Any solution to the electricity crisis in California must include greater consumer choice, says a coalition of green power suppliers.
SACRAMENTO, California – December 22, 2000 (RENN) – “We are pleased to see that FERC (Federal Energy Regulatory Commission) is unwavering in its support for developing competitive electric power markets in California,” says the Competitive Retail Energy For Consumers in response to FERC’s order last week. “While today’s order illustrates that FERC continues to move in the right direction, Competitive Retail Energy For Consumers is concerned by FERC’s lack of attention to the development of retail energy markets.” “Approximately 150,000 California consumers have already benefitted from retail energy markets and millions more deserve the opportunity to do the same,” the group explains. “Ultimately, any solution to the crisis in California’s electric power markets must include the development of retail energy markets because they provide residential customers and small businesses the opportunity to make their own decisions about the best way to spend their energy dollars.” The “critical” need to provide retail choice was not adequately addressed in the legislation that started deregulation in California, adds the group. “Today, California has a new opportunity to put real, competitive choice into the hands of consumers. Unfortunately, the FERC order provides California with little guidance on this crucial issue.” The group serves almost all of the 150,000 customers in the state who have chosen a competitive energy provider instead of their traditional utility provider. Members include GreenMountain Energy Company, Commonwealth Energy, AES NewEnergy, Enron Energy Services, New Power, Strategic Energy, Chevron Energy Solutions, PHASER Advanced Metering Services and Shell Energy Services. In the order issued on Friday, FERC will overhaul California’s electricity market to control skyrocketing prices and curtail supply shortages that have almost resulted in blackouts throughout the state. The order will set a temporary price cap of $150 per megawatt-hour on wholesale rates and allow investor-owned utilities to keep the power they generate rather than sell it on the open market, as required under the 1996 utility deregulation law. The state Public Utilities Commission will set the price the utilities may charge customers. The order “will staunch the hemorrhage and begin the process of rehabilitation” of California’s power market, says FERC Chairman James Hoecker. More than half the states in the United States have moved toward a more competitive electricity market, and uneasiness is growing that the industry is running too close to the edge in providing electricity when it is most needed. A study by the Department of Energy concluded earlier this year that the transition to competition has strained transmission and distribution lines, and caused some utilities to focus on competing for markets, cutting costs and maximizing prices instead of assuring that power keeps flowing. The Foundation for Taxpayer and Consumer Rights says FERC has refused to take the necessary steps to control the outrageous power prices that electricity deregulation has brought to the California energy market, and argue that the order does nothing to assure the reliability and affordability of electricity. “Federal regulators have blatantly ignored the failure of electricity deregulation, and they continue to blindly appeal to the unregulated marketplace to control itself,” says the group’s Doug Heller.