Bail of tears
But it’s hard to see how the governor’s plan to save Edison has been forged for “our sake.” And the word “rescue” seems an absolute misnomer. You don’t have to be a consumer activist named Harvey Rosenfield to recognize that Davis is supporting a straight-ahead bailout here.
Like PG&E, Edison incurred massive debt last year and early this year (about $3.9 billion) while purchasing power for more than it could charge its customers under a state-imposed rate freeze. Now the governor and many legislators seem ready to do just about anything to make sure the state’s second largest utility doesn’t go into receivership alongside Pacific Gas & Electric.
Davis’ original plan was to have the state purchase 12,580 miles of transmission power lines from Edison at book value—$1.2 billion. But Edison executives said that wasn’t enough to keep them from bankruptcy. So the state bailout deal got even sweeter and the “purchase” of transmission lines became only an “option.” Though the specifics remain in flux, SB 78XX would now basically have the state acquire a five-year option to purchase the power lines at double their book value. The bill, which political watchdogs and pundits agree is an unusually complicated piece of legislation, will wind its way through the Assembly before heading back to the Senate for a final vote.
Since when is it the job of legislators to arrange to donate billions of dollars to a single private corporation? And let’s not forget: Edison played a major role in creating the energy crisis in the first place when it lobbied hard for deregulation and for capping electricity rates.
Though opposed unilaterally by consumer groups, SB 78XX had some mixed support from environmentalists at its inception because the original deal would have shifted thousands of acres of Sierra watershed land to the state. But that option got dumped in committee.
Longtime consumer crusader Rosenfield, leader of the Foundation for Taxpayer and Consumer Rights, has set up a “war room” in Sacramento’s downtown Sheraton Hotel to focus public attention on the bailout. Volunteers wear yellow-and-black armbands emblazoned with the logo “Bailout Watchdog.” Last week, the group heralded a “Christmas in August” for Edison and sang “bailout carols” to legislators, e.g. to the tune of “We Wish you a Merry Christmas” … We won’t pay another penny, we won’t pay another penny, we won’t pay another penny, don’t gouge us again!”
Rosenfield’s group stands ready to take the matter to the voters in November 2002 if the Legislature dares to pass a bailout in any form. We hope that won’t be necessary.
Hey, pass around some of those armbands.