Consumer Group Demands Documents Containing Information About Companies’ Proposals to Relinquish Plants

Santa Monica, CA. — Consumer advocates today called on Governor Davis to explain reports that he rejected offers for California to take over power plants as part of the re-negotiation of long-term energy contracts that the state signed during the height of the energy crisis in 2001. According to a report in the Los Angeles Weekly (December 6, 2002), certain energy companies offered to cede control of power plants to the state of California. Reportedly, the Governor and his staff received both formal and informal offers that would have allowed the state to operate power generators that are presently owned by unregulated power companies.

“After the miserable deregulation experiment, the most effective way to regain control of electricity prices in California would be to regain control of generating capacity,” said Doug Heller, senior consumer advocate for the Foundation for Taxpayer and Consumer Rights (FTCR). “It is hard to believe that Governor Davis wants to leave these plants in the hands of the very companies that robbed the state blind during the deregulation disaster.”

FTCR submitted Public Records Act requests to Governor Davis and the Department of Water Resources (DWR) seeking the release of documents detailing the alleged offers.

“So much of Governor Davis’s energy policy happens in the dark and too many times the public learns of missed opportunities long after the fact,” said Heller. “We simply want the Governor to make public the offers that power companies made to the State of California, so we can evaluate the proposals and better understand the Governor’s decisions.”

According to the Bill Bradley, reporting for the Weekly, Mirant, AES and Duke Energy — power companies that control more than 11,000 megawatts (about 20%) of the state’s generating capacity in California — among others offered to turn over power plants to the state, but Governor Davis’s legal counsel Barry Goode “rejected the idea whenever it was raised.”

FTCR notes that private control over power-generation allowed energy producers to manipulate the power market, driving electricity prices to exorbitant levels. The group argues that it is irresponsible to reject public control of power plants out of hand, noting that in 2001 the legislature and Governor Davis created the California Public Power Authority with the clear authority to own and operate power plants on behalf of Californians.

“The Davis administration must take the long view on California’s energy system, or we will find ourselves back in the days of rolling blackouts and market manipulation. California ratepayers built these power plants in the days before deregulation and the Governor should not ignore an opportunity to get those plants back in the hands of Californians,” concluded Heller, referring to the fact that the cost of building power plants has historically been borne by consumers as part of electricity prices.

Governor Davis and the DWR have ten days to respond to FTCR’s request.

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