California

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Electricity:

Contrary to popular belief, electric competition in California was not completely suspended. In fact, some customers still have the ability to shop for an alternate electric provider to find a lower rate, although choice is suspended for most customers.

Customers who were shopping for electricity on September 20, 2001 -- the day choice or "direct access" was suspended -- can still choose an alternative energy provider, called an Electric Service Provider in California. Customers can even choose an alternative energy provider if they subsequently went back to "bundled" utility service with Pacific Gas & Electric, Southern California Edison, or San Diego Gas & Electric after Sept. 20, 2001. However, if customers who have the right to shop for power are currently receiving electric supply from the utility, they must give the utility six months advance notice before they can leave again for an alternative energy provider.

California Electricity Suppliers and who can choose an alternate energy company?

JANUARY 5, 2011

California is a deregulated electric utility state but their right to choose is a little bit more hampered than in other states.

Because CA has had issues in the past with their deregulated energy market they are phasing in deregulation again very slowly.

There is a cap in place that only lets so many commercial and industrial businesses participate and when that cap is reached no more businesses can choose an alternate provider.

When choosing a competing electricity supplier there is usually only one motivation for doing so and that is a cheaper price.

When the cap is reached many businesses may see this cap as being unfair because some businesses got to save money on their electric bill while others did not.

Don’t worry too much about this cap as this whole CA deregulation process is a slow progression and the cap is just an artificial measure to make sure the process goes smoothly.

CA can decide each year if they need to expand the cap or eliminate it all together based on if the deregulation role out is going well.

If you are a commercial or industrial business in California you can shop and compare electricity suppliers by participating in a reverse auction process.

Popular Deregulated electric utility areas in California

Los Angeles CA
San Diego
San Jose
San Francisco
Fresno Long Beach
Sacramento
Oakland
Santa Ana
Anaheim
Bakersfield
Riverside
Stockton
Chula Vista

California Retail Electricity Market

Senate Bill (SB) 695 became law on October 11, 2009 and as an urgency statute, took effect immediately.

What it does:

SB 695, among other things:

Allows nonresidential customers to purchase electricity from an ESP up to an overall historical maximum load amount in each utility territory - Requires the Commission to "allow individual retail nonresidential end-use customers to acquire electric service from other providers in each electrical corporation's [utility] distribution service territory, up to a maximum allowable total kilowatt-hours annual limit," defined as the Commission-established "maximum total kilowatt-hours supplied by all other providers to distribution customers of that electrical corporation during any sequential 12-month period between April 1, 1998, and the effective date of this section." Limits the amount of electric load that ESPs may serve, based on a Commission-adopted three to five year phase in schedule until the historical maximum is reached in each utility territory - "Within six months of the effective date of this section, or by July 1, 2010, whichever is sooner, the commission shall adopt and implement a reopening schedule that commences immediately and will phase in the allowable amount of increased kilowatt-hours over a period of not less than three years, and not more than five years, raising the allowable limit of kilowatt-hours supplied by other providers in each electrical corporation's distribution service territory from the number of kilowatt-hours provided by other providers as of the effective date of this section, to the maximum allowable annual limit for that electrical corporation's distribution service territory." Otherwise retains the suspension on the right to acquire DA service until the legislature acts - "…the right of retail end-use customers … to acquire service from other providers [e.g., ESPs but not Community Choice Aggregators] is suspended until the Legislature, by statute, lifts the suspension or otherwise authorizes direct transactions."

Definitions:

Direct Access (DA) service [or transactions] is retail electric service where customers purchase electricity from a competitive provider, an Electric Service Provider (ESP), instead of from a regulated electric utility. The utility delivers the electricity that the customer purchases from the ESP to the customer over its distribution system.

An Electric Service Provider (ESP) is a non-utility entity that offers electric service to customers within the service territory of an electric utility.

What Are My Power Supply Options?

Electricity is provided to you through a three-step process: generation, transmission, and distribution. California’s Senate Bill 695 gives you the ability to choose who supplies the generation portion of the electric service. Electricity delivery is over the same poles and wires and is not subject to choice. You now have the opportunity to compare prices, enjoy greater savings and choose a service that best fits your needs and preferences.

Technically Electricity is “Deregulated” or should I say in the process of deregulation in California.

Businesses have to apply to the state to be able to participate in deregulation. The state only approves a small percentage of those applicants. The plan is to slowly phase in deregulation over a 5 year period. The only business we can do is with a company that has been approved by the state. Because of those conditions electricity in California is not a competitive market. If we had it on our list people would be recruiting there not knowing the conditions and would be sorely disappointed.

