California Software Executive to Head Initiative to Stabilize Energy Market
Contra Costa Times, Walnut Creek, Calif. - April 17, 2004
Gov. Arnold Schwarzenegger has tapped East Bay software executive Joe Desmond to oversee a broad new initiative to stabilize California's energy market and reorganize the agencies that govern it.
Energy experts said the choice signals the governor's commitment to pursue
free-market solutions to rising electricity prices and tightening supplies. And
it's another sign Schwarzenegger views pleasing business executives as one of
his chief objectives.
The choice drew praise from many, including business leaders, but troubled
one consumer advocate, who said he worried Desmond would cater to big businesses
and pay little attention to residential electricity users.
Bob Finkelstein, the executive director of the consumer group The Utility
Reform Network, said, "Certainly we've had indications the new governor
would have more interest in what the large industrial users have to say than the
small residential customers. So it's not a surprise that he's picked someone
from their ranks."
Desmond is president and chief executive officer of Infotility Inc., a San
Ramon-based energy software and consulting firm. He has worked closely with the
Silicon Valley Manufacturing Group, serving most recently as the co-chairman of
its energy committee.
He is an advocate of loosening regulation and providing big energy users,
such as manufacturing plants and other large businesses, the option to buy
electricity directly from wholesalers. Lawmakers froze so-called "direct
access" when the energy crisis hit California in 2001, and ever since, the
debate has raged about whether to increase regulation or decrease it.
"He has very much a large customer viewpoint of the world," said
Severin Borenstein, the director of the University of California Energy
Institute. Borenstein worked with Desmond on Schwarzenegger's transition team.
"This is one more force that will be pushing toward some sort of choice for
large retail customers."
Desmond did not return phone calls Friday afternoon, and Margita Thompson,
the governor's press secretary would only say: "We don't have anything to
announce on energy yet."
However, officials at the Silicon Valley Manufacturing Group and within the
administration confirmed that Desmond had been offered the position and accepted
it. He will be the governor's top adviser on energy, but it's unclear exactly
what his responsibilities will entail.
Administration officials said they are still putting together their energy
team and strategy. In recent weeks, Schwarzenegger said energy would be his next
major challenge after sealing a workers' compensation deal.
"Affordable and abundant energy is necessary to keep the business
environment healthy in California, which is why it is a priority for the
governor," said Ashley Snee, a spokeswoman for Schwarzenegger.
A recent report by the California Independent System Operator, which manages
the state power grid, predicted a new all-time high peak demand for electricity
this summer. While Borenstein and other experts say the chances of rolling
blackouts occurring this summer remain slim, concern is growing about keeping up
with the state's increasing energy needs.
Jim Sweeney, a Stanford professor who wrote a book about the state's energy
crisis and advised the Schwarzenegger transition team, said the governor is
keenly aware of the dangers of a potential electricity crunch.
"There is high degrees of uncertainty with (electricity) loads and rain,
and so nobody knows exactly how quickly you would be in a shortage
situation," Sweeney said. "We need to cut through some of the problems
that are blocking development of new power plants so we don't come to a new
crisis situation.
"I think he's looking ahead and saying 'Let's avoid a problem.'"
In addition, legislators are pushing bills to reshape the energy market, with
measures ranging from a complete return to regulation to providing customers
options to choose from different suppliers.
"The key issue is to get more investment for new generation of
electricity for California," said Assemblyman Keith Richman, R-Northridge,
who is the author of one of the bills. "We are not yet out of the energy
crisis."
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