Monday, December 08, 2008

The "D Word"


Mike Peevey is preparing for battle with the Democratic legislature over the PUC's proposal that partial deregulation be brought back to the state's electric power market. Specifically, he wants large, institutional users like big box stores, and cement plants to be able to shop for their own power, through the kind of direct access arrangement that still sends shivers down the spine of anyone who remembers the electricity crisis a few years ago.

TURN opposes it in a big way and put its opposition into context for the Los Angeles Times:

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.

Keeping electricity available and affordable is too much a "life-and-death kind of issue" to leave its delivery and pricing up to the free market and susceptible to possible manipulation by unscrupulous generators, he said. "Not having power in your house is a lot more serious than your cable going down for an hour or a cellphone call dropping."

Peevey cites market forces as a predictor of lower rates.

The Times points out that there are some significant legal hurdles to overcome first:

"Bringing back direct access is a complex legal task that began more than a year ago. The biggest impediment is more than two dozen expensive power-purchase contracts signed by the state in 2001 to help end the crisis. According to state law, no expansion of retail competition for electricity can occur before the last contract expires, sometime between 2015 and 2017."