Let state own electric utilities, group says

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Proposed ballot initiative could pressure Gov. Davis to consider public ownership

The Orange County Register

SACRAMENTO – The state should buy out private utility companies and replace them with a government-run agency that would produce and deliver electricity, a consumer group proposed Tuesday, unveiling its solution for the state’s troubled power system.

Under the proposal – which the Foundation for Taxpayer and Consumer Rights said it wants to put on the 2002 ballot – the government would be responsible for building, operating and buying power plants, and delivering the electricity to consumers.

“We need to take it out of the hands of the greedy public utilities and into a state agency to make sure we have an affordable stream of energy,” said the group’s president, Harvey Rosenfield, unveiling the plan at the Capitol.

Utilities, energy producers and small-government advocates ridiculed the proposition, saying it would be too costly and be worse for consumers than the current situation.

“Instead of resorting to threats and demagoguery, Harvey should be joining other responsible consumer advocates to work on effective solutions truly in the public interest,” said Tom Higgins, an Edison International spokesman.

The ballot initiative announcement was timed to serve as a warning to Gov. Gray Davis, who on Friday will submit his energy proposal to the Federal Energy Regulatory Commission, which is trying to fix the state’s electricity market.

“The public will take this up at the ballot box unless the governor is willing to take on the utility companies,” said Douglas Heller, a member of Rosenfield’s organization.

The group would not have proposed the measure if lawmakers appeared poised to act in the public interest, he said.

“We want the Legislature to do its job and seriously reform this industry,” Heller said. “So far the only thing we’ve heard from the Legislature is, ‘How do we get $6 billion back to the utility companies?'”

The group wants to make sure consumers don’t get stuck with the $6 billion – and growing – tab that utilities say they’ve been left with since rates they could charge customers were frozen. The group wants the utilities to be paid back through a special tax on profits that would be charged to the companies that actually generate the electricity and sell it to the utilities.

A Davis spokesman said the governor has not ruled out a publicly owned utility.

But Assembly Republican Leader Bill Campbell of Orange said, “Most people are not interested in expanding the role of government.”

In 1996, the Legislature deregulated the electricity market with the idea that competition would hold down prices.

But this summer, San Diego and south Orange County residents were hit with sharp increases when SDG&E had to buy power from producers at unusually high rates. The rest of the state will face the same unless changes are made.

Consumer Watchdog
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