Groups Push New State Energy Office

California’s energy bureaucracy needs a good housecleaning, say lawmakers and business groups trying to create a new state department.

Frustrated by government overlap and a lack of accountability, the California Chamber of Commerce and California Business Roundtable propose eliminating two state agencies and consolidating various duties now carried out by the Public Utilities Commission, Energy Commission, Department of Conservation and the energy division of the California Department of Water Resources. The head of the new Department of Energy would be appointed by the governor.

“We have six boards and commissions that sometimes compete with one another and sometimes conflict with one another,” said Chamber President Allan Zaremberg. “That is very diffuse decision-making.”

The business leaders said they are raising the issue because a more accountable, streamlined energy bureaucracy might lead to lower electricity rates. That is exactly what the chamber and roundtable sought in the mid-1990s when they pursued deregulation of the state’s electricity industry. That 1996 plan backfired last year and saddled consumers with higher electricity rates and billions of dollars in debt.

The business lobbying groups said they are pushing reform of the state’s energy bureaucracy because they can’t count on lawmakers to do it.

“In the era of a term-limited Legislature,” Zaremberg said, “it’s difficult to do things with long-term goals in mind.”

But several lawmakers said they are eager to tackle the issue.

Though they were drafted separately, the business groups’ proposal practically matches a bill, AB 1661, by Assemblyman Anthony Pescetti (R-Rancho Cordova).

His measure would consolidate under a single energy agency the tasks of forecasting electricity and natural gas supplies, licensing power plants, funding energy conservation and planning transmission line expansion.

Like the business group proposal, Pescetti’s bill would abolish the public power agency that the Legislature created five months ago. The Consumer Power and Conservation Financing Authority, led by former Los Angeles Department of Water and Power General Manager S. David Freeman, is still figuring out how to execute its mission of guaranteeing that California always will have abundant electricity supplies. The Legislature vested the agency with the ability to borrow $5 billion.

Pescetti’s bill also would eliminate the Electricity Oversight Board, a $4-million-a-year operation that has not met since April and has shrunk to a single board member. It was one of three institutions created under deregulation. The board was supposed to oversee the operations of the Power Exchange, which went bankrupt last January, and the California Independent System Operator, which manages the transmission grid serving most of California.

“It appears to me that there’s no way we’re going to get sound, rational energy policy when we’ve got myriad agencies with competing agendas and policies all given some piece of the energy pie,” said Assemblyman Joe Canciamilla (D-Pittsburg), who supports some elements of Pescetti’s bill but is working on similar legislation.

“It is a system that has taken a simple subject,” he said, “and turned it into a complicated problem.”

But Assemblyman Rod Wright (D-Los Angeles) said the Legislature must move cautiously on an overhaul or risk making things worse. To shift the rate-making authority of the PUC could require a constitutional amendment, he said, and changes to Cal-ISO could be overruled by the federal government.

“Now is the time to step back and see what worked and didn’t,” said Wright, chairman of the Assembly Energy Costs and Availability Committee. He said Pescetti’s bill probably should be amended to create a task force to study the bureaucracy.

“Let’s not start fixing willy-nilly,” Wright said.