California deregulation dead : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Little choice left for energy: The concept, eroding for months, likely will die this week.

By Carrie Peyton Bee Staff Writer (Published Aug. 20, 2001) Remember shopping around for electricity?

It was at the heart of electric deregulation, the flip side of letting independent generators buy and build power plants.

Supermarkets tried it. Colleges tried it. More than a fifth of the state's biggest power users abandoned major utilities and cut independent deals for cheaper electricity, under a program variously called "direct access" or "customer choice."

But the program has been living on borrowed time since February, when the state Legislature told regulators to suspend it. Regulators waited more than six months amid frantic angling to preserve customer choice, but now are scheduled to act this week.

If choice is eliminated, it's hard to say just what would be left of the consumer side of California's costly venture into deregulation.

"We sort of have this hybrid that in some ways is the worst of all worlds," said state Sen. Debra Bowen, D-Marina del Rey, who believes that reviving a full-fledged market may not be practical for years.

"It looks to me like a state-run monopoly," said Rick Counihan of Green Mountain Energy Co., an independent supplier whose customer list statewide has shriveled from 60,000 to 6,000.

Vendors including Green Mountain and big consumers in agriculture, manufacturing and retailing are trying to stop the state Public Utilities Commission from pulling the plug on choice at a meeting Thursday. They have asked the PUC to look instead at options for keeping the program going with new restrictions.

In addition, they are mobilizing in Sacramento, hoping that when the Legislature returns today, it can be persuaded to let a stripped-down program live on.

The efforts face tight deadlines, furious opposition from small consumers and deep skepticism from many lawmakers, the state treasurer and the governor.

"I'm not confident at all right now" of succeeding before either the PUC or the Legislature, said Andrea Weller of Strategic Energy, one of the few independent suppliers still signing up new customers. "Every day, more and more, I feel like we're losing momentum."

Here's why:

When the state stepped in to buy power for California's three big, ailing utilities in mid-January, it paid short-term prices so high that officials concluded it would have crippled the customers of those utilities -- businesses and homeowners alike -- if they had to pay the state back all at once through rate increases.

Instead, the state decided it would sell bonds and let those utility customers pay it back on their bills for years to come, a little at a time.

In addition, the state Department of Water Resources began arranging long-term power contracts for those utilities, lining up supplies for the next 10 to 20 years, often at wholesale rates far higher than are being charged today.

The state's fear is that if choice is an option, consumers would try to get out from under those two sets of higher costs by choosing a provider that can buy power now, when wholesale costs have fallen again.

"DWR purchased power on behalf of everyone," said Nettie Hoge, executive director of The Utility Reform Network, a Bay Area consumer group.

"If there is low-cost power out there, and certain customers can flee the lifeboat that DWR created, that means they'll get cheap power and the folks left behind will be paying," she said.

Hoge's group worries that smaller consumers would shoulder an unfair share of the costs, because they traditionally lack the prowess of a big business to negotiate the best deals for commodities like electricity.

The three-year history of customer choice bears her out. Big consumers far outpaced households in switching suppliers. Only about 2 percent of eligible households gave customer choice a whirl at its peak last year, mostly signing up for environmentally gentle "green" power, sometimes at higher prices. By comparison, 20 percent of the state's largest power users switched, and among them they accounted for nearly one-third of the electricity consumed by big industrial users.

Numerous independent suppliers turned their customers back to the big utilities early this year after wholesale prices soared, the state-sanctioned Power Exchange collapsed and the Legislature seemed to seal their fate by ordering the PUC to suspend customer choice.

"We were sort of collateral damage" amid the chaos that spread through the electric industry, said Counihan of Green Mountain, which jettisoned all but a small group of customers who had signed up for fixed-price electricity.

The Sacramento Municipal Utility District, which had its own choice program, changed course in spring, putting it on hold until at least 2003. Statewide, direct access fell from more than 220,000 customers to fewer than 70,000, and from 14 percent of the state's electric load to about 2 percent.

"It was eerie," said Tara Warfield, an Auburn massage therapist and longtime Green Mountain customer. "All of a sudden, PG&E is sending me their bills and Green Mountain had disappeared."

Warfield, who believes that investing in wind and solar power is the only route to a sound energy future, said she doesn't really know what should happen now. She wants a chance to choose green power, but she doesn't want to soak the state.

Big businesses, too, say they are willing to pay their fair share but are not willing to be captive consumers.

"I don't see any reason why the state would want to stand in the way of the ability of businesses to reduce their costs," said Allan Zaremberg, president of the state Chamber of Commerce.

State Treasurer Phil Angelides is among those arguing for customer choice to be suspended. He said the course California must follow is clear.

"Retail choice needs to be suspended so we can sell the bonds," and it needs to happen Thursday to keep the sale on track for late October, he said.

Would-be bond investors have to be assured that they'll be repaid by utility customers or the entire sale could be threatened, Angelides said. That could leave state taxpayers at risk for the $12.5 billion in bonds, imperiling schools and other public programs.

But after the sale, Angelides said, lawmakers and regulators can still look for ways to revive customer choice without threatening bond revenue. His office spelled out the ground rules in a memo issued in June, saying that any program must charge customers who leave the big three utilities their fair share of costs run up by the state.

One effort to do that, Bowen's SB 27xx, faltered in July. Big consumers didn't support the proposal, fearing its "exit fee" was too high and its restrictions on the timing of switching were too tough, said Dominic DiMare, legislative advocate for the Chamber of Commerce.

Now, the chamber and others are asking Bowen to revive some version of her bill, believing it may be their last, best hope for salvaging any kind of market in the short run.

But Bowen is not sure that the backers of electric choice are willing to unite behind something that would fully protect the state and small consumers.

"I've been very clear with people" about what would be needed to revitalize the bill, she said. "If people don't care enough about it to deal with it in a realistic way, I have other things to work on."

-- Martin Thompson (, August 20, 2001


The demise of Green Mountain Power is a good thing.

see for details on how they lied about the supposedly green nature of their power

it's better to invest in efficient appliances (compact fluorescent lights!) than to support scams like Greed Mtn Power, a brainchild of billionaire Sam Wyly, one of Dubya's chief backers

-- mark (, August 20, 2001.

I just bought a Maytag fridge, 20.7 cu-ft. It uses 463kWHrs in a year # FMB2156GEx [x=color, White, Q=bisQue, Black] I paid $725. I asked if they could do any better on the price and saw a price of $725 on the screen. It listed for $850. Delivery was $35.
My old fridge used almost three times more juice. ~1156kWHr a year.
I did not like the sliding shelves in this frezer, they are fancy and take up too much room, just pulled them out and was much happier.
    The criteria for choosing this frige was:
  1. Energy below 525kWhr in a year
  2. Larger than 20 cu-In
  3. Brand Maytag or Whirlpool [many folks including some repair techs said these were the least annoying applaince brands]
  4. Less than $800

see Going solar? thread Skip the unformatted text, it was reposted in a readable format.
Another beef was that the sockets did not allow for small flourscent bulbs to be screwed in, so a quick dissembly of the control panel and cut the extra rib off, and wallah 11W flourecents in the fridge. -- Flourecents are slow in the startup, are even slower in the cold. When frozen it takes way too long for them to start.

Costco has some really nice small wattage flourescent bulb two for less than $12. I know Wallymart also sells some but these are much smaller.

The reason for flourescents in the fridge is that should the door get left open - youngsters. The heat from the bulb will not overwhelm the cooling available, but you will probably still have spoilage.

-- (, August 20, 2001.

Moderation questions? read the FAQ