Staff Report Item 11
Staff Report Item 11
To: Ava Community Energy Authority
From: Sam Sadle, Principal Legislative Manager
Subject: Approval of Legislative positions for AB 1761 and SB 1138 Date: March 18, 2025
__________________________________________________________________ Summary/Recommendation
Ava staff has worked to implement the Board approved Legislative Program since the Legislative Program’s adoption in July of 2018. The Legislative Program provides a framework for the Ava legislative team to identify, assess, track, and (with Board approval) take advocacy-related action regarding proposed legislation. Furthermore, the Legislative Program guides staff in identifying which of the more than 1,800 bills per year that are introduced in Sacramento are important to Ava and relevant to our services.
Ava staff recommend adopting a “support” position on two bills that the statewide CCA trade association (CalCCA) is sponsoring. The bills are Assembly Bill 1761 (Rogers) and Senate Bill 1138 (Padilla). As detailed below, AB 1761 increases transparency of rate setting processes by requiring data disclosures from the Public Utilities Commission (PUC) and Investor Owned Utilities (IOUs). SB 1138 facilitates affordability by allowing Ava and others to trade load obligations rather than spending additional money on resource adequacy under certain circumstances.
Financial Impact
• AB 1761 (Rogers) - Support: Unlikely to have a direct fiscal impact on Ava. • SB 1138 (Padilla) - Support: The effect of SB 1138 and the ensuing launch of a Resource Adequacy (RA) transactability scheme will provide some level of financial Staff Report Item 11
savings to Ava. Per analysis from CalCCA, if RA was transactable in summer of 2025, LSEs would have saved $182 million through a combination of a reduction in RA prices and avoidance of excess RA procurement. Ava’s share of that savings depends on a number of factors including Ava’s procurement strategy, RA prices, and broader CAISO marketplace dynamics.
Analysis and Context
• AB 1761 (Rogers) - Support: If passed, AB 1761 will require the Public Utilities Commission (PUC) to ensure that all data relied on in any decision or ruling, or in any proposal or analysis provided by an investor-owned utility (IOU), PUC staff, or any other party, for the determination or application of a calculation methodology (e.g., for the Power Charge Indifference Adjustment (PCIA)) be made available to LSEs (including Ava) and ratepayer advocates. The CCA trade association (CalCCA) is sponsoring AB 1761 and Ava staff worked directly with CalCCA to draft the initial proposal and ensure its introduction in the California Assembly. If approved, AB 1761 would support Ava’s affordability efforts by ensuring our staff would have access to all data relied upon by the PUC, PG&E, and other IOUs to calculate, e.g., the PCIA. This would allow Ava (and others) to review the data, ensure it is correct, and better plan for future changes to the PCIA and how to address its rate impacts on our customers. • SB 1138 (Padilla) - Support: If adopted, SB 1138 would require the PUC to permit LSEs to demonstrate compliance with Resource Adequacy (RA) requirements by selling to, or otherwise making transactions with, another LSE to meet not more than 25% of our compliance obligation, on a short-term basis, and to permit those transactions to be denominated in the same unit of time used to denominate RA compliance requirements.
CalCCA is sponsoring SB 1138 and Ava staff worked directly with CalCCA to draft the initial proposal and ensure its introduction in the California Senate. The proposal to allow for the trading of RA compliance products stems from the ongoing transition of RA compliance obligations from a monthly framework to a slice-of-day (hourly) framework.
As of today, adjustments to an LSE’s portfolio are limited to transacting product for the whole month even though obligations are now measured on an hourly basis. This mismatch means Ava must purchase more RA than we need to meet compliance obligations, creating artificial market scarcity and unnecessarily driving up RA demand (and prices). SB 1138 will allow Ava to trade RA obligations with other LSEs and will facilitate the efficient procurement of Resource Adequacy, driving down prices across California.
