. (For customers receiving generation service from PG&E, the PCIA is embedded in their electricity rates.) The California Public Utilities Commission (CPUC) updates PG&E’s PCIA every year based on their projected costs and CPUC estimates of the value of their energy portfolio. PG&E’s PCIA has grown 900% since 2013, and as the PCIA has grown, SJCE has lowered its rates so that SJCE service remains competitive with PG&E.
The current regulatory system does not incentivize PG&E and other investor-owned utilities to keep operating costs down or maximize the value of their energy resources. Under state law, energy contract costs are only recoverable through the PCIA if the costs are unavoidable. It is the investor owned utilities’ responsibility to prudently manage their generation portfolios and take all reasonable steps to minimize above-market costs.
As of now, the CPUC has not set an expiration date for how long the PCIA can be charged to CCE customers. Community Choice Energy programs, including SJCE, are collectively advocating with the CPUC and Legislature for better PG&E management of its above-market costs.
PG&E assesses other fees such as non-bypassable charges and taxes exactly the same for customers receiving their electric generation service from SJCE or PG&E.