Peace’s profile low in energy dilemma

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The San Diego Union-Tribune

SACRAMENTO — California’s power crisis has captured nearly all the energy of the new legislative session.

Lawmakers are competing to showcase their solutions, lobbyists are working overtime to publicize their clients’ views, and the normally mild-mannered Gov. Gray Davis has made some unusually angry accusations and, for him, bold proposals.

One voice, however, is strangely subdued — that of state Sen. Steve Peace, D-El Cajon.

The energetic, outspoken and sometimes abrasive lawmaker who pushed through the Legislature’s version of electricity deregulation four years ago has been sitting on the sidelines, content to support Davis.

“We’re in the middle of a war. I’m doing everything I can to support the governor,” he said in an interview last week.

But war has casualties.

Rumors were swirling around the Capitol last week that Peace would be one of them, driven from office by the frustration of being cast as a villain in a state power play that’s quickly turning into a tragedy.

His colleagues understood his anguish.

“He’s human, and he’s taken a lot of hits for something that wasn’t his fault,” said Senate President Pro Tempore John Burton, D-San Francisco.

Just last Monday, Davis called deregulation a “colossal and dangerous failure” in his State of the State address, while making clear he was not pointing fingers.

For months, Peace has been trying to shift blame for the deregulation plan from the Legislature to appointed state and federal regulators.

Last week, he did something that might seem natural for Peace, the producer and star of “Attack of the Killer Tomatoes,” a cult horror film spoof. His office released a video that outlined what it called the seven myths of deregulation.

The 10-minute video, starring Peace and the Legislature, was intended to explain the history of deregulation to constituents, said Art Castanares, Peace’s legislative director.

The video, produced by Four Square Productions, a film production company partially owned by Peace, was paid for out of campaign funds, Castanares said.

The video says the state Public Utilities Commission, controlled by appointees of former Republican Gov. Pete Wilson, ordered deregulation.

Peace insists that the legislative effort he spearheaded, which was put into a bill carried by then-Assemblyman Jim Brulte, R-Rancho Cucamonga, improved on a plan that the state would have been forced to accept.

The video shows clips of Peace expressing doubt about deregulation four years ago, warning that it might lead to higher prices. It portrays him as a skeptic of the concept who was working hard to fix it.

But in news accounts at the time, he showed no such doubts.

“This is designed,” he said in a 1996 article, “to reduce costs to all consumers of all classes and simultaneously bring stability to the system.”

The video disputes the common view of Peace as the architect of deregulation. To back his claim, it highlights a letter from Michael Shames, executive director of the Utility Consumers’ Action Network, calling him not the architect but the primary amender of deregulation.

But it doesn’t offer any evidence that Peace protested the label of architect of deregulation — and the favorable publicity that went with it — four years ago.

The video quotes several consumer advocates giving him credit for improving deregulation. Still, some activists don’t buy his efforts to play down his role in creating a flawed system.

“Even if this video turns out to be a blockbuster, his career is finished,” said Harvey Rosenfield, president of the Foundation for Taxpayer and Consumer Rights.

Rosenfield said Peace lost his credibility by assuring fellow lawmakers that the deregulation bill would help consumers, who are now facing skyrocketing rates.

He disputes the idea that lawmakers had no choice but to accommodate deregulation. “They could have stood up and said no, but they didn’t want to miss out on the campaign contributions,” Rosenfield said.

Utilities and energy companies are generous contributors to legislators. Peace accepted contributions from the utilities totaling more than $100,000 in the first half of last year.

Peace insists that the problems with deregulation have been caused by price manipulation among power generators, delays in building power plants and inaction by federal regulators.

Still, he can’t escape blame.

State Sen. Dede Alpert, D-Coronado, said she recently received a letter from a constituent urging her not to listen to Peace on energy matters because of his work on deregulation.

Ironically, Peace was the person who helped Alpert and then-Assemblywoman Susan Davis, D-San Diego, put together legislation that aided San Diego Gas & Electric Co. consumers by capping rates temporarily.

“He can’t be out front,” Alpert said, “and that’s got to be frustrating knowing you have something to offer.”

Peace is one of the most intelligent and ambitious legislators, according to a poll of Capitol insiders. He has never been shy about offering solutions to problems. He actively and enthusiastically participates in debates ranging from fixing the state’s troubled workers’ compensation system to revitalizing democracy with an open primary.

His restraint on energy matters represents a new role.

He said last week that he never seriously considered resigning because of fallout from his role in deregulation.

“This is politics. This happens,” he said. “Sometimes you get a lot more credit than you deserve, and sometimes you get a lot more blame than you deserve.”

The 47-year-old veteran legislator had been gearing up to run for secretary of state, though the power controversy adds some uncertainty to his political future.

Colleagues say his desire to make public policy has always conflicted with a desire to spend more time with his wife and three sons.

During the middle of last week, Peace had an especially acute case of conflict. He had to decide whether to continue as chairman of the powerful Senate Budget Committee or take a less time-consuming position.

He said his goal was to avoid what happened last year, when he missed all his son’s high school baseball games.

His colleagues understood.

“They’ve lived this commuting life a long time, and it’s always hard on the family,” Alpert said. “He’s always been interested in watching his kids play sports.”

By the end of last week, however, Senate leader Burton had persuaded Peace to keep the budget job, saying that Peace had not lost any credibility in the Legislature by pushing the deregulation legislation.

For a third straight year, Peace will be right in the middle of the decisions over how to spend the billions of dollars in state revenues.

“He’s good. We’ve had two of the best budgets in memory,” Burton said.

Alpert, who chairs the important Senate Appropriations Committee, which also reviews spending proposals, cheered Peace’s decision, saying, “It will be good for San Diego and for California.”

Consumer Watchdog
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