California May Expand Retail Energy Choice

In the wake of the California energy crisis of 2000 to 2001, which resulted in market manipulation by Enron and others that led to price spikes and rolling blackouts, the state rolled back its restructuring rules. In October 2009, Governor Arnold Schwarzenegger signed SB 695, reinstating retail competition on a limited basis for non-residential customers, referred to as “direct access” under California law. In practice, however, the cap was so stringent that it was reached within seconds of the time that enrollment opened.

If the state enacts new legislation proposed last month, that cap would be lifted. Senator Robert Hertzberg introduced SB 286, which would allow all nonresidential customers to procure retail electricity from non-utility suppliers. The legislation proposes phasing in direct access rules over a three-year period. More than 40 customers and competitive suppliers have signed a letter supporting the legislation, according to the COMPETE Coalition.

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