PUC may reinstate deregulation policy

The California Public Utilities Commission on Thursday moved to possibly reopen a program suspended during the state’s energy crisis in 2001 that lets consumers buy electricity from independent suppliers rather than from utilities.

The PUC’s decision, made on a 4-1 vote, opens a three-phase process to decide whether “direct access” can be reinstated in the state’s retail electricity market. The process could take more than 18 months.

“Direct access is an integral part of the competitive market,” said Michael Peevey, PUC president and the proposal’s author. “Retail competition may exert further downward pressure on rates.”

The commissioners emphasized that they wanted to study retail competition and get more information before making a final decision.

Consumer groups, however, oppose the move, saying independent energy companies are working to circumvent a state law that protects consumers from harm due to deregulation.

Edison International’s Southern California Edison and some legislators oppose the effort, contending the PUC doesn’t have the legal authority to lift the suspension of direct access. PG&E; Corp.’s Pacific Gas & Electric Co. and Sempra Energy’s San Diego Gas & Electric Co. utility gave general support to competitive choice but said the schedule was unrealistic.

Direct access to electricity suppliers was a key plank in California’s ill-fated deregulation plan adopted by the state Legislature in 1996. The goal was to drive down power prices through competition among investor-owned utilities and independent energy suppliers buying and selling electricity through a central power exchange.