What’s Happening In California
[December 2006]

Coalition Asks CPUC to Reopen Direct Access
On December 6, 2006, a coalition of 38 parties petitioned the California Public Utilities Commission (CPUC) to initiate a proceeding “to adopt a regulation and establish rules with respect to how and when the Direct Access ("DA") retail [electric] market should be reopened in California.” The CPUC suspended the ability of additional electric consumers to participate in California’s DA program as of September 20, 2001 pursuant to Assembly Bill (AB) 1X. Since that time, DA – which allows consumers to choose their electricity supplier and have the local distribution utility deliver the power – has been limited to a “grandfathered” class of electric consumers who were participating in the DA program at the time of the September 2001 suspension.

The Petitioners assert an additional 147 entities support the initiative. The Petitioners and these additional supporters represent energy service providers, schools, universities, trade associations, and commercial customers of all sizes, including both utility bundled customers and current DA end-users. The Petitioners request that the CPUC reopen DA no later than January 1, 2008.

AB 1X, which was enacted in response to the California energy crisis, authorized the California Department of Water Resources (DWR) to enter into power contracts on behalf of utility customers. The Petitioners assert that DA was suspended, in large part, to ensure the existence of a “stable customer base” from which to recover costs associated with DWR power contracts. The Petitioners contend, however, that these conditions no longer exist. The Petitioners note that DWR is no longer entering into power contracts and that the CPUC has implemented other measures to assure a sufficient revenue stream exists to cover costs associated with existing DWR power contracts. As a result, the Petitioners argue that past concerns related to customers switching to DA are now “moot.”

The Petition identifies “several key issues” that should be addressed as part of the CPUC proceeding, including the CPUC’s authority to reopen DA, the type of retail market that should be established, the identification of default service providers, customer switching rules, and funding for public purpose programs.

Public Utilities Code section 1708.5 allows the CPUC up to one year to either deny the petition or institute a proceeding to adopt, amend, or repeal the regulation. Interested parties may file comments on the Petition and these comments are due by January 5, 2007.

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