Sep 27 - Inland Valley Daily Bulletin
Sep. 27--SACRAMENTO, Calif. -- While focusing the public's attention on his efforts to rebuild the California economy, Gov. Arnold Schwarzenegger has quietly started overhauling the state's dysfunctional power system with the goal of completing the task in time for a 2006 re-election bid.
Administration officials, however, say the Republican governor has a strategy
to head off short-term power supply and transmission problems, and to create
long-term stability to benefit business and consumer ratepayers.
"The governor's plan is simple: more reliable power and better prices
for all ratepayers," Schwarzenegger spokeswoman Ashley Snee said.
His plan is particularly needed to protect Southern California, except for
Los Angeles which has its own power utility, and the San Francisco Bay area,
administration officials say.
Unlike his solutions for the state budget crisis and high workers'
compensation insurance rates, the governor's electricity fix does not require
much negotiation or compromise with the Democrat-controlled Legislature.
Using his authority to appoint members to state regulatory boards such as the
Public Utilities Commission, Schwarzenegger can call most of the shots.
His intricate plan involves the complex tasks of writing new regulations,
accelerating the implementation of previously passed legislation and expanding
the state's power-industry infrastructure to meet two key goals -- ensuring that
supply meets demand, and making sure electricity can be delivered where it is
needed at any time.
But the governor's plan won't solve the state's problems, said Assembly
Speaker Fabian Nunez, D-Los Angeles.
Nunez said Schwarzenegger would leave too many decisions to the PUC -- a move
that contributed to the last crisis, he said -- and would not encourage the
building of new generating plants, or provide the ratepayer protections the
state needs.
Nunez was an author of Assembly Bill 2006, the Democratic counter-proposal to
the governor's plan.
As was widely expected, Schwarzenegger on Saturday vetoed AB 2006, which was
co-authored by Sen. Debra Bowen, D-Redondo Beach, chair of the Senate Energy,
Utilities and Communications Committee.
"His energy policy does absolutely nothing," Nunez said. "I'm
not saying mine is perfect, but I think it's the closest thing to getting us out
of this crisis."
A number of consumer-watchdog groups and other Democrats are suspicious -- if
not highly critical -- of Schwarzenegger's proposals. They contend the governor
is too cozy with the power industry and that his plan would cost ratepayers,
possibly leading to another electricity crisis like the one that occurred a few
years ago.
The Foundation for Taxpayer and Consumer Rights, a Santa Monica organization
that regularly criticizes Schwarzenegger and operates Arnoldwatch.com, accuses
him of proposing the same electricity deregulation "agenda" that led
to the 2001 energy crisis and ended up costing Davis his job.
The group says the governor's plan to streamline and consolidate some of the
state's energy regulatory boards would eliminate protections for ratepayers and
make another "phony" shortage possible.
"Californians were devastated by energy deregulation," FTCR
spokesman Doug Heller said.
He said Schwarzenegger's plan to build more power plants risks weakening
environmental standards.
Heller said AB 2006 was designed to "restore regulatory balance to our
state," but Schwarzenegger seems to be operating on the assumption that
"deregulation can work."
Administration officials vehemently dispute such criticism, pointing out that
this past summer included seven days of record-breaking electricity demand but
ended with no power blackouts because of policies the governor has already set
in motion.
Among the the major components of his plan:
-- Having the PUC and other state regulatory boards speed up the
implementation of state regulations to entice and to make it easier for
investor-owned utilities and independent power companies to build new power
plants and power transmission lines.
-- Requiring energy suppliers to keep 15 percent worth of reserves available
to meet unusual and unanticipated spikes in demand. The administration expects
to see this goal met in 2006.
-- Creating a dual market, with consumers being able to depend on the
stability of buying power from the utilities they are used to, and large
businesses and cities having the option of purchasing electricity from the
supplier of their choice.
-- Increasing natural gas supplies, as 45 percent of California power plants
are powered by natural gas. When natural gas is scarce, the cost to generate
power increases, as does the cost of electricity.
-- Encouraging conservation and the use of alternative fuels such as wind and
solar power, so that by 2020 roughly a third of all power consumed by California
comes from environmentally friendly sources.
-- Reducing costs immediately by renegotiating the long-term contracts for
electricity signed by the Davis administration at the height of the 2001 energy
crisis, and accelerating and increasing the amount of refunds from energy
suppliers to California ratepayers that have already been ordered by the Federal
Energy Regulatory Commission.
"I think this plan recognizes the complexity of the energy market in
California," said Dominic DiMare, a spokesman for the California Chamber of
Commerce. "It allows for both public utilities and independent producers to
participate in the marketplace -- and I don't think a market that excludes some
participants is right for California."
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