In California, it depends on when you ask.

The California Public Utilities Commission's ongoing proceeding on distributed generation is examining a host of operations issues, including grid access, connection fees, and net metering rules. But DG also raises questions about distribution service. Specifically, did authors of the state's electric restructuring law, AB 1890, intend for transmission and distribution (T&D) to be opened to competition along with generation?

Pacific Gas & Electric on April 17 addressed this question in comments to the CPUC. In those comments, PG&E notes that competition in distribution is increasing. As a result of cherry-picking of its customers, says PG&E, "significant levels of uneconomic bypass, associated stranded costs, and the unnecessary duplication of facilities appear likely."

Perhaps more disconcerting to PG&E is the CPUC's apparent flip-flopping on whether distribution should be regulated. Notes PG&E, "Over the last few years the Commission has sent mixed signals regarding whether it is still adhering to its long-standing policy of rejecting economically inefficient and socially wasteful duplicative electric distribution facilities."

While each of the CPUC's decisions may appear to have little impact, says the energy company, "in aggregate [they] encourage non-CPUC-regulated entities to select profitable customers and shift costs to remaining PG&E customers."

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