Lawmakers Focusing on Energy Bills

While Gov. Gray Davis and legislative leaders met with Clinton administration officials in Washington, state lawmakers worked Tuesday on measures that could go to a vote as early as Friday, aimed at overhauling California’s energy distribution system.

The lineup of legislation remained in flux. However, Assembly members said they probably would move quickly to revamp the organization that oversees most of the state’s electrical grid.

In his State of the State speech Monday, Davis said the board should be composed of state appointees, rather than individuals who have power industry ties.

The Legislature also is expected to quickly heed Davis’ call for measures to require that Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric not sell more power plants.

Additionally, the Legislature could extend to the governor the authority to order that power plants that otherwise might be shut down be kept operating in periods of shortages.

On Tuesday evening, operators of the state’s transmission grid declared a “Stage 2” emergency, the first of the year, when power reserves were expected to drop below 5%. Dozens of such alerts were declared last year.

Supplies were tightened by the need to refuel a nuclear power plant in northern San Diego County and the shutdown of several major power plants, some for scheduled maintenance and three others for boiler tube leaks, said Patrick Dorinson, spokesman for the California Independent System Operator.

“The public needs to understand that we’re moving urgently,” said Assemblyman Darrell Steinberg (D-Sacramento), a member of the lower house committee that will review the bills. “We ought to come out this week and pass bills that are significant, but ones for which there is general consensus.”

Assemblyman Roderick Wright (D-Los Angeles), chairman of the utilities and commerce committee and the head of an 18-member committee chosen by legislative leaders Monday to oversee energy bills, called the initial round of bills “low-hanging fruit.”

The test of which issues are taken up, said Wright, should be: “Does it produce electrons, does it reduce the consumption of electrons, or does it reduce the cost of electrons?”

Wright said the notion of creating a public power authority could be put off until later in the Legislature’s special energy session, which opened last week.

But the idea is building momentum. State Treasurer Phil Angelides spent Tuesday afternoon calling Republican lawmakers, trying to win support for the creation of a public power authority that would float billions of dollars of bonds to help close the state’s electricity shortfall through conservation and power plant construction.

Angelides unveiled a detailed plan for such an authority Friday, and Davis endorsed the notion of more state authority in his speech Monday. Consumer groups and some Democratic lawmakers said they like the idea too, and Senate leader John Burton (D-San Francisco) is expected within a week to introduce a bill to create such a state agency.

In his speech, the governor said a power authority could act alone or jointly with the state’s 30 municipal utility districts, including the Los Angeles Department of Water and Power. Those publicly owned utilities were not subject to deregulation.

Angelides said a joint authority melding all the municipal utilities would be too unwieldy, but a stand-alone power authority would certainly work in partnership with utilities to distribute loans to homeowners for energy-efficient air conditioners, for example, or rooftop solar panels.

Some Republican lawmakers have criticized a new state power authority as excessive government. Angelides said it would simply use the state’s vast ability to borrow money to solve the energy crisis.

“What we should start looking at is not what’s ideological but what’s best for the long-term economy,” Angelides said. “This week I am trying to talk to as many people as possible so they understand what it really is versus what they fear it is.”

Bills aimed at encouraging people to conserve--Davis called on Californians to cut electricity use by 7% statewide--probably will take more time. Davis has proposed spending $250 million to provide “cash incentives” to people who trade in old, power-hungry appliances for new ones.

Other questions remain unsettled as well, such as the revamping of the board that oversees the state’s grid operating agency, the California Independent System Operator. Exactly what form it should take has not been determined, but many critics said the board is dominated by members with links to the power industry.

“I think the governor would like them to be his appointments,” said Assemblyman Anthony Pescetti (R-Rancho Cordova), vice chairman of the Assembly committee that will hear the bills. “I would hope that they would bipartisan.”

Also unresolved is whether the state should intervene on behalf of financially strapped utilities until after federal energy regulators decide whether to limit the wholesale prices charged by power producers.

On Tuesday, Davis flew to Washington, D.C., to meet with federal energy regulators and power industry officials about such matters.

“Our challenge is much greater if we are looking at two years of skyrocketing rates,” said state Sen. Debra Bowen (D-Marina del Rey), chairwoman of the Senate energy committee.

Consumer groups warned Tuesday against any attempt by the Legislature to “bail out” the utilities.

“We argue that the utility companies brought this on themselves,” said Harry M. Snyder, senior advocate with Consumers Union.

He and other consumer advocates called a joint news conference to urge the Legislature to embrace a plan that they said would quickly stabilize electricity rates for homeowners, renters and small businesses.

The consumer groups said PG&E; and Edison, which together serve 24 million people, should be forced to serve their small customers with the output of the power plants they still own, which are largely nuclear and hydroelectric.

That electricity should be sold at prices fixed by the state, said Nettie Hoge, executive director of The Utility Reform Network in San Francisco. Large industrial and commercial customers should be cut loose from the utilities to go find another source of electricity, she said, because they consume enough electricity to allow them leverage to cut deals with private power firms.

“That will go a long, long way toward stabilizing rates,” said Hoge. “Every legislator here should be willing to pledge to that result.”

The utilities sold off at least 20 oil- and gas-fired power plants under deregulation. They still have the ability to meet about 40% of their customers’ needs with the plants they retained.

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California’s Power

California gets its power from a variety of sources. Here is a look at the mix:

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Natural gas: 31%

Hydroelectric: 20%

Coal: 20%

Nuclear: 16%

Renewables*: 12%

Other (oil and diesel): 1%

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*Renewables include biomass and waste products, geothermal, small hydroelectric (less than 30 megawatts), solar, wind.

Source: California Energy Commission. Researched by NONA YATES/Los Angeles Times *

More on Crisis: Profiles, background and recent news stories are available in a Times special report at https://www.latimes.com/power