Angelides Makes Right Moves in Power Crisis

Amid bailouts, buyouts and blackouts, the electricity meltdown has shined light on a seldom noticed state politician: Treasurer Phil Angelides.

He’s the only statewide elected official, besides the governor, who has stepped forward and inserted himself into the legislative debate over how best to fix the energy mess.

The Democrat--a likely gubernatorial candidate when Gov. Gray Davis leaves--is one of the strongest advocates for state acquisition of the private utilities’ power lines. He’s also promoting creation of a state public power authority to finance conservation efforts and new generating plants.

The power line purchase is being negotiated by Davis. A power authority bill has passed the Senate and is pending in the Assembly.

Angelides has linked up with powerful Senate leader John Burton (D-San Francisco), author of the public power legislation. The two go way back; Angelides’ wife worked for Burton in the Legislature about 30 years ago.

The 47-year-old treasurer, a former Sacramento housing developer, argues that state ownership of the electricity transmission lines makes sense for several reasons: The utilities need the buyout money to avoid bankruptcy. The roughly $7-billion purchase can be financed with revenue bonds that won’t raise consumer rates. And the state can upgrade the outdated lines for much less than it would cost the private companies.

“Here’s the best argument for buying the system,” he says. “It’s the equivalent of the state water project, the equivalent of the highway system. It’s the conduit of power for the state.

“The reality is the system has not been expanded and maintained in a way that’s commensurate with our energy needs. And that’s not because the utilities are good guys or bad guys, but the nature of private companies. They’re going to make investments that get them the highest return. That may or may not be coincident with the public interest.”

The public also would be buying some control over the flow and pricing of electricity.

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As for the state venturing into public power, Angelides says “it’s a way to keep the private sector honest. We’ll be out there creating new power and selling it at cost into the market. It’s a good competitive prod . . .

“There’s been a lot of glorification of private markets the last few decades. We should never fool ourselves into thinking they’re perfect devices. . . . There’s a set of goods we long ago decided we needed in society, things we needed to do in the public interest because you couldn’t always depend on the private sector . . . transportation, housing, health care. Electricity is a vital commodity.”

And he notes, “at least public agencies are answerable to the public. If you don’t like the [municipal power] board, you can toss ‘em out.”

It’s not as if Angelides were butting in where he doesn’t belong. He has license as the manager of state bond sales. And there’ll be record bond sales before all this is through--$10 billion to purchase electricity for the strapped utilities, maybe $7 billion to buy the power lines and $5 billion to fund the power authority. The borrowing will be repaid by electricity rates, transmission fees and power sales.

Angelides’ activism has gotten mixed reviews in the Capitol. One influential assemblyman, speaking anonymously, characterizes the treasurer as an irrelevant showboat. Burton, however, praises him for developing a workable bond scheme. And Davis welcomes Angelides onto his policy turf, says political advisor Garry South: “The governor wants everybody to put on their thinking cap.”

Not that it would matter, Angelides indicates. “I don’t get permission,” he says. “I’m an elected official so I’m going to put ideas on the table. I’m never going to shy from that.”

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Angelides definitely is not the shy type. He’s tenacious and aggressive--traits he demonstrated to his detriment and regret when he first ran for treasurer in 1994.

His primary election opponent was former Senate leader David Roberti (D-Van Nuys), who opposed abortion because of religious faith. Angelides, who supports abortion rights, ran an ugly TV ad trying to link Roberti in voters’ minds with the murder of a doctor at a Florida abortion clinic.

Angelides won the primary, then lost the general election. In 1998, he ran again and won. But many Roberti supporters still haven’t forgiven the sleaze.

“As you get older, you mellow, you learn and you grow,” Angelides says. “I probably wouldn’t do that ad again. . . . Clearly, the ad offended a whole bunch of people I respected. In that sense, it was a mistake.”

A very big mistake. But inserting himself into the limelight of an energy crisis is unmistakably the right move.