A prescription for public power
I support the proposal of Treasurer Phil Angelides to create a state consumer power and conservation financing authority (SB6X and SB33X Burton). With bankruptcy imminent and continuing disintegration of the California electric power supply, now is the time to move to a state power authority before we bleed away the state’s money in efforts to hold up failing private utilities.
We are at risk of losing leading industries if power cannot be assured. The private utilities cannot be trusted to act in the public interest, even with California bailout funds.
Of primary importance will be the continued normal daily operation of the existing investor-owned utilities through the transition to a California state-managed utility. A new state utility could save the jobs of current private utility employees and existing labor agreements.
This proposal would not affect existing California municipal electric utilities in any way. We should draw upon their proven performance and successful policies as a model for statewide operations.
There is a long history of public utilities that function well. A new state electric utility would follow the example of SMUD, the Tennessee Valley Authority, Bonneville Power, and cities such as Los Angeles, Palo Alto and Santa Clara.
What will work to everyone’s long-term benefit is the idea of designing efficiency into our economy to reduce consumption and pollution. We need to be customer advocates, not consumer advocates. This translates into a focus on reducing our energy bills, not rates.
In response to new state legislation, our governor should order the Public Utilities Commission to implement an additional measured increase of all electric rates (leaving unaffected all residential customers using less than 130 percent of baseline). All proceeds should go directly to the new state Department of Water Resources energy accounts. SMUD customers would also benefit from the addition of a higher rate tier on over-consuming residents. This rate adjustment will encourage needed conservation and efficiency investments. An early rate increase will avoid future growing interest expense and uncontrolled debts.
Further, our governor should make the investor owned utilities’ parent companies accountable to the people and state of California; implement a western states regional wholesale electricity price cap; create a windfall profits tax on electricity sold in California; and investigate, prosecute and police generators who illegally game electricity or gas markets.
Once again, history is teaching us that the benefits of a “free market” are insured for all people only when balanced by government regulation in the public interest.