Poll Analysis: Californians Want Deregulation Repealed, Don’t Believe Shortages Are Real

     Amid rising concern about the state‚s economy, a solid majority of residents say they are closely following the news about the California power crisis, according to the latest Los Angeles Times poll. Residents feel the situation is very serious, and over half don‚t believe the shortage of electricity is real. Many instead blame greed on the part of wholesalers and private energy utilities for rising prices and threats of rolling blackouts. By a three-to-one margin, Californians want deregulation discontinued.
     Even though more Californians said they blame the state‚s private utilities, the California Legislature, the Public Utility Commission, and deregulation itself than said they blame Gray Davis for the power shortage problems in California, there are some signs that he may not escape political fallout from the public‚s belief that deregulation has failed. The Governor‚s job approval rating and overall impressions are down from when measured last year, and more disapprove than approve of the way he‚s handled the electricity crisis so far.

A Failed Experiment
     In 1996, the California Legislature overwhelmingly approved electricity deregulation, which was seen by both parties at the time as a way to combat the disproportionately high consumer prices for power in the state. A quarter of this survey‚s respondents said they had expected that deregulation would result in lower electricity prices for consumers when they first heard about it, however, but the third who expected rates to go up were proved right˜on January 4th, the California Public Utility Commission (CPUC) approved a 90-day rate hike for residential and business customers.
     Over three in five Californians said they disapprove of the legislation which set the deregulation process in motion, up from the 47% plurality who expressed disapproval of it in an October, 2000 Times Poll. Possibly as a result of Californian‚s concern over the power situation, the job approval rating of the current Legislature has slipped among registered voters to 43% from 54% measured by the Times Poll about a year ago.
     Even though consumers have not yet seen higher electricity bills or experienced power cuts from shortages, awareness of the energy crisis in the state is high. Four out of five said they had been following the news and nearly a third said they‚d been following it closely. Two in five named the power crisis as the most important problem facing the state, displacing concern over education which was pushed to second place at 19%, down from 34% when last measured by the Times Poll in June 1999. Power issues did not register even a blip on the radar that June. Nearly seven in 10 said they were concerned about the possibility of experiencing rolling blackouts and over half of those affected by rate hikes said it would pose a financial burden.
     Many Californians are skeptical about what they read and hear about the crisis, the survey found. Over half said they don‚t think there is a real shortage of electricity. When asked why, forty-nine percent said they thought either the utility companies or the electricity wholesalers were manipulating the situation for profit.
     But no matter how it was measured in the survey, Californians said they consider deregulation a failure, and want it repealed.
   66% of all residents disapprove of the deregulation legislation of four years ago, vs. 23% who approve of it.
   63% agreed that „allowing private companies to provide electricity means prices are no longer regulated and consumers end up paying more‰ vs. 26% who were more inclined to agree that a free electrical market allows more competition and lower prices.
   64% say deregulation has been a bad thing for California, including 40% who said „very bad‰, while 14% said it has been a good thing and 15% said it has had no effect.
   59% said they think California should go back to a regulated electricity market vs. 30% who said deregulation will work if we just give it more time.
   24% characterized the situation as a crisis, 35% said it was a serious problem for consumers, 29% said it was somewhat serious and only 10% said it wasn‚t a problem at all.
     In addition, just over three in five said they support the view of the democratic majority in the California Legislature who want to repeal deregulation and get the state into the business of producing power, while only 22% said they support the Republican view that deregulation would work if restrictions were further cut and private investment in power plants encouraged.
     Even though customers of private utilities have not yet felt the pinch of higher electricity prices, more than three-quarters said they had taken some steps to conserve electricity over the last six months, even more than the 48% who said they had cut back on natural gas usage over the same time period. Natural gas prices have already risen in the state this winter due to high demand.

The Economy
     The survey found evidence that confidence in the state‚s economy is slipping. Forty-five percent said they think the state is on the right track, down from 53% measured by the Times Poll last year at this time. Just over two thirds see recession on the state‚s economic horizon in the coming year.
     Residents in the northern half of the state are especially gloomy˜by 47% to 41% northerners said the state is on the wrong track. The survey found that northerners are more likely than southerners to say that higher natural gas bills are already a problem for them financially, are more likely to think that there is an actual shortage of electricity, and one in 10 named „housing‰ as the biggest problem facing California today, compared to just 2% among southerners. This may reflect that northern California has suffered from housing shortages caused by the expansion of the dot com industry in that area, and now is feeling an economic pinch as that industry contracts.
     While a solid four out of five residents overall said they think the state‚s economy is doing fairly or very well, the number of those who say it is doing „very well‰ has dropped a precipitous 19 points since last October. Still, there is little indication residents are having a difficult time now. Two-thirds characterize their own personal finances as secure, including 75% of registered voters˜which is very close to the 78% who indicated in a Times Poll survey about a year ago that their finances were secure.

State Leaders
     The survey found some indication that Governor Gray Davis may be suffering political fallout from a situation he insists he inherited from his Republican predecessor Pete Wilson. While the governor‚s rating still hovers around 50%ˆ49% among all residents and 51% among registered voters˜it has slipped from 59% among voters last measured by the Times Poll in October, and is much lower than the high of 67% measured by the Times Poll just under a year ago. Only three in 10 respondents said they approve of the way Davis is handling the electricity situation and just one third say he has shown himself to be a decisive leader. Davis has said he will set forth his proposals for solving the energy crisis in his State of the State address on January 8th.
     The state Legislature has slipped even more in public opinion, from a 54% approval rating among voters measured nearly a year ago, to 43% who said they approve in the current poll. But the California Public Utilities Commission is suffering most from respondent disapproval˜two thirds of all respondents say they disapprove of the agency which approved deregulation five years ago and recently ruled that consumer rates could increase. Only 22% said they approved of the way the commission has handled its job.
     One indication Davis may have succeeded in convincing Californians that the situation is not of his creation is that the governor does not come up in the top five when respondents were given two chances to pin blame. Topping the list are the state‚s private utilities˜the two largest of which are Southern California Edison, and Pacific Gas & Electric˜who were recently granted temporary rate hikes by the CPUC. One third of respondents blame the utilities, who claim they are the victims of price-gouging energy wholesalers, for the crisis. The California Legislature was next in line for blame, mentioned by 22% of respondents, followed by deregulation in general at 18%, and the CPUC at 12%. Only 7% said the electricity wholesalers were responsible, and Davis was named by 9%.

***

How the Poll Was Conducted
The Times Poll contacted 575 Californians, including 459 registered voters, by telephone Jan. 4-5. Telephone numbers were chosen from a list of all exchanges in the state. Random-digit dialing techniques were used so that listed and non-listed numbers could be contacted. The entire sample was weighted slightly to conform with census figures for sex, race, age, education and region. The margin of sampling error is plus or minus 4 percentage points for the entire sample and 5 points for registered voters. For certain subgroups the error margin may be somewhat higher. Poll results can also be affected by other factors such as question wording and the order in which questions are presented.