Business Group Sues to Block Referendum

A coalition of California’s investor-owned utilities, business organizations and other groups has filed suit in the 3rd District Court of Appeal in Sacramento to invalidate a proposed ballot initiative that would undo parts of the new restructured electricity market. Consumer activists seeking to qualify the initiative for the November ballot have delivered more than 700,000 signatures to county clerks around the state for verification. The referendum would change the law so that consumers would not be responsible for paying off bonds that were sold to refinance nuclear plants and other investments that utilities say they must eliminate to compete in an open market. The initiative would also mandate a 20% rate cut for consumers, compared with the current 10%. The lawsuit asks the court to prevent the initiative from appearing on the ballot, claiming it is unconstitutional and would cost taxpayers more than $6 billion. Consumer activist Harvey Rosenfield called the action “a frivolous lawsuit designed to prevent the public from exercising their right to vote.”