Freeman Weathers a GOP Attack

SACRAMENTO -- S. David Freeman, the energy expert recruited by Gov. Gray Davis to keep the lights on during the California energy crisis last year, survived a Republican attack Wednesday to win a major victory in his fight for Senate confirmation as chairman of the state’s power authority.

Republicans on the Senate Rules Committee suggested he mismanaged the negotiation of billions of dollars’ worth of power purchase contracts, had “potential” conflicts of interest and for months cloaked details of the contracts in secrecy.

“I have no conflicts of interest,” Freeman shot back at one point. At another, he told the committee: “I’ve done what the law requires” in reporting possible conflicts.

“I like to think I have 76 years of ethical behavior behind me,” the 76-year-old snapped at his chief GOP antagonist, Sen. Ross Johnson of Irvine, the upper chamber’s senior Republican.

On a 3-2 party-line vote, the Democrat-controlled Rules Committee approved Freeman’s confirmation as the first chairman of the state’s new public power authority, formally known as the California Consumer Power and Conservation Financing Authority.

The committee also approved other directors of the authority’s board, including Sunne Wright McPeak, John R. Stevens and Donald Vial, all Democrats. Unlike Freeman, who is paid $220,008 a year as chairman, they receive no pay.

Davis’ nomination of Freeman and the others was sent to the full Senate, where easy approval is expected.

The power authority, created last year during the energy crisis, is authorized to issue $5 billion in state bonds for projects that encourage conservation, invest in renewable sources of electricity and protect against blackouts.

At the outset of the gubernatorial campaign last year, Republicans launched an assault on Davis’ leadership during the energy crisis, charging that he first pretended it didn’t exist and then mismanaged the state’s effort to overcome electricity shortages and astronomically high power prices.

Freeman, a folksy, Stetson-wearing native of Tennessee, has managed some of the nation’s biggest public power agencies, including the Tennessee Valley Authority and the New York Power Authority. He is credited with turning the once-anemic Los Angeles Department of Power and Water into a successful operation.

But he found himself a bull’s-eye for Johnson and Sen. William “Pete” Knight (R-Palmdale) at the committee hearing. On occasion, Senate leader John Burton (D-San Francisco), the committee chairman, joined in with skeptical questions.

Criticism of Freeman centers on whether the state’s $43 billion in contracts with power generators will end up costing Californians far more than Davis and Freeman indicated.

The administration is trying to renegotiate some of the agreements and is seeking lower prices on others in proceedings before the Federal Energy Regulatory Commission.

Freeman conceded that with “20/20 hindsight” a year later, the contracts should be renegotiated, but insisted that at the time, they were the best the state could get from the power “gougers.”

“The bargaining power of those generators was the equivalent of a gun [at the state’s head]. They had us over a barrel,” Freeman said.

When the state locked up multiyear power contracts last winter, the average contract price of roughly $70 per megawatt-hour was a fraction of spot-market prices. But the situation reversed itself in June when market prices plummeted to $30 per megawatt-hour and less.

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Times staff writer Nancy Vogel contributed to this report.