Committee Recommendation
This matter was discussed at the March 6 Marketing, Regulatory, and Legislative Subcommittee meeting.
Staff Report Item 11
Attachments
A. Resolution in support of AB 1761 and SB 1138
B. AB 1761 Legislative language
C. AB 1761 Fact sheet
D. SB 1138 Legislative language
E. SB 1138 Fact sheet
F. Presentation - “2026.03.18 Board Item XX 2026 California Legislative Position Recommendations”
Attachment Staff Report Item 11A
RESOLUTION NO. R-2026-__
A RESOLUTION OF THE BOARD OF DIRECTORS
OF THE AVA COMMUNITY ENERGY AUTHORITY IN SUPPORT OF
AB 1761 (ROGERS) AND SB 1138 (PADILLA)
WHEREAS Ava Community Energy Authority (“Ava”) was formed as a community choice aggregation agency (“CCA”) on December 1, 2016, under the Joint Exercise of Powers Act, California Government Code sections 6500 et seq., among the County of Alameda, and the Cities of Albany, Berkeley, Dublin, Emeryville, Fremont, Hayward, Livermore, Piedmont, Oakland, San Leandro, and Union City to study, promote, develop, conduct, operate, and manage energy-related climate change programs in all of the member jurisdictions. The cities of Newark and Pleasanton, located in Alameda County, along with the City of Tracy, located in San Joaquin County, were added as members of Ava and parties to the Joint Powers Agreement (“JPA”) in March of 2020. The city of Stockton was added as a member to Ava in September of 2022. The city of Lathrop was added as a member to Ava in October of 2023. San Joaquin County was added as a member to Ava in July 2024. On October 24, 2023, Ava legally adopted the name Ava Community Energy Authority, where it had previously used the name East Bay Community Energy Authority since its inception.
WHEREAS federal and state governments consider numerous legislative proposals throughout the year that can have either a beneficial or negative impact on Ava Community Energy and our customers;
WHEREAS Ava Community Energy’s Legislative Program was first adopted in 2019 and has been updated frequently since then;
WHEREAS Ava Community Energy seeks to advance policy positions on a variety of issues including rate affordability, transmission affordability, managing data center growth, utility scale decarbonization, industrial and large load decarbonization, distributed energy resources, transportation electrification, dynamic rates, among others;
WHEREAS the Power Charge Indifference Adjustment has a significant impact on Ava Community Energy’s forecasting and customer energy affordability, which AB 1761 will mitigate by ensuring better transparency into Power Charge Indifference Adjustment (PCIA) costs;
WHEREAS the ongoing transition of Resource Adequacy compliance obligation from a monthly framework to a slice-of-day framework presents both challenges and opportunities, and SB 1138 will facilitate the efficient procurement of Resource Adequacy;
WHEREAS Ava Community Energy staff worked closely with CalCCA staff to draft AB 1761 and SB 1138 and identify legislative authors; Attachment Staff Report Item 11A
WHEREAS the CalCCA Board of Directors is in support of AB 1761 and SB 1138 and the organization serves as the official legislative “sponsor” of the bills; WHEREAS the state legislative session is already under way and bills are moving through the legislative process;
NOW, THEREFORE, THE BOARD OF DIRECTORS OF AVA COMMUNITY ENERGY AUTHORITY DOES HEREBY RESOLVE AS FOLLOWS:
Section 1. The Board of Directors hereby expresses its support for Assembly Bill 1761 (Rogers) and Senate Bill 1138 (Padilla).
ADOPTED AND APPROVED this 18th day of March, 2026.
Betsy Andersen, Chair
ATTEST:
Adrian Bankhead, Clerk of the Board
california legislature—2025–26 regular session
ASSEMBLY BILL No. 1761
Introduced by Assembly Member Rogers
February 9, 2026
An act to add Section 365.4 to the Public Utilities Code, relating to electricity.
legislative counsel’s digest
AB 1761, as introduced, Rogers. Electricity: calculation methodology:
data disclosure.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law authorizes the commission to fix the rates and charges for every public utility and requires that those rates and charges be just and reasonable.
