SACRAMENTO — When Chairman S. David Freeman gavels the new state Public Power Authority into session today, he will launch an agency that is the centerpiece of California's plan to tame its volatile electricity market.
Conceived during the winter energy crisis, the five-member California Consumer Power and Conservation Financing Authority has emerged with broad powers and the authority to spend $5 billion to ensure that the exorbitant price spikes and blackouts of last winter and spring never occur again.
"The mission is to be the strategic [energy] reserve," Freeman said.
Even before its first meeting, however, the power authority has drawn fire from critics who say it is an unnecessary layer of bureaucracy, could slow private power plant construction, and may infringe on the jurisdiction of a federal energy agency.
"Every time government gets involved in these types of things, taxpayers get taken to the cleaners," said state Sen. Bill Morrow (R-Oceanside), vice chairman of the Senate Energy Committee. "We . . . don't need this power authority."
At the root of the argument is a basic ideological difference. Freeman and Gov. Gray Davis believe that private companies will never build enough power plants on their own to guarantee stable electricity prices for California.
To force energy companies to truly compete for sales and keep prices low, the state needs to create a supply of electricity 15% greater than its peak-hour demand, Davis said. "This business is all about leverage," he said at a news conference this week.
But private industry won't build this surplus of power, because creating plants in excess of demand is not profitable. So the state will do the building, he said.
"That's where the power authority will step up and build the plant itself to assure we have the power we need to keep California moving forward and the power we need to get good prices," Davis said.
"They are the builder of last resort," the governor said after swearing in his four authority appointees Tuesday. "They will guarantee that we will never again go through the hellish days of January and February . . . not knowing whether or not the lights are going to stay on."
Morrow and other Republicans, by contrast, said the power authority represents empire building and political grandstanding by Davis and the state's Democrat-controlled Legislature. Energy industry spokesmen agreed.
