Tell the Truth, Governor

Friday, March 9, 2001 ©2001 San Francisco Chronicle

URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/03/09/ED115510.DTL

STEP BY STEP, California is returning to the worst kind of energy regulation. The new rules are built on the fly, contain unwarranted secrecy and commit the state to billions in future spending. Calling the shots is Gov. Gray Davis, bent on controlling the energy crisis and the information about it.

The latest example is a series of 40 long-term power contracts, devised by Davis to supply California with a third of its power needs for the next decade.

The pacts offer the potential of stable prices and steady supply.

But there are drawbacks. Davis won't divulge the terms of the deals, which are a welter of short- and long-term contracts. With the state on the hook for $40 billion in these contracts, the public has a clear right to inspect the details. What portion of the power buys are coming soon, when need is greatest? Are there options to renegotiate if natural gas rates drop or new electric generation plants open? It's not clear if these contracts are as good as Davis claims.

Taken alone, the power buys would be troubling enough. Taxpayers are being committed to enormous sums far into the future. The hurry-up atmosphere of crisis provides a cover for Davis' gamble.

But there are other decisions equally disturbing. The state Public Utility Commission will no longer oversee power buys made by the less-experienced Department of Water Resources. The California Independent System Operator, which operates the state's power grid, is now run by a Davis-appointed board that meets behind closed doors.

Also, Sacramento is moving toward taking over the utility-owned system of power lines. The state could pay an additional $5 billion to $10 billion to ailing utilities for the network of steel towers and power cables that ferry electrons to cities and industry. The takeover also puts the state in the energy business, a field that governments elsewhere want to leave.

Nothing about these choices is easy, and the particulars of California's situation make for healthy debate. But Davis has yet to explain where he is headed with his varied initiatives.

He may calm a jittery market with power contracts and a takeover of the transmission grid, but what are the risks three or four years from now? If Davis wants to gaze into a crystal ball, he needs to tell California what he sees.

©2001 San Francisco Chronicle Page A - 22

-- Martin Thompson (mthom1927@aol.com), March 09, 2001