Southern California Community Choice Energy Company files for bankruptcy

A Community Choice Aggregation (CCA) company that was formed to supply power to several towns in Riverside County, Southern California, has filed for bankruptcy, citing rising costs and falling costs. income during the COVID-19 pandemic.

Western Community Energy (WCE) is a Joint Powers Authority (JPA) made up of the towns of Eastvale, Hemet, Jurupa Valley, Norco, Perris and Wildomar. The JPA was formed last year to develop a CCA program and purchase power on behalf of residents and businesses as a “cost effective alternative” to electricity offered by Southern California Edison (SCE).

The company’s board of directors declared a “tax emergency” and authorized its legal counsel to file for Chapter 9 bankruptcy protection on May 24. In a press release, WCE said “several external factors” have impacted the company’s financial position since implemented in April 2020, at the start of the COVID pandemic.

Last August, California experienced “an unprecedented heat event” that resulted in significantly higher energy requirements and skyrocketing energy costs, according to WCE.

“Although WCE provided 90% of its electricity needs for the summer of 2020, the heatstorm prematurely depleted planned supplies,” the statement said. “Additional energy costs of $ 12 million were incurred throughout the 2020 summer season due to the unforeseen hot weather. “

Additionally, tighter state requirements for resource adequacy have created a market shortage, “dramatically increasing the cost of regulatory compliance.”

WCE said it lost revenue because many customers failed to pay their bills during the COVID-19 pandemic following a tenure from Governor Gavin Newsom. SCE also criticized Newsom for its mandate “that no customer can be disconnected due to non-payment of their utility bills” during the pandemic. The order was implemented by the California Public Utilities Commission (CPUC).

“Over the past year, defaults have averaged ten times higher than pre-pandemic industry standards and cost WCE millions of dollars in additional costs,” WCE said.

WCE President Todd Rigby said the continued impacts of the pandemic “severely limited the organization’s options for moving forward” and forced the company into bankruptcy.

“Chapter 9 protection gives us the opportunity to restructure the organization and reorganize our finances. We look forward to working with our lawmakers, the governor and other parties to identify a way forward for the WCE, ”Rigby said in a press release.

WCE has assured customers that they will not experience any disruption in service as a result of the bankruptcy, and said it will keep them informed and informed as its debt restructuring proceeds.