California energy marketers
strike accord with speaker

Nunez agrees to marketers'
'clarifying amendment'

Bright line between core, non-core
isn't agreed to as yet

Norm Plotkin runs the Alliance for Retail Energy Markets in Sacramento.
     He met late Tuesday with the speaker's people and Bill Dombrowski who runs the state's retail chain trade association.
     At issue was AB 2006 adopted last week and sent to the Rules Committee.
     Since last week's voting, staffers have been drafting what they think has been agreed to in committee.
     While the bill has been called the Southern California Edison bill, Plotkin reports that the speaker's staff has agreed to clarifying amendments not considered controversial favored by AREM with only two issues still up in the air -- the threshhold now blank in the bill -- and aggregation.
     The rolling commitment that a shopper has to shop for a minimum of five years will be gone, said Plotkin.
     But there is to be a five-year transition to the core, non- core market.
     Once the big guys shop, "they're gone -- no moving back and forth for any duration," Plotkin added. Those chosing not to shop are then "customers of the utility."
     Where is the threshhold likely to be set?
     Discussion is about 200, 300 and 500 kw peak.
     Dombrowski wanted the 200 kw line. If the line is set at 200, said Plotkin, the state will get the growth from Safeways, Macys, the Home Depots, all the folks who're clamoring for choice now.
     "You have to set it at 200 kw to get those folks," Plotkin added.
     If Nunez is against aggregation, "you absolutely have to do the 200 kw but if they pick a higher number than 200, "you absolutely have to do the aggregation."
     One development that may have strengthened Plotkin's hand yesterday was a survey done for the POWER Coalition June 20-21 revealing that Californians are squarely against passage the SoCal Ed version.
     The survey was done by a bi-partisan polling team of Republican pollster Neil Newhouse of Public Opinion Strategies and Democratic pollster Geoff Garin of Hart Research.
     The two talked between them to 600 registered voters.
Here's what they found:
     "The public likes competition in the energy industry believing it is good for the state and is important for keeping prices down.
     "Voters strongly oppose the "cost overrun" provision in the current energy proposal, and express willingness to vote against legislators who support it.
     "Voters have little faith that the state legislature will look out for their interests when it comes to energy legislation, strongly believing legislators will cater to special interests.
     "In contrast, voters overwhelmingly believe that [Gov Arnold] Schwarzenegger will not cater to special interests on this issue, but will do the 'best thing for California residents.'
     "The cost overrun provision of AB 2006 is very troubling to voters.  By huge margins and across all demographics and party lines, voters simply do not believe that the monopoly utilities should be able to pass their cost overruns onto consumers.
     "Also, voters do not trust the legislature to solve the energy problem and are much more inclined to follow the governor's lead.
     "A strong majority of voters believe that competition for services like electric power is good for the state.
     "Fully 56% of voters believe that competition for services like electric power is good for the state, while just 38% believe that too much competition for services like electric power can be dangerous.
     "Support for competition cuts across the partisan board, with at least a plurality of Republicans (61%), Democrats (49%) and Independents ... (60%) believing that competition for electric services is good for the state.
     "By a three-to-one margin, voters believe that California's electric utilities should have to compete against other power generation companies.
     "By a 66%-22% margin, voters believe that the state's electric utilities should have to compete against other power generation companies to ensure consumers receive the lowest possible price for their electric service (R - 64%, D - 69%, I - 61%).
     "Voters overwhelmingly oppose the provision of the energy proposal dealing with charging ratepayers for cost overruns.
     "By a wide 57%-27% margin (16% are undecided), voters oppose the provision of the energy proposal which would allow utility companies to "charge ratepayers for all reasonable costs, including any cost overruns, of building and operating power plants.
     "Opposition to this provision cuts across both party lines (R - 55%, D - 62, I - 53%) and across every major media market in the state.
     In fact, Democrats are the strongest in their opposition to this provision - fully 45% of Democrats interviewed strongly oppose it.
     "Once voters learn that the last three public utility projects in the state had cost overruns of $10 billion, opposition to this provision in the energy proposal surges.
     "Fully 73% of those polled (R - 71%, D - 72%, I - 77%) said they would be less likely to support the energy legislation including the "cost overrun provision" upon learning that the last three public utility projects completed in the state had cost overruns of $10 billion.
     "Voters' intensity is clear - fully 52% said they would be "much less likely" to support the legislation containing the cost overrun provision.
     "Voters would likely make legislators who supported the cost overrun provision pay a price at the polls.
     By a 76%-12% margin, voters say they would be less likely to vote for a candidate for state legislature who support the legislation which included the cost overrun provision.
     "And, fully 50% said they would be "much less likely" to do so - indicating an extremely strong level of opposition to this proposed legislation.
     "When it comes to energy policy, voters trust Gov Schwarzenegger to do the best thing for California, while they believe the state legislature will cater to powerful special interest groups.
     "By 62%-27%, voters believe that Gov Schwarzenegger will do the right thing for the state on the issue of energy policy, rather than cater to special interest groups.
     "But, by a similar 59%-32% score, voters believe the state legislature will cater to special interest groups on this issue rather than do the right thing for the state.
     "Few voters blame the state's previous energy crisis on the deregulation of the energy market.
     "Fully 41% of voters polled blame the state's energy crisis of a few years ago on "market manipulation by a few greedy energy companies" (41%), compared to 31% who blame it on "mismanagement and poor oversight by former Gov Davis' administration.
     "There is little awareness of a legislative proposal dealing with the state's utilities and power plants.
     "Just 19% of voters say they have seen, read or heard anything recently about a proposal being considered by the state legislature in Sacramento dealing with California's utilities and power plants." 

(Story originally published in Restructuring Today 7/7/04)