Utilities Fight Plan to Limit Affiliates’ Sales

Parent companies of California’s major utilities are battling a proposal that would ban their affiliates from selling electricity in the parent’s service area or using its name and logo during the first two years of energy deregulation.

The proposal, scheduled to go before the California Public Utilities Commission today, is designed to make it more difficult for affiliates of the state’s investor-owned utilities to dominate the electricity market after deregulation takes effect Jan. 1.

“It would be devastating to our business,” said Doug Oglesby, vice president and general counsel for PG&E; Energy Services, the electricity retailer created by PG&E; Corp., which also is the parent of San Francisco-based Pacific Gas & Electric Co.

PG&E; Energy Services has a contract to provide electricity to McDonald’s restaurants throughout the state, a deal that could be voided by the proposed rule unless commissioners insert a grandfather clause.

“It is anti-Californian. It gives the out-of-state players in this competitive arena definite unfair advantage,” said Clarence Brown, spokesman for Southern California Edison, a unit of Rosemead-based Edison International. “We also feel it is unconstitutional in what it restricts us from being able to say about our affiliates, our affiliate companies.”

He added, “They’re working on things every day, signing up deals. We’ve invested quite a bit in our branding strategy of the Edison brand.”

Under deregulation, investor-owned utilities will not be able to market electricity directly to consumers. Instead, homeowners and businesses will be able to choose from a growing list of energy retailers, much in the same way they now choose a long-distance carrier.