CA Group Pushes to Re-Regulate Electricity

In a take-it-or-leave-it gesture, California consumer advocates Tuesday handed the governor and state legislature an ultimatum to rollback electric industry restructuring and insert the state in an expanded role over the development and operation of power plants. If the elected officials fail to act, the consumer activists plan to put another measure on the statewide ballot in 2002.

The sponsors of a failed 1998 anti-electricity deregulation ballot measure, Harvey Rosenfield and Douglas Heller, of the Foundation for Taxpayer and Consumer Rights in Santa Monica, CA, offered a six-point "reform" proposal that is aimed squarely at what the consumer activists allege are abuses by the state's investor-owned utilities, merchant power plant operators and state energy regulators.

Southern California Edison Co., one of the major architects of the state's 1996 electricity industry restructuring law, quickly reacted with a prepared statement calling the proposal "misguided" and one that "would hurt consumers and threaten the foundation of California's economic recovery."

A spokesperson for Gov. Gray Davis, who will submit the state's proposed electricity plan to federal regulators Friday, said the governor is still considering suggestions from all of the state's stakeholders and is trying to blend those ideas into the state plan.

"Deregulation of electricity was a disastrous mistake," said Rosenfield, who originally came to prominence when he helped win voter approval for California's 1988 insurance industry reforms. "It must be fixed to protect our health, safety, our economy and the environment. When we say fixed, we do not mean a superficial fix that protects politicians and the utility companies.

"Elected officials created this mess four years ago, and it is the job of Gov. Davis and the (state) legislature to fix it."

Some of the consumer advocates' six points are being made by other stakeholders, such as refunds to San Diego consumers who paid retail electricity rates three and four times greater this summer, but their call for a return to integrated resource planning, creation of a "state power authority," expropriation of existing private sector generating facilities and institution of a windfall profits tax are not so far being formally suggested by any of the state's other energy stakeholders.

"Instead of resorting to threats and demagoguery, Harvey should be joining other responsible consumer advocates to work on effective solutions that are truly in the public interest," said Tom Higgins, senior vice president for corporate relations at Edison International, parent company to the utility.

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