Amid a buzz about higher retail rates and the need to conserve to cut down on summer’s looming blackouts, California Gov. Gray Davis Wednesday signed a new law (SB 6X) creating the “California Consumer Power and Conservation Financing Authority,” which will have broad powers to construct, own and operate electric generation and power facilities and finance energy conservation programs. The law becomes effective in 90 days.

The new state agency sunsets Jan. 1, 2007; it was developed on a strictly partisan vote with no Republicans, who are the minority party in both houses of the state legislature, voting for it, something the governor singled out for criticism.

In his formal written letter accompanying the newly signed legislation, Davis noted that he wants some clean bills passed to streamline the organization and operations of the authority, and he indicated he would be working with state lawmakers to get that done later in this legislative session. There are also questions about the new power authority’s oversight board and how the new agency will interact with existing state energy bodies, particularly the California Energy Commission, which sites all power plants over 50 MW or larger.

While championing his state as the leader in electricity conservation with per capita usage 42% below the national average, the governor characterized the state’s latest intervention into the electricity business as a means of forcing down skyrocketing wholesale power prices and adding greater reliability of adequate supplies.

“Direct participation in California’s energy markets will help dampen wholesale energy costs and ensure an adequate supply of energy,” said Davis, at a media photo-op-staged signing ceremony at a cogeneration plant near the state capitol. “This bill gives back to California the power to control its own energy destiny.”

Strong speculation among industry and government sources is that the former head of the City of Los Angeles’ municipal utility, S. David Freeman, 75, will be named by the governor to head the new power authority.

The California Power Authority will be able to finance natural gas transportation or storage projects; issue up to $5 billion in bonds; have the power of eminent domain; and make loans and grants. No new projects will be funded after Jan. 1, 2007.

California’s Power Authority is modeled, in part, after the successful New York Public Power Authority,” Davis said. “We will be authorized to build, own and operate new power plants on behalf of consumers. The Power Authority will be armed with the power of government and the flexibility and initiative of private enterprise. This is power generated in California for California.”

Before the signing ceremonies, Davis issued a statement on California’s electricity conservation, calling it “a great accomplishment,” and with a touch of the politician, noted that he hopes “this will send a message to the rest of the nation that we are doing everything we can as Californians to keep the light on.”

Davis’s announcement used statistics from the Department of Energy that show California’s per-capita power use at 7.085 thousand kWh; compared to the next closest state, Rhode Island, which is at 7.261. New York’s is 7.660 thousand kWh; Hawaii’s is 7.913; and Massachusetts’ is 8.001.

Separately, Pacific Gas and Electric Co. launched a new program for industrial customers on a pilot basis, offering an Internet-based service allowing the utility’s largest energy users to retrieve real-time consumption/price information via a computer link. Called Inter-Act, the PG&E utility is using a system developed by Alameda, CA-based Silicon Energy. The program employs interval meters as a load management tool, and the 2,700 largest customers are not going to be charged for the service during the pilot, PG&E’s utility announcement said.

Meanwhile, in federal bankruptcy court in San Francisco Wednesday, the PG&E utility received the judge’s approval to keep its $260 million annual public purpose programs — which include demand-side management — out of the bankruptcy proceedings, meaning that it can go ahead with pre-bankruptcy commitments to pay customer rebates and other conservation/energy efficiency efforts.

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