United States

United States


The human face of deregulation: Plea for retail wheeling

About 40 households near Los Angeles are petitioning to buy wind power from the turbines of their neighbour, Peter Banner, of Support Resources Inc. The demand comes as California regulators consider how to restructure the state's power market, including meeting suggestions for "green pricing." Banner petitioned the California Public Utilities Commission, arguing for immediate access to the retail marketplace so consumers could choose their power supplier. He argued that his utility SO4 contract was expiring and without access to customers, his project was in severe financial trouble.

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About 40 American households in an upscale residential enclave near Los Angeles have signed a petition saying they want to buy wind power directly from the turbines of their neighbour at Support Resources Inc (SRI), a wind farm operator and owner. It is apparently the first time citizens have demanded the right to buy wind power directly and comes as California regulatory officials are considering how to restructure the state's massive power market, including meeting suggestions for "green pricing" of clean power.

The citizens are residents of a hill-top area in the coastal surfing community of Malibu and are asking to buy "non-polluting renewable energy technology" from SRI owner and local, Peter Banner.

In December Banner petitioned the California Public Utilities Commission (CPUC), arguing for immediate access to the retail marketplace to enable electricity consumers to buy power from the supplier of their choice. "My request and desire is for equal access to the distribution highway and the right to offer the consumer my product," he said, pointing out that it is the consumer who pays for transmission lines.

Banner further told CPUC Commissioner Daniel Fessler that since SRI's Standard Offer 4 power purchase contract expired and he fell of the "price cliff," payments by local utility Southern California Edison have only barely covered the costs of running his wind farm in the San Gorgonio Pass. "I have difficulty understanding and reconciling the disparity between what SCE believes my power is worth, $0.035 per kWh, and what they believe their power is worth, $0.138 per kWh," he says. This is the rate paid by consumers in nearby Palm Springs.

Banner stressed that the slow pace of deregulation, as mandated by the CPUC, is a major stumbling block for small independent power producers, giving an unfair advantage to established members of the power industry. "They are being given the luxury and ability to prepare and strategically position themselves for the opening up of the market place to competition," he storms. "While this gradual phase-in takes place, those of us not protected by guaranteed rates of return and assured customer base will not be able to survive.

"I for one cannot afford three years of deficit spending while waiting for my turn at the trough." By that time, Banner said, he would be bankrupt and his wind farm dismantled and shipped off to a country such as India where a retail wheeling type concept is already in place.

The issue of retail wheeling has dominated the question of how California, the largest state and often a trend setter, restructures its power market. Major consumers such as industrial plants are allowed to buy power from independent producers but residential customers are not. In an attempt to force a change in legislation, Banner circulated a petition amongst local homeowners in a canyon in the Santa Monica Mountains overlooking the California coast, who range from fire fighters to famous music stars. As many as 40 signed, asking to be allowed to buy power from SRI, and Banner has no doubt that more would do so, given the opportunity. He estimates that the homes need some 676,000 kWh annually and that just ten of his turbines would generate 1.5 million kWh a year. The power generated does not, however, match the needs of the community month by month, and a short fall would occur in the three months with least wind, November, December and January, he says.

"The California wind industry, once the world leader, is now moribund. Without careful evaluation and consideration given to the impact the presently proposed deregulation process and time table will have on the renewable energy industry, California will once again become a leader. A leader in killing a once thriving industry," he concluded.

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