CONTACT: Armando Rendón October 30, 1997 CPUC-116
415-703-1366 (R94-04-031; I94-04-032)

CPUC APPROVES SPECIFIC RULES TO ENABLE

CUSTOMER CHOICE OF ELECTRICITY PROVIDERS

The California Public Utilities Commission (CPUC) today approved electric utility plans that will allow consumers direct access to other power providers, thus putting the finishing touches on restructuring the state's electric industry.

The plans submitted by the electric service distributors, Pacific Gas & Electric (PG&E), San Diego Gas & Electric (SDG&E), and Southern California Edison (Edison) detail the options available to their customers, and explain how to exercise a choice. They also provide guidelines to govern transactions with the Electric Service Providers (ESP), new firms which are competitors to the distributor utilities.

Although moving toward a statewide set of guidelines, today's order accepted from the big three electric utilities plans, or tariffs, that differed in a few respects. "The processes and systems that we adopt today are far from perfect," the Commission stated, "and are unlikely to please every direct access market participant. However, as time goes by and we gain more experience with direct access, these processes and systems are likely to undergo further revision," as part of the review that's built into the restructuring process.

The key areas basic to all market participants are as follows:

A. Customer Service Elections

All customers will be able to obtain electric power in one of three ways:

  1. Direct Access: Customers may purchase electric power, and as the customer elects, other services, directly from an ESP.
  2. Hourly PX Rate Option (or Virtual Direct Access): A customer may purchase power from the distributor at PX rates posted every hour. The customer must install at his/her own expense an electric meter capable of recording usage by the hour.
  3. Do nothing (default service): A customer retains their existing service provider, one of the three distributors. A customer who chooses direct access may return to their original service provider. The electric service



distributor acquires all its power from the Power Exchange (PX), the CPUC's designated source for all electric power.

An individual householder or a small business owner may want direct access but may not be able to find an ESP willing to provide service to just one customer. However, if that householder teams with neighbors or the business owner joins with other businesses, together they may be able to negotiate better rates. About 150 ESPs are already registered with the CPUC.

In order to select direct access, a customer will need to have an ESP fill out a "direct access service request" in his/her behalf. As a consumer protection, these switches must be verified by an independent third party.

Residential and small business customers may cancel a contract with an ESP within three days. No request is processed, therefore, until at least the three-day period has passed. Distributor utilities will begin accepting change requests from the ESPs beginning no later than November 9.

B. Metering

Larger users (20 kW and above) who choose direct access or the hourly PX rate option can already select from whom they'll buy the meter, who will install it, and who will read it. These services may be offered by the utilities, the ESPs, or metering companies. Smaller residential and business customers will also be able to choose these options in January 1999.

  1. Billing

An ESP may offer its customers a choice of one of the following billing options:

  1. Consolidate both its own charges and the utility's charges into one bill;
  2. Have the utility bill the customer for both the ESP's and the utility's charges; or,
  3. Issue a separate bill with just the ESP's charges; and the distributor would also bill separately for its charges.

Customers who have accounts of between 20 and 50 kiloWatts per month may be exempt from metering requirements. This issue was addressed in a related proceeding dealing with "load profiling" today. Most residential customers fall below 20 kW and, by applying load profiling, could also be exempt from the metering requirement.

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