Dan Walters: A power grab by politicians

(Published Feb. 23, 2001)

Slowly, but inexorably, control over the generation, acquisition and distribution of electric power in California is being shifted from professional utility managers and independent regulators into the hands of politicians.

The 1996 utility "deregulation" scheme enacted by the Legislature was an initial foray into politicization. Legislation granting the governor more control over the makeup of the Public Utilities Commission was another.

But the current power supply/price crisis has led to even more direct political influence over -- or interference with-- electric service. One hastily enacted bill, for example, gives the governor direct control of the now-misnamed "Independent System Operator," which operates the statewide power grid.

More political intrusion is in the works, from a state takeover of the intercity power transmission grid to the creation of a state power authority that would buy, generate and sell electricity directly. And while local public utilities function well, a state power agency might operate on the whims of professional politicians.

The Legislature, for example, wants appointments to the board that would direct a state power authority, and big state power projects would be subject to the same kind of pork-barrel mentality that distorts other public works appropriations.

Where power plants were to be built, or where high-voltage lines would be strung, might well depend on who could, and could not, bring political influence to bear, rather than what the system needed to work efficiently.

Clues to the potential pitfalls of a state-operated power system are found in the approaches of Capitol politicians to the current crisis. There is, for example, the unspoken goal of avoiding big power rate boosts until after the November 2002 election -- even if it means running up billions of dollars in debts to do it.

Would future rates charged by a state power authority be raised or lowered to enhance the prospects of the dominant party or an incumbent governor? There's no evidence in past performances to indicate they wouldn't be.

And then there's the knotty question of who would get vital power supplies in the event of shortages -- a situation that is already looming and could become worse in future months.

Emergency legislation already gives the state the right to sell power as it pleases, without competitive bidding or even public notice. There's nothing, really, to prevent politically influential power customers such as big industrial enterprises from cutting their own supply deals with politically directed state officials.

And whose juice would be cut off if shortages mean blackouts? Approximately 45 percent of current power customers are effectively exempt from rolling blackouts because they are connected to circuits (called "blocks") that also include vital services, such as hospitals, fire and police agencies, water supply systems and communications centers. The Capitol, not surprisingly, is in one of those noninterruptible blocks.

With the threat of further blackouts looming, legislation is being drafted to designate which customers will suffer and which will not -- thus taking that authority out of the hands of utilities and regulators. And that, in turn, is generating pressure from lobbyists from all sorts of interest groups to place their clients on protected lists. Should farmers be cut off, or biotechnology facilities, or computer chip plants, or schools?

When politicians control any process or system, one can be certain that they will always make expedient political decisions, regardless of the long-term or wider consequences. Thus, we may someday regret allowing the Capitol's self-serving politicians to get their hands on our electric power system.

DAN WALTERS' column appears in The Bee daily, except Saturday. Mail: P.O. Box 15779, Sacramento, CA 95852; phone (916) 321-1195; fax: (781) 846-8350; e-mail: dwalters@sacbee.com

-- Swissrose (cellier3@mindspring.com), February 24, 2001

Answers

Depending on perspective, it is either state corruption or stone-age capitalist greed.

-- Swissrose (cellier3@mindspring.com), February 24, 2001.

More than likely, it will be an amalgam of the worst facets of both.

-- Scott Brim (sbrim@3-cities.com), February 24, 2001.