Governor Seeks Consolidation of Energy Agencies

The Schwarzenegger administration is proposing to consolidate parts of California’s diffuse energy bureaucracy in an effort to avert blackouts and other potential crises, aides said Monday.

The governor wants to create a new Cabinet-level position of energy secretary to formulate policy and respond to disasters. The state’s plethora of existing energy panels and agencies has been widely criticized as duplicative and fragmented.

“For California to move forward, it needs to have a consistent, consolidated view and speak with one voice on energy policy,” said Joe Desmond, chairman of the California Energy Commission, a quasi-independent body that would become part of the new department.

One of the new department’s main responsibilities would be deciding whether to approve new transmission lines and natural gas facilities. That job is currently done by an independent entity, the Public Utilities Commission.

Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights, a Santa Monica group that frequently opposes the governor, called that proposal “a literal and figurative power grab.”

“This is a governor who is dead set on removing all independent oversight, and this seems to be an extraordinary move in that direction,” Heller said.

The governor’s aides said applications for new power plants would still be evaluated with independence by the Energy Commission, which, as the Public Utilities Commission now does, would hold hearings, take testimony and establish a record of all its decisions.

Four of the five commission members would not report to the energy secretary but would serve staggered, fixed terms after being nominated by the governor and confirmed by the state Senate. The fifth would be the energy secretary, who would serve at the pleasure of the governor.

The hodgepodge of entities that currently oversees energy issues includes the Energy Resources Conservation and Development Commission, which approves power plants and sets energy conservation and building standards; the Energy Oversight Board, which investigates market manipulation issues and oversees California’s power grid operator; part of the California Department of Water Resources, which administers state electricity and natural gas contracts; and the California Power Authority, which can help finance power plants. All of those functions and others would be placed under the new department.

The energy reorganization is not nearly as extensive as what was proposed by the California Performance Review report, commissioned by Gov. Arnold Schwarzenegger last year to recommend changes in state government. The report had proposed placing all energy-related offices, including the Public Utilities Commission, under one department along with other business-related agencies.

Schwarzenegger’s reorganization plans have not fared well this year. Only an overhaul of the state prison system has been approved by the Legislature, and he has scrapped or postponed key changes outlined in his State of the State message in January.

The governor’s energy proposal was welcomed Monday by Jan Smutny-Jones, executive director of the Independent Energy Producers Assn., a trade group for power generators. The new agency and secretary would offer “a coherent, focused energy policy and have someone accountable, and I think that’s an improvement,” he said. “This helps put it all in one place.”

Robert Finkelstein, executive director of the Utility Reform Network, a consumer advocacy group in San Francisco, said that if an energy secretary could provide a more cogent explanation of state energy policy, “that would be an improvement.”

But Schwarzenegger’s office “can do that today,” Finkelstein said. “I’m not sure you need some reorganization to achieve that clear voice on these issues. From our perspective, the hang-up has been the failure of the governor to set forth a real clear energy policy that goes beyond ‘Conservation is good, new generation is good.’ ”

The administration said it would submit the plan Thursday to the Little Hoover Commission, an independent evaluation board that will examine it and make recommendations to the full Legislature. Lawmakers will then have 60 days in which they could reject the plan, or it would become law.