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California and the West | CAPITOL JOURNAL

On Electricity Issue, She Was Crazy Like a Fox

August 24, 2000|GEORGE SKELTON

SACRAMENTO — You all think I'm licked. Well, I'm not licked, and I'm going to stay right here and fight for this lost cause, even if this room gets filled with lies. . . . Somebody'll listen to me.

--James Stewart in "Mr. Smith Goes to Washington"

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"Sen. Jefferson Smith" was Diane Martinez's hero and role model. So when the Legislature passed the now-infamous electricity deregulation bill in 1996 and later refused to join the then-assemblywoman in adding consumer protections, she invited colleagues to a private screening of "Mr. Smith Goes to Washington."

There were, indeed, similarities between the Jimmy Stewart character and Martinez. "Sen. Smith" was described in fictitious newspaper stories as "an incompetent clown." In the Capitol, Martinez was regarded as, she acknowledges, "just loony."

Smith was shocked by the Capitol corruption. Martinez says she was too: "I watched [legislative] members get tons of money from utilities."

Martinez (D-Monterey Park) became so frustrated by her colleagues' coziness with special interests that she showed the classic movie in the speaker's conference room. She thought it might inspire lawmakers with some backbone.

"I provided popcorn, Cokes and nice seating," she recalls. "Only a handful showed up. . . .

"I was dying, because what was happening to that [Stewart] character was happening to me. You think these things happen only in movies! Everybody was trying to make me look like just kind of a nut. I'm watching this movie and thinking, 'How can anybody see this and not understand what's going on with the big special interests?' "

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In the movie, they finally listened to Sen. Smith. But in the Legislature, nobody listened to Martinez.

"You guys always wondered what the hell I was yelling about. It was this," Martinez, 47, told me in a phone interview from her Portland home. " 'Mr. Smith Goes to Washington' was just my opening volley."

Martinez was chairwoman of the Assembly utilities committee. She papered the committee room walls with 1,500 blue postcards from citizens urging legislators to vote for her consumer bills.

Utility lobbyists boycotted the hearings. So did her own committee members. Her bills died.

Says one senior Assembly staffer today: "The only one who got it right was crazy Diane Martinez. But she was crazy, so nobody paid any attention to her. Steve Peace was the smartest guy in the Legislature. Everybody knew that. So people paid attention to him. 'Peace says it's a good bill! OK.' "

Until he jockeyed the deregulation bill through the Legislature, Sen. Steve Peace (D-El Cajon) was best known in the Capitol for having produced the cult film "Attack of the Killer Tomatoes." Now, Peace's own constituents in San Diego County are the first to be attacked by his deregulation bill.

Electricity bills in San Diego and parts of Orange County--served by San Diego Gas & Electric--are two to three times higher this summer than last. These are the first Californians to be hit by deregulation. Rates for people served by Southern California Edison and Pacific Gas & Electric are frozen until 2002.

Politicians are pointing fingers everywhere except back at themselves: Unanticipated power demand, poor implementation by the Public Utilities Commission and SDG&E, higher natural gas costs, little federal cooperation, not enough power plants, wholesaler price gouging, unusually hot weather. . . .

Hot weather? Summers can get hot, after all.

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The deregulation bill passed both houses on the final weekend of the session without one "no" vote. It had originated with Gov. Pete Wilson. Legislative leaders of both parties supported it. Consumer groups dropped the ball.

Even Martinez--a ferocious opponent--finally voted for it, although the next year she tried to fix the mess with her consumer bills. Like many, she reasoned that the legislation was better than a deregulation scheme that had been concocted by the PUC.

But in truth, the Legislature could have killed the PUC plan without passing its own abomination. The Legislature got bamboozled and bought off by major manufacturers who wanted to cut volume deals for themselves under deregulation--and by utilities that were allowed to charge rate payers for about $30 billion in bad investments, mostly nuclear power plants.

Neither lawmakers nor the news media paid close enough attention. It was too complicated. Peace--a fast-talking, energetic policy wonk who believed in deregulation--wore down everybody.

Lots of lessons here. One of them: Sometimes, listen to a nut.

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