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Mar 30, 2001

CONTACT: Doug Heller - 310-392-0522 x309

Utility Backed Group, Davis Donors Begin Campaign Against Unwritten Energy Initiative

A utility-backed business group and financial supporters of Gov. Gray Davis have begun a political campaign to turn public opinion away from a proposed electricity rate reduction initiative and toward Governor Davis, who is losing public support according to recent polls.

The radio ads, sponsored by "Energy for California," tell listeners that Governor Davis is working with business and community leaders to create "historic" programs and that the "crisis" (which the Governor has called a "challenge") can be solved if we "all do our part." Representatives of the political consulting firm Goddard-Claussen told the Los Angeles Times that the ads could be the precursor to a campaign against a ballot initiative by the Foundation for Taxpayer and Consumer Rights (FTCR) and other consumer groups. Goddard-Claussen was hired by the utilities in 1998 to fight the FTCR-backed utility reform initiative, Prop. 9.

"This is a first," said Douglas Heller, consumer advocate with The Foundation for Taxpayer and Consumer Rights (FTCR). "And it shows how terrified the utilities and 'energy hogs' must be of a ratepayer revolt. We haven't even written the initiative yet, and they're running ads against it."

Business Group Support Davis Hikes onů. Business
FTCR said that with two recent polls -- one by Assembly Democrats, the other by a labor union -- showing a dramatic decline in public support for Davis's reelection, it was natural for supporters to rise to defend Davis. But with most of this week's 40% rate increase by the Davis administration slated to hit big business, their support for the Governor was remarkable.

"In the wake of the largest single electricity rate hike on California businesses, business groups should be up in arms about Governor Davis's energy policy. Unlike residential consumers, businesses receive absolutely no protection from the current round of rate hikes; businesses should be running ads against Davis's policy," said Heller.

One member of "Energy for California" is William Hauck, the President of the California Business Roundtable. According to the Roundtable website, its members include Edison International, PG&E. and Sempra. FTCR will write to the members of the Business Roundtable and urge them to renounce their membership in this organization, which appears to be protecting their utility members and Governor Davis in direct conflict with the interests of the rest of California's business community.

"It is reprehensible that a business group would defer entirely to the utilities and support ads that serve to politically benefit the Governor while ignoring the massive rate increases he is forcing on its business members," said Heller.

FTCR also noted concern that one of the ad's supporters, according to the Los Angeles Times, is Silicon Manufacturing Group director Carl Guardino, who is also a Davis appointee to the Independent System Operator. FTCR points out that a Davis appointee should not be funding political ads in support of the Governor's energy committee while sitting as a member of state energy board. Mr. Guardino should be removed from his post as a result of this conflict of interest, according to FTCR.

Group Laments Lack of Action on Crisis
Calling the state's efforts to address the deregulation disaster so far a "chaotic, haphazard and ineffectual mess," FTCR said it was becoming increasingly likely that FTCR will draft and qualify an initiative for the 2002 ballot. It would mandate refunds and lower prices for electricity and seek to restore a reliable, affordable energy system based on non-profit public power and emphasizing new energy technologies pioneered by California companies. FTCR will continue to work with legislators in an effort to develop a consumer-oriented, legislative solution to the deregulation debacle.


Members of the California Business Roundtable include:

Aetna U.S. Healthcare of CA, Inc.
Autodesk, Inc.
Automobile Club of Southern California
Avery Dennison Corp.
Bain & Company
Bank of America Corporation
Bechtel Group, Inc.
Blue Shield of California
BP Amoco
C.J. Segerstrom & Sons
Catellus Development Corporation
Charles Schwab Corporation
Chevron Corporation
CNF Transportation Inc.
DHL Airways, Inc.
Edison International
Farmers Group, Inc.
Fidelity National Financial, Inc.
Fireman's Fund Insurance Co.
Fluor Corporation
The Gap, Inc.
Granite Construction, Inc.
GTE Network Services
Health Net
Hilton Hotels Corporation
Hughes Electronics Corporation
The Irvine Company
J.G. Boswell Company
Jacobs Engineering Group, Inc.
Kaiser Foundation Health Plan, Inc.
Kaufman and Broad Home Corp.
Levi Strauss & Company
Lockheed Martin Corporation
McClatchy Newspapers, Inc.
McKinsey & CO.
The Newhall Land and Farming Company
Pacific Life Insurance Co.
Pacific Telesis
PG&E Corporation
Safeway Inc.
Sempra Energy
State Farm Insurance Companies
SunAmerica Inc.
Sutter Health
Target Corporation
Times Mirror
Transamerica Corporation
Unified Western Grocers, Inc.
Union Bank of California
United HealthCare
Vodafone Airtouch
Washington Mutual
Wellpoint Health Network
Wells Fargo Bank

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