Peace video defends role in state power crisis

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The Associated Press

State Sen. Steve Peace has released a videotape to counter charges that he was an architect of California’s energy deregulation and is largely to blame for spiraling utility bills and widespread power shortages in California.

“It was done out of frustration,” Dan Howle, the senator’s chief of staff, said Wednesday. “He just wants people to understand his role.”

In the nearly 12-minute videotape, which Peace posted on his Website and made available to reporters, the Democrat from Chula Vista is portrayed as a skeptic of deregulation who shepherded the policy through the Legislature in 1996 only to guarantee that consumer protection would be included in the final version.

A narrator on the tape calls it a myth that the senator is the architect of deregulation – a charge that has dogged Peace in media accounts of the state’s power crisis. A production company partially owned by the senator produced the tape and released it several weeks ago, Howle said.

Howle said he did not know details about the cost or financing of the project.

Consumer advocates who opposed deregulation and backed a failed 1998 voter referendum to change the policy derided the videotape as spin control. Peace, who must leave office in 2002 because of term limits, is considering a run for secretary of state.

“It’s going to take a lot more than a video to revise history and rehabilitate his role in this fiasco,” said Harvey Rosenfield, the president of the Foundation for Taxpayer and Consumer Rights.

Harry Snyder, the senior advocate for Consumer’s Union, the nonprofit publisher of Consumer Reports magazine, called Peace’s efforts “reconstructive surgery.”

“He was the primary elected official to be responsible for the biggest mistake in California history since giving away land to the railroads,” Snyder said.

Others said Peace shouldn’t be the fall guy for California’s attempt to introduce competition in the statewide energy market.

“Certainly he was an important cog in the wheel, but he wasn’t the only cog,” said Jesse Knight, who was a member of the state Public Utilities Commission during the deregulation debate and is now president of the San Diego Regional Chamber of Commerce.

The legislation restructuring the rules governing the state’s utilities passed unanimously in 1996 and was signed by Gov. Pete Wilson. Instead of spurring competition, the policy resulted in electricity shortages and soaring prices.

Gov. Gray Davis this week called the program a “colossal failure” and lawmakers are struggling to fix the situation.

Peace was chairman of the Legislative committee that crafted the state’s deregulation law and called it “our effort to protect California’s consumers and businesses” at the time of its passage.

But the videotape says he sought only to include “defense mechanisms” in a program adopted in a 3-2 vote by the PUC a year earlier. The video shows him at hearings in 1996 expressing doubts about the program and saying “I am in favor of maintaining a regulated environment.”

Mark DiCamillo, director of the nonpartisan Field Poll, predicts the state’s voters aren’t likely to associate Peace with energy deregulation at the moment because his name isn’t widely recognized. But he said the senator’s role would likely be emphasized by his opponents and make it difficult for him to attract campaign funds and other support in preparation for a run.

But Peace’s chief of staff disagrees, and believes the public is looking to Gov. Davis to resolve the energy situation. “The election isn’t until 2002,” Howle said.

Consumer Watchdog
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