May 27, 2020

Choice and Savings – is the California ISO Market Direct Access (DA) Program right for you, right now?

By John Reid, Vice President, Power Strategy & Ali Clunk, Sales Operations Analyst

California is expanding access to retail electricity for non-residential customers, allowing some end users the ability to shop for competitively priced energy. Eligible customers can enter into a lottery for the chance to procure electricity at a more cost-effective rate than they are currently paying with the utility, however, the exit fees to leave the utility program can sometimes outweigh the benefits. As such, it is important to run an analysis to calculate the associated cost and fees in order to determine which option is the best for your energy profile before making the decision.

Upcoming Lottery

California’s Direct Access (DA) Program allows a limited selection of non-residential customers in California to purchase electricity from an Electric Service Provider (ESP). Non-residential customers must actively submit their application to the Annual DA Lottery Process by the June 8-12, 2020 due date to participate in the lottery. Edison’s team of analysts can assist in submitting the application as well as run an analysis to determine if entering DA is the most cost-effective option. Those participating in the 2020 Lottery that are not initially awarded Direct Access (notices given by August 2020) will then be moved to the 2021 DA Waitlist. Flow dates for those awarded DA will start as early as January 1, 2022.

Once you have submitted your application, if you are selected as one of the customers who may shop for competitively priced energy, you have a short period to accept or deny. If no response is given, you are automatically enrolled.

The Edison Energy team is able to run analyses and make recommendations on whether moving to retail pricing provides the best savings, or if rejecting the option is the most cost effective.

Program Background

For the first time in almost ten years, California’s DA Program allowed more participants to shop for the most cost-effective electricity programs. Because of “Hertzberger” Bill – SB 237, the annual participation program cap is set to raise by an additional 4,000 GWh statewide (from 13% of retail load in California to approximately 15.5% of retail load). This addition is to be added in two phases:

  • Phase One: 2,000 GWh of load first awarded to 2019 DA Waitlist determined by the 2018 Lottery. Flow dates started as early as January 1, 2020.
  • Phase Two: 2,000 GWh of load first awarded to 2020 DA Waitlist determined by the 2019 Lottery. Flow dates will start as early as January 1, 2021.

The DA Program closed in September of 2001 allowing only customers actively in the market to continue as DA customers and was was revisited in 2010 by the Legislature. The DA Program was re-opened to new customers and expanded the cap to the current level.  approximately 13% of retail electric load in California. Customers were able to apply under a first come first serve process, however, in 2013, the process changed to a lottery system where utilities assigned a random number to applicants determining their position for available capacity within that utility’s DA load cap.

Navigating the Changing Energy Landscape

Edison Energy helps clients navigate the uncertainty and complexity surrounding the energy landscape. In California, the energy market has seen numerous changes over the last several years and will continue to evolve in the near future, all of which can significantly impact your energy portfolio. Edison’s team of experts monitor, evaluate, explain and make recommendations on market, policy, and technology trends—ensuring program compliance and reduced-price risk.

 


 

Looking for more information about the Direct Access program or electric choice programs in other states? Submit an inquiry here or email us directly: Information@edisonnergy.com

 

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