By HOWARD FINE

Staff Reporter

With computer problems delaying implementation of energy deregulation for perhaps two months or more, Los Angeles companies will miss out on substantial savings on their power bills perhaps totalling in the millions of dollars.

“We estimate that, if this delay lasts through February, our customers cumulatively will lose about $6 million in savings,” said Michael Burke, executive vice president with Los Angeles-based New Energy Ventures.

New Energy’s customers, including Ralphs Grocery Co./Food 4 Less Inc., are largely based in Southern California.

But for most small businesses and many of the electric service providers scrambling to prepare for the now-postponed Jan. 1 start-up date, the delay will have little impact and may even help them get better organized.

“We haven’t heard of many rumblings,” said Arthur O’Donnell, editor and associate publisher of California Energy Market, a San Francisco-based industry newsletter. “Sign-ups with different power providers have been at a moderate pace and most of those who have signed up probably won’t start on Jan. 1 anyway.”

O’Donnell said that many energy service providers have experienced delays in installing new power meters and are still working out power supply arrangements.

“It would have been a stretch for some of these folks to be ready to deliver power on Jan. 1, and that was before the news of this delay,” he said.

The delay was caused by computer problems at two new entities created by the state’s deregulation law: the Sacramento-based Independent System Operator (ISO), which will manage the power grid, ensuring equal and reliable access for all power service providers; and the Alhambra-based Power Exchange (PX), which will function as a “trading floor” for spot power transactions.

In a smoothly operating system, the computer systems for both entities must communicate with each other during each power transaction to ensure that the right amount of power gets to each provider at the right price.

But in test runs earlier this month, the computer systems either failed to communicate with each other at all or, when they did, took up to 10 hours to process transactions that were only supposed to take three or four hours. Officials with both systems said there were “minor computer program bugs” in the software and that there was no major design flaw.

Part of the problem stemmed from the fact that the program connecting the computers was not received until Dec. 8 less than a month before the system was to go online.

Officials with the ISO and the PX were scheduled to meet Dec. 29 to set a new deregulation start date.

“As long as the delay is only a month or two, then there shouldn’t be much of a problem,” O’Donnell said. “But if the delay stretches out longer or a second start date has to be rolled back then the confidence of the marketplace will be shaken. It could even slow deregulation programs in other states.”

The delay will likely have the biggest impact on major power users like Ralphs, which signed up early in the hopes of achieving significant savings on their power bills.

It is not expected to have a significant effect on most small-business owners and residents, who have so far largely sat out the deregulation sign-up derby. Those customers will still receive a mandated 10 percent rate cut from Southern California Edison and the two other investor-owned utilities.

Customers of municipal utilities like the Los Angeles Department of Water and Power have until 2001 to decide whether to deregulate and are not part of the present round of rate cuts.POWER/16inches/1stjc/mark2nd

Customers of municipal utilities like the Los Angeles Department of Water and Power have until 2001 to decide whether to deregulate and are not part of the present round of rate cuts.