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Deregulation Bill Signed by Wilson

Utilities: Law will make electricity providers competitive by 2000. Firms will cut residential rates but can add charges to recoup bad investments.

September 24, 1996|DAN MORAIN | TIMES STAFF WRITER

SACRAMENTO — Gov. Pete Wilson signed legislation Monday to deregulate the state's electric utilities at the turn of the century and lower electrical bills for residential customers by at least 10%.

The governor's action puts into motion a plan to bring competition to the state's $20-billion electrical utility industry by 2000, and requires added charges on ratepayers' bills to help utilities pay off the costs of $29 billion in bad investments, including construction of nuclear power plants.

The bill was backed by California industry and utility companies, and had only a smattering of opposition from consumer groups.

In all, Wilson signed 160 bills into law Monday, including one banning the practice of female genital mutilation, which occurs in some immigrant communities, and another measure to permit civil fines against adults who have sex with minors.

The governor also signed a measure to increase sentences for people convicted of stealing from the elderly, and one aimed at gang members, making it a felony for them to carry concealed firearms they do not legally own.

In signing the bill to deregulate the electrical industry, Wilson said the "landmark legislation is a major step in our efforts to guarantee lower rates, provide consumer choice and offer reliable service, so no one literally is left in the dark."

"We've pulled the plug on another outdated monopoly and replaced it with the promise of a new era of competition," Wilson said as he signed AB 1890.

States have been moving toward electrical deregulation since Congress approved legislation authorizing an open, wholesale electrical market in 1992.

California is not the first state to approve a deregulation plan. But the measure signed into law Monday is the most comprehensive adopted so far.

California has moved faster than other states because of pressure from large industrial users. Customers of California's three major utilities--Southern California Edison, San Diego Gas and Electric, and Pacific Gas and Electric--pay 50% more for electricity than the rest of the nation.

The rate cuts won't affect customers of the Los Angeles Department of Water and Power and other municipal utility districts.

Noting that the measure will lower electrical rates for major industries, Wilson called the legislation "a powerful new stimulant" for "any new business looking to grow or move to California."

California Manufacturers Assn. President Bill Campbell lauded Wilson's action, saying Monday that the signing "shows that California is serious about keeping the economy growing."

The bill by Sen. Steve Peace (D-El Cajon) and Assemblyman Jim Brulte (R-Rancho Cucamonga) permits the three major investor-owned utilities to recoup from customers as much as $29 billion in bad investments. The investments range from costly nuclear power plants to uneconomical fuel contracts.

As the bill is written, full competition will not occur until after the turn of the century, when the utilities have recouped the bulk of the $29 billion. But the measure requires that utilities cut rates for residential customers by 10% in 1998. They could receive another 10% reduction in 2002. Manufacturers will receive their cuts--of as much as 30%--by 2002.

The bill whipped through the Legislature without opposition in the final weekend of the session last month. But recently, some consumer activists have attacked the measure, in part because it will allow the utilities to charge customers for their bad business decisions.

"It's like a con artist bilks you out of $100 and gives you back $10, and you're happy because you got the $10," said Harry Snyder, co-director of the West Coast office of Consumers Union.

In other action, Wilson signed legislation by Assemblywoman Liz Figueroa (D-Fremont) and Assemblyman Jim Cunneen (R-San Jose) making it a crime to perform female genital mutilation, sometimes called female circumcision, on girls under age 18.

Figueroa cited reports of the practice being carried out by immigrants from African countries, including Ethiopia and Somalia. The practice also takes place in parts of Asia and the Middle East.

"California welcomes diversity. But there are limits, and certain practices are not acceptable," Figueroa said Monday. "This is an extreme form of child abuse that will not be tolerated."

As it is, the practice could be prosecuted as child abuse, punishable by between two and six years in prison--although prosecutors have never brought such a case in California. The bill (AB 2125) spells out the practice and defines it as a crime, punishable by up to seven years in prison.

Wilson signed several other bills Monday, including measures:

* Giving prosecutors the power to seek civil penalties against adults convicted of statutory rape. The bill (AB 1490), by Assemblyman Louis Caldera (D-Los Angeles), permits fines of between $2,000 and $25,000.

* Making it a felony for anyone to carry a concealed firearm if they are not the legal owner, or for a gang member, a parolee or a person with a mental disorder to carry any concealed gun. The bill (AB 632) is by Assembly Democratic Leader Richard Katz of Sylmar.

* Increasing sentences for theft, embezzlement or extortion of people 65 years or older. Under the bill, (AB 1205) by Assemblyman Jim Morrissey (R-Santa Ana), judges can take into consideration the victims' age in sentencing.

* Allowing counties to operate traffic amnesty programs for those who are six months delinquent paying their fines. The bill, (AB 3095) by Assemblyman Antonio Villaraigosa (D-Los Angeles), will permit drivers to pay 70% of their fine, as long as the offense does not involve driving while intoxicated.

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