This bill would require the commission to ensure that all data relied on in any decision or ruling, or in any proposal or analysis provided by an electrical corporation, the commission’s staff, or any other party, for the determination or application of a calculation methodology for any charge imposed on customers of a load-serving entity to recover the cost of contracts or resources owned by an electrical corporation or any value derived from that calculation is made available to load-serving entities and ratepayer advocates on behalf of customers. The bill would require that data to meet specified requirements, including that it is made through a public disclosure, except for market-sensitive data, as provided.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Attachment Staff Report Item 11B
Because the above prohibition would be a part of the act, and because a violation of a commission action implementing the above prohibition would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 365.4 is added to the Public Utilities line 2 Code, to read:
line 3 365.4. (a) The commission shall ensure that all data relied on line 4 in any decision or ruling, or in any proposal or analysis provided line 5 by an electrical corporation, the commission’s staff, or any other line 6 party, for the determination or application of a calculation line 7 methodology for any charge imposed on customers of a line 8 load-serving entity, as defined in Section 380, to recover the cost line 9 of contracts or resources owned by an electrical corporation or any line 10 value derived from that calculation is made available to line 11 load-serving entities and ratepayer advocates on behalf of line 12 customers.
line 13 (b) Data provided pursuant to subdivision (a) shall meet all of line 14 the following requirements:
line 15 (1) It shall be made through a public disclosure, except for line 16 market-sensitive data, which shall be made through disclosure to line 17 a nonmarket participant reviewing representative pursuant to the line 18 terms of a reasonable, commission-approved nondisclosure line 19 agreement.
line 20 (2) It shall be made available to load-serving entities and line 21 ratepayer advocates concurrent with any proposal or analyses from line 22 the electrical corporation, the commission’s staff, or any other line 23 party, or any commission adopted outcome. This requirement may line 24 be met through adoption of data sharing practices mutually agreed line 25 to by parties at the outset of a proceeding.
line 26 (3) It shall be made available in native file format. 2 Attachment Staff Report Item 11B
line 1 SEC. 2. No reimbursement is required by this act pursuant to line 2 Section 6 of Article XIIIB of the California Constitution because line 3 the only costs that may be incurred by a local agency or school line 4 district will be incurred because this act creates a new crime or line 5 infraction, eliminates a crime or infraction, or changes the penalty line 6 for a crime or infraction, within the meaning of Section 17556 of line 7 the Government Code, or changes the definition of a crime within line 8 the meaning of Section 6 of Article XIII B of the California line 9 Constitution.
O
3 Attachment Staff Report Item 11B
Assembly Bill 1761 – Improving Energy Bill Transparency Updated: February 18, 2026
Assemblymember Chris Rogers, 2
nd Assembly District
Bill Summary
AB 1761 improves transparency to how the Power Charge
Indifference Adjustment (PCIA), a charge on nearly all
energy bills, is calculated.
Background
Electricity bills in California are on the rise, in part due to challenging market conditions and outdated and
inefficient regulatory policies. Families and businesses are feeling the impact. Lawmakers and regulators need
practical, consumer-focused solutions that ensure
customers do not pay more than their fair share.
One tool to ensure customers receive energy bills that
are fair and accurate is increased transparency in how
PCIA charges are calculated. The PCIA is a fee
designed to ensure customers who leave utility
generation service, like customers of a Community
Choice Aggregator (CCA) or Energy Service
Provider (ESP), pay their portion of legacy power
costs. But since the PCIA was implemented, there has
been no consistent standard for what data must be
made available in any California Public Utilities
Commission (CPUC) process or proceeding where
the PCIA, or a related charge, is set.
