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May 03, 2001

CONTACT: Doug Heller - 310-392-0522 x309

California Legislature Authorizes Public Power Agency

Consumer Group Calls Power Authority the Long Term Energy Solution
The California State Legislature sent SB 6X (Burton) to the Governor's desk today. If signed by Governor Davis, who has previously indicated support for the plan, the law would create a public power and conservation financing authority for the state of California. Like the Los Angeles Department of Water and Power or the New York Power Authority, the state power authority would be empowered to build and own power plants, develop and implement efficiency and conservation programs and contract with private companies to ensure reliable and affordable power for California consumers.

Unlike Enron, Duke Energy and other members of the power cartel, a California power authority would be accountable to California taxpayers rather than private shareholders. Throughout the country, public power agencies have lower rates because they do not require a profit margin or pay dividends.

"Public power is an old idea whose time has come in California. A publicly-run, not-for-profit power system is essential if we are to pull ourselves out of this deregulation nightmare," said Doug Heller, consumer advocate with the Foundation for Taxpayer and Consumer Rights (FTCR). "The public power agency will provide consumers with energy reliability, affordability and safety, the pillars of a sound energy policy."

In addition to building plants and financing efficiency programs, the authority could re-instate an integrated resource plan for the state's energy needs. Such planning, which provides a blueprint for meeting energy needs, fell apart as a result of California's 1996 deregulation scheme.

"Electricity deregulation meant an end to consumer-oriented planning and, instead, created incentives for the new energy cartel to tighten supplies and gouge California consumers. In moving away from the volatile, unregulated marketplace and towards a rational, consumer oriented model, California can declare independence from the energy generators that have turned out our lights and plundered our treasury," said Heller.

"While public power is the long-term solution to the energy crisis, Governor Davis must become more aggressive with the generators to protect taxpayers and consumers this summer," Heller added.

On November 28, 2000, FTCR and other consumer groups called on California lawmakers and the Governor to create a Public Power Authority similar to that prescribed by SB 6X.

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