California’s once-dominant non-utility electric serviceprovider, Tustin, CA-based Commonwealth Energy, has turned backabout 18,000 commercial customer accounts to their incumbentutilities and is working on a fixed-price retail product to marketto San Diego Gas and Electric customers later this year.

Commonwealth, which is marketing in other states under an”electricAmerica,” is proceeding with the backdrop of a stateregulatory investigation into the company’s business practices.Founder/CEO Fred Bloom left the company June 1 after he agreed withregulators last year to avoid any involvement in the company’sCalifornia operations.

The company recently gave up on its non-residential markets(leaving it with about 65,000 mostly residential customers) becauseof the tripling of its cash flow requirements to keep the biggerenergy users during these summer price spikes and rise in theCalifornia Power Exchange (Cal-PX) price. The normal $5 millionmonthly requirement to cover the cost of supplies to the commercialusers jumped to $15 to $20 million in June, according to aCommonwealth spokesperson.

“It wasn’t that we weren’t going to get the money back, it wasjust that cash flow-wise we had to wait 60 days to get it back,”said Jay Goth, Commonwealth’s California-based marketing vicepresident and spokesperson. “Now we are pretty much a 100% greenand we do have a few small commercial accounts on the green(renewable energy sources) program.”

The company is “basically staying even” in California with noaggressive marketing efforts here, Goth said. “We’re stillaccepting California customers, but we’re not out beating thebushes for them. We’re hoping we can do something in San Diegowithin the next month or two, and I know that Utility.com andGreenMountain.com are looking at the same thing.”

The plan for San Diego would be geared to give small retailcustomers a hedge against next summer’s price volatility, and Gothsaid his firm is “still working out the details. You want toprotect the consumer, but you have to stay in business, too.”

Under the electricAmerica brand, Goth said, the firm now has itsprovisional license to market in New Jersey, and it hopes to getthe permanent license later this month, after which time they willbegin marketing there. He also said earlier efforts in Pennsylvaniaare “still going strong” where Commonwealth has about 35,000 mostlyresidential customers in the area in and around Philadelphia.

Goth said the company will not comment on the ongoing CaliforniaPublic Utilities Commission investigation of Commonwealth. Ahearing was held last week before the newly assigned commissionPresident Loretta Lynch, who had some tough questions for bothCommonwealth and CPUC investigatory staff witnesses.

“We thought the issue was resolved in January,” said Goth, whois unsure when the investigation will be concluded. “We’re justgoing along as best we can and hope to get it resolved as soon aspossible.”

He noted that Bloom is now “completely out of the business.”Goth was originally brought into Commonwealth by Bloom, with whomhe had worked in the past. Commonwealth now has a new COO, DickPaulsen, and a new controller who has auditing experience with amajor company.

“We’re continuing to hone our organization so we can becomeprofitable and successful,” said Goth, who noted Commonwealthexpects to be in the black for the first time this current firstquarter of its 2000-2001 fiscal year that began Aug. 1.

He said an initial public offering (IPO) would most likely comein the first quarter of calendar year 2001 after the firm “gets acouple of profitable quarters under our belt.” He expects revenuesfor fiscal 1999-2000 ended July 31 to be around $70 million.

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