Petitions target unfair cost shifts, retroactive ratemaking, and improper treatment of renewable energy credits
Sacramento, Calif. — The California Community Choice Association (CalCCA) today filed petitions asking the California Public Utilities Commission (CPUC) to reconsider its recent decisions approving Pacific Gas and Electric Company’s (PG&E) and Southern California Edison Company’s (SCE) 2026 Energy Resource Recovery Account (ERRA) forecast applications. CalCCA members San Diego Community Power (SDCP) and Clean Energy Alliance (CEA) earlier this month filed a similar rehearing request challenging the CPUC’s approval of San Diego Gas & Electric’s (SDG&E) ERRA forecast application.
Together, these three CPUC decisions unlawfully shift investor-owned utility (IOU) energy supply costs onto Community Choice Aggregation (CCA) customers to the benefit of bundled IOU customers. * The CPUC’s actions reflect a growing erosion of the statutory principle of “ratepayer indifference”— the requirement that neither bundled IOU customers nor unbundled CCA customers should be harmed by the existence of retail electric choice. The rehearing requests challenge the legality of the CPUC’s approach and seek to restore fair and lawful IOU cost recovery.
“California law is clear: retail electric choice should not be used as a mechanism to shift costs from one group of customers to another,” said CalCCA CEO Beth Vaughan. “Unfortunately, the CPUC’s recent actions do exactly that, undermining the legal protections that exist to ensure a level playing field.”
CalCCA’s and SDCP/CEA’s rehearing requests challenge legal flaws in the CPUC’s decisions. In all three IOU cases, the Commission implemented a key pricing formula used to calculate Power Charge Indifference Adjustment (PCIA)—the fee charged to customers who have left an IOU for a CCA—after 2025 rates had already gone into effect. This kind of after-the-fact change—known as “retroactive ratemaking”—is illegal under California law because customers must be able to rely on stable, predictable rates. Find additional information on the PCIA here.
Additionally, in the PG&E and SCE service areas, CalCCA is challenging how the IOUs value Renewable Energy Credits purchased before 2019. Although these credits were paid for by all customers—including ones that later left for CCA service—the IOUs now use them exclusively to benefit their bundled customers in meeting current clean energy requirements. Under the CPUC’s approach, customers who left PG&E or SCE generation service to receive CCA service get no credit for the value of these RECs, despite having funded their purchase. This misallocation inflates PCIA charges for CCA customers while shielding IOU customers from the full costs of IOU-owned resources.
CalCCA’s Application for Rehearing in PG&E’s 2026 ERRA Forecast proceeding (A.25-05-011) is available here. CalCCA’s Application for Rehearing in SCE’s 2026 ERRA Forecast proceeding (A.25-05-008) is available here. The Application for Rehearing filed by San Diego Community Power and Clean Energy Alliance in SDG&E’s 2026 ERRA Forecast (A.25-05-012) proceeding is available here.
Parties have 15 days to respond to the Applications for Rehearing. CalCCA is urging the CPUC to correct these errors and reverse these unlawful decisions. The association will continue to advocate for fair, lawful, and transparent rate-setting that protects customers while advancing California’s clean energy goals.
* A bundled IOU customer receives all electricity services—generation, transmission, and distribution—from a single investor-owned utility (IOU), while a CCA customer receives electricity generation from a Community Choice Aggregation (CCA) program and the IOU’s distribution services.
About CalCCA
Launched in 2016, the California Community Choice Association (CalCCA) represents California’s community choice electricity providers before the state Legislature and at regulatory agencies, advocating for a level playing field and opposing policies that unfairly discriminate against Community Choice Aggregators (CCAs) and their customers. There are 25 operational CCA programs in California serving more than 15 million customers—over one-third of the state’s population—in 200+ cities and counties throughout the state. For more information about CalCCA, visit www.cal-cca.org.
Frequently Asked Questions: Changes to Electricity Costs
1. What is going on with electricity bills right now?
The California Public Utilities Commission (CPUC), which regulates how investor-owned utilities (like PG&E) operate, recently made some decisions about how costs are shared that affect both PG&E and VCE customers.
