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The Redwood Coast Energy Authority’s Board of Directors approved a rate increase Thursday that will prod RCEA rates just above Pacific Gas and Electric Company’s for the first time.

The increase will pencil out to about $2 more than what PG&E charges the average customer a month due to a change to the electric generation portion of the bill.

RCEA staff pointed to a skyrocketing fee charged by PG&E as the culprit.

Fiscal responsibility of RCEA was the broad purpose of the increase, adopted at last week’s meeting, with an aim to keep $26 million in the agency’s reserves to avoid paying creditor fees.

The agency, a community choice aggregator, purchases electricity for customers as a (typically more affordable) alternative to the same service offered by for-profit utilities. The aim is to, one day, offer a 100% renewable energy portfolio that’s locally controlled.

About 90% of residents of Humboldt County get their energy through RCEA.

Extra funds from customers rates are needed to keep reserves healthy thanks to jumps in power costs and a volatile fee customers pay to PG&E called the Power Charge Indifference Adjustment (PCIA), staff said at the meeting.

Executive Director Beth Burks called an analysis of the fee “shocking.”

“Since the inception of our Community Choice Energy Program, our customers have paid $118 million in PCIA fees,” she said.

The fee is intended to recover a utility’s costs for power contracts or resources acquired before a customer left the utility in favor of an alternative energy provider (like RCEA).

But this fee is exceedingly volatile. It increased a whopping 230% this year, something that made it “impossible for RCEA’s retail rates to remain discounted from PG&E generation rates,” according to the resolution. 

Without the fee, RCEA’s generation rates would be 25% lower than PG&E, according to RCEA staff.

“It really is the PCIA that makes it difficult for us to recoup our costs,” said Burks.

Board members criticized the PCIA, which customers of community choice aggregators must pay, and spoke in support of reform.

Community choice agencies have been pushing for legislative change, including a bill authored by North Coast Assemblymember Chris Rogers. AB 1761 would add transparency and forecasting measures to the fee, which was established by the California Public Utility in 2001.

The California Community Choice Association is also pursuing legal challenges to the methodology approved by the California Public Utilities Commission, claiming it unlawfully shifted costs onto customers of agencies like RCEA.

As for increasing rates on customers, board members and staff weren’t happy but agreed it was the right choice.

“It sucks. It doesn’t feel good,” remarked Vice Chair Sarah Schaefer.

The board agreed unanimously, with a couple of absences, to allow for staff to charge up to a 9.5% increase to the generation charge.

A 6% increase to this charge will go into effect September 1. The change would mean an average cost of $2.33 more than PG&E’s rates, staff said.

Other items like transmission and distribution fees make up larger portion of customers bill, according to Burks.

She called the volatility of the PCIA “frustrating,” when speaking to the Outpost today.

“This is really just tying our hands to deliver real benefits to our community,” she said.

Aside from this fee, staff at the meeting pointed to a fiscal situation that required action now, rather than later.

This fiscal year, expenses are outpacing revenue.

“We’re still not covering the total cost of power, let alone our operational expenses,” said Lori Biondini, RCEA’s business planning & finance director. 

Staff told the board they are anticipating pulling $3.7 million out of cash reserves.

The board had previously directed staff to raise rates as part of a broader push toward fiscal responsibility. This raising of rates follows COVID-19 era financial problems for RCEA because people stopped paying their bills. The agency took out loans in response.

Burks encouraged customers to reach out to RCEA for explanations on bills, or for affordability programs geared toward energy efficiency.