Frustrated by the pace of electric competition’s development inCalifornia, Enron has stepped out of the battle for residentialcustomers, at least for the time being. Enron blamed severalfactors for its decision. Consumer response has been disappointing,and state regulations put a crimp on the profitability of thebusiness.

Enron has signed up only 30,000 residential electricitycustomers, which it says it will keep. The company also servesaggregated customers in the cities of South San Francisco and PalmSprings, said spokesman Mark Palmer. “We still have lots ofemployees on the residential side looking at products that canoffer value to residential customers. We still have a residentialeffort going.” Enron will continue to pursue business customers.Gas marketing activities are not affected by the exit from theresidential electricity market.

Palmer couldn’t say when Enron might re-enter the fray forresidential customers in California. “It’s tough to predict.Certainly one trigger would be how quickly the CTC [competitivetransition charge] rolls off. The legislation has a deadline of2002, but it could go faster than that.” The CTC is a fee chargedto California electricity consumers whose proceeds go to localutilities’ stranded costs.

For now, Enron also is not pursuing residential customers inMassachusetts and Rhode Island, the other states where electriccompetition is coming to fruition. However, “Pennsylvania lookspromising,” Palmer said. “Pennsylvania has a competitive frameworkthat depends on competition to deliver the benefits ofderegulation. There are several other states that are kind of inthe process right now, but I think Pennsylvania is the bestexample.”

Another company, Green Mountain Energy Resources, which wascreated specifically to serve the residential electricity market,said it believes competition can and will be successful inCalifornia. “A staunch supporter of consumer choice, Green MountainEnergy Resources remains strongly committed to providing power toresidential customers and working to increase demand foralternative, cleaner forms of electricity,” the company said. Thecompany began supplying power to Californians in March and plans tointroduce offerings to customers in other states as they open tocompetition.

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