Although political pressure and some editorial writers seem bent on goading California’s governor into action on new energy legislation in the waning days of this year’s legislative session, Gov. Arnold Schwarzenegger remained unmoved on Friday, following a letter from the lower house Assembly Speaker and a consumer group rally on the Capitol steps last Wednesday.

At the rally and in his letter, Assembly Speaker Fabian Nunez challenged Schwarzenegger to “join consumers” in supporting his proposed electric industry reform bill, AB 2006, and he criticized the governor’s current implied energy policy as potentially driving up energy costs in the state.

There were “rumblings” of additional amendments being made to AB 2006, but no hint of a meeting between the speaker and the governor, according to one veteran energy lobbyist in Sacramento who noted the Nunez has other major legislative issues he has simmering with Schwarzenegger.

In his letter to the governor dated last Tuesday, Nunez said what Schwarzenegger said last April and earlier this month “fails to accomplish” what the governor intended, and “very well could result in higher cost energy for California consumers.” The Speaker’s analysis contends that existing laws (AB 57) still being implemented are only “part of the solution,” and the governor/s call for “open, transparent, competitive” processes would not be the best deal for consumers.

“Investment will be made in new power plants only when there is market certainty and long-term customer commitments,” Nunez told the governor in his letter. “Further deregulating the market will paralyze investments and result in energy shortages and higher power costs for consumers.”

At mid-week, the utility consumer watchdog TURN (The Utility Reform Network) brought together representatives from a broad array of small community and consumer organizations gathered at the state Capitol in Sacramento to hear from TURN’s senior attorney Mike Florio and Nunez, both trying to put some public pressure on the governor to get involved with the ongoing legislative process that is entering its end-of-session crunch time.

An editorial in Friday’s Los Angeles Times sided with Nunez, urging that some version of AB 2006 be passed and that ideally Schwarzenegger meet with Nunez and other lawmakers. The speaker made the same pitch in closing his letter, saying “I welcome the opportunity to begin having substantive conversations with you on this very important issue.”

An amended version of the bill emerged Wednesday that addresses some of the concerns of major business and independent power plant operators, but the state Senate took no action on the measure, which is now in the Rules Committee, chaired by the leader of California’s Senate and the most powerful lawmaker in the state.

Among the amendments are provisions to broaden California Public Utilities Commission processes, but remove proposed CPUC authority to establish a special separate industrial rate, remove public-sector municipal utilities from being required to have resource plans, and allow the CPUC in processing private-sector utilities” proposed development of new power plants to permit merchant energy providers to enter the proceedings with alternatives to the utilities’ construction plans.

TURN’s Florio, who is also on the California Independent System Operator’s governing board, said passage of AB 2006 would “ensure that California’s electric utilities are adequately prepared to meet their customers’ needs in the future.” It would protect consumers from upward pressure on rates by assuring that adequate supplies of electricity are always available when needed.

While TURN stressed that the proposed bill would require “all electricity providers operating in utility territory to participate in resource planning and institute minimum standards to prevent shortages,” but the latest amendment apparently strips that provision, allowing the California Municipal Utility Association to support the legislation.

Expressing chagrin toward Schwarzenegger, TURN’s Florio raised the rhetorical question: “How can anyone be against resource adequacy planning? Most everyone agrees the stability and certainty are key to lowering rates. Deregulation only creates uncertainty and prevents the planning we need.”

Schwarzenegger’s major energy/environmental advisers last week issued an ultimatum of sorts that if the current form of AB 2006 wasn’t heavily amended, the governor likely would veto any bill passed by the legislature. Big business and various community/environmental groups have sided with the governor.

Pending legislative committee action twice last week was postponed on AB 2006, prompting speculation on what role, if any, Schwarzenegger will play in getting a comprehensive electricity bill passed in the remaining time left this month before the lawmakers adjourn Aug. 31. The state Senate Appropriations Committee now is expected to vote on a current amended proposal (AB 2006) Wednesday, a Senate energy committee staff member told NGI late last week.

“Gov.Schwarzenegger has threatened to veto a bill that would ensure that California has the stability and certainty necessary to build and purchase adequate energy supplies in the future,” said a TURN spokesperson organizing Wednesday’s rally.

The governor’s top energy adviser last week clarified the governor’s “oppose-unless-amended” position on AB 2006 as it stood then. “We still remain open to engaging in open, productive dialogue with the Speaker about what is important and necessary (in a comprehensive electricity bill). I think many people recognize these are complex issues and we have a very tight time frame, so we have a lot of work ahead of us.”

©Copyright 2004 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.