United States

United States

California advances competition, choice opens market but green sources no longer lead line-up

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The California Public Utilities Commission (CPUC) issued a ruling on May 1 that tentatively endorses the right of all customers of the state's investor owned utilities to choose alternative power providers starting on January 1, 1998. Whether this ruling, which displaces a previous policy of phasing in customers by classes over a four to five year transition period, is good or bad for wind energy is open to debate.

At first glance, though, it would seem to nullify the incentive built into California's restructuring law passed last year for customers to buy green. "The CPUC ruling does change the provision of the law that essentially states if you go green, you go first," acknowledges Jan Smutny-Jones, executive direct or of the Independent Energy Producers (IEP). He maintains, nonetheless, that "in the event of congestion" of long lines of customers lining up to buy power through direct access bi-lateral transactions, those choosing renewables such as wind would still go to the front of the line. "Retail marketers pitching green power still have an advantage. I think the ruling is a very positive development for the wind industry," he comments.

Rich Ferguson, national energy chair for the Sierra Club and research director of the Center for Energy Efficiency and Renewable Technologies (CEERT), also lauds the CPUC decision. He points out that CPUC president Gregory Conlon "was doing the whining for utilities" about the need to go slow with authorising direct access. Utility obstructions to direct access opportunities only delays the inevitable, he says. Ferguson argues that the CPUC ruling will expand the market for clean power sources. "All people will now be focused on choice, so there will be a bigger market," he says.

Randy Swisher of the American Wind Energy Association admits, though, that the wind industry has mixed feelings. "The green go first provision was effective in that many power marketers whose focus was on other technologies suddenly began looking at wind," he says. "On the other hand, we recognise that wind will benefit from choice and the CPUC ruling accelerates choice for everyone."

The CPUC also ruled that medium sized customers will have to install metres in order to participate in direct access transactions. This could deter smaller businesses from choosing alternative suppliers. But the CPUC also reaffirmed that utilities will no longer have a monopoly on metering and billing services, a move cheered on by green power marketers such as Working Assets of San Francisco. Nevertheless, the CPUC added a new wrinkle to this policy. To ensure that existing utilities are not stuck with the costs associated with stranded cost recovery and the funding of renewable energy and other "public purposes," competitors will have to pay these charges, regardless of whether these alternative providers collect these costs from customers.

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