California Commercial and Industrial (C&I) customers may have noticed rising electricity bills due to supply shortages. Capacity and Resource Adequacy ancillaries aim to encourage new power generation to meet the increasing demand. Participating in the CA Lottery may help you potentially lock-in costs for a longer period. 

What is the California Lottery? 

The California Lottery allows users in California to select a competitive supplier for their electricity. The local utility remains responsible for distribution and power line maintenance, and these costs will not be affected. 

Participation is available to customers of utilities such as Southern California Edison or PG&E. It is not available to those served by municipally owned utilities. 

Why is Competitive Supply called a lottery system? 

Utilities anticipate supply requirements in advance. A designated portion of their load capacity is allocated for competitive supply through an annual lottery system held in late spring. Clients are randomly selected to participate until all available spaces are filled. Each utility determines the allocation of its own space based on specific needs. Clients who are not selected must wait a year before registering again. 

Why a Lottery System? 

At the end of the last century, California was one of the first states to deregulate electricity and offer consumer choice. The ENRON bankruptcy in 2001 had significant financial implications for the state, leading to a Governor recall and a return to regulation. Currently, the lottery system allows some competitive supply, but not to the extent seen during the ENRON era. 

Potential Lottery Benefits 

As energy costs rise annually, securing energy futures at current rates may provide financial stability for your business. This approach can help ensure more predictable budgeting in the future. 

Is the California Lottery/Competitive Supply right for you? 

Energy contracts may not be suitable for every business. However, for businesses where energy constitutes a major expenditure and where budgeting future costs at current rates would be advantageous, it is worth considering. 

How Can You Participate? 

Freedom Energy assists clients with paperwork, the lottery process, and enrollment in competitive supply.   

The application deadline for the CA DA lottery this year has passed. Now is an opportune time to prepare for future opportunities. Please contact me at dprabhakar@felpower.com if you wish to discuss your energy portfolio and explore options to achieve your energy goals and objectives.