Deregulating California’s Energy Utilities

Regarding the article “PUC Opens State to Competition for Energy Customers,” and James Flanigan’s column of May 7: I am a former utilities engineer with 37 years’ experience.

The main emphasis in California has been that we have electric rates 50% higher than the rest of the nation, but there is never a discussion as to why.

The PUC has mandated, in years past, that alternate power suppliers such as windmill and geothermal be allowed to sell power to the utilities at a much higher rate than the user pays. Also mandated were programs that forced utilities to subsidize low-income users, pay large awards to businesses that reduced their use of electricity (and their bills) and pay enormous amounts to reduce air pollution that is unique to this region. Also, a much higher amount of our energy comes from higher-priced gas and oil rather than hydro and coal.

Electricity, for all practical purposes, cannot be stored. What is generated is much more than what is received. These “losses” can be very high and are variable, but must be paid for by someone. To read the media, a new day is dawning where rates will be dirt-cheap and everyone will be able to select their supplier. Obviously, someone has been fooling the public all of these years.

C. E. PHILLIPS

Mission Viejo

* Your article missed a critical non-price benefit that some new suppliers will offer: the ability to choose the type of power plants that customer dollars support.

Coal and nuclear-fired plants are respectively the largest source of air pollution and nuclear waste. Electricity-related air pollution is implicated in thousands of premature deaths and it is also the primary cause of global climate change and acid rain.

With the advent of electricity competition, Californians will be able to choose far less damaging alternatives. Renewable power providers will sell electricity to households and businesses, at least 50% of which comes from wind, sun and heat from the Earth’s core.

WARREN W. BYRNE

Executive Vice President

Eco-Power/Foresight Energy Co.

Oakland

* The editorial “Electricity Deregulation: Consumer, Take Care” (May 8) implies impending doom and confusion for California businesses and consumers as a result of electricity deregulation. The truth is much different. California is about to witness one of the greatest examples of free market competition in this century.

While consumers for the first time will have a choice regarding their electricity provider, reliability under the new structure--whether your lights go on or not--will not change. The transmission of power will continue to be provided through regulated electric utilities that, under the new regulatory setup, will actually be incentivized to improve service delivery.

MICHAEL R. PEEVEY

President, New Energy Ventures

Los Angeles