Utilities May Be Barred From Open Market

California lawmakers may prevent the state’s three investor-owned utilities from buying power on open markets, reversing a ruling last week by state utility regulators.

The state Senate’s budget and fiscal review committee, led by Steve Peace (D-El Cajon) and James Brulte (R-Rancho Cucamonga), is expected to vote today on a paragraph inserted in a budget bill that would require utilities to continue buying electricity from the California Power Exchange, a state agency formed by regulators.

The California Public Utilities Commission voted 3 to 2 last week to let utilities buy electricity from any approved exchange, with proponents saying that a choice of supplier exchanges will result in lower prices for consumers.

“The commission created a monopoly with the California Power Exchange,” Commissioner Richard Bilas said before voting to end a requirement that utilities buy from the state clearinghouse. “If it doesn’t survive in a competitive market, then it shouldn’t exist.”

Peace and Brulte, authors of California’s 1996 deregulation law, couldn’t be reached for comment. Bilas wouldn’t comment on the senators’ effort to trump last week’s ruling.

Competing exchanges, such as the closely held Automated Power Exchange and the New York Mercantile Exchange, would get a boost if utilities have a choice. PG&E; Corp. of San Francisco, Sempra Energy of San Diego and Rosemead-based Edison International make up about 85 percent of the state’s $25 billion electricity market.

“It can’t hurt to give utilities a choice,” said Ed Cazalet, chairman and chief executive of Santa Clara-based Automated Power Exchange.

The state’s utility owners still would need final regulatory approval before they can buy power from outside the state exchange.