Yesterday, Commission Staff issued "California Customer Choice: An Evaluation of Regulatory Framework Options for an Evolving Electricity Market," which is also being referred to as the draft Green Book. The Commission launched the Customer Choice Project last year in recognition of the rapid expansion of CCAs, direct access and rooftop solar in the state and the need to develop a comprehensive plan for handling these changes. The draft paper provides a series of findings and observations to prompt conversations, but does not make recommendations.

The draft Green Book includes a series of questions to inform future action, including:
"*How does California continue its course as a global leader in achieving deep decarbonization as regulated utilities provide electricity to fewer Californians?
- Does there need to be a single entity for policy target setting, implementation, oversight and enforcement?
- How can California continue to support innovation and provide financing for scaling up new technologies?
- What is needed reduce the use of fossil fuels such as natural gas, which is used not just for electric power, but also for industry and in homes and buildings?
- How are the utilities compensated for providing the essential infrastructure to achieve these policies?

* What are the essential grid operations to make sure California’s lights stay on?
- Who has the requirement to perform the necessary functions?
- Who establishes the rules and has enforcement authority?
- What does it cost and who pays?

* Can California provide investment and operational certainty to address reliability and resiliency, especially in the face of catastrophic events that impact the electric sector, such as the 2017 wildfires?
- With so many decision-makers entering into the market to provide electrical supply, how do we ensure coordination to provide all the energy needs for reliability purposes?
- Who will provide backstop procurement for resource adequacy if there are shortages of power needs identified in planning and a disaggregated set of electricity purchasers cannot fill the need?
- Who will coordinate supply and operations during local events where resources must come from outside the region? What is the responsibility of non-utility electricity suppliers to help meet unexpected contingencies?
- What role do non-utility providers play to ensure adequate responses to catastrophic and emergency events?

* Are there adequate protections for all customers with the wider choices created by Direct Access, CCAs and behind-the-meter installations?
- Should there be a state entity that provides basic customer protections to customers of services that are either behind the meter or served by entities not historically under the jurisdiction of the CPUC?
- Who will ensure that customers have access to power service if a lightly or unregulated electric power provider fails?
- What protects customers who are not interested in choice, elect not to engage or unwittingly make the wrong decision or might otherwise be left behind?

* What is the role of the investor-owned utilities in the new regulatory construct?
- Under all visions of the future, the IOUs continue to provide transmission, distribution and other grid services, what are the requirements to maintain these systems?
- How will these utilities be compensated for building the necessary infrastructure and operating the grid?

* Regulated utilities were required by laws, like the Renewables Portfolio Standard, to enter into long-term contracts. If customers increasingly buy electricity from non-utility sources, what happens to the contracts that the regulated entities executed?
- Who will execute the long-term contracts that can be used to finance construction of new facilities going forward?
- Should the incumbent electric utilities be allowed to compete with other market participants, or should they be limited to offering a platform for other electricity suppliers?"

The draft Green Book discusses market models employed in New York, Illinois, Texas and Great Britain. In yesterday's webinar introducing the draft, Staff explained that differences in each jurisdiction prevent any of those models from being adopted as a "cookie cutter" for California. After reviewing these models the draft offers the following observations for California:
1) standardized consumer protection materials for market participants interacting with customers are needed;
2) consideration should be made of whether market forces, rather than state mandates, should be relied upon to drive innovation;
3) POLR responsibilities need to be defined as customers increasingly migrate to competitive options;
4) regulatory certainty about the role of various market participants is needed and further rate unbundling may be necessary to support price transparency;
5) standard business practices applicable to energy sales may be needed to ensure competitive neutrality in the marketplace;
6) customer participation in the market should be an informed choice, not through a default enrollment; and
7) a price comparison website would facilitate price transparency and consumer engagement.

Comments on the draft Green Book are due June 4, 2018. An en banc hearing is expected to be scheduled for mid-June, after which time a final paper will be issued. The full texts of the Draft Green Book and Webinar are available on the NEM Website.

The Joint Committee on Telecommunications, Utilities and Energy of the Massachusetts legislature will hold an oversight hearing on the Attorney General's report on the residential competitive supply industry on May 8th at 1PM.

The Attorney General's office commissioned a report on whether residential consumers participating in the retail electric market are realizing savings compared to the basic service rate. The report was prompted by the AG's office receipt of more than 700 complaints from residential consumers from January 1, 2014 through December 31, 2017, regarding various competitive suppliers. The report analysis claims "that Massachusetts consumers in the competitive supply market paid $176.8 million more than they would have paid if they had received electric supply from their electric company during the two-year period from July 2015 to June 2017." The analysis was performed using "detailed supplier-specific data" obtained from the electric utilities. Low income shopping customers were found to have paid $23.6 million more, and the report suggests that there has been "disparate targeting of low-income customers for enrollment in competitive supply accounts."

The report recommends that "legislators in Massachusetts consider eliminating the electric supply market for individual residential consumers." If residential electric competition continues, the report recommends:

a) Public disclosure of: 1) each supplier’s historical rates by product for the prior 24 months; 2) the current and historical residential fixed basic service rates for each electric company for the last 24 months; 3) aggregated complaint data for each supplier based on complaints received by the Department, the AGO, and the electric companies.

b) Monthly reporting by the electric companies of: 1) all suppliers in each electric company’s service territory who billed consumers for the prior month; 2) all the rates charged by each supplier for the prior month; and 3) the number of residential consumers charged per supplier, per rate.

c) The establishment of a dedicated enforcement team at the Department funded by competitive suppliers.

d) The Legislature should consider prohibiting variable rates.

e) Establishment of "do not switch" options for consumers to block unauthorized switching of their accounts.

The full text of the Report is available on the NEM Website.

NEM filed comments in support of the availability of an electric supplier consolidated billing (SCB) option. The comments are in response to the Commission's inquiry into the legality and appropriateness of adopting SCB in Pennsylvania. NEM urged that increased sophistication of consumers and suppliers in the marketplace; supplier investment and experience in providing SCB in other jurisdictions; and deployment of AMI to support increased innovative product offerings all argue in favor of implementing SCB. NEM argued SCB is permitted under Pennsylvania law and the Commission's implementing regulations. NEM explained the significant benefits to be realized by consumers through SCB implementation, including establishment of a direct relationship between customer and supplier, meeting customer preferences for a single bill, and an increased array of innovative offerings that utility consolidated billing does not accommodate. The full text of NEM's Comments is available on the NEM Website.