Outside power providers snatching L.A. customers.The race to sign up major L.A. power users is off to a fast start - and it's being led by a 2-year-old startup. Los Angeles-based New Energy Ventures has snagged snag n. 1. A rough, sharp, or jagged protuberance, as: a. A tree or a part of a tree that protrudes above the surface in a body of water. Also called sawyer. See Regional Note at preacher. b. A snaggletooth. a half-dozen industrial and commercial power users in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, over the last six months. Among them: TAMCO TAMCO theater Army movement control center (US DoD) Steel's Rancho Cucamonga Rancho Cucamonga (răn`chō k  'kəmäng`gə), city (1990 pop. 101,409), San Bernardino co., S Calif. mini-mill, which had a $10 million electric bill last year; May Department Stores The May Department Stores Company was a department store chain founded in 1877 by David May in Leadville, Colorado. Its headquarters moved to St. Louis, Missouri in 1905, and the company went public in 1911. ; Montgomery Ward; Allied Signal Corp.; and Toddman Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Corp. New Energy Ventures, headed by former Southern California Edison Southern California Edison (or SCE Corp), the largest subsidiary of Edison International (NYSE: EIX), is the primary electricity supply company for much of Southern California. It provides 11 million people with electricity. president Michael Peevey, is only one of several power providers scrambling to steal major power users away from Southern California Edison, the utility arm of Edison International Edison International (NYSE: EIX) is a public utility holding company based in Rosemead, California. Its subsidiaries include Southern California Edison, and un-regulated non-utility assets Edison Mission Energy, a power producer, and Edison Capital. . Others aggressively marketing their power services to local businesses include giant Houston-based Enron Corp. and Charlotte, N.C.based Duke Power Corp. Unlike New Energy Ventures, these more-established utilities would not disclose their new customers, citing the need to keep their strategies secret from competitors. "We have found that Edison has the lowest customer loyalty of the three investor-owned utilities in the state," said Lee Jestings, vice president of Enron Energy Services Enron Energy Services (EES) was a business unit of Enron Corporation, whose purpose was to provide gas, electricity, and energy management directly to businesses and homes. Enron compared the service to choosing a telecommunications company to provide your house with a phone line. , the energy marketing ann of Enron Corp., which has nearly 400 sales reps in California. Edison officials downplayed the loss of customers, saying the utility will primarily focus on transmitting power rather than selling it to end users. However, Edison's non-regulated power marketing arm may find it hard to win these customers back. Analysts said only about 15 percent of all the major commercial and industrial power users in the state have signed up with a provider. The rest have remained on the sidelines On the sidelines An investor who decides not to invest due to market uncertainty. on the sidelines Of or relating to investors who, having assessed the market, have decided to avoid committing their funds. . One factor preventing quick defections is the problems big industrial customers experienced during national deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. of the natural gas market in the 1980s. Under a scenario similar to today's electricity market, lower-priced gas providers rushed in and stole customers. But then problems arose, such as unreliable deliveries and disruptions related to a wave of natural-gas company mergers. "A lot of big companies had troubles with gas deregulation," said Arthur O'Donnell, editor and associate publisher of California Energy Market, an industry newsletter. "There was a big shakeout Shakeout A situation in which many investors exit their positions, often at a loss, because of uncertainty or recent bad news circulating around a particular security or industry. Notes: During the dotcom boom and bust, numerous shakeouts occurred. and many companies that rushed in were forced to switch providers. They remember that now." Despite the reluctance, New Energy Ventures Executive Vice President Michael Burke said the company has signed up customers for about 500 megawatts of power, While that translates to only 2 percent of Edison's total capacity, Burke said the amount represents more megawatts than any other California player besides the three currently regulated utilities. "Nobody else is even close to signing up that much power," said Burke, who is a former staff member of the state Public Utilities Commission. Other energy providers dispute this assertion, but would not release any figures showing they had signed up more. Burke credits New Energy Ventures' strong showing to an aggressive marketing campaign that has focused on convincing businesses that its rates will be lower than the state-mandated power pool. That pool is the source from which regulated utilities must buy their power once deregulation kicks in. "Our business is to beat the power exchange," Burke said, referring to the power pool, which will operate as a spot market for electricity. As part of the giant compromise in last year's landmark utility deregulation law, Edison and the state's two other regulated electric utilities - Pacific Gas & Electric and San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. Gas & Electric (whose parent company, Enova Corp., recently merged with Pacific Enterprises, the parent company of Southern California Gas This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. Co.) - are forbidden from charging less than the spot market price for power. All other electricity service providers can. In exchange for charging the spot market price, the three utilities are being allowed to recoup tens of billions of dollars in investments they have made in nuclear power plants and other alternative power supplies. That deal gives non-regulated electricity service providers such as New Energy Ventures a big edge, which they are exploiting in their marketing campaigns. "New Energy Ventures started the rush earlier this year by setting itself up as a buyers' agent," O'Donnell said. "Now, as the deadline nears, other players ... are starting to copy them and sign up major companies of their own." Chronology of Deregulation Sept. 1996 Deregulation legislation passed by state. July 1, 1997 Electric service providers begin registering with the state. Nov. 1, 1997 Electric service providers can begin signing up small-business and residential customers. Jan. 1, 1998 Deregulation begins; businesses and residential customers of the state's three investor-owned utilities can start receiving power from new providers. Rates, however, are frozen until Jan. 1, 2002; a "competition transistion charge" is imposed to cover utilities' stranded investments. Jan. 1, 2000 Date by which municipal utilities must decide whether to opt for deregulation. Jan. 1, 2002 Electricity purchasing becomes fully deregulated; transition charge expires, rate freeze ends. |
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