The California electric utilities have given the first indication of how many customers will be able to shop for a lower electric rate under the state's expansion of electric competition, known as direct access, which is subject to a cap.

In filings with the state's Public Utilities Commission, the three largest utilities reported, according to statutory criteria, their proposed cap levels for the amount of business customer load able to be served on direct access:

Pacific Gas & Electric: 9.5 billion annual kilowatt-hours

San Diego Gas & Electric: 3.5 billion annual kilowatt-hours

Southern California Edison: 11.7 billion annual kilowatt-hours

These cap levels must still be approved by the Public Utilities Commission.

Since annual electric usage among business customers varies wildly from millions of kilowatt-hours for heavy industries to just a few thousand kilowatt-hours for small businesses, it's impossible to place any meaningful estimate on the number of California businesses that will be allowed to shop for a lower electric rate under the cap.

However, according to the Energy Information Administration, the average electricity use of a California industrial customer is nearly 650,000 annual kilowatt-hours.  At that rate, the number of customers allowed to shop for electricity at Pacific Gas & Electric would be limited to 14,000 customers out of about 1 million non-residential customers in its service area (or just 1%).

Because the largest electricity users are always the first to shop for a lower rate (since electricity is a bigger cost for them), the shopping cap in California could quickly be reached as several very large industrials with extraordinarily large power usage take up all the room under the cap.  That could leave mid and small-sized businesses unable to shop for a lower energy price, even though they could save thousands of dollars from being able to shop.

That's why customers need to take advantage of their ability to shop for cheaper electricity as soon as it is enacted, which is expected in April 2010.  Your business should find a low electric rate, and submit your switch to a new energy provider as soon as you are able, maximizing your chance to be allotted space under the direct access cap, and realize the savings available from shopping for electricity.