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Wednesday, November 09, 2005

California Electric Utility Re-Regulation Fails

We, like the Governator, opposed the re-regulation of California electricity service via Proposition 80 because utility deregulation can work if structured properly and allowed to work the way it was intended. Proposition 80 failed in the special election but would have:

  • 1) Reversed deregulation and allow electric companies to be regulated by the California Public Utilities Commission.
  • 2) Restricted customers' ability to switch from private utilities to other electric providers.
  • 3) Required all retail electric sellers to rely more on renewable energy.
  • 4) Barred independent power sellers from signing up new customers.
  • 5) Let the utilities, which sold most of their generating facilities to private operators after the 1996 deregulation, build and operate their own power plants.
  • 6) Returned to so-called vertical integration, where utilities generate the power they sell, which would put them in competition with the independent power generators that have spent hundreds of millions of dollars building gas-fired power plants over the last decade to serve the California market.

Supporters believed the measure would prevent a repeat of the energy crisis of 2000-01 by removing retail competition from the state's system for generating and selling electricity. Opponents believed the initiative would create uncertainty in the state's electricity market and stall investment in badly needed power plants.

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