Senate Bill 237 Expands Competitive Electricity in California

By September 25, 2018 News

On Sept. 20th, California Governor Jerry Brown signed into law Senate Bill 237 which will enable a larger number of California commercial and industrial customers to purchase competitive electricity supply through what’s known as Direct Access. SB 237 requires the California Public Utility Commission, on or before June 1, 2019, to issue an order specifying an increase in the annual limit on Direct Access purchases of 4,000 gigawatt-hours split among the service territories of the electrical corporations. Secondly, the bill direct the PUC to provide recommendations to the legislature on additional future increases in direct access on or before June 1st, 2020.

Direct Access (DA) is an optional service that allows eligible customers to buy electricity directly from non-utility providers known as electric service providers (ESPs). The utility (PG&E, SCE, SDG&E) continues to transport and deliver electricity to all customers on DA service. You should expect no change in reliability of service levels from the utility.

DA provides commercial and industrial customers with many benefits. These include:

  1. The ability to control generation costs through forward purchases and electricity products that fit their specific usage profiles and risk tolerance
  2. Savings versus utility generation rates of 10-20% in many cases
  3. Proper assignment of contractual risk
  4. Access to wholesale market opportunities, including offsite renewable generation

Now that the bill has been signed, the next step is for the PUC to determine the application and approval process for new customers seeking Direct Access. In the past this process has been handled through a lottery process. It is expected that the new process will be similar. New customers can expect to submit a notice to leave to the utility during an “open” week that is typically held in June and begin receiving Direct Access service in January of 2020.

Energy Edge Consulting will be monitoring the PUC directives closely along with the Legislature’s recommendation for further reopening.  Please contact Josh Sternberg (jsternberg@energyedgeconsulting) with questions on California Direct Access.