Power scramble feels like deja vu

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Many fear a special session to fix deregulation will repeat ’96 disaster that created it.

The Orange County Register

SACRAMENTO The frenzy and confusion in the Legislature surrounding a multibillion-dollar bailout for Southern California Edison reminds veteran lawmakers, staff and lobbyists of the 1996 battle over deregulation that prompted the utility’s problems in the first place.

Some say it’s worse.

Lawmakers are drafting laws in the dead of night behind closed doors. They’re voting on legislation they’ve hardly seen. The timetable is so tight lawmakers are scarcely given the opportunity to ask questions during committee hearings. Fewer opportunities exist for public scrutiny or comment.

The ’96 law was supposed to lower prices by boosting competition among electricity producers, which was expected to lead to lower electricity rates for consumers. Instead, the producers’ prices rose sharply with demand. A sellers’ market took over. The state’s largest utilities, their rates capped, ran up huge losses because they were unable to pass on the cost of power to their customers.

With the unfortunate consequences of the ’96 legislation ap parent, the scramble to forge major energy legislation gives people a sense of deja vu.

I’ve been here 20 years, and I’ve never seen anything like it,” consumer lobbyist Lenny Goldberg said. Nobody knows what’s in the bills. The members (legislators) don’t know what’s in the bills. Lobbyists are coming up to each other and asking, What’s in the bill?’ ”

Driving this week’s rush are the Legislature’s self-imposed summer recess, scheduled to start today , and an Aug. 15 deadline allowing Edison to abandon the bailout deal it worked out with Gov. Gray Davis.

This kind of legislative frenzy isn’t unusual at the end of a session. But it’s unusual to have such critical matters at stake. Legislators are deciding how much, if any, of Edison‘s $3.5 billion debt should be spread among residential and business customers. They’re trying to make sure state finances aren’t jeopardized by its new role as a power buyer. They’re trying to make sure Edison will resume its role as power buyer.

The Assembly’s point man on energy, Fred Keeley, D-Boulder Creek, dismisses complaints. We have done what I think is customary. People have had the opportunity to analyze it and evaluate it” since April 9, when the governor’s deal was announced. We’ve held informational hearings (on the governor’s deal)” Keeley said. If people feel that way, they have not conveyed that to the speaker or to me.”

But Keeley’s bailout legislation , wasn’t completed until 2 a.m. July 13. A proposal by Assemblyman Rod Wright, D-Los Angeles, was drawn up Sunday. The Senate bailout proposal was introduced Monday, though the basic concept was floated a few weeks ago. All have had only two days of hearings.

With the exception of Wright’s bipartisan proposal, the other bills were largely Democrat-driven plans. By contrast, a bipartisan two-house conference committee drafted the 1996 law.


I do not know of any significant government decision in 20 years that was not made in conference committee until this year,” said Sen. Steve Peace, D-El Cajon.

While Assembly leaders have been calling for a conference committee, the upper house leaders have resisted. But Peace said the call for a conference committee should have come months ago, when the governor first announced his deal.

Five years ago, the two-house committee headed by Peace wrote and revised the deregulation law during nearly two months–and nearly 200 hours–of public hearings.

The last two weeks of the hearings became known as the Steve Peace Death March,” because Peace scheduled meetings from morning until long after midnight. Lobbyists, legislative staffers and utility executives staggered through the hearings; few reporters attended.

Crowds, confusion

This time, staff, lobbyists and journalists jostle by each other in Capitol halls, trying to find committee hearings that frequently change times and locations. Negotiations occur while key lawmakers are presenting their bills.

One key committee held three hearings in 12 hours on the Edison bailout— the first to hear the bill, the second to hastily defeat the bill and the third to just as hastily approve it. What happened?

They finally had a chance to see what’s in it,” said Sen. Debra Bowen, D-Marina del Rey.

Dozens of industries and consumer advocates oppose bills that continue to roll through the process.

Jan Smutny-Jones, who represents hundreds of small, alternative-energy generators, said making the deregulation law was more orderly than what’s happening today.

The difference between 1996 and this year is that issues are emerging and popping up as we go along. In 1996, there was structure,” Smutny-Jones said. These bills are constantly mutating, and it’s really a question of being able to stay on top of what the latest developments are.”

In the Assembly energy committee, Assemblywoman Hannah-Beth Jackson, D-Santa Barbara, said she still didn’t understand some aspects of Keeley’s bailout plan.

Then don’t vote,” advised Wright, who authored rival bailout legislation.

This fly-by-night legislating irks many people.

You don’t make a $6.7 billion (bailout) policy from one committee hearing,” said consumer advocate Doug Heller, of the Foundation for Taxpayer and Consumer Rights. I’m not sure every lawmaker can go back to their districts and explain to their constituents everything that this bill would do. And if that’s the case, we should not be voting on this.”

Consumer Watchdog
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