Problem
CCAs, ESPs, and their customers must pay the PCIA
charge but often lack access to the data, assumptions, and methods used to set it. This transparency problem leads to disputes, inefficiencies, and unexpected rate impacts for customers. More specifically:
• Disclosures vary by utility and by CPUC
proceeding, resulting in repeated fights between
CCAs and Investor-Owned Utilities (IOUs) over
data access and increased administrative
inefficiencies as the CPUC resolves disputes on a
case-by-case basis.
• Utilities sometimes make mistakes. In a 2019
PG&E proceeding, CalCCA identified $73
million in errors (including a $16 million increase
for CCA customers). In a recent proceeding,
PG&E identified an accounting error that would
have cost CCA customers $217 million.
• In an ongoing PCIA Rulemaking, the
Commission withheld information on the
evidence underlying their proposal and the rate
impacts of a proposed change. The CPUC did not
respond to a Public Records Act request for the
information.
Without adequate transparency, CCAs and ESPs are
unable to verify the accuracy of the PCIA charges that
their customers must pay and cannot confidently forecast rates – both of which are affordability tools needed to protect customers from unexpected rate increases.
Solution
AB 1761 proposes amending the Public Utilities Code to
require the CPUC and IOUs to disclose all data used to
calculate PCIA costs, including cost inputs, forecasting assumptions, and methodologies. The bill would also
ensure that when parties make proposals in a proceeding to change the PCIA they provide all the underlying data informing that proposal. Sensitive information would
remain protected through Commission-approved
nondisclosure agreements – a practice already used to
protect sensitive information in other compliance areas.
Greater transparency allows CCAs and ESPs to better
advocate for their customers and assess proposals to
change the PCIA. It also can inform cost forecasts and
shield customers from sudden rate swings. It reduces
repeated fights over information, improves regulatory
efficiency, and encourages utilities to verify calculations since the underlying data would be open to review. Costs to implement the proposal are miniscule, as most of this information already exists, while the benefits for rate, accuracy, stability, and consumer protection are
substantial. This proposal strengthens confidence that
customers pay their fair share — and not more.
For More Information:
Logan Pitts, Legislative Director
[email protected]
(916) 319-2002
Support
California Community Choice Association-CalCCA(sponsor) Attachment Staff Report Item 11C
SENATE BILL No. 1138
Introduced by Senator Padilla
February 18, 2026
An act to amend Section 380 of the Public Utilities Code, relating to electricity.
legislative counsel’s digest
SB 1138, as introduced, Padilla. Load-serving entities: resource adequacy requirements.
Existing law vests the Public Utilities Commission with regulatory authority over public utilities, including electrical corporations. Existing law requires the commission, in consultation with the Independent System Operator, to establish resource adequacy requirements for all load-serving entities, as provided. Existing law defines load-serving entity, for that purpose, as an electrical corporation, electric service provider, or community choice aggregator. Existing law requires each load serving to be subject to the same requirements for resource adequacy, the renewables portfolio standard program, and the integrated resource planning process that apply to electrical corporations, as provided.
This bill would require the commission to permit a load-serving entity to demonstrate compliance with resource adequacy requirements by selling to, or otherwise making transactions with, another load-serving entity to meet not more than 25% of its compliance obligation, on a short-term basis, and to permit those transactions to be denominated in the same unit of time used to denominate resource adequacy compliance requirements.
Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Attachment Staff Report Item 11D
Because the above provisions would be a part of the act, and because a violation of a commission action implementing the above prohibition would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do enact as follows:
line 1 SECTION 1. Section 380 of the Public Utilities Code is line 2 amended to read:
line 3 380. (a) The commission, in consultation with the Independent line 4 System Operator, shall establish resource adequacy requirements line 5 for all load-serving entities.
