Staff Reporter

Though much remains unknown about the coming deregulation of the electricity market, this much is certain: It has added a new level of competition for California's three biggest utilities.

Because utilities are required to be separate from marketing and reselling companies, Edison International, PG & E; Corp. and Enova Corp. (parent of San Diego Gas & Electric Co.) have set up their own unregulated power-reselling companies.

Enova has a joint venture with Southern California Gas Co. parent Pacific Enterprises, PG & E; has PG & E; Energy Services, and Edison has Edison Source. These companies have been relying on the strength of their utility parents, but also looking for cheaper power supply sources elsewhere.

In addition to these utility-operated resellers, one new local start-up has aggressively entered the market: New Energy Ventures, a Los Angeles-based power retailer.

Each of these companies is targeting large commercial and industrial customers, not only because they use more power, but because the utilities instituted a 10 percent rate cut for residential and small retail customers at the start of the year. As such, most modest energy users will likely continue to receive their power from the utilities for the near-term future.

Here are the major power players in the local market and their strategies:

- Energy Pacific

The offspring of Enova's San Diego Gas and Pacific Enterprises' Southern California Gas, Energy Pacific has the backing of the utilities' combined annual revenues of about $4.5 billion and 6 million energy customers.

If the merger of Enova and Pacific Enterprises goes through this summer, the newly merged utility parent, Sempra Energy, would be the nation's largest natural gas distributor.

Armed with the two utilities' customer bases, Los Angeles-based Energy Pacific has substantial leverage to sell power. Even so, it has to distinguish itself from the fierce competition in the unregulated power provider market.

Energy Pacific officials hope to break away by offering all-inclusive energy packages electricity, natural gas, site audits, strategic energy planning, energy efficiency and consulting services.

To that end, Energy Pacific last December acquired Houston-based CES/Way International Inc., the largest independent U.S. energy-services company. That allows Energy Pacific not only to sell power, but to upgrade its customers' existing energy plants and even build new operating plants for customers, such as the $7 million energy facility at DreamWorks SKG's Glendale animation studio.

Energy Pacific has also signed deals with San Diego-based Foodmaker, parent of the Jack in the Box chain, and Sears Roebuck & Co. Energy Pacific is also negotiating deals with the Los Angeles Unified School District and AT & T.;


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