Marketing Letter
http://www.myutilitybrokers.com/pdf/Marketing_Letter.pdf

PG&E Price Comparison
http://www.myutilitybrokers.com/pdf/PG&E_G1_Cost_Savings.pdf

Residential
Pacific Gas & Electric only

Residential
http://www.myutilitybrokers.com/enrollment.asp?util=gas&state=california

Residential Agreement
http://www.myutilitybrokers.com/pdf/PGE-Residential-Contract.pdf

Commercial
Pacific Gas & Electric, San Diego Gas & Electric

Southern California Gas Company

Small Business (<1,000 MCF)
http://www.myutilitybrokers.com/enrollment.asp?util=gas&state=california

Large Commercial (>1,000 MCF)
http://www.myutilitybrokers.com/commercial_naturalgas.asp

Commercial Agreement
http://www.myutilitybrokers.com/pdf/PGE-Commercial-Contract.pdf

Commercial Natural Gas Prices
http://www.natural-gas-prices.com/california-natural-gas.html

http://www.glacialenergy.com/about-us/locations

Glacial Energy of California
11693 San Vicente Blvd. #482
Los Angeles, CA 90049
Email: salesca@glacialenergy.com

For Sales Information in California, call:
310-442-8330

The California electricity crisis (also known as the Western U.S. Energy Crisis) of 2000 and 2001 was a situation where California had a shortage of electricity. By keeping the consumer price of electricity artificially low, the California government discouraged citizens from practicing conservation. In February 2001, California governor Gray Davis stated, "Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes." Blame has also been placed on the gaming of a partially deregulated California energy system by energy companies such as Enron and Reliant Energy. In-state power output failed to keep up with demand California's population increased by 13% during the 1990s. The state did not build any new major power plants during that time, although existing in-state power plants were expanded and power output was increased nearly 30% from 1990 to 2001. Government price caps By keeping the consumer price of electricity artificially low, the California government discouraged citizens from practicing conservation. In February 2001, California governor Gray Davis stated, "Believe me, if I wanted to raise rates I could have solved this problem in 20 minutes." Energy price regulation forced suppliers to ration their electricity supply rather than expand production. [citation needed] This artificial scarcity created opportunities for market manipulation by energy speculators. [citation needed] State lawmakers expected the price of electricity to decrease due to the resulting competition; hence they capped the price of electricity at the pre-deregulation level. Since they also saw it as imperative that the supply of electricity remain uninterrupted, utility companies were required by law to buy electricity from spot markets at uncapped prices when faced with imminent power shortages. When the electricity demand in California rose, utilities had no financial incentive to expand production, as long term prices were capped. Instead, wholesalers such as Enron manipulated the market to force utility companies into daily spot markets for short term gain. For example, in a market technique known as megawatt laundering, wholesalers bought up electricity in California at below cap price to sell out of state, creating shortages. In some instances, wholesalers scheduled power transmission to create congestion and drive up prices. After extensive investigation The Federal Energy Regulatory Commission (FERC) substantially agreed in 2003: "...supply-demand imbalance, flawed market design and inconsistent rules made possible significant market manipulation as delineated in final investigation report. Without underlying market dysfunction, attempts to manipulate the market would not be successful." "...many trading strategies employed by Enron and other companies violated the anti-gaming provisions..." "Electricity prices in California’s spot markets were affected by economic withholding and inflated price bidding, in violation of tariff anti-gaming provisions." The major flaw of the deregulation scheme was that it was an incomplete deregulation—that is, "middleman" utility distributors continued to be regulated and forced to charge fixed prices, and continued to have limited choice in terms of electricity providers. Other, less catastrophic energy deregulation schemes, such as Pennsylvania's, have generally deregulated utilities but kept the providers regulated, or deregulated both. New regulations In the mid-90's, under Republican Governor Pete Wilson, California began changing the electricity industry. Democratic State Senator Steve Peace, the chair of the energy committee and the author of the bill that put these changes into effect, is often credited as "the father of deregulation". [who?] Wilson admitted publicly that defects in the deregulation system would need fixing by "the next governor". PG&E electric meter on Angel Island. The new rules called for the Investor Owned Utilities, or IOUs, (primarily Pacific Gas and Electric, Southern California Edison, and San Diego Gas and Electric) to sell off a significant part of their electricity generation to wholly private, unregulated companies such as AES, Reliant, and Enron. The buyers of those power plants then became the wholesalers from which the IOUs needed to buy the electricity that they used to own themselves. While the selling of power plants to private companies was labeled "deregulation", in fact Steve Peace and the California legislature expected that there would be regulation by the FERC which would prevent manipulation. The FERC's job, in theory, is to regulate and enforce Federal law, preventing market manipulation and price manipulation of energy markets. When called upon to regulate the out-of-state privateers which were clearly manipulating the California energy market, the