Californians will have a chance to nail
the coffin shut on electric deregulation
in the special election scheduled for
this November.
Proposition 80—sponsored by the consumer
group TURN and strongly supported by the
state’s largest union of utility workers,
IBEW Local 1245—would repeal key provisions
of the failed deregulation law passed
in 1996 and restore regulated utilities’ obligation
to serve California customers.
Proposition 80, tentatively called the
Repeal of Deregulation and Blackout Avoidance
Initiative, clearly establishes that utilities
have an obligation to serve, and places
independent power producers under state
regulatory authority as well.
While some Californians may think that
the energy crisis put an end to deregulation
in California, the disastrous law remains
on the books and will spring back to life
after the expiration of electricity contracts
negotiated by the state during the 2000-2001
energy crisis.
“We have a deregulatory time bomb sitting
in the heart of the current situation,” said
Marc Joseph, an attorney for the union-backed
coalition of California Utility Employees.
Especially dangerous would be the return
of “direct access,” a system championed
by Enron that allows unregulated power
marketers to make contracts directly with
large energy users. Direct access, in
addition to being unfair to average consumers,
makes it much more difficult to predict
and plan for future electricity demand,
which in turn heightens the risk of blackouts.
Under Proposition 80, current direct access
customers would be grandfathered, but
no new direct access contracts would be
permitted.
Another provision of Proposition 80 establishes
that regulated utilities will be responsible
for metering and billing. During the heyday
of deregulation, Enron attempted to take
this work away from regulated utilities
like PG&E. One can only imagine how the
energy crisis would have been magnified
if Enron had succeeded in taking these
functions away from skilled employees
working for state-regulated utilities.
Deregulation die-hards keep insisting
that “free markets” are essential to assuring
future power supplies. This claim is pure
nonsense, scare tactics put forward by
an industry that fleeced Californians
to the tune of $40 billion and hoping
to get another bite at the apple. Proposition
80 will lock into place a stable set of
rules that will help to attract new investment
in electricity generation at the lowest
possible cost.
Electric service is essential to modern
life. Proposition 80 will ensure that
this service remains in the hands of state-regulated
companies who have an obligation to serve
the public, not in the hands of price-gouging
companies whose only obligation is to
maximize profits.
Eric Wolfe is the Communications
Director for the International Brotherhood
of Electrical Workers, Local 1245. Local
1245 represents the workers of Pacific
Gas and Electric Co.