PUC to look into deregulation
That's Legislature's job, top lawmakers say as
plan evokes memories of energy crisis for some.
By Shane Goldmacher,
Bee Capitol Bureau — May 25, 2007
Story appeared in MAIN NEWS section, Page
The California Public Utilities Commission voted Thursday to open talks to
return California to a deregulated retail energy market, despite objections
from legislative leaders that it is "not within the discretion" of the
utilities panel to do so.
The 4-1 vote means the PUC will open hearings, tentatively scheduled to run
through 2009, on whether the panel has the legal authority to deregulate the
retail energy market, and if so, how to do it and what such a market would
"Frankly, it continues to astound me that we have choice in most everything
in our lives but not electricity service," said the commission's president,
Michael Peevey, who wrote the draft decision to begin studying deregulating
the retail energy market, also known as "direct access."
"It is true that it's only been six years since we were in the energy
crisis, and it is also true that crisis is behind us," Peevey said. "The
rationale that justified the suspension of direct access, in my view, no
Direct access was one piece of the complex 1996 deregulation puzzle passed
by the Legislature, a system that led to the California energy crisis in
2000 and 2001.
Energy experts disagree on how much of a role it played in the crisis.
In 2001, the Legislature in an emergency session told the PUC to suspend
direct access in order to bring stability to the electricity market, with
the suspension set to run through 2015, according to the Department of Water
Now, the PUC will study whether it has the authority to lift that suspension
as early as 2009. If its answer is "yes," then it will study how to take
The leaders of the Democratic-controlled Legislature, Senate President Pro
Tem Don Perata and Assembly Speaker Fabian Núñez, as well as the lawmakers
who head the committees overseeing the state's energy policy, said Wednesday
in a letter to the commission that any such move "should be considered only
by the Legislature."
But Norm Plotkin, executive director of the Alliance for Retail Energy
Markets, which petitioned the PUC to bring back retail competition, welcomed
"We're pleased at the outcome and know there's lot of hard work ahead, but
we're ready to engage," said Plotkin. "This is the first step in a long road
to restoring consumer choice."
Matt Freedman of The Utility Reform Network, a consumer advocacy group, saw
"We're very disappointed that the PUC and the governor want to return
California to the dark day of energy deregulation," he said.
Gov. Arnold Schwarzenegger has been a supporter of direct access, but his
office has declined to comment on whether the PUC has the authority to lift
The only dissenting vote Thursday came from Commissioner Timothy Simon,
whose appointment to the PUC still must be confirmed by the state Senate.
Though he generally favors competition, Simon said, "Introducing competition
into electricity markets has not always brought about lower rates for
Peevey, and the majority of the independent panel, disagreed.
"So I say to those who will totally ... oppose direct access, why are you
afraid of healthy debate?" Peevey asked at Thursday's meeting. "Have you no
confidence the average consumer can make rational, reasonable choices? And
how can consumer advocates, and I use the term advisedly, claim giving
people choice (is) anti-consumer?"
About the writer:
The Bee's Shane Goldmacher can be reached at (916) 326-5544 or