The collapse of wholesale markets has utilities once again making the purchasing decisions, and taking all the risks.
If a common theme is emerging from the various...
Munis See the Lite
The search for cheaper electricity is in full swing, from the East Coast to the West.
Orange and Rockland Utilities, Inc. of Pearl River, NY, proposes that 1,500 residential customers, along with industrial and commercial businesses, be allowed to pick their electric power supplier. The proposal, called "PowerPick," has been endorsed by New York Public Service Commission staff, the Industrial Energy Users Association, and the state Consumer Protection Board. Certain large industrial customers would choose electric suppliers by June 1, 1996; the others would be able to participate January 1, 1997. The test run could last three years.
Further north, in Lexington, MA, town representatives have voted 178-2 to research aggregating their electric load with that of other municipalities to trim the electric bills of residents and business owners.
"What we're looking for is to examine all the potential alternatives for the town, including total municipalization, partial municipalization, or load aggregation," says George A. Woodbury, public works director. "Load aggregation being the first priority."
Woodbury says rates run 9.5 cents per kilowatt-hour, plus a sizable demand charge. He hopes, through aggregation, for a 15-percent savings.
Woodbury says Lexington is trying to drag its utility into the future by showing it innovative ways to secure a customer base. But working with Boston Edison could be difficult, Woodbury says: "My experience so far with Boston Edison is they're in a field they're unfamiliar with. The company seems to be keeping its head in the sand until something bites them on the rump."
But Walter Salvi, a Boston Edison spokesman, says the Massachusetts Department of Public Utilities (DPU) has yet to set the rules for customer choice. Taking action now would be premature.
"What they've done is probably totally unnecessary," says Salvi about Lexington. "Somebody's going to aggregate customers. We think we can do it better than anybody else."
Salvi says the utility will meet with Woodbury and other groups, while DPU commissioners and legislators debate issues of stranded costs and seek to ensure that residential customers receive the same benefits as industrial customers.
Palm Springs, CA, meanwhile, has proposed a "muni-lite" plan, calling for dual electric meters throughout the resort haven of 44,000. Residents and businesses could choose between the current utility or a wholesale provider selected by city fathers. The city has asked the Federal Energy Regulatory Commission (FERC) to approve its proposal.
The power wholesalers that would vie for supplier include Enova Energy Management Co., an affiliate of San Diego Gas and Electric, and Enron Power Marketing, Inc. Nine other parties also support the plan.
However, the city is accumulating more detractors than supporters for its plan.
Leading the opposition is Citizens Against Government Takeover (CAGT), a group funded by Edison International, the parent of incumbent utility Southern California Edison (SCE). Some 25 other utilities or groups (em including the Edison Electric Institute, the California Public Utilities Commission, and the National Association of Regulatory Utility Commissioners (em have asked the FERC to deny the plan.
A CAGT motion filed with the FERC is supported by taxpayer associations throughout California. CAGT calls the