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As of March 31, California became the first state to fully deregulate its electric power industry. Customers can now choose to either stay with their current electric utility company or purchase electricity directly from a nonutility provider. Aside from the 10 per-cent rate reduction residential and small-business customers will receive regardless of whether or not they switch, homebased business owners in California have plenty to be happy about, says Dianne Dienstein of the California Public Utilities Commission.

Because utility distribution companies purchase the electricity they sell to consumers at the Alhambra, California-based California Power Exchange (PX), a competitive auction held on an hourly basis, customers can choose to be billed at an hourly rate that reflects hourly electricity prices at the PX. This rate decreases during off-peak periods as demand for electricity decreases. Customers who opt for the hourly rate billing option (which electricity providers must offer under the provisions of the deregulation bill) instead of a fixed rate stand to see big savings if they schedule their operations during off-peak periods.

Deregulation also means that environmentally aware consumers can choose their electricity providers based on how green their generating processes are. Consumers who abhor nuclear power plants, for example, have the option to buy only hydroelectrically generated power.

Currently, 20 states are in various stages of deregulating their electric power industries; Congress, meanwhile, is considering a national version of deregulation.


Jeff Zbar (jeff@goinsoho.com) is a homebased journalist and author of Home Office Know-How (Upstart Publishing).

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