Ratepayers Pay Off Direct-Access Tab

After the Department of Water Resources signed $42 billion in long-term contracts to fill the void left by financially threatened investor-owned utilities during the energy crisis, the percentage of customers leaving utilities to work out energy deals elsewhere grew from 2 percent in early 2001 to more than 13 percent of total utility load. The increase is attributed to ?the California Public Utilities Commission?s liberal interpretation of the Legislature?s direction to suspend direct access, including allowing customers to begin direct-access service after the suspension date and switch between bundled service and direct access service,? according to the Senate Energy and Utilities Committee analysis. In late November 2002, the CPUC limited the costs to departing load to 2.7 cents/kWh. The committee estimates the cost to remaining utility customers after large consumers departed for direct access as $750 million and climbing. ?In the meantime, [utility] customer rates will have to be maintained at a level high enough to support this ?forced loan? to direct access customers,? warns the committee.

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Ratepayers Pay Off Direct-Access Tab

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