Pacific Gas & Electric Corp, the large northern California utility holding company, says it will supply electricity at a discounted rate to more than 800 McDonald's fast food restaurants in California in a contract valued at $180 million. The agreement, which takes effect on January 1 as the state plunges into deregulation of power suppliers, is bound to worry consumer advocates. They say that deregulation will allow suppliers to "cherry pick" the most lucrative contracts, leaving small businesses and home owners to contend with higher rates. PG&E is not disclosing terms of the McDonald's contract, announced in November. PG&E also says it has just signed contracts with a major chain of upscale department stores. It will supply consulting and billing services to about 40 shops, outlets and other properties of Neiman Marcus Group. The contract, to be provided through PG&E through its Energy Services subsidiary, indicates further how conventional utilities are coping with America's changing electricity market.
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