line 6 (b) In establishing resource adequacy requirements, the line 7 commission shall ensure the reliability of electrical service in line 8 California while advancing, to the extent possible, the state’s goals line 9 for clean energy, reducing air pollution, and reducing emissions line 10 of greenhouse gases. The resource adequacy program shall achieve line 11 all of the following objectives:
line 12 (1) Facilitate the development of new generating, nongenerating, line 13 and hybrid capacity and the retention of existing generating, line 14 nongenerating, and hybrid capacity that is economical and needed line 15 for reliability and to achieve the state policy specified in Section line 16 454.53.
line 17 (2) Establish new, or maintain existing, demand response line 18 products and tariffs that facilitate the economical dispatch and use line 19 of demand response that can either meet or reduce an electrical line 20 corporation’s resource adequacy requirements, as determined by line 21 the commission.
line 22 (3) Equitably allocate the cost of generating capacity and line 23 demand response in a manner that prevents the shifting of costs line 24 between customer classes.
line 25 (4) Minimize enforcement requirements and costs. line 26 (5) Consideration of mitigation measures, if the commission line 27 determines they are needed, to reduce costs to ratepayers. 2 Attachment Staff Report Item 11D
line 1 (6) Maximize the ability of community choice aggregators to line 2 determine the generation resources used to serve their customers. line 3 (c) Each load-serving entity shall maintain physical generating line 4 capacity and electrical demand response adequate to meet its load line 5 requirements, including, but not limited to, peak demand and line 6 planning and operating reserves. The generating capacity or line 7 electrical demand response shall be deliverable to locations and line 8 at times as may be necessary to maintain electrical service system line 9 reliability, local area reliability, and flexibility. line 10 (d) Each load-serving entity shall, at a minimum, meet the most line 11 recent minimum planning reserve and reliability criteria approved line 12 by the board of directors of the Western Systems Coordinating line 13 Council or the Western Electricity Coordinating Council. line 14 (e) (1) The commission shall implement and enforce the line 15 resource adequacy requirements established in accordance with line 16 this section in a nondiscriminatory manner. Each load-serving line 17 entity shall be subject to the same requirements for resource line 18 adequacy, the renewables portfolio standard program, and the line 19 integrated resource planning process pursuant to Section 454.52 line 20 that apply to electrical corporations pursuant to this section, or are line 21 otherwise required by law or by order or decision of the line 22 commission. The commission shall exercise its enforcement powers line 23 to ensure compliance by all load-serving entities. line 24 (2) Notwithstanding subdivision (c), the commission shall permit line 25 a load-serving entity to demonstrate compliance with resource line 26 adequacy requirements by selling to, or otherwise making line 27 transactions with, another load-serving entity to meet not more line 28 than 25 percent of its compliance obligation, on a short-term basis, line 29 and shall permit those transactions to be denominated in the same line 30 unit of time used to denominate resource adequacy compliance line 31 requirements.
line 32 (f) (1) The commission shall require sufficient information, line 33 including, but not limited to, anticipated load, actual load, and line 34 measures undertaken by a load-serving entity to ensure resource line 35 adequacy, to be reported to enable the commission to determine line 36 compliance with the resource adequacy requirements established line 37 by the commission.
line 38 (2) The commission shall calculate and publish annually on its line 39 internet website, in a new report or as part of another report, the line 40 percentage of each load-serving entity’s local and system resource 3 Attachment Staff Report Item 11D
line 1 adequacy requirements from the previous calendar year that was line 2 met with capacity from eligible renewable energy resources line 3 pursuant to the California Renewables Portfolio Standard Program line 4 (Article 16 (commencing with Section 399.11)), other zero-carbon line 5 resources, including large hydroelectric and nuclear resources, or line 6 energy storage resources. In determining the percentage of each line 7 load-serving entity’s resource adequacy requirements, the line 8 commission shall include all directly owned or contracted resources line 9 and each load-serving entity’s allocation of any centrally procured line 10 resources or allocation of resources pursuant to any other line 11 mechanism that involves an assignment or allocation of resources line 12 purchased or owned by a single buyer, and shall exclude any share line 13 of a load-serving entity’s resources that were allocated to another line 14 load-serving entity.
