Return to News Exchange Palm Springs Fights Bad Dereg Law and Utility Gaming, But Signs Up Many

The City of Palm Springs Energy Services Company (PSESC) has received mailed responses from 9,000 of its 29,000 residential, and 4,000 commercial, electricity customers, despite an unfavorable law and obstruction from Southern California Edison. The City's company will serve its aggregated residential, small business, and municipal government customers in early 1998 at rates below Edison's.

PSESC contracted with Enron for wholesale power and with its subsidiary "FirstPoint" for retail services, but will maintain "ownership" of its customers after the contract expires, unlike South San Francisco, which signed a weaker contract that gives Enron the ultimate ownership.

Continued threats to the city's aggregation effort crop up, however. Edison filed a distribution rate increase, then withdrew it under public outrage. Edison also designed cumbersome and time-consuming changeover procedures for customers that choose Palm Springs, at first requiring 49 fields of information on each applicant's changeover form. When the first 2000 changeover customers sent in their forms, Edison "rejected" 1500 as "incorrectly filled out." Under public pressure, Edison recently reformed the applications.

Art Lyons, the City's ex-mayor and energy consultant, says Edison and the other two California monopolies "have done a masterful job of protecting their turf." He says the state's deregulation law (AB 1890) protects the monopolies by giving them "default provider" status and prohibiting "automatic aggregation" by cities. As a result, "Palm Springs must bear the huge expense of individually signing on every customer in the city," in spite of their city council vote in support of city-wide aggregation. "We're slugging it out here," said Lyons, "if a few people got in this fight (for municipal aggregation) a year and a half ago, we might not be in the position we are now."

Lyons expects the city council to approve its wholesale contract in early January.

Copyright 1998 by American Local Power News