Legislators Skeptical of Direct Access for Small Consumers

With the California Public Utilities Commission creating the opportunity last week for the state to renew consumers’ ability to go around utilities and buy their electricity from third party providers, the State Senate Energy, Utilities, & Communications Committee appeared dubious about the move. “I want to make sure we have a full grasp of what [direct access] means to the average Californian,” Senator Christine Kehoe (D-San Diego), committee chair, said in a March 4 informational hearing. She added, however, that she found it “shocking” that some, like the CPUC, are advocating allowing direct access for small customers. So-called “direct access” became part and parcel of the state’s attempt at deregulating the electric industry in 1996. The plan allowed consumers to opt out of utility service to receive their electricity from other providers, such as Enron. Utilities remained responsible for administration, but not the price of the commodity. The price was agreed upon between the customer and the third party, called an “electric service provider.” Large electricity consumers, such as those represented by the California Manufacturers & Technology Association, lobbied heavily for their members to be allowed direct access to try and cut rising energy rates. Enron, as a potential energy service provider, was also a big lobbyist of regulators and legislators. After being allowed direct access, a weakness appeared during the 2000-01 energy crisis: the drain on utilities’ finances was exacerbated by all the customers who had left their full service systems. The Legislature then determined to cancel any new direct access contracts. The CPUC estimated at the hearing that the remaining grandfathered contracts represent 7 percent of utilities’ demand. Representatives from investor-owned utilities did not strenuously resist reintroducing direct access. However, if so, they wanted clear curbs on exits and reentry so they can plan for electricity supplies. The state has more important priorities, according to Mike Florio, The Utility Reform Network senior attorney. Those issues--curbing greenhouse gases and increasing renewable energy in utilities’ portfolios--should be taking precedence over the direct access debate, he said. The committee made no decisions. However, Kehoe wrapped up by saying this is what’s in play, “give some relief to the few at the expense of the vast majority.”

Over 11K Stories!

| Independently Powered Energy News

Legislators Skeptical of Direct Access for Small Consumers

vdharadmin

Related Posts

Op-Ed: Before and After Net Energy Metering 3, A Thought Experiment

Auld Lang Zine

CPUC Chops Solar Rooftop Payments & Adds Battery Incentives, Few are Happy

Personalities Plugged In: Steven Chu