Peevey Shapes Core-Noncore Plan into Policy Creed

By Published On: July 3, 2004

As legislation moves in Sacramento to establish limited direct access to nonutility electric providers within a core-noncore market, Michael Peevey, California Public Utilities Commission president, is set to air his proposed policy statement supporting a more full-fledged core-noncore structure at next week?s CPUC meeting. The draft policy tweaks Peevey?s April proposal in part by calling for two years? instead of five years? notice before customers switch to direct access. This version ?moves the debate forward very significantly,? said John Geesman, California Energy Commission member. He added that he is pleased that the current iteration more strongly endorses a move toward real-time prices for direct access, which are meant to reflect actual costs based on when energy is purchased. Real-time pricing is also intended to push load away from peaks in order to allow for more reserves and better power plant efficiency. Peevey?s plan underscores that electric service providers are required to meet the state?s 20 percent renewables goals. Unchanged are provisions for direct access to resume one year after the Legislature approves a direct-access market for noncore customers and a 500 kW threshold for customers to leave bundled service, with aggregation of smaller customers permitted. Peevey still banks on safeguards against cost shifting between residential customers and those pursuing electric choice. Legislators and regulators alike have long been bedeviled by the question of how to devise such protections.

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