What is Direct Access?
Direct Access is a retail service option whereby eligible customers purchase electricity from an independent supplier rather than from an investor owned utility (PG&E, SDG&E, Edison).
DRA's Position on Direct Access
DRA is actively participating in the Direct Access OIR proceeding, R.07-05-025, and looking forward to working with the parties to determine what are the potential risks and benefits to ratepayers, and whether reopening Direct Access would be in the public interest.
Background on Direct Access
Direct Access was originally implemented by the Commission in 1998 to bring retail competition to California electric power markets. Retail customers had the choice either to subscribe to traditional bundled utility service or to purchase electricity on a competitive basis from an electric service provider. The restructuring program was cut short by the events of 2000- 2001 which caused wholesale power costs to increase dramatically. In early 2001, pursuant to the legislative mandate of Assembly Bill (AB) 1X, the Commission suspended the right to enter into new contracts for direct access service after September 20, 2001. However, it applied a “standstill approach,” permitting no new direct access contracts, but allowing preexisting contracts to continue in effect.
On December 6, 2006, the Alliance for Retail Energy Markets (AReM) filed a Petition with the Commission seeking a rulemaking to reopen electric retail markets to competition by lifting the suspension on direct access. On May 24, 2007, the Commission granted AReM’s Petition and issued an Order Instituting Rulemaking (OIR), Rulemaking (R.) 07-05-025, to consider whether, when, or how direct access could (or should) be restored,
On February 28, 2008, the Commission issued Decision (D.) 08-02-033, ordering that Phase I of this proceeding is hereby resolved and determined that it did not currently have authority to lift the direct access suspension because California Department of Water Resources (DWR) currently supplied power under AB 1X. It further ordered that Phase II of this proceeding shall move forward and consider the merits of possible alternative approaches to satisfy the legal conditions s as to allow the suspension to be lifted on a more expedited basis.
Recent Activity
In the current phase, the proceeding will address the feasibility and merits of measures to facilitate removing the DWR as supplier of retail electric power under AB 1X. The Commission is specifically looking at the possibility of having DWR transfer its status in existing power contracts to investor-owned utilities, or other party, through novation and/or assignment; and investigate whether contracts without novation clauses may nonetheless be renegotiated. Parties, including DRA, have recently filed their opening and reply comments to shape the agenda for the workshop scheduled for July 1 and 2, 2008 in San Francisco.