Energy, Cont’d
Politicians in California have been charged with the enormous responsibility of protecting the interests of residential energy customers as well as the interests of California businesses that were promised lower energy prices under electricity deregulation. Despite the pressure on politicians to end the electricity crisis, it is important that they do not to attempt “fixes” that at first pass appear attractive, but ultimately make matters worse.
Such is the case with recently passed legislation, Assembly Bill 1X, that made the California government, through the Department of Water Resources, the largest electricity buyer in California and directed the California Public Utilities Commission to suspend retail competition.
Competition in the retail energy market is what allows consumers, whether large or small, to opt out of their utility and choose an alternative energy provider to secure their power. While the CPUC has not yet suspended direct access, the prospect of suspension has created an unstable market environment for customers wishing to take control of their own energy needs.
This new law is fast becoming California businesses’ worst nightmare. Businesses will no longer be allowed to open a contract with an energy service provider, regardless of whether or not the ESP can offer a better energy deal than the utility. Some of the many benefits of using an ESP for businesses include the option to secure forward contracts and/or choose a fixed price, enabling businesses to protect themselves from the market volatility that has been punishing California for a year. The new law takes away these crucial budgeting tools and prevents businesses from knowing their energy costs in advance and allocating their resources accordingly.
Limiting the ability of customers to choose an alternative supplier also places a greater burden on the state as a power buyer. Politicians should recognize that each customer who switches to an alternative supplier is one less customer for whom the state must purchase energy, thus avoiding an increase in its already-significant liability.
If the state continues down its current path, ESPs will be forced to exit the market and direct access customers will become unwilling participants in the state government’s ever-growing liability from purchasing power.
As a satisfied direct access business customer, I encourage the California government to rethink its approach to competitive suppliers. ESPs are not the problem, but they will be an essential part of the solution.
Robert J. Bahl
Regional Vice President, Engineering
Marriott Western Region
Re his May 14 letter, is Republican Assemblyman John Campbell feeling okay? Whenever Republicans launch into sweeping, Rush Limbaugh-like generalizations about “liberals,” many people world have to wonder if they’re getting delusional.
Here’s a fresh idea, Assemblyman Campbell. Instead of recycling worn-out euphemisms, how about explaining more about the Republican role in the electricity fiasco? When it all began in 1996 with AB 1890, didn’t California Republicans unanimously endorse the so-called “deregulation” scheme? I’m all for deregulation, but few politcos are willing to admit that it’s the Republican form of deregulation that will rob homes and businesses of power this summer.
Until Republicans outgrow their perpetual finger-pointing stage, it seems independents will have to continue pushing the bipartisan mirror in front of their collective face.
Ted Bell
Santa Ana
