Assembly Looks at Governor

Assembly Looks at Governor's Energy Vision

Jul 26 - Daily Breeze

SACRAMENTO -- Lawmakers debated whether the state should again allow a competitive retail market for electricity Monday as they reviewed Gov. Arnold Schwarzenegger's energy goals.

Schwarzenegger's vision, outlined in a letter last week to Public Utilities Commission President Michael Peevey, includes a return to a competitive market for the state's largest electricity consumers.

Direct access, which lets consumers shop around for electricity, was a cornerstone of the state's failed attempt at deregulation. Proponents of direct access say that's a minor part of deregulation, and a physical shortage of electricity was more to blame for the state's energy crisis and blackouts in 2000 and 2001.

Schwarzenegger also urged the PUC to hasten a requirement that utilities keep a 15 percent electricity reserve by 2006 instead of 2008 and to finish writing regulations that let utilities sign long- term contracts for electricity.

Much of Schwarzenegger's energy plan is focused on speeding up implementation of AB57, legislation former Assemblyman Rod Wright wrote in 2001, said Joseph Desmond, deputy secretary of the resources agency.

The PUC is working on implementing Wright's bill, said Peevey. The final pieces, including approving the utilities' long-term resources plans, should be finished by the end of this year, he told members of the Assembly Utilities and Commerce Committee.

Peevey said he agreed with Schwarzenegger's plan to move up the reserves requirement, and with the governor's goal of allowing direct access.

"Having a more competitive market is in the public interest," Peevey said.

Some environmental and consumer groups were skeptical, though, of again allowing consumer choice.

Allowing customers to shop around is going in the wrong direction, said Mike Florio, an attorney with The Utility Reform Network, a San Francisco-based consumer group.

"It creates more chaos when what we need is stability," Florio said. "Worry about the frills later."

Also Monday, the Assembly voted to approve legislation that lets Pacific Gas and Electric Co. issue bonds with a dedicated rate component -- saving customers about $1 billion over the life of the bonds. The bonds would be more secure than the present financing, so the interest rate would be lower, said Sen. Debra Bowen, D-Marina del Rey, the bill's author.

"I didn't support PG&E's bankruptcy settlement plan because I thought it was far too expensive and it stuck ratepayers with far too much of the bill for something they had absolutely no control over," Bowen said. "This doesn't make the bankruptcy settlement plan any better, since we can't undo what the bankruptcy court rubber- stamped, but it does make it a little bit cheaper for the ratepayers who are forced to pick up the tab."

For far more extensive news on the energy/power visit: http://www.energycentral.com .