Ending direct access threatens green power, California group says

Small hydro and anaerobic digestion, two new potential sources of green power, will be 'obliterated' by the termination of customer choice in California, the Association of California Water Agencies (ACWA) complained. The comments were made in response to an Aug. 27 draft decision that's on the Public Utilities Commission's Sept. 6 agenda.


By the OGJ Online Staff

HOUSTON, Aug. 31, 2001 — Small hydro and anaerobic digestion, two new potential sources of green power, will be "obliterated" by the termination of customer choice in California, the Association of California Water Agencies (ACWA) complained.

Conditions that prompted the legislature to authorize suspension of the state's direct access electricity markets no longer exist, making it unnecessary for California regulators to terminate consumer choice for electricity, the organization said in comments filed with the California Public Utilities Commission.

The comments were made in response to an Aug. 27 draft decision that's on the PUC's Sept. 6 agenda. The decision would suspend the ability of electricity users to purchase generation from third party suppliers, effective July 1, based on emergency legislation adopted in February.

"The proposed decision terminating direct access is a poorly thought out decision," ACWA said in its comments. "The conditions that gave rise to the urgency clause in January no longer exist."

Further, ACWA said ending customer will harm development of new green power sources. It recommended that at the very least, customers should be allowed to purchase green power through direct access.

Earlier, the agency asked the PUC to preserve direct access to protect ratepayers from excessive electricity costs. It said state contracts to buy power were not subject to traditional reasonableness and prudency reviews typically conducted by the PUC.

Without PUC reviews, customers cannot be protected from unreasonable costs, the agency said. Independent power suppliers and businesses have also petitioned the PUC to preserve direct access. But the agency is concerned that if too many large users choose another supplier, there will not be enough revenue to retire a proposed bond issue. The proceeds from sale of the bonds will be used to reimburse the general fund for money used by the state to buy electricity.

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