Activist targets utilities for ballot measure

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The proposal in the works for the 2002 election would restore regulation of privately owned power firms.

Riverside Press-Enterprise

SACRAMENTO Depicting producers and distributors of electricity as a menace to California’s prosperity, a consumer activist vowed Tuesday to organize a ratepayers’ revolt in the next statewide general election.

Consumer groups have begun drafting a ballot measure to restore regulation of privately owned electric utilities and gradually move toward state ownership of power plants and transmission lines, Harvey Rosenfield said.

“We’ve got to take the greed out of electricity,” said Rosenfield, who in 1988 successfully promoted a ballot measure — Prop. 103 — that promised rollbacks of auto insurance rates.

Although the proposed initiative on electricity would not go to voters until November 2002, Rosenfield brandished it as a threat.

He warned Gov. Davis and the Legislature not to be timid in the next few months as they consider changes to the state’s 1996 law deregulating electricity.

Davis is scheduled to unveil his proposals Friday.

“The governor inherited this problem and he’s working hard with all parties to fashion an appropriate solution,” said Davis spokesman Steve Maviglio.

Maviglio said Davis “hasn’t ruled out” Rosenfield’s proposals, such as state ownership of utilities.

But a spokesman for Southern California Edison, which serves much of the Inland area, and the leader of an energy producers’ trade group both said re-regulation and eventual state ownership of the electric industry would produce higher rates and shortages.

Edison spokesman Steve Hansen and trade-group executive Jan Smutny-Jones said the 1996 law can deliver the benefits promised, but not yet delivered, if it is given more time and state authorities fine-tune it — for instance, by allowing for more long-term power contracting.

Privately owned utilities such as Edison have been encouraged by state regulators to sell off their power plants and buy from independent producers. But municipal utilities, such as Riverside’s, continue to own generating facilities.

Rosenfield, president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, warned against mere tinkering.

Last summer’s soaring electric bills in San Diego and southern Orange County proved the 1996 law was “a disastrous mistake,” he said.

State lawmakers and Davis should stop accepting campaign contributions from power companies, Rosenfield added. He also rebuked a Los Angeles lawmaker for inviting consumer groups to discuss the state’s electricity situation at a closed meeting next week. He said policy-makers should avoid closed-door meetings, which he asserted helped produce the flawed 1996 law.

Rosenfield vowed to raise $7 million to pass his “Ratepayer Protection Act” as an initiative. He predicted that consumer and environmental groups and labor unions would be able to overcome opposition from the power industry.

In coming months, he added, consumer groups should pull out of any discussions of “another utility bailout.”

Edison and Pacific Gas Electric have filed federal lawsuits and pressured the state Public Utilities Commission to allow them to bill their customers retroactively for $6 billion they say they lost while buying power last summer.

But Rosenfield said the utilities erred in backing the 1996 law and thinking low prices at the time would continue during a six-year transition period, when a rate freeze has been in effect. Utilities shouldn’t be protected from harm from such misjudgments, he said.

Consumer Watchdog
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