Exceptions to the Rule: Bypassing the California Transition Charge

Fortnightly Magazine - November 15 1996
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Legislative waivers from the "nonbypassable" CTC could favor

a fortunate few, opening up competitive options even

in advance

of 1998.With a fountain pen and a flourish of promises, California Gov. Pete Wilson ushered in the future on September 23 when he signed California's latest legal missive on electric utility restructuring, known as Assembly Bill (AB) 1890.

"Every time a resident of this state flicks on the electric switch, they pay 40 percent more than residents across the United States," Wilson proclaimed. "The legislation I am signing will end that by ushering in a new era of competition, making California the first state to dismantle its electric monopoly."

Whether the legislation matches such a grand vision remains to be seen, but it certainly moves the process forward by putting into law many of the major industry restructuring policies formulated over the past 30 months by the California Public Utilities Commission (CPUC).

The price of this grand package hasn't come cheap. The changes to the state Public Utilities Code envisioned by AB 1890 include a series of compromises by and guarantees to utilities, industry stakeholders, and ratepayers. Among the promises: the power pool (Power Exchange) and

independent transmission system desired by utilities and regulators; "direct access" competition sought by large energy users; even a

10-percent rate decrease for residential and small commercial ratepayers by 1998, with another 10 percent promised by 2003.

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