State Must Consider Regulation of Electricity Industry, Burton Says

State Senate leader John L. Burton agreed Thursday that Gov. Gray Davis and the Legislature must examine possible conversion of California’s electricity industry to a public power system.

“Everything has got to be on the table,” the liberal San Francisco Democrat said, if California is to devise a long-term solution to soaring costs in the state’s deregulated electricity market.

Unless a permanent remedy is found quickly, Burton said, voters would embrace in a “heartbeat” a proposed 2002 ballot initiative to restore utility regulation and authorize a state takeover of private power operations.

That proposal, outlined Monday by the Foundation for Taxpayer and Consumer Rights, would be seen as relief for people smacked with skyrocketing electricity bills, he said.

“When they are mad, they are looking for the easiest answer,” Burton told reporters. “The easiest answer is going to be blame ‘them,’ and ‘them’ is going to be the utilities.”

The prospective initiative, similar to one voters defeated in 1998, would undo the deregulation law California enacted in 1996, largely at the urging of the utilities industry.

It froze rates temporarily, but unexpectedly touched off extraordinarily high electricity rates last summer in San Diego and parts of Orange County. Even higher rates are predicted statewide next year and beyond for electricity and natural gas.

While he cautioned against the proposed initiative, Burton, the Legislature’s most powerful Democrat, stressed that its public power provisions “certainly can’t be disregarded” and are “worth looking at.”

He noted that public power has long been a fact of life in Pacific Northwest states, and that publicly owned utilities operate locally in California, including the Department of Water and Power in Los Angeles.

“It’s a concept that, throughout the country, works,” said Burton, who in the early 1980s was a legal and government relations consultant to Northern California’s Pacific Gas & Electric Co.

At a press conference, Burton cited the complex California energy crisis as the No. 1 issue facing lawmakers when they return on Jan. 3 for the 2001 session. In perhaps his toughest leadership test so far, Davis is scheduled to outline his energy reform plans today.

Burton credited Harvey Rosenfield, president of the consumers foundation, for pressuring Sacramento to act by proposing to put the initiative before voters in 2002, when Davis and many lawmakers face reelection.

“It’s beneficial that [Rosenfield’s] threat is being held over the head of the Legislature, of the utilities and of government itself,” Burton said.

“The real question when you get down to it [is]: Who is going to bear the burden, the rate payers or the shareholders? . . . It is a really complicated thing,” said Burton, who stopped short of endorsing any proposed solutions.

Unless brought to heel, he said, the energy crisis poses a “quite serious” threat to the “economic well-being of the state and, frankly, the political well-being of people in public office.”