line 15 (g) An electrical corporation’s costs of meeting or reducing line 16 resource adequacy requirements, including, but not limited to, the line 17 costs associated with system reliability, local area reliability, or line 18 flexible resource adequacy, that are determined to be reasonable line 19 by the commission, or are otherwise recoverable under a line 20 procurement plan approved by the commission pursuant to Section line 21 454.5, shall be fully recoverable from those customers on whose line 22 behalf the costs are incurred, as determined by the commission, line 23 at the time the commitment to incur the cost is made, on a fully line 24 nonbypassable basis, as determined by the commission. The line 25 commission shall exclude any amounts authorized to be recovered line 26 pursuant to Section 366.2 when authorizing the amount of costs line 27 to be recovered from customers of a community choice aggregator line 28 or from customers that purchase electricity through a direct line 29 transaction pursuant to this subdivision.
line 30 (h) The commission shall determine and authorize the most line 31 efficient and equitable means for achieving all of the following:
line 32 (1) Meeting the objectives of this section.
line 33 (2) Ensuring that investment is made in new generating capacity. line 34 (3) Ensuring that existing generating capacity that is economical line 35 is retained to ensure reliability.
line 36 (4) Ensuring that the resource adequacy program can reasonably line 37 maintain a standard measure of reliability, such as a line 38 one-day-in-10-year loss-of-load expectation or a similarly robust line 39 reliability metric adopted by the commission, and use it for line 40 planning purposes.
4 Attachment Staff Report Item 11D
line 1 (5) Ensuring that the cost of generating capacity and demand line 2 response is allocated equitably.
line 3 (6) Ensuring that community choice aggregators can determine line 4 the generation resources used to serve their customers. line 5 (7) Ensuring that investments are made in new and existing line 6 demand response resources that are cost effective and help to line 7 achieve electrical grid reliability and the state’s goals for reducing line 8 emissions of greenhouse gases.
line 9 (8) Minimizing the need for backstop procurement by the line 10 Independent System Operator.
line 11 (i) In making the determination pursuant to subdivision (h), the line 12 commission may consider a centralized resource adequacy line 13 mechanism among other options.
line 14 (j) The commission shall ensure appropriate valuation of both line 15 supply and load modifying demand response resources. The line 16 commission, in an existing or new proceeding, shall establish a line 17 mechanism to value load modifying demand response resources, line 18 including, but not limited to, the ability of demand response line 19 resources to help meet distribution needs and transmission system line 20 needs and to help reduce a load-serving entity’s resource adequacy line 21 obligation pursuant to this section. In determining this value, the line 22 commission shall consider how these resources further the state’s line 23 electrical grid reliability and the state’s goals for reducing line 24 emissions of greenhouse gases. The commission, Energy line 25 Commission, and Independent System Operator shall coordinate line 26 to jointly ensure that changes in demand caused by load modifying line 27 demand response are expeditiously and comprehensively reflected line 28 in the Energy Commission’s Integrated Energy Policy Report line 29 forecast and in planning proceedings and associated analyses, and line 30 shall encourage reflection of these changes in demand in the line 31 operation of the electrical grid.
line 32 (k) For purposes of this section, “load-serving entity” means an line 33 electrical corporation, electric service provider, or community line 34 choice aggregator. “Load-serving entity” does not include any of line 35 the following:
line 36 (1) A local publicly owned electric utility.
line 37 (2) The State Water Resources Development System commonly line 38 known as the State Water Project.
line 39 (3) Customer generation located on the customer’s site or line 40 providing electric electrical service through arrangements 5 Attachment Staff Report Item 11D
line 1 authorized by Section 218, if the customer generation, or the load line 2 it serves, meets one of the following criteria:
line 3 (A) It takes standby service from the electrical corporation on line 4 a commission-approved rate schedule that provides for adequate line 5 backup planning and operating reserves for the standby customer line 6 class.