FERC hardly reacted at all and did not take serious action against Enron, Reliant, or any other privateers. FERC's resources are in fact quite sparse in comparison to their entrusted task of policing the energy market. Lobbying by private companies may also have slowed down regulation and enforcement. Supply and demand California's utilities came to depend in part on the import of excess hydroelectricity from the Pacific Northwest states of Oregon and Washington. [citation needed] California's groundbreaking clean air standards favored in-state electricity generation which burned natural gas because of its lower emissions, as opposed to coal whose emissions are more toxic and contain more pollutants. In the summer of 2000 a drought in the northwest states reduced the amount of hydroelectric power available to California. Though at no point during the crisis was California's sum of [actual electric-generating capacity] + [out of state supply] less than demand, California's energy reserves were low enough that during peak hours the private industry which owned power-generating plants could effectively hold the State hostage by shutting down their plants for "maintenance" in order to manipulate supply and demand. These critical shutdowns often occurred for no other reason than to force California's electricity grid managers into a position where they would be forced to purchase electricity on the "spot market", where private generators could charge astronomical rates. Even though these rates were semi-regulated and tied to the price of natural gas, the companies (which included Enron and Reliant Energy) controlled the supply of natural gas as well. Manipulation by the industry of natural gas prices resulted in higher electricity rates that could be charged under the semi-regulations. In addition, the energy companies took advantage of California's electrical infrastructure weakness. The main line which allowed electricity to travel from the north to the south, Path 15, had not been improved for many years and became a major bottleneck point which limited the amount of power that could be sent south to 3,900 MW. Without the manipulation by energy companies, this bottleneck was not problematic, but the effects of the bottleneck compounded the price manipulation by hamstringing energy grid managers in their ability to transport electricity from one area to another. With a smaller pool of generators available to draw from in each area, managers were forced to work in two markets to buy energy, both of which were being manipulated by the energy companies. The International Energy Agency estimates that a 5% lowering of demand would result in a 50% price reduction during the peak hours of the California electricity crisis in 2000/2001. With better demand response the market also becomes more resilient to intentional withdrawal of offers from the supply side. Effects of partial deregulation Part of California's deregulation process, which was promoted as a means of increasing competition, involved the partial divestiture in March 1998 of electricity generation stations by the incumbent utilities, who were still responsible for electricity distribution and were competing with independents in the retail market. A total of 40% of installed capacity — 20,164 megawatts — was sold to what were called "independent power producers." These included Mirant, Reliant, Williams, Dynegy, and AES. The utilities were then required to buy their electricity from the newly created day-ahead only market, the California Power Exchange (PX). Utilities were precluded from entering into longer-term agreements that would have allowed them to hedge their energy purchases and mitigate day-to-day swings in prices due to transient supply disruptions and demand spikes from hot weather. PG&E yard in San Francisco Then, in 2000, wholesale prices were deregulated, but retail prices were regulated for the incumbents as part of a deal with the regulator, allowing the incumbent utilities to recover the cost of assets that would be stranded as a result of greater competition, based on the expectation that "frozen" rates would remain higher than wholesale prices. This assumption remained true from April 1998 through May 2000. Energy deregulation put the three companies that distribute electricity into a tough situation. Energy deregulation policy froze or capped the existing price of energy that the three energy distributors could charge. Deregulating the producers of energy did not lower the cost of energy. Deregulation did not encourage new producers to create more power and drive down prices. Instead, with increasing demand for electricity, the producers of energy charged more for electricity.[9] The producers used moments of spike energy production to inflate the price of energy. In January 2001, energy producers began shutting down plants to increase prices. When electricity wholesale prices exceeded retail prices, end user demand was unaffected, but the incumbent utility companies still had to purchase power, albeit at a loss. This allowed independent producers to manipulate prices in the electricity market by withholding electricity generation, arbitraging the price between internal generation and imported (interstate) power, and causing artificial transmission constraints. This was a procedure referred to as "gaming the market." In economic terms, the incumbents who were still subject to retail price caps were faced with inelastic demand (see also: Demand response). They were unable to pass the higher prices on to consumers without approval from the public utilities commission. The affected incumbents were Southern California Edison (SCE) and Pacific Gas & Electric (PG&E). Pro-privatization advocates insist the cause of the problem was that the regulator still held too much control over the