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Calif. Energy Deregulation Delayed

December 30, 1997

SAN FRANCISCO (AP) _ Deregulation of California’s electricity market, which will give customers a choice of energy providers, will be delayed by as much as three months, the state’s new electric wholesaler announced Monday.

The startup, originally scheduled Jan. 1, now is planned by March 31, the California Power Exchange said.

The need for a delay was first disclosed last week. Operators of the new system attributed it to computer problems and insufficient training of workers.

A 10 percent cut in electricity rates will take place Jan. 1 as required by law, state regulators said.

Deregulation will allow consumers to choose an electricity provider from nearly 200 companies that have registered with the state Public Utilities Commission. Electricity will be bought and sold through the Power Exchange, based in Alhambra, and transmitted through an Independent System Operator rather than the utility companies.

A seven-day simulation of the new system found problems in a software program that was designed to enable communication between computers at the Power Exchange and the ISO.

Officials of the new entities estimated that the delay would cost the Power Exchange $110,000 a day and the ISO $300,000 a day, much of which will eventually be billed to customers.

The Power Exchange said Monday the March 31 date was chosen after consultation with the ISO’s chief executive, utilities and other market participants.

``We will press ahead rapidly with the aim of achieving startup as soon as possible,″ Dennis Loughridge, chief executive officer of the Power Exchange, said in a statement.

The Public Utilities Commission is scheduled to meet Tuesday and vote on formal extension of the startup date.

PUC President P. Gregory Conlon said he was disappointed by the prospect of a three-month delay, ``but given the technical difficulties in the testing to date, the need to be conservative on the operational reliability of the electricity grid, and the complexities of the new hourly trading market, it is a prudent action to take at this time.″

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