line 7 (B) It is not physically interconnected to the electrical line 8 transmission or distribution grid, so that, if the customer generation line 9 fails, backup electricity is not supplied from the electrical grid. line 10 (C) There is physical assurance that the load served by the line 11 customer generation will be curtailed concurrently and line 12 commensurately with an outage of the customer generation. line 13 SEC. 2. No reimbursement is required by this act pursuant to line 14 Section 6 of Article XIIIB of the California Constitution because line 15 the only costs that may be incurred by a local agency or school line 16 district will be incurred because this act creates a new crime or line 17 infraction, eliminates a crime or infraction, or changes the penalty line 18 for a crime or infraction, within the meaning of Section 17556 of line 19 the Government Code, or changes the definition of a crime within line 20 the meaning of Section 6 of Article XIII B of the California line 21 Constitution.
O
6 Attachment Staff Report Item 11D
SB 1138 – Lowering the Cost of California’s Resource Adequacy (RA) Program Background
California’s Resource Adequacy (RA) program, which ensures there is enough electricity supply to meet customer demand, recently transitioned to a new “Slice-of-Day (SOD)” compliance framework, which requires load-serving entities (LSEs), such as community choice aggregators (CCAs), investor-owned utilities (IOUs) and energy service providers (ESPs), to procure enough RA to meet load obligations in each hour rather than monthly. While this aligns resources more precisely with load, under current rules, LSEs can only buy or sell RA products for the whole month even though obligations are unique to each hour.
Problem
The mismatch between the procurement obligations and transaction rules forces LSEs to purchase more RA than they need to meet their obligations, creating artificial market scarcity and unnecessarily driving up RA demand (and prices). It’s akin to having to buy a crate of oranges when you only need a few slices. These unnecessary costs fall directly on California ratepayers, totaling tens of millions of dollars annually.
Solution
At a time of rapidly rising costs in the electricity sector, policymakers should provide LSEs maximum flexibility in how they contribute their fair share to keep the overall system reliable. SB 1138 would lower the costs to consumers of California’s RA trading program by allowing LSEs to transact RA load obligations on an hourly basis to align with the new slice-of-day RA program.
Benefits
Enabling hourly load obligation trading:
Promotes efficiency: LSEs with excess resources in one hour could trade with LSEs that are short, reducing the need to purchase additional RA.
Delivers affordability: In 2025, hourly trading could have lowered RA costs for consumers by avoiding $105 million in excess RA purchases for summer 2025 and potentially saving an additional $77 million annually.
Maintains LSE Responsibility: Creates a new procurement product rather than offering relief from meeting existing requirements
Requires limited administrative oversight: Trades can be executed bilaterally with existing RA tracking tools, making the system administratively simple while maintaining each LSE’s full responsibility to meet obligations.
Attachment Staff Report Item 11E
Today’s RA rules make it difficult for CCAs to allocate resources efficiently, resulting in unnecessary costs and administrative hurdles. By allowing hourly transactions, CCAs can better match supply to local demand, reduce over-procurement, and protect customers from inflated electricity costs. The system becomes more transparent, predictable, and fair. These reforms could save tens of millions of dollars each year while maintaining reliability and supporting California’s clean energy goals.
Staff Contact
Name: Emily Zhou
Title: Legislative Aide
Email: [email protected]
Capitol Office: (916) 651 – 4018
Support
• California Community Choice Association (sponsor)
Attachment Staff Report Item 11E
2026 California Legislative
Position Recommendations
Sam Sadle – March 18, 2026
Attachment Staff Report Item 11F
Power Charge Indifference Adjustment (PCIA
)
2 Power Charge Indifference Adjustment (PCIA) is Meant to Prevent Unintended Cost Shifts • The PCIA seeks to ensure departed customers neither impose nor receive unintended benefits bundled customers through evaluating the value of legacy utility resources relative to recent market values.
