Despite failing this summer to deliver several high-profileenergy restructuring corrective laws, California’s statelegislature is expected to be the focal point of future energypolicymaking again next year, with more involvement from thegovernor’s office, according to a variety of energy expertsaddressing a two-day industry workshop in San Francisco.

Left unresolved so far are the broader issues of electricrestructuring, creating a nonbypassable gas public goods charge andhow to handle Pacific Gas and Electric Co.’s massive,multi-billion-dollar hydro-electric system. What was accomplishedin new laws this year included limits on future retail gasunbundling, easing the merchant power plant siting process andstrengthening the governor’s influence in energy regulation.

“The energy issues will be back,” said Karen Edson, a formerstate energy commissioner now a Sacramento lobbyist for variousenergy interests, addressing “Restructuring in California:Surviving the Transition,” a conference for marketers, lawyers,regulators and utilities. “Very little actually happened this year,and in fact, I think this year was important for what did nothappen.

“This was a year of transition, and that was most important inthe administration where there was a new governor (Gray Davis),whose views on utility and energy issues were really uncertain.What we do know is that energy (at this point) is not education(Gov. Davis’ prime focus so far).”

In most of the legislative proposals, the experts said, too muchwas thrown into single proposed bills, and as a result, theirwidespread acceptance was diminished. The gas unbundlinglegislation that did pass, for example, originally was a sweepingproposal curbing both added retail electric and gas unbundling inthe future. Electricity eventually was stripped out. Similarly, abill that now streamlines state power plant siting at one time wasstructured so it also addressed the public sector assumingresponsibility for electricity transmission.

“I’m impressed that it (the gas unbundling bill, AB 1421)includes carbon monoxide and other safety/reliabilityinvestigations (as basic utility-provided services),” said BillJulian, a former state legislative staff energy expert and now alobbyist with consumer-oriented energy clients, who noted that theyear’s most important new energy law is the one streamlining powerplant sitings (SB 110). “The revenue cycle services on the gas sideare a little less complex and controversial than they are on theelectric side, but these services for the most part are assigned toincumbent gas utilities.”

A question raised at the two-day energy conference, however, waswhere was the new governor and his administration while the debateswere raging on the issues that did not get addressed? Is the statelegislature basically becoming the sole energy policymaking body inCalifornia?

Administration involvement on some of the issues this year was”met with a lot of hostility,” according to James Boyd, anassistant secretary in the sprawling state Resources Agency, whichoversees environmental agencies and the state energy commission. “Ithink the administration was involved (on some issues), waswatching, was learning and was judging peoples’ actions and words,hoping to trust and desiring to cooperate, collaborate and partner.In the end, it was disappointed. “Overall, I think a lot ofvaluable time was consumed, relationships were strained, and I’msure any progress was made.” Next year, Boyd said theadministration will be more engaged on energy and he and his boss,Resources Secretary Mary Nichols, a former federal environmentalofficial and leader of the Natural Resources Defense Council,intend to lead the charge. He noted that the administration will beconcerned about energy “security, diversity and reliability” as ittries to take a more comprehensive approach to future legislativeproposals that will necessarily include the hydro-electric issueand how far to go with further unbundling.

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