California Governor Proposes Scaled-back Deregulation
With Gov. Arnold Schwarzenegger poised to veto Assembly Bill 2006, a bill that would largely return California's troubled electricity industry to regulation, he is also cranking up his own proposals.
With Gov. Arnold Schwarzenegger poised to veto Assembly Bill 2006, a bill that would largely return California's troubled electricity industry to regulation, he is also cranking up his own proposals, The San Diego Union-Tribune reported.
The heart of his plan is a scaled-back version of deregulation, one that carves out a larger role for California Public Utilities Commission than the sweeping deregulation plan that precipitated California's electricity crisis four years ago.
Schwarzenegger's emerging plan reflects the desires of the state's large industrial users to lower their rates and obtain electricity from non-utility suppliers.
The governor also argues that his proposals will provide incentives for building badly needed power plants at reasonable costs.
Critics, including most consumer advocates, say the governor's plan recycles deregulation and big-business-favored reforms. And they say that even partial deregulation will dump costs and instability onto smaller power consumers.
Consumer advocates say the collision course between regulation and deregulation could prompt them to sponsor a ballot initiative in 2005 that would re-regulate the industry in much the same manner as it was for its first century.
The governor's plan:
A artly deregulated market. Large electricity users would be allowed to buy power from providers other than local utilities. Consumer groups say this would leave residential customers shouldering higher costs.
Time-variant electric meters. These would reflect the varying price of electricity through each 24-hour cycle and allow users to avoid higher costs. Critics say meter costs would exceed any savings.
Rate relief. The governor says the rate cap enacted during the power crisis to protect smaller electricity consumers is unfair to larger customers. Consumer advocates say it was the larger customers who wanted deregulation in the first place and they should pay the bulk of crisis-related costs.
A competitive wholesale power market. The governor wants developers to compete to build new power plants, a process he says will bring the lowest cost. Consumer advocates want to use competitive markets to check abuses by utilities and use the prospect of utility-built plants to check abuses by private developers. Either way, the governor's ideas will come more sharply into focus when he issues an expected veto before month's end of AB 2006, the re-regulation bill passed by the Legislature and supported by Southern California Edison and consumer groups.
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