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Fight Over Power Initiative Generates Little Awareness

October 17, 2005|Marc Lifsher | Times Staff Writer

The consumer advocates who got Proposition 80 on the November special election ballot have a simple message for voters: Don't get fooled again.

They contend that the measure would prevent a repeat of the energy crisis of 2000-01 by removing the last vestiges of retail competition from the state's system for generating and selling electricity and by leaving traditional utilities such as Southern California Edison Co. as the dominant providers of power.

"California learned that deregulation in the electricity industry is a disaster, and Proposition 80 says never again," said Bob Finkelstein, executive director of the Utility Reform Network, referring to the state's failed 1996 deregulation law.

But opponents -- mainly businesses, independent power producers and alternative-energy advocates -- say there's nothing simple about the issue.

They contend that the initiative is rife with inconsistent language and legal contradictions that could create enough uncertainty in the state's electricity market to stall investment in badly needed power plants. Passage could destabilize California's still-fragile energy industry for years, the proposition's critics say, leaving the state susceptible to power shortages.

"This is going to create chaos in [the electricity market] because of uncertainty and litigation," said V. John White, executive director of the Center for Energy Efficiency and Renewable Technologies in Sacramento, who fears the measure could make it harder for the state to require utilities to buy more solar, wind and geothermal energy. "This is a backward-looking initiative that does not solve any problems we now face."

In any case, Proposition 80 supporters appear to have their work cut out: The November ballot is crowded with other, more high-profile initiatives, and a poll indicated there's very little public awareness of Proposition 80. What's more, opponents have raised nearly 10 times as much money, giving them a big edge in advertising power.

Even if the initiative passes, some important elements of the 1996 deregulation law would survive. The California Independent System Operator would still run much of the state's electricity grid, and independent power generators would still be allowed to produce electricity and sell it on the wholesale market.

Looming over the debate is a state appeals court's ruling in July that Proposition 80 would unconstitutionally impinge on the Legislature's authority over the California Public Utilities Commission. Advocates appealed to the state Supreme Court, which won't rule on the issue unless Proposition 80 passes.

The state's investor-owned utilities -- Edison, Pacific Gas & Electric Co. and San Diego Gas & Electric Co., which together serve about three-fourths of the state -- have steered clear of the ballot battle, even though they are likely to benefit if the initiative becomes law.

The measure would let the utilities, which sold most of their generating facilities to private operators after the 1996 deregulation, build and operate their own power plants. A return to so-called vertical integration, where utilities generate the power they sell, would put them in competition with the independent power generators that have spent hundreds of millions of dollars building gas-fired power plants over the last decade to serve the California market.

The independent generators fear that Proposition 80 would let the utilities unfairly favor their own power plants when deciding where to buy electricity.

"Competitive bidding [for electricity] is an option, but the initiative doesn't require it," said Kent Robertson, a spokesman for Calpine Corp., a San Jose-based power generator.

The measure also would bar independent power sellers such as Calpine from signing up new customers. Those companies, which cater to large energy users such as big-box stores, industrial plants, universities and hospitals, account for 11% of California's electricity consumption.

In addition, Proposition 80 would convert a series of recent Public Utilities Commission decisions designed to make the state's electricity grid more reliable into state laws that could be changed only by two-thirds votes of both houses of the Legislature.

"We don't want the policy to change down the road," said Michael S. Mowrey, a vice president of the International Brotherhood of Electrical Workers, which represents utility workers who would gain job security by passage of Proposition 80.

Turning the PUC decisions into laws would strip the commission of the flexibility it needs to adapt quickly to changing energy needs, said James Bushnell, research director of the University of California Energy Institute in Berkeley.

"There's a real web of issues all bundled within this proposition," he said. "This is a classic example of the kind of thing that shouldn't be decided through the initiative process."

For now, the fight over Proposition 80 is being fought largely out of view of the electorate.

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