Californiaís hybrid energy market: Some have retail choice, some donít rid energy market: Some have retail choice, some donít

By CMTA Staff

Capitol Update, Dec. 8, 2006 Share this on FacebookTweet thisEmail this to a friend

Direct access (DA) – the right to choose energy suppliers -- was the centerpiece of California’s electric restructuring in 1996.  Then came the 2000-01 crisis, the suspension of DA, and the hybrid approach that has characterized California’s retail energy market ever since. 

The retail market was divided into two on Sept. 20, 2001.  DA customers as of that date were allowed to continue on DA with a hefty surcharge added to pay for crisis-related costs, the DA Cost Responsibility Surcharge (CRS).  The other customers—those receiving bundled utility service—were shut out, and from that point on ineligible for DA.  The hybrid retail market—still in effect five years later—has created a world of haves and have nots: those with the right to enter into direct transactions and manage their own energy costs—and those without.

There have been numerous legislative proposals to lift the suspension of DA and establish a "core-noncore" market ("noncore" customers defined as customers with a maximum peak demand of 500 kilowatts or more), but none have reached the Governor’s desk.

CMTA and a number of other entities filed a petition on Dec. 6 asking the California Public Utilities Commission to investigate lifting the existing suspension and restoring the right of all customers to choose their electric energy supplier.  Other petitioners included K-12 schools, universities, retailers and reastaurants.

DA enables customers to choose an alternate power supplier, and to contract for energy supplies that meet their needs for price, reliability and level of risk.   Customer choice made sense when electric restructuring was enacted in 1996 and still makes sense today. Without competition, consumers will always pay more, and receive less, than if they are able to choose between providers vying for their business.

To become a supporter of this effort, contact Joe Lyons at 916) 498033 or e-mail at

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