On March 11 of this year, the California Public Utilities Commission acted to implement SB 695, which means that soon California businesses will be allowed to choose their electricity provider. This process is known as “direct access”, and means that businesses will be able to choose from energy providers competing for their business. Competition means lower prices, which leads to a substantial savings on energy costs for many companies.

The CPUC suspended direct access back in September of 2001, and held a workshop in June of 2008 to discuss lifting the suspension of direct access. Unfortunately, SB 695 does not allow all California businesses to shop for a lower electric rate, and limits on the expansion so it is crucial that businesses be prepared to shop for a new provider by March or April of this year. This is when the CPUC will most likely initiate the first step in allowing new customers to shop for an electricity provider.

SB 695 was signed in to law in October of 2009, with six months for the Commissioner to adopt and implement direct access, which means the phase-in should begin on April 11th. California businesses will be able to purchase electricity through a competitive service provider at lower rates rather than forced to purchase from regulated electric utilities. Some customers who had signed up previously for the option to switch electric providers are eligible to sign up again, but are required to give their current utility a six-month notice.

Direct access to competitive electricity providers will only be given to those customers that received DA service as of September 20, 2001, or those customers who were placed on an electricity service provider list pursuant to D.02-03-055 due to a direct access contract that was in effect as of September 20, 2001. New customers will be allowed to take direct access service through as ESP with Senate Bill 695.

Some of the electric service providers competing for business will include:

3 Phases Renewables, LLC
Manhattan Beach, CA – new service to all customers

Calpine PowerAmerica-CA, LLC
Houston, TX – new service to large customers

Constellation NewEnergy, Inc.
Baltimore, MD – new service to large customers

Liberty Power Delaware, LLC
Fort Lauderdale, FL – new service to all customers

Shell Energy
San Diego, CA – new service to large customers

Even while the scope is limited, SB 695 will allow businesses in California to take greater control over energy costs, which is a large cost in California. More focus can then be placed on creating additional California-based jobs.

Those who benefit most from SB 695 are large commercial and industrial customers who can line up contracts for electricity with the ESP’s that offer cheaper rates than those charged by the three investor owned utilities. California will benefit greatly in that it will be a more attractive market to wholesale power producers, and many industrial customers will experience lower overall energy costs.