Electricity Deregulation: Consumer, Take Care

There goes the phone again, just as the family sits down to dinner. The voice on the line has something new to pitch: electric power. Yes indeed, for sale soon, direct to most of us--the invisible juice that runs our homes and businesses.

Welcome to the world of electric power deregulation.

No longer will traditional utility companies have a lock on electricity, all the way from the power plant to the user. They will have to share the market with new providers. The California Public Utilities Commission decided Tuesday that, beginning next year, consumers can buy their power, even their own meters, from any marketer they select. But the power will still be distributed and delivered over lines owned by today’s utility companies. Details on these and other changes will be forthcoming from the PUC over the next few months.

Confusing? Undoubtedly so, and consumers should take care. There is no need to rashly dump your tried and true utility service when power marketers start soliciting, as early as July. The voice on the phone or the pitch in the mail may offer free airline miles, a couple of months of free cable service or a rebate to lure you into making a change. Be wary of promises of big reductions in your electricity bill. Tap into the information offered by the $20-million state-sponsored consumer education program that will start in September. For now keep in mind:

* Beginning Jan. 1, all residential and small commercial customers of investor-owned utilities such as Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric will receive a 10% rate cut as mandated by Sacramento in the deregulation legislation.

* Customers of the municipal Department of Water and Power will have to wait until mid-June for the Los Angeles City Council to decide whether to give them the option of choosing a new electricity provider. Currently, the DWP’s residential and small commercial customers enjoy rates about 20% lower than Edison’s, but the department’s large commercial and industrial users pay higher rates. That may change.

* Although electricity prices in California are about 50% above the national average, it is unrealistic to expect electric rates to fall by that amount. Rates are high in California because of state policies on the use of renewable energy sources, air quality standards and other factors. Hydroelectric power and coal-fired plants, unavailable and unacceptable here, give other states an edge.

At this point what you need to do is your homework. Decisions made under pressure might be regretted later.