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NEWS RELEASE
Aug 20, 2003

Consumer Group Calls on Davis to Act Responsibly to Fix Errors in Handling of Energy Crisis

August 20, 2003

Honorable Gray Davis
Governor, State of California
State Capitol
Sacramento, CA 95814

Will You Act Responsibly to Fix Errors in Handling of Energy Crisis?

Dear Governor Davis:

Last night, for the first time, you began to take responsibility for the devastating debacle of California's electricity's crisis. To be responsible as Governor, we ask that you take the following steps to address the lingering costs and impending dangers of deregulation's failure.

Support re-regulation of our state's energy system. This year, you failed to provide strong public support for the legislation that would re-regulate the state's electricity system. SB 888 was defeated in the Assembly Utilities Committee shortly after legislators who failed to support the bill held a fundraiser in the home of energy industry lobbyists where the politicians served chocolate martinis and deserts to the power company lobbyists. Last night you mentioned that you never voted for California's energy deregulation scheme, but you did oppose our ballot initiative, Proposition 9, in 1998 -- which would have spared the public $20 billion of deregulation's costs. In the last three weeks of the legislature, you should work to make sure that energy deregulation is entirely taken off the California law books by working to ensure that SB 888 is passed and signed.

Stop efforts by big energy firms and large manufacturers to recreate a "direct access" scheme that would allow an unregulated energy market to continue. You should make clear that you will refuse to sign any legislation this year that would return deregulation to California. Big energy firms have lobbied for loopholes that would allow them to sell their energy directly to some of the biggest manufacturers in the state, rather than making it available to all Californians through a more reliable regulated process. You should insist that the any energy re-regulation bill does not bring with it the surreptitious revival of deregulation through "direct access." You should also make clear your opposition to such "direct access" schemes with the public utility commission.

Call on the California Public Utilities Commission (CPUC) to reverse the ratepayer bailout of Edison and the proposed bailout of PG&E. You should publicly disavow your longstanding support for the ratepayer-funded utility bailouts -- which will cost California consumers $10 billion in order to cover the deregulation disaster. During the crisis, California Senators refused to support your $3 billion bailout of Edison, but the CPUC commissioners who you have appointed accomplished the bailout by decree anyway. By rescinding the bailout agreement and the PG&E proposed bailout, the PUC could return billions of dollars to California consumers.

Hold the utility holding companies accountable. Edison's and PG&E's parent companies absconded with more than $8 billion of ratepayer money during the transition to deregulation. The CPUC that you have appointed has failed to require the holding companies to return the money to ratepayers and the Assembly Utilities Committee defeated legislation geared toward holding the utilities accountable. You should demand that the money be returned and call for a rehearing of the legislation (SB 429).

Governor, the people of California deserve an answer about whether you are willing to take the steps above. It is one thing to acknowledge mistakes, it is another to fight to fix them. As Governor, that is your job.

Last night you claimed that during last week's black out on the East Coast the lights stayed on in California. What you neglected to say is that Californians are still paying 30 to 40 percent more than they should for their electricity. Now is your chance to act responsibly and fix your past mistakes. We await your response.


Sincerely,


Jamie Court Douglas Heller
Executive Director Senior Consumer Advocate

---------
Douglas Heller
Foundation for Taxpayer and Consumer Rights
http: //www.consumerwatchdog.org
doug@consumerwatchdog.org
ph. 310/392-0522 ext. 309



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