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Jan 07, 2004 - 03:45 PM

Arnold didn't say deregulation, but that's what he meant

by Doug Heller
When Arnold announced that he plans to reform California's energy system during the State of the State last night he steered clear of the word "deregulation." The Gov knows that Californians have no taste for the failed energy deregulation scheme that Sacramento foisted upon the state in the 1990's. California consumers and businesses learned the hard way that electricity is the type of service that is too crucial to our economy and public safety to leave in the hands of unregulated power companies.

But, just because Arnold didn't use the "D" word, doesn't mean we're in the clear. In fact, loaded into his State of the State was the Enron-style deregulation agenda that Arnold learned when he first met with Ken Lay in May of 2001. (see our report)

Under a regulated system, the price of power and access to it is controlled so it is affordable for everybody. Arnold wants to deregulate the system to allow big businesses to cherry pick the cheapest power, leaving residential and small business consumers paying the highest price for electricity. That's what he really means when he says "We must reform the retail market so that large customers can get competitive prices." To boot, when Arnold said that there were too many energy agencies, the Gov is really saying that he wants to get rid of the California Public Power Authority -- the one public agency that can be the great energy equalizer by ensuring that if consumers do not have access to inexpensive electricity from the power industry, the Power Authority will can step in and produce it.

And while the governor was properly critical of the energy contracts signed during the power crisis by Gray Davis, he said nothing about the deals given by Davis's PUC appointees to Edison and PG&E, the state's largest power utilities that wrote the original deregulation law with former Governor Pete Wilson. But of course Arnold isn't talking about the outrageous consumer bailout of the utilities, he just accepted a $50,000 contribution from Edison.

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