Staff Reporter

Edison International has essentially abandoned the newly deregulated power market, choosing instead to focus on selling ancillary services like security systems and appliance warranties.

Edison said its decision to drop out of the race to sign up new electric power customers, less than a year into deregulation, is based on too-thin profit margins.

"We do not define our business as providing electricity until the end of time," said Janine Ames, executive director of marketing for Edison Enterprises, the unregulated marketing division of Edison. "Rather, we are looking at a whole range of products and services that add value to our customers."

Edison's pullback stands in sharp contrast with its two major in-state rivals: San Diego-based Sempra Energy (comprised of the San Diego Gas & Electric utility and Southern California Gas Co.) and San Francisco-based PG & E; Corp. (the holding company for the Pacific Gas & Electric utility).

Both those companies have pursued a strategy of signing up major commercial and institutional customers, from Fortune 500 companies to school districts.

Regardless of strategy, most utility customers in the state are staying on the sidelines, opting to remain with their current providers. Only about 1 percent of the state's 10 million customers had switched providers as of Dec. 31, according to the state Public Utilities Commission.

The most movement is taking place among major industrial power users. About 18 percent of such companies statewide had switched providers as of Dec. 31, accounting for about 27 percent of the total power used by this category of companies.

Several of those companies have been signed up by PG & E; Energy Services, including Atlantic Richfield Co., Nestle Corp.'s Glendale facility, Safeway and Vons stores and Carl's Jr. restaurants.

By contrast, Edison Source, the Edison arm set up to pursue commercial and residential power customers, has only one deal to provide "green power": Toyota Motor Corp.'s U.S. headquarters facility in Torrance.

Rosemead-based Edison has not totally withdrawn from the power market. It continues to sell alternative or "green" power to residential customers. It also sells power to pre-existing customers and distributes power through its local grid. But it is has abandoned signing up new customers.

"We have limited investment dollars and we need to prioritize where those dollars are best spent," said Ames.

The decision makes Edison vulnerable to losing its existing customer base, as companies like PG & E; Energy Services and Los Angeles-based New Energy Ventures sign up new accounts in Edison's service territory.

For reprint and licensing requests for this article, CLICK HERE.