Energy bill gets bright reviews

Deirdre Newman

City leaders are adamantly supporting a state energy bill touted as

having the power to prevent future blackouts despite not being

drastically affected by rolling blackouts during the energy crisis of

2001.

The bill, called the Reliable Electric Service Act of 2004, would

establish a framework of electrical service that supporters say will

entice investment in power plants in the state. It would also ensure

that the California Public Utilities Commission approves and

maintains reasonable rates so utilities can completely recover their

costs of investments, as long as those costs are found to be

reasonable by the commission.

The legislature instituted deregulation of the power companies in

1996, and the utilities were forced to sell at least 50% of their

generation plants, leaving them vulnerable to price gouging and

gaming of the energy market from companies like Enron.

To show Costa Mesa’s support for the bill, Councilman Mike

Scheafer testified for a Senate energy committee Tuesday in

Sacramento. City officials like the bill because they are concerned

about the negative effect of potential future blackouts on things

like public safety, traffic and schools, Scheafer said. They are also

concerned about the cost that would be incurred by public safety

personnel and the loss of revenue from disrupted business activity if

blackouts were to occur.

Supporters point to some alarming statistics in their backing of

the bill. The California Energy Commission and the Independent System

Operator, which operates the state transmission grid, have come to

the same conclusion: The state could experience major energy

shortages by 2006. And of the 10,000 megawatts of generating capacity

that has been approved by the commission, only 3,000 megawatts are

currently under construction and on schedule.

These are among the reasons that Southern California Edison also

strongly supports the bill. Investment in new power plants throughout

the state is desperately needed, spokeswoman Jane Brown said.

“The goal is to secure enough power for the state and to do it

soon,” Brown said. “That’s why it’s so important to do it now,

because it takes a long time to get plants built.”

The bill is opposed by some independent generation companies that

would not like to see the utilities build more power plants, Brown

said. But there’s room for both independent generators and utilities

alike, Brown said.

“The makers of this bill believe that the best framework for

generation would be a mix of independent generational and utility

generation, like a diversified portfolio,” Brown said.

Southern California Edison also supports the bill because it wants

its customers to pay the lowest rates possible, Brown said. The

company would benefit by being better able to put some long-term

investments in its power plants and transmission lines, said Tommy

Ross, Sacramento regional vice president. Because of deregulation,

Southern California Edison owns only 30% of its generational

capacity.

“In order to make long-term investments in the infrastructure,

what we need to have is a durable and stable regulatory framework

that provides some degree of [certainty] that those investments can

be recovered,” Ross said.

The bill ultimately cleared the energy committee and now goes to

the Senate appropriations committee.