The California Public Utility Commission’s (CPUC) newest member and fourth Democratic appointee, Michael Peevey, joined in a new coalition majority Thursday on a narrow (3-2), politically charged vote to make the CPUC’s earlier suspension of retail direct access effective on the date of the original decision, Sept. 20. The vote derails the CPUC president’s desire to make the suspension retroactive to July 1 and may have implications for future issues facing the regulators.

“It is time to move on,” said Peevey, a former utility and energy service sector executive. He noted that to let the matter linger would only make it more difficult later. He made it clear that he is an advocate for direct access. “I want to get resolution sooner, rather than later.” The move essentially allows most existing direct access customers to keep their power deals.

Part of the decision calls for an “exit fee” that would be charged to participating direct access customers, representing almost 15% of the power loads of the state’s three major private-sector utilities. The politically charged issue is far from over, however, because a series of hearings and legal assessments will be required before an exit fee is passed by the CPUC. Furthermore, the coalition will likely be active in stating its case for preserving as much direct access as possible.

CPUC President Loretta Lynch, who was thwarted in continuing to delay a vote on the issue, said she is concerned about the legal ramifications of an exit fee and also had been asked by some state legislators to hold off voting on the issue. She is also concerned about the rate impacts on small remaining utility customers.

Commissioner Geoffrey Brown, the architect of the alternative way of dealing with the issue, said it was “time to move on with this issue,” noting that he feels “exit fees are legal and we can move forward with it now.” Both Brown and Lynch are attorneys; the other three commissioners are not.

After Thursday’s meeting the long-time utility watchdog group, TURN (The Utility Reform Network), issued a blast at Peevey, saying his action on the implementation of suspending direct access confirmed consumers’ worst fears about him, positioning him squarely on the side of big business and energy marketers.” TURN argued that the move allowing most existing direct access customers to keep their power deals ultimately will cost existing utility customers more in future rates.

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