Consumer group plans to bring electric costs to ballot box

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Contra Costa Times

SACRAMENTO, Calif._A consumer group vowed Tuesday to pursue an initiative that would re-regulate the electric utility industry if state lawmakers fail to take strong action in coming months to protect consumers.

The announcement by the Foundation for Taxpayer and Consumer Rights, a Santa Monica- based nonprofit organization dedicated to consumer advocacy, signals another turn in the intensifying debate over how to handle California’s electric deregulation mess.

The move confirmed what many government officials said they had feared_that no matter what the Legislature does, the whole matter could be settled at the ballot box.

High electricity rates and threats of power outages are fueling a consumer revolt not unlike that of the late 1970’s that led to the passage of Proposition 13, the property tax limitation measure, said Jamie Court, a spokesman for the foundation.

“This is an issue that will affect everyone in California by 2002,” Court said. “It’s a bullet that can’t be dodged. Moreover, it’s a bullet fired by the Legislature.”

Court said foundation officials will decide whether to pursue the ballot initiative after the 2001 legislative session concludes next September. The group is asking for several reforms, including a profits tax on power generators to refund San Diego consumers who saw their rates triple over the summer and renewed authority for the state Public Utilities Commission to oversee electricity rates.

The foundation also called for setting up a state power authority that could build and operate power plants, transmission lines and other facilities to distribute electricity.

Nettie Hoge, executive director of The Utility Reform Network, called the measures part of the radical solution needed.

“It seems entirely appropriate that we all should be preparing for an initiative battle because the Legislature has such an abysmal record of kowtowing to the electric utility companies,” Hoge said.

Representatives of utility companies, however, said returning to regulation is not the answer and pledged to work with legislators and government officials to come up with a workable plan.

“We don’t believe that creating a new bureaucracy is the right solution,” said Ron Low, a spokesman for the Pacific Gas & Electric Co. “We believe deregulation can work if all parties act reasonably.”

State lawmakers approved legislation in 1996 setting deregulation into motion but have been wringing their hands of the plan since last summer, when the first fully deregulated utility company, San Diego Gas & Electric, fell victim to high wholesale prices it was forced to pass on to consumers.

In August, the Legislature enacted a rate cap for San Diego consumers and left open the question of how to pay for the excess charges.

As the crisis emerged, many blamed power generators for the price run-ups and accused them of profiting illegally. Currently, power generators are under investigation by the state Attorney General’s Office and the Public Utilities Commission.

Bay Area residents have yet to feel the impact of deregulation. PG&E has not made the transition to the open market and is still subject to a rate freeze. However, the company is expected to move into the deregulated environment in the coming year.

In Sacramento, anticipation is building. Gov. Gray Davis and his staff have met for weeks to explore the state’s options, and Davis is scheduled to announce an energy plan on Friday.

The governor has not ruled anything out, said his spokesman, Steve Maviglio.

“As the ballot proponents pointed out, the governor inherited this problem and he is working hard with all parties to fashion an appropriate solution,” Maviglio said.

Court, the spokesman for the Foundation for Taxpayer and Consumer Rights, said he’ll look at the governor’s plan closely. The foundation, which has a history of pushing initiatives_it was behind the 1988 approved Proposition 103 mandating lower automobile insurance rates_is prepared to gather the 670,816 signatures required and put the measure on the November 2002 ballot.

“The governor needs to heed these considerations in shaping a plan and if he ignores them, the whole question is going to be reopened in 2002,” Court said.

Consumer Watchdog
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