Electricity Deregulation

Your March 2 editorial regarding the coming competitive electricity market took a dim view of fundamental change that has already benefited investor-owned utility customers through lower rates. More important, your view negates the ultimate benefit of exponentially enhancing the state’s economic viability, as businesses choose to remain in, or relocate to, California.

Not to have embarked upon this fundamental change would have been a colossal economic disservice to this state. Until January, the people of California were paying rates 50% higher than the national average. On Jan. 1 residential and small commercial utility customers saw their monthly electric bills drop 10%. The Legislature has required another 10% reduction in 2002, and rates are anticipated to fall 25%-30% after that.

The commission has taken steps to ensure that only companies that meet standards for technical, operational and financial viability pass a background check during a 30-day waiting period. The issuance of a CPUC registration number ensures that they understand their obligations to comply with California law. A variety of consumer protections, in addition to those already in place that serve to prevent switching of customers from their chosen electricity provider to another one without independent third-party verification, will be adopted this month.

Competitive markets inherently produce competitive prices and an increase in providers. Providers in turn offer consumers new products and services, and it is consumer choice that then drives the growth of the market. As in any industry, there will be a small number of bad actors. This fact should not deter our efforts.

JESSIE J. KNIGHT JR.

Commissioner

Public Utilities Commission

San Francisco