In April, 36,000 Make Switch to a Different Power Provider
In the first full month of California’s new, competitive market for electricity, a growing number of consumers and small businesses stuck their toes into the electron-buying pool, according to statistics released by the California Public Utilities Commission.
Slightly more than 36,000 homes and businesses picked a new electricity provider in April, significantly more than in any other month, perhaps indicating a grudging acceptance of the restructuring industry. Advertising was heavy during the month, both by new energy service providers and the publicly funded “Knowledge Is Power” informational campaign.
But the ranks of converts are still sparse. Of the state’s nearly 10 million eligible electricity customers, barely 1%, or slightly more than 97,000 to date, have exercised their ability to purchase power from any marketer they choose.
Since April 1, customers of the state’s seven investor-owned utilities--the biggest being Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric--have been able to buy their electric power from any of the dozens of energy marketers that have registered with the PUC. Customers were allowed to begin selecting new providers since last November. Customers who do not switch continue to receive their electricity from their previous utilities at prices set by the California Power Exchange market for electricity.
Since Jan. 1, residential and small-business customers of the utilities have received a 10% discount on their electric bills that is being financed by bonds.
“I’m very positive,” said Greg Conlon, the PUC commissioner who, as the agency’s president until three months ago, helped craft the deregulation plan.
“I had no expectations. You invite them to the dance and if no one comes, you’re disappointed,” he said.
Conlon said he is encouraged by media reports that the large energy service providers have garnered more than $3 billion, or more than 13%, of the state’s $23-billion electricity market--a level of business that new telecommunications companies didn’t reach until 18 months after that market was opened to competition.
“There appears to be more awareness” among electricity users of the new-found ability to switch energy service providers, said Diane Sable, spokeswoman for PG&E; Energy Services, an unregulated affiliate of San Francisco-based Pacific Gas & Electric. For example, PG&E; Energy Services, one of the biggest and most successful of the new energy marketers, announced a $120-million contract in April to provide electricity and energy services to the Rite Aid drugstore chain.
In all, 25,459 residential customers of the three big utilities asked to be switched to a new energy service provider in April, compared with 18,530 in March. Some 8,516 small commercial users requested a change in April, compared with 2,725 in March. The total kilowatt usage represented by these customers was not available for all utilities.
Slightly fewer large commercial and industrial users elected to pick new electricity providers in April, slipping to 1,443 from 1,823 in March.
“A lot of them are laying back in the bushes and waiting,” Conlon said. “I would encourage companies to go out and cut the best deal.”
But electricity shoppers are finding the new market confusing and not very rewarding, said Michael Shames, executive director of United Consumer Action Network in San Diego. The consumer advocacy group just completed a survey of all the new energy service providers and what prices and terms they were offering, which will be released soon, he said.
“The headline will be: ‘Why Bother?’ ” Shames said. “It’s a hassle and it’s confusing” to shop for electricity and the discounts are not that good, he said.