PG&E Official Lukewarm on N??ez Bill

Stopping short of opposing a bill that would allow large consumers direct access to nonutility providers, a top Pacific Gas & Electric official has questioned the author of the legislation about its necessity. ?We are not convinced that broad legislation is needed in this session,? said Dan Richard, PG&E senior vice president of public affairs, in a March 11 letter to Assembly Speaker Fabian N??ez (D-Los Angeles). Among other causes for doubt, according to Richard, is that the measure calls for a resource planning process already in play at the California Public Utilities Commission. Richard added that if noncore customers choose to terminate service from utilities, their right to service from utilities needs to be restricted to guard against shifting costs to bundled, or core, customers. Richard asked N??ez to defer to the administration. ?The governor?s planned realignment of energy agency responsibilities may address many of the policy implementation issues,? he said. Known informally as the ?Edison? bill for that utility?s support for and imprint on its language, AB 2006 is seen by some Sacramento insiders as having mileage on the strength that it has recently appointed Assembly speaker N??ez?s name on it. The California Manufacturers & Technology Association (CMTA) is pleased with Richard?s letter. It opposes the bill in its current form because its core-noncore strategy doesn?t address many of the ills CMTA perceives in the current energy market. ?Our main concern is lower rates because our members? rates are 60 percent to 90 percent higher than they were before the crisis,? said CMTA lobbyist Joe Lyons. ?We also want to make sure that there is a competitive procurement process and a competitive market,? issues that are not addressed in AB 2006, he added. Richard?s letter adds a ?credible voice that seems to cast doubt on the need for AB 2006,? said Gary Ackerman, Western Power Trading Forum executive director. ?I think it will change the balance of how people will view the bill.? The core-noncore approach to direct access was a key precept in original deregulation rules in the mid-1990s. At the time, regulators fought over the idea that both small core customers and large noncore customers should have direct access to outside electricity markets. Though the dual core-noncore approach carried favor, the market dropped out for small customers after retail competition set in. Meanwhile, the flight of large customers away from utility service to outside providers further threatened the economic survival of private utilities during the energy crisis. An informational hearing on the bill by the Assembly Utilities and Commerce Committee is expected after the spring break. At this point, some expect it to pass out of that committee for no other reason than that N??ez is the author. One insider noted, ?It may land with a big thud in the Senate.? Elizabeth McCarthy also contributed to this report.

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PG&E Official Lukewarm on N??ez Bill

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