SACRAMENTO — With memories of California's millennial energy meltdown fading, a top utility regulator and some businesses are maneuvering to resurrect a key element of the state's infamous electricity deregulation law.
That effort -- and fears about fiddling with the state's delicate power grid -- are sure to amp up political tensions between the constitutionally independent California Public Utilities Commission and the Democrat-controlled state Legislature.
Led by its president, Michael Peevey, the commission is exploring ways to lift a freeze on a program that allows residential and large power users, including big-box stores, cement plants and universities, to shop around to get the best price for electricity.
"I do believe that people ought to have choice," said Peevey, who was just appointed by Gov. Arnold Schwarzenegger to a second term as commission president. "Why is it that in this particular instance people seem cool to the idea of choice but like it in everything else they buy, from phones to cars?"
Deregulation advocates, who persuaded lawmakers in 1996 to revamp the way electricity was generated, distributed and marketed, tout "direct access" as a way to lower energy costs and break historical monopolies held by Edison International's Southern California Edison Co. and other big utilities.
"The savings are extremely significant," said George Waidelich, vice president for energy operations at Safeway Stores Inc. The Pleasanton, Calif., supermarket chain still purchases electricity in bulk for more than 400 of its California locations. The company started buying power from unregulated, non-utility "electric service providers" in 1998 and has been allowed to continue doing so even after the Legislature suspended direct access for new participants in 2001 during the depths of the market meltdown.
Opponents say they are willing to coexist with the remnants of the direct-access market, which accounts for about a tenth of the state's electricity consumption, down from a high of 16% in 2000. But they are adamant about not allowing the Public Utilities Commission to expand it unilaterally, without full debate and approval from the Legislature.
"We think this is an awful time to experiment with a system that proved to be a colossal failure last time," said Mark Toney, executive director of the Utility Reform Network, a San Francisco-based consumer group that advocates for ratepayers.
