Is The Governor Of California Doing Enough?

Michael Giberson

In my rather simplified understanding of the world, the reason for regulation of electric utilities is to protect consumers from monopoly power. So how does this reason explode into such an intertwining of government and business, that the economic fate of over 35 million people depends upon the decisions of a single man? How does the story of natural monopoly and cost-of-service ratemaking lead us to the present world of the California and its governor, Arnold Schwarzenegger?

Actually, I don’t think the economic fate of the 35 million Californians does depend upon the Governor’s energy policies, but that assumption seems to underlie this story in the (Los Angeles) Daily News.

SACRAMENTO — While focusing the public’s attention on his efforts to rebuild the California economy, Gov. Arnold Schwarzenegger has quietly started overhauling the state’s dysfunctional power system, with the goal of completing the task in time for a 2006 re-election bid.

Critics say another electricity crisis — like the one in 2001 that soured voters on former Gov. Gray Davis, led to his low job-approval ratings and made his recall possible — is imminent, and that Schwarzenegger is not doing enough to prevent it.

… Using his authority to appoint members to state regulatory boards like the Public Utilities Commission, Schwarzenegger can call most of the shots.

His intricate plan involves the complex tasks of writing new regulations, accelerating the implementation of previously-passed legislation and expanding the state’s power-industry infrastructure to meet two key goals — making sure that supply meets demand and that electricity can be delivered where it is needed at any time.

But the governor’s plan won’t solve the state’s problems, said Assembly Speaker Fabian Nuez, D-Los Angeles.

Nuez said Schwarzenegger would leave too many decisions to the PUC…

Arthur O’Donnell ran a commentary piece on EnergyPulse, the subtitle of which got the point right: Energy Policies Should Not Be Governor-centric.