market, and true market processes were stymied — whereas opponents of deregulation assert that the fully regulated system had worked for 40 years without blackouts. [edit] Market manipulation As the FERC report concluded, market manipulation was only possible as a result of the complex market design produced by the process of partial deregulation. Manipulation strategies were known to energy traders under names such as "Fat Boy", "Death Star", "Forney Perpetual Loop", "Ricochet", "Ping Pong", "Black Widow", "Big Foot", "Red Congo", "Cong Catcher" and "Get Shorty". Some of these have been extensively investigated and described in reports. Megawatt laundering is the term, analogous to money laundering, coined to describe the process of obscuring the true origins of specific quantities of electricity being sold on the energy market. The California energy market allowed for energy companies to charge higher prices for electricity produced out-of-state. It was therefore advantageous to make it appear that electricity was being generated somewhere other than California. Senator Barbara Boxer received a letter in 2002 that pointed to Enron as the cause of the electricity crisis. Over scheduling is a term used in describing the manipulation of capacity available for the transportation of electricity along power lines. Power lines have a defined maximum load. Lines must be booked (or scheduled) in advance for transporting bought-and-sold quantities of electricity. "Over scheduling" means a deliberate reservation of more line usage than is actually required and can create the appearance that the power lines are congested. Over scheduling was one of the building blocks of a number of scams. For example, the Death Star group of scams played on the market rules which required the state to pay "congestion fees" to alleviate congestion on major power lines. "Congestion fees" were a variety of financial incentives aimed at ensuring power providers solved the congestion problem. But in the Death Star scenario, the congestion was entirely illusory and the congestion fees would therefore simply increase profits. In a letter sent from David Fabian to Senator Boxer in 2002, it was alleged that: "There is a single connection between northern and southern California's power grids. I heard that Enron traders purposely overbooked that line, then caused others to need it. Next, by California's free-market rules, Enron was allowed to price-gouge at will." Some key events Rolling blackouts affecting 97,000 customers hit the San Francisco Bay area on June 14, 2000, and San Diego Gas & Electric Company filed a complaint alleging market manipulation by some energy producers in August 2000. On December 7, 2000, suffering from low supply and idled power plants, the California Independent System Operator (ISO), which manages the California power grid, declared the first statewide Stage 3 power alert, meaning power reserves were below 3 percent. Rolling blackouts were avoided when the state halted two large state and federal water pumps to conserve electricity. On December 15, 2000, the Federal Energy Regulatory Commission (FERC) rejected California's request for a wholesale rate cap for California, instead approving a "flexible cap" plan of $150 per megawatt-hour. That day, California was paying wholesale prices of over $1400 per megawatt-hour, compared to $45 per megawatt-hour average one year earlier. In January 17, 2001, the electricity crisis caused Governor Gray Davis to declare a state of emergency. Speculators, led by Enron Corporation, were collectively making large profits while the state teetered on the edge for weeks, and finally suffered rolling blackouts on January 17 & 18. Davis was forced to step in to buy power at highly unfavorable terms on the open market, since the California power companies were technically bankrupt and had no buying power. The resulting massive long term debt obligations added to the state budget crisis and led to widespread grumbling about Davis' administration. [edit] Consequences of wholesale price rises on the retail market As a result of the actions of electricity wholesalers, Southern California Edison (SCE) and Pacific Gas & Electric (PG&E) were buying from a spot market at very high prices but were unable to raise retail rates. A product that the IOU's used to produce for about three cents per kilowatt hour of electricity, they were paying eleven cents, twenty cents, fifty cents or more; and, yet, they were capped at 6.7 cents per kilowatt hours in terms of what they could charge their retail customers. As a result, PG&E filed bankruptcy, and Southern California Edison worked diligently on a workout plan with the State of California to save their company from the same fate. PG&E and SCE had racked up US$20 Billion in debt by Spring of 2001 and their credit ratings were reduced to junk status. The financial crisis meant that PG&E and SCE were unable to purchase power on behalf of their customers. The state stepped in on January 17, 2001, having the California Department of Water Resources buy power. By February 1, 2001 this stop-gap measure had been extended and would also include SDG&E. It would not be until January 1, 2003 that the utilities would resume procuring power for their customers. Between 2000 and 2001, the combined California utilities laid off 1,300 workers, from 56,000 to 54,700, in an effort to remain solvent. San Diego had worked through the stranded asset provision and was in a position to increase prices to reflect the spot market. Small businesses were badly affected. According to a 2007 study of Department of Energy data by Power in the Public Interest, retail electricity prices rose much more from 1999 to 2007 in states that adopted deregulation than in those that did not.

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