CPUC uses consumer apathy to shatter retailers’ trust

By Kathleen Davis, Associate Editor
Electric Light & Power

September 21, 2001 – I moved on Saturday. It was a physical and emotional hassle made even more heinous by the dwindling handful of volunteers who actually made it past the “I promise to be there” phase and showed up. And what I can’t seem to convey to those rude individuals who didn’t come and didn’t call, is that the move itself is not the reason I’m angry. The actual issue revolves entirely around trust. I went against my better judgment and relied on others to complete a project. I let my fate (however minor) rest in their hands, and they did more than fracture that trust.

They dismissed me, as if my needs and my faith in their promises were no more important to them than what good popcorn flick might be coming on HBO to “tear them away.” That sweaty, muggy afternoon I “found out who my friends are” (as my mother had commented when I told her that I wasn’t hiring movers after all), and I found out how little I actually meant to some.

Power retailers in California are struggling with those same trust issues right about now. This week, the California Public Utility Commission (CPUC) has effectively put the brakes on any fleeting hopes of an open market in the Golden State. In a three-to-two vote, they have suspended a customer’s right to choose her electric retailer. It’s yet another blow to an already teetering power structure.

And it’s another blow to trust. While the move may indeed make it easier for the state to repay the Department of Water Resources–who have been making emergency power purchases to combat the “crisis” for awhile now–it erodes the foundation of deregulation: that you will follow through on what you promised. And, in this instance, I am not talking about that promise to those constituents everyone seems so worried about. Instead, I’m talking about that promise to market retailers.

“This action affects more than the business community,” commented Rick Counihan, California regional vice president of Green Mountain Energy Company–one of those spat-upon retailers. “Hundreds of thousands of individual Californians have made this choice [to switch suppliers] in the past, and we expect hundreds of thousands more would make this choice if given the opportunity.”

Commissioner Carl Wood, however, disagrees. He brought up the issue of failure at the CPUC meeting, citing that direct access was never really a success. Even with megabucks ad campaigns, consumers were still apathetic. So now it’s over.

Whether direct access cracked the top 40 doesn’t get to the heart of the matter here. That access was a doorway for outside retailers–a doorway that was pledged to be held open by legislation, market activities and even the heavy lead foot of the CPUC, regardless of whether those retailers made the first down or gained enough yards to attempt a field goal in record time. Now that door is shut, and retailers are on the outside looking in, pressing their noses against the glass and wondering just what happened.

Retailers have been battered and beaten by California’s deregulation process in the past, but this particular lashing stings the most, because it only goes to prove that promises are made to be broken: Even the political organizations that structured and enacted the restructuring legislation aren’t willing to stand up and say, “We promised you this, and we’re going to follow through.”

They haven’t even said, “We promised you this. It didn’t work, and we are sorry. What can we do to help?”

Instead, there’s just the resounding thud of that heavy door slamming shut.

Kathleen Davis is an Associate Editor for Electric, Light & Power Magazine, a PennWell publication. She can be reached at kathleend@pennwell.com.

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