CPUC considers ending hybrid energy market to allow more retail choice

By CMTA Staff

Capitol Update, May 25, 2007 Share this on FacebookTweet thisEmail this to a friend

Direct access (DA), the right to choose energy suppliers, has been allowed for some but not others since September 2001.  It was then that the retail market was divided in two.  DA customers 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 to access the retail energy market.  The hybrid retail market is still in effect five years later.  It 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 such rights.

The California Public Utilities Commission (CPUC) opened a proceeding on Thursday, May 24, to consider whether, or under what conditions, to lift the suspension of DA.  The proceeding will occur in three sequential phases:

    •    Phase 1 will examine the CPUC’s legal authority to lift the suspension of DA;
    •    Phase 2 will consider public policy issues relating to DA and the wholesale energy market; and
    •    Phase 3 will develop the rules that should govern a reopened DA market.

"Consumers have choices for most of the purchases they make and we will evaluate whether and how that may include electricity," said CPUC President Michael Peevey.  "We will conduct this proceeding in a careful and balanced manner and take into account any lessons to be learned from previous efforts to bring competition to electric retail markets."

The proceeding is in response to a petition filed last December by CMTA and a number of other entities asking the CPUC to investigate restoring the right of all customers to choose their electric energy supplier.  Other petitioners included K-12 schools, universities, retailers and restaurants.

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