The San Diego Union-Tribune
Californians could soon find themselves with fewer inspectors to ensure the lights stay on and prevent reruns of the market manipulation that triggered the blackouts of two years ago.
Under pressure from efforts to close the budget deficit, the California Public Utilities Commission is planning to lay off more than half the people on its power plant inspection team.
The team was enlarged after state officials concluded that suppliers manipulated the power market and withheld electricity during the crisis of 2000 and 2001, when California suffered rolling blackouts along with soaring prices.
Bill Ahern, executive director of the PUC, said it’s likely that about a dozen members of the 20-person team will be laid off by October. Facing mandated cutbacks because of the state budget crisis, the commission is eliminating positions on a seniority basis, Ahern said. Members of the team were hired earlier this year.
The team is responsible for establishing maintenance and operational standards at more than 200 electric generating facilities, as well as making hundreds of visits annually to plants reported by operators to be out of service.
The layoff of power plant inspectors in response to the state budget crisis struck one state legislator as ironic.
“The manipulation of the power crisis is what caused the whole thing,” said Sen. Jackie Speier, D-San Francisco, who co-authored the bill mandating inspections. “I find it jaw-dropping that this is where the cuts would be made. I object to them and will do what we can to see the positions are reinstated.”
The layoff of inspectors is only the first wave of cuts planned at the PUC. Ahern said that under orders from the state Department of Finance, the commission is preparing to lay off 50 to 200 of its 875 employees in a second round of cuts.
The state’s general fund has also borrowed $150 million from a PUC fund for subsidizing discounts to school, libraries and hospitals on telecommunications services. The duration of the loan has not been specified.
That loan followed a similar borrowing last year of $200 million from another PUC fund.
Ahern said the cuts and the loans to the state come at a time when thecommission’s workload is enormous and growing. Currently on the PUC agenda are general rate cases — proceedings that determine utility rates for years — for San Diego Gas & Electric, Southern California Edison and Pacific Gas and Electric.
Each of those cases might require the equivalent of 50 PUC staffers, Ahern estimated. “And in the 1980s, I might have put twice as many people on those cases,” he said.
The commission is also wrestling with reconstructing a regulatory framework for power purchases in the wake of California’s failed deregulation effort. Utilities are back in the power-buying business and their procurement policies are under review by the commission.
Consumer complaints about telecommunications services have also risen sharply, and energy complaints are up this year.
In addition, the PUC regulates railroad safety, moving companies and limousine services. The cuts will mean, for example, that only 50 percent of California’s railroad track will be inspected annually, according to the commission.
The PUC‘s staff levels have grown in recent years — from 745 in 1999 to its current level of 875 — but are below levels earlier in the 1990s, when the personnel count reached 1,075.
The PUC is a constitutional entity that does not draw upon the state’sgeneral fund, the central pool of money suffering the massive deficit the Legislature has scrambled to close.
Instead, the commission is funded through payments by ratepayers and utilities.
“Consumers who have paid to have the regulatory protections and benefits of the PUC are not only having their money taken to bail out other government mistakes, we are losing the front line of protection against the power industry,” said Douglas Heller, senior consumer advocate the Foundation for Taxpayer and Consumer Rights in Santa Monica.
“We’re getting rid of the people needed to protect us against the next multibillion-dollar disaster.”
The prospect of cutbacks at the commission concerns the utilities as well.
Loretta Lynch, a member and former president of the PUC, said layoffs could cause the loss of legal staffers and impede the state’s attempt to recover billions of dollars in illegal overcharges from the electricity crisis. The matter is before federal regulators but will almost certainly shift to federal court.
Lynch also questioned the basis under which the state is drawing funds from commissions like the PUC. Not only does the PUC draw nothing from the general fund, said Lynch, adding that it contributed roughly $100 million last year from fees and penalties it collected.
Anita Gore, a spokeswoman for the Department of Finance, said although the commission is self-funded, officials believed that all state workers should be subject to cutbacks in the interest of parity. But Gore could not explain the legal basis under which funds are shifted from the PUC to the state’s general fund.
Michael Shames, executive director of the Utility Consumers’ Action Network in San Diego, said there is no legal basis. Shames said the self-funding of the PUC was intended to insure its independence.
“There is no legal authority for that kind of money transfer but as a practical matter by the time someone sues and gets it resolved it would be moot,” said Shames, who spoke by cell phone from an airport in Baltimore, where his travel plans were stalled by the East Coast blackout.
“Sitting here stranded at the airport right now, it sounds like inspection of the power grid might be very important.”
Craig Rose: (619) 293-1814; [email protected]