The president of California’s state senate has introduced a bill to create a new state authority that would own and operate the state’s power transmission grid, and at the same time help the state’s two biggest utilities out of financial trouble. John Burton, senate president pro tem, said that California’s current energy crisis demonstrated the need for public ownership of the 26 000 mile network. “It gives us some control over our electrical destiny, it allows us to make badly needed upgrades in the system and it gives cash to utilities in exchange for assets that are of real value” he said, introducing the bill.
Burton’s is the most recent in a number of proposals aimed at repairing the damage caused by the disastrous 1996 move to partially deregulate the power market, leading to wholesale prices spiralling out of control, rolling blackouts and bottlenecks statewide and near-bankrupt utilities.
In another saving move state pollution laws are to be temporarily relaxed, allowing power plants to operate for longer hours or at higher emissions levels. However, the plants will have to purchase “offset credits” in order to be eligible, essentially an undertaking to speed up and increase the scale of emissions control at power plants. The state will allow “some increase in pollution in the near term, in return for much less emissions from those plants in the long run” according to California Environmental Protection Agency secretary Winston Hickox.
Hickox has also been landed with the job of speeding new power plant projects through the application process to help realise state governor Gray Davis’s plan to get 5000 MW of new power plant into operation and added to the grid by the summer.
With the crisis now nearly a month old, Californians are starting to wonder where all the money went that was accumulated by the utilities in the boom years between 1996 and 1999. “It’s quite clear that the parent companies (Edison International and PG&E Corp) vacuumed out the utilities and siphoned off all the wealth so they could put it where they thought it would be safe” says Nettie Hoge, who heads The Utility Reform Network, a critic of the utilities. This turns out to be in investor profits and in affiliated businesses that have now prospered. The California Public Utilities Commission may open an investigation into how the holding companies shifted around their assets. The holding companies maintain that they have followed the rules as confirmed by several prior investigations, but the PUC has told the utilities that they will have to show they didn’t violate decades old rules that allowed them to set up holding companies only if it did not hurt customer service.
