A Fable That Outdoes Aesop for Folly

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Los Angeles Times

The best analogy about California’s electricity deregulation comes from Richie Ross, a political consultant.

The private utilities never were real businesses, Ross observes. They were tweeners–somewhere between a government entity and a competitive enterprise. Sort of like a domestic animal. Protected and productive. Like a cow.

“One day they turned the cow loose into the wild,” Ross says, “and it was eaten.”

By the real wild animals. The jackals. The profiteering power generators.

Continuing with this simile, somebody also let a bunch of horses out of the barn. Power plants that were grabbed up by the jackals.

One question now being pondered is what fate awaits the hired hands–the politicians–who carelessly turned loose the livestock. Not only those hands, but the recent hires who didn’t react fast enough to minimize the losses. Particularly the most important hire, foreman Gray Davis.

Will the peasants take up pitchforks and rebel?

But enough.


A Time magazine headline last week asked simply: “Lights out for Davis?” It ran a grotesque likeness of the governor praying under a dim lightbulb, a darkened city in the background. Not preferred national exposure for a little-known governor who may someday want to run for president.

The more immediate political question for Davis, however, is how does this energy mess affect his reelection bid next year.

Perhaps not much if he and the Legislature during the next two weeks–as promised–can come up with a satisfactory solution. It’s a good bet they’ll find some fix because they plain have to–for their sake and the state’s.

For starters, any satisfactory solution means ending rolling blackouts and avoiding big rate hikes. But a lot more also has to happen.

California can’t be dragged into a recession by this debacle or the governor may well become an unemployment statistic.

People also can’t feel like they’re being gouged as they bail out the utilities.

Already, hundreds of millions of tax dollars are being paid to the profiteers to keep the lights on. For the utilities to stay afloat, Sacramento believes it must help them unload their huge debt–$ 4 to $ 12 billion, depending on the bookkeeper. But it’s insisting on some utility payback, maybe stock for ratepayers.

Consumer activists are threatening a ballot initiative if residential and small-business consumers are stuck for the bailout. Harvey Rosenfield, president of the Foundation for Taxpayer and Consumer Rights, recently became so angry at the governor that he hung up on him during a conference call with other activists.

“I just felt the conversation was going in the wrong direction,” Rosenfield recalls. “They were talking about deals and bailouts. It was very uncomfortable. I thanked him for soliciting our views. It took about a second to hang up.”

It’s tense in the Capitol. And there hasn’t even been a blackout there yet.


Davis’ biggest political threat is from the left, not the right. Republicans are vulnerable themselves. They conceived and installed this deregulation scheme, after all–a Republican PUC, governor and Assembly. And, yes, Democrats backed it. Nobody’s hands are clean.

But if there’s a public outcry, it’s likely to be for more government involvement, not less. For protection from the profiteers. That’s not a GOP message.

“This is the making of conditions that produces the politics of Jesse Ventura,” says Pat Caddell, a former pollster who’s now a consultant for the NBC-TV series “The West Wing.”

Also the politics of a Ralph Nader. Potential Green Party candidate for governor? Drawing Democratic votes from Davis? Just a thought.

Davis is vulnerable for acting slowly. Indeed, key legislators of both parties have been grousing anonymously about his leadership.

Last summer, he could have pressured the PUC into allowing the utilities to sign long-term contracts for electricity at a lower purchase price than his administration now is negotiating. Davis’ answer is that it was a Republican PUC and he had little influence. Legislators counter he didn’t even try.

Davis could have called a special legislative session in September, as Republicans urged. In truth, he and lawmakers of both parties were focused on the November elections.

The self-image Davis crafted makes him vulnerable. He conditioned voters to think of him as cautious, deliberative, centrist. In times like these, that can morph into cowardly, indecisive and lacking boldness.

To return to that barnyard analogy, all these hirelings slacked off on their chores. And the ugly chickens have come home to roost.

Consumer Watchdog
Consumer Watchdoghttps://consumerwatchdog.org
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