Energy Initiative Is Upheld

California voters can use the state’s initiative process to enact laws that would expand the authority of state energy regulators to control electricity generators, the California Supreme Court ruled Monday.

The state Constitution doesn’t preclude voters from giving additional authority to the California Public Utilities Commission, the court said in ruling against an energy trade organization that had contended that only the state Legislature could expand the regulatory agency’s power.

The Independent Energy Producers Assn. sued the state last year to block a voter initiative that would have given the regulatory agency control over energy service providers such as Constellation Energy Group Inc. and prevented the return of deregulation to California’s retail power market.

Even though the measure didn’t pass, the court ruled on the case. It said voters had the right to decide to expand the regulatory agency’s power.

Bob Finkelstein, executive director of the Utility Reform Network, a San Francisco consumer group that sponsored the measure, Proposition 80, said the ruling was important because a similar proposition might be introduced in the future. “The power companies wanted to cut off the public from this avenue and the Supreme Court said very clearly and firmly, not on your life,” Finkelstein said.

Jan Smutny-Jones, executive director of the Independent Energy Producers Assn., didn’t return a message. The ruling overturned an appeals court decision in favor of the producers.

Constellation and other electricity producers donated $1.77 million to defeat Proposition 80, which would have barred reopening the retail power market to competition and given regulators control over energy service providers on issues such as energy efficiency and procurement.

Competition was suspended during California’s energy crisis in 2000 and 2001. The utility reform group said deregulation contributed to the crisis, which caused the state’s two largest utilities to become insolvent.