By: Michelle Davis, for Valley Clean Energy

Monday, Dec 8.—The California Community Choice Association (CalCCA) today filed a Petition for Writ of Review with the California Court of Appeal, Third District, challenging a recent California Public Utilities Commission (CPUC) decision that retroactively changes the methodology used to calculate the Power Charge Indifference Adjustment (PCIA), a key component of electric rates for more than 15 million Californians who receive service from Community Choice Aggregators (CCAs).

“Retroactive ratemaking undermines one of the most fundamental protections for California ratepayers: the certainty that once a rate is approved, it cannot later be changed for policy reasons or to favor one group of customers over another,” said Beth Vaughan, CEO of CalCCA. “The CPUC’s decision creates instability, jeopardizes local planning and budgets, and erodes trust in the fairness of the state’s regulatory process. CCAs support strong, consistent rules, but those rules must be applied evenly—no matter who benefits in a given year.”

CalCCA’s petition argues that:

• Retroactively changing rates is unlawful. State law bars the CPUC from revising rates after they take effect.
• The CPUC’s justification relied on speculation, not evidence. Staff raised hypothetical concerns about the 2025 market price benchmark, but nothing in the record demonstrates that the existing method failed.
• The decision unfairly favors utilities. Investor-Owned Utilities (IOUs) supported the old calculation method for years—until it produced results that benefited CCA customers.
• The retroactive change harms affordability. Sudden, unexpected cost increases undermine customers’ confidence and make it harder for local governments and CCAs to plan budgets and set stable rates.

State law requires the CPUC to ensure “ratepayer indifference,” meaning neither IOU customers nor CCA customers should experience cost shifts due to retail choice. To accomplish this, the CPUC compares each utility’s procurement costs with the current market value of its generation portfolio and applies the resulting difference—positive or negative—to customer bills as a PCIA charge.

For many years, the PCIA produced higher charges for CCA customers. But in 2024 and 2025, rising market prices increased the value of utility portfolios, resulting in lower PCIA charges for some CCA customers. Although the existing methodology was developed with utility support in 2018 and applied consistently for years—including during periods when utility customers benefited—the CPUC acted once it began to increase rates for utility customers.

In an abbreviated four-month proceeding and with the support of the IOUs, the CPUC adopted Decision 25-06-049, altering the methodology for setting market price benchmarks used in the PCIA. The decision was justified by concerns about transaction volumes underlying one benchmark for 2025, despite no evidence in the record showing that the existing benchmark was inaccurate. The CPUC then applied the new methodology retroactively to 2025 rates already in effect.

CalCCA’s petition argues that the CPUC’s action violates the statutory prohibition against retroactive ratemaking, which protects rate stability and prevents after-the-fact changes to approved rates. The petition also asserts that the CPUC lacked adequate findings or evidence to change the existing methodology.

CalCCA warns that allowing the decision to stand would undermine the principle of indifference and create uncertainty for ratepayers, who could no longer rely on approved rates being final. The association is asking the Court to reverse Decision 25-06-049 on the grounds that the CPUC violated the prohibition against retroactive ratemaking and applied the new methodology to 2025 rates without legal or evidentiary support.

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 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. 

This press release was originally issued by CalCCA and is reprinted here with permission.