In California, Monopoly Affiliates Cherry Pick Large Customers as Small Customers are Found "Unprofitable"

Working Assets announced it will not market power to residents and businesses in California. Meanwhile, affiliates of the state's distribution monopolies and out-of-state holding companies are shunning small customers for mega-deals with corporate customers.

"It's virtually impossible to make money" selling to small customers in California, said Enron's Ken Lay, "in fact you'll probably lose money on every customer you hook up." Southern Company CEO Bill Dahlberg said it will shun the retail market to seek large corporate contracts.

Perhaps the biggest deal to date is the California Manufacturers Association, credited with sponsoring AB1890, which has signed a contract for its 1,000 members with Montana Power Group for 1350 MW of capacity, sending $300 million in energy dollars out of state. Even for the largest group of the state's largest manufacturers, savings range from one to seven percent, with no renewable component in the deal.

PG&E Energy Services (PG&EES), a subsidiary of PG&E, will provide billing management and information to Neiman Marcus' 30 retail stores, five outlets and other facilities. PG&EES will also deliver power to California's 800 McDonald's franchise restaurants and corporate offices, and expects contracts for 400 remaining franchises served by municipal utilities when their markets are opened.

Foodmaker Inc., which owns 900 Jack-in the-Box restaurants, will receive energy information services from Energy Pacific, the joint venture between Enova Corp. (owns San Diego Gas & Electric), and Pacific Enterprises.

New Energy Ventures recently took the Los Angeles Coliseum account formerly held by the beleaguered Los Angeles Department of Water and Power.

Copyright (c) 1998 by the American Local Power Project