Study on Electric Initiative Shelved Before Election

Weeks before the Nov. 3 election, the California Energy Commission prepared but then withheld an analysis of Proposition 9 that showed the measure would have dramatically reduced electric rates for nearly 10 million Californians.

The study, finalized on Oct. 16 but not released until this week, concluded that under Proposition 9, ratepayers of Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric would have received reductions of 11% to 18% over what they now pay.

Addressing another campaign issue, the study said that closing P G & E’s heavily subsidized Diablo Canyon Nuclear Power Plant would not pose a significant loss to the state’s electricity supply because other sources were being developed.

Because it would have helped debunk claims by Proposition 9’s opponents that the initiative would lead to higher electric rates, release of the study would have aided the measure’s sponsors, whose arguments were overwhelmed by the more than $40 million spent by the utility industry during the campaign.

It also might have injected an objective voice in the back-and-forth over an initiative whose arcane provisions--from utility deregulation to multibillion-dollar bond sales--befuddled many voters.

“We were shocked,” said Doug Heller, a spokesman for Californians against Utility Taxes. “The public would have benefited by release of the report.”

Proposition 9, which was defeated by about a 3-1 margin, called for a 20% reduction in electric rates for residential and small commercial customers of state-regulated utilities and an end to subsidies for nuclear power plants.

Private utility companies contended in their media blitz that the initiative would result in higher rates. The utility companies also argued during the campaign that provisions of the measure ending nuclear subsidies would cripple the state’s power supply, causing increased demand on remaining supplies that would push electric rates higher.

Ironically, as helpful as the study might have been to their cause, sponsors of Proposition 9 may have themselves to blame for the report being held up.

Fearing that the state Energy Commission, composed of Gov. Pete Wilson’s appointees, would write a politically skewed report critical of Proposition 9, two leading sponsors of the measure sent a letter to Energy Commission Chairman William J. Keese in September urging him to avoid any action that would “influence the outcome of the election.”

Citing the study they knew was in the works, Harvey Rosenfield, a co-author of Proposition 9, and Harry Snyder, an attorney for Consumers Union, wrote: “The Energy Commission has no business participating in the political campaign for or against Prop. 9. It has neither the legal authority, nor the resources, nor the expertise to weigh in on fiscal or political matters.”

Energy Commission attorney William Chamberlain said that when the staff completed its study in mid-October, he advised the commission to hold the report until after the election in part because of the letter.

“We intended the report as a balanced presentation of facts, but because it might be interpreted as something else, I felt the commission ran a risk if it put out anything at all,” Chamberlain said Wednesday.

Chamberlain said the issue fell within a gray area of the law. He said the law prohibits the commission from advocating one side or the other in an election, but acknowledged that state agencies clearly had a right to make objective analyses of issues.

Keese said Chamberlain relayed his concerns during a closed-door executive session with the commission, which is responsible for licensing power plants and making forecasts about energy supply and demand in California.

Keese said the five commissioners hoped to have their study reviewed by outsiders before it was released but were unsuccessful.

“Our counsel said the closer we got to the election the more it might appear we were trying to influence it,” Keese said. “The decision was made that we are too close, we just can’t do it.”

Snyder said he was infuriated by suggestions that the letter he drafted with Rosenfield was being used as a reason to hold up the report. Snyder said the commission had an obligation to release the report, which was prepared at taxpayers’ expense and drafted by state employees.

“It was their job and duty to tell the public what the impact of Proposition 9 would have been and they failed in that duty,” Snyder said.

Clarence Brown, a spokesman for Southern California Edison, said he did not believe holding up the report had a significant impact on the election. He continues to insist that Proposition 9 would have raised electric rates.

“Voters reacted to flaws in what was a very badly written proposition,” Brown said.

Chris Warner, chief counsel for regulatory affairs at PG&E;, said the report did nothing to shoot down the belief by utilities that electric rates could rise sharply if there was an immediate shutdown of Diablo Canyon.

In July, the commission released a preliminary staff analysis of Proposition 9 showing it would have provided consumers with rate reductions of 24% to 37%

Snyder and other sponsors of the initiative jumped on that study and used it in trying to sell their measure.

But utility companies strongly criticized its conclusions. The commission ordered a second study to respond to those concerns, but Snyder said Proposition 9 sponsors feared that the second look might bow to pressure from Proposition 9’s opponents.