Trade Group’s Deal Promises Cheap Electricity

The California Manufacturers Assn. announced Monday that it has an agreement with a Montana utility company to provide cheap electricity to California businesses.

“What we have here is a historic document that we think is the wave of the future,” CMA President William Campbell said in a telephone news conference announcing the pact with Montana Power Co. “It’s going to be good for business and good for consumers. We will once again be competitive with other states and other nations.”

The three-year agreement provides power at 6% to 8% below the California market index price for electricity, which CMA and Montana Power officials described as a floating number that may change from hour to hour.

After signing up through the CMA, companies will be billed directly by Montana Power.

CMA Vice President Brian McMahon said he didn’t know how many of the association’s 1,000 member companies would sign up for Montana Power service, but he predicted it would be a substantial number because of the savings.

“More than 30 companies have inquired so far, and this is without marketing the product, and one very large manufacturer with thousands of employees has signed up,” McMahon said.

The agreement was made possible by a 1996 state law that allows Californians to buy electricity from any source they choose beginning next year.

That law also allowed trade associations and others to create or join buying groups to pool their buying power to negotiate better prices from suppliers. The electricity will be delivered by existing distribution systems for an access fee to the utilities that build those systems.