One of the biggest issues is that the CPUC changed its method of calculating the Power Charge Indifference Adjustment, or PCIA, a fee that investor-owned utilities (IOUs) are allowed to charge CCA customers for contracts the IOU entered into before the customer was able to join a CCA like VCE. This fee can be substantial for customers. Most importantly, the new CPUC formula is retroactive, which is not supposed to happen in ratemaking because it affects any utility that has previously made electric rate and budgetary decisions based on the existing PCIA calculations. For example, when the PCIA goes up, VCE’s revenues go down because our Board of Directors is committed to keeping costs low, and has voted to absorb that cost for customers.
2. How could this affect me as a VCE customer?
Because of these new rules, some extra costs might show up on your bill, even though you are still getting your electricity through VCE. VCE is committed to providing affordable electricity, and will continue to maintain our 5% discount (or 10% discount for low-income and medically vulnerable customers) on electric generation rates.
3. What is an Energy Resource Recovery Account (ERRA) Forecast?
An Energy Resource Recovery Account, or ERRA, Forecast is a process the CPUC uses to figure out how much investor-owned utilities like PG&E, SCE, and SDG&E can charge for the electricity supply they provide. The ERRA forecast helps decide the costs that show up on monthly bills for:
- People who get both their electricity supply and delivery from an investor-owned utility
- People who get their electricity supply from VCE (or another community choice aggregation program), but still get electric delivery from the investor-owned utility
The goal is to make sure utilities recover the costs of the energy they provide, without shifting extra costs onto CCA customers.
4. What actions are VCE and other CCAs taking?
Valley Clean Energy supports CalCCA (our statewide association) and other Community Choice Aggregation programs that are challenging these decisions. CalCCA filed official requests—called “applications for rehearing”—asking the CPUC to reconsider its approval of PG&E’s and Southern California Edison’s (SCE) 2026 ERRA forecasts. San Diego Community Power and Clean Energy Alliance made similar requests for San Diego Gas & Electric (SDG&E). These actions challenge decisions that would unfairly shift extra costs onto CCA customers.
5. What legal concerns are VCE and other CCAs raising about these decisions?
There are three main reasons to challenge these rules:
- Protecting customer fairness: We believe the new rules shift extra costs onto our customers, making it unfair.
- No changes after the fact: The CPUC changed the way it calculates an important fee, called the Power Charge Indifference Adjustment (PCIA), after 2025 rates were already set. Changing rates after they are in place makes it hard for customers to plan for their bills.
- Fair credit for clean energy: Many customers paid for clean energy credits years ago, before switching to VCE. Now, those credits are being used only for investor-owned utility customers, even though CCA customers helped pay for them. This means CCA customers don’t get the benefit they already paid for, and their costs go up.
6. How is this issue being approached outside the CPUC rehearing process?
Besides asking the CPUC to reconsider its decision, CalCCA filed a Petition for Writ of Review with the California Court of Appeal in December 2025. This petition challenges the CPUC’s retroactive change to how certain rates are calculated and asks the court to make sure any new methods are used only for future rates, not for bills that have already been paid.
7. What is the Power Charge Indifference Adjustment (PCIA) on my bill?
The Power Charge Indifference Adjustment, or PCIA, is a fee that VCE customers pay to help cover costs from old energy contracts made by the investor-owned utilities before customers were able to join VCE. We want to make sure this fee is fair and not higher than necessary.
8. What are the next steps?
Parties involved have 15 days to respond to the rehearing requests. VCE supports advocating for fair, clear, and legal rates that protect customers and support California’s clean energy goals.
9. Who can I talk to if I have questions?
If you have questions, please contact VCE’s customer service or visit our website for more updates.
Where can I read the official filings and learn more?
- CalCCA Application for Rehearing – PG&E 2026 ERRA (A.25-05-011)
- CalCCA Application for Rehearing – SCE 2026 ERRA (A.25-05-008)
- SDCP/CEA Application for Rehearing – SDG&E 2026 ERRA (A.25-05-012)
For additional resources and updates, please visit the Valley Clean Energy website or CalCCA’s website. You may reach VCE’s Customer Care Team at 1 (855) 699-8232 Monday-Friday, 9am-5pm.