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CA Governor's State-of-State Targets Energy for Jobs, Restructuring

CA Governor's State-of-State Targets Energy for Jobs, Restructuring

California's movie actor-turned-governor, Arnold Schwarzenegger, late Tuesday targeted energy for job creation, market restructuring and government streamlining as part of his state-of-the-state address to the legislature in Sacramento, kicking off a year in which the state faces unprecedented budget deficits. Schwarzenegger emphasized the need to cut and consolidate government, including oversight of the energy sector.

High on the governor's agenda are consolidation of the state's many energy agencies, a push for commercial electric customer choice and a restructuring of the state's multi-billion-dollar long-term power supply projects, but the budget deficit and politically sensitive cutbacks in education and health care will dominate the early weeks of the new year.

Asking for help from voters in fixing a broken system, Schwarzenegger said the state's approach to energy is "another barrier to jobs and economic growth" caused by a "flawed" regulatory structure that has not fully resolved the state's energy crisis of 2000-2001.

"Our businesses pay energy rates nearly twice as high as those in other western states," Schwarzenegger said during the latter third of his 26-minute speech. "In California, there are 13 different state energy agencies. Something is wrong when it is easier to create energy agencies than power plants."

The new governor said the state needs to act this year to avoid a recurrence of the earlier crisis in 2005, and he suggested several steps:

  • Reform the wholesale power market to attract new energy investment.
  • Reform the retail power market so large customers can get competitive prices.
  • Renegotiate those "high-priced electricity contracts that locked us into energy prices at the market's peak."

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