February 2025: Energy Division Report Asserts PCIA Calculation Methodology Needs Reform • CPUC staff asserts the way the PCIA’s RA market price benchmarks were calculated was flawed—resulting in a undesirably distorted valuation of legacy utility resources—and urgently needed reform.
February 2025 to May 2025: CPUC’s Undertakes Accelerated Rulemaking • After only two months of consideration, in May, CPUC staff proposes (and then in June the Board subsequently elects) to implement new RA market price benchmarks as part of the PCIA calculation that result in meaningful impacts for Ava and other CCA customer costs to the benefit of bundled customers.
KEY TAKEAWAY: Lack of Transparency
• Despite requests from Ava and other CCAs, in the proceeding and through Public Records Act requests, the CPUC has refused to share the information staff used to conclude that the previous methodology was flawed and that rapid change was needed. Absent legislative action, we do not expect this to change in the ongoing track 2 and 3 PCIA regulatory processes.
2025: What changed with the PCIA?
Attachment Staff Report Item 11F
Power Charge Indifference Adjustment (PCIA
)
3 AB 1761 Electricity: calculation methodology: data disclosures (Rogers):
• Official summary: This bill would require the commission [CPUC] to ensure that all data relied on in any decision or ruling, or in any proposal or analysis provided by an electrical corporation, the commission’s staff, or any other party, for the determination or application of a calculation methodology for any charge imposed on customers of a load-serving entity to recover the cost of contracts or resources owned by an electrical corporation or any value derived from that calculation is made available to load-serving entities and ratepayer advocates on behalf of customers. The bill would require that data to meet specified requirements, including that it is made through a public disclosure, except for market-sensitive data, as provided. (Emphasis added)
2026: Potential PCIA legislative action
Staff proposed action:
Support
AB 1761
(Rogers)
Support: Oppose:
Attachment Staff Report Item 11F
Resource Adequacy (RA)
4 CPUC transitions RA program to “Slice-of-Day”
• Prior to 2025, LSEs were required to procure sufficient RA capacity in order to demonstrate they were able to meet demand for the single highest demand hour each month
• Launched in 2025, the CPUC’s Slice of Day (“SOD”) RA program now requires LSEs to show available generating capacity to meet the highest demand for each hour on the day with the highest demand each month.
Compliance mismatch
• Under existing rules, LSEs are restricted in how they can transact with other entities to ensure compliance and are limited to transacting RA product for the whole month even though obligations are unique to each hour. • This mismatch means LSEs must purchase more RA than they need to meet their obligations, creating artificial market scarcity and unnecessarily driving up RA demand (and prices) CCA initiatives to allow hourly transactability to address mismatch in "Slice-of-Day" program • Regulatory approach: Since 2022, CalCCA and other parties have sought achieve hourly transactability through regulation. The CPUC refused to consider transactability until February 2026 when it released an assessment concluding that while it would provide cost savings for customers, the CPUC was ill-equipped to implement it. • 2025 legislative session: CalCCA pursued a strategy to insert RA transactability language into other energy legislative proposals and budget trailer bills. This was unsuccessful. 2025: Transition to ”Slice-of-Day” and unsuccessful regulatory and legislative strategy Attachment Staff Report Item 11F
5 SB 1138 Load-serving entities: resource adequacy requirements (Padilla):
• Official summary: This bill would require the commission to permit a load-serving entity to demonstrate compliance with resource adequacy requirements by selling to, or otherwise making transactions with, another load-serving entity to meet not more than 25% of its compliance obligation, on a short-term basis, and to permit those transactions to be denominated in the same unit of time used to denominate resource adequacy compliance requirements.
(Emphasis added)
2026: Potential RA transactability legislative action
Staff proposed action:
Support
SB 1138
(Padilla)
Support: Oppose:
Resource Adequacy (RA)
Attachment Staff Report Item 11F