Senate leader says re-regulation, public power should be considered
By STEVE LAWRENCE
Associated Press Writer 
SACRAMENTO (AP) -- Lawmakers should consider re-regulating electric utilities 
or building a publicly operated power system as ways to hold down 
skyrocketing electricity rates, the Senate's leader said Thursday. 
"I think everything has to be on the table," Senate President Pro Tem John 
Burton told reporters. 
How to avoid huge spikes in electricity prices is likely to be the hottest 
issue facing the Legislature as it prepares for its 2001 session. 
Electricity bills tripled after a rate deregulation plan approved by the 
Legislature in 1996 kicked in this year for customers of San Diego Gas and 
Electric Co. 
California's two other huge investor-owned utilities, Southern California 
Edison and Pacific Gas & Electric Co., say they have suffered $5 billion to 
$6 billion in losses because of increases in wholesale electricity prices 
while they've waited for deregulation to fully affect them. 
They may ask the Legislature for permission to raise rates to make up for 
those losses if they can't get authorization from the Public Utilities 
Commission or the courts. 
Burton questioned whether the utilities have lost that much. 
"I know they've got problems, but it's like the baseball teams saying they 
lose money," the San Francisco Democrat said. "Well, they lose money cause 
they depreciate Alex Rodriguez's $20 million contact. They ain't losing money 
they are making money." 
PG&E spokesman Ron Low said Burton raised some "legitimate questions" but he 
said his company's losses were real. 
"The fact is we cannot continue to keep borrowing money to pay the high 
wholesale prices," Low said. "We have filed reports at the commission each 
month that detail the seriousness of the situation." 
Burton said the PUC needs to do an audit of utility company books. 
"If they are running broke who's responsibility is it to bail them out: the 
state, ratepayers, share holders?" Burton asked. "Those are not easy 
questions to answer." 
He said consumer advocates believe utility stock holders should eat the 
losses and utilities believe their customers should pay to cover them. "Maybe 
it's something in between," Burton said. 
Asked if taxpayers should chip in, he said one possible way to do that and 
try to hold down prices would be to develop more power generation systems 
that would be fully or partially owned by the public. 
"Public power has been around for years," he said. "It has worked for years." 
But Jan Smutny-Jones, executive director of the Independent Energy Producers, 
an association of privately owned power plant companies, said there's no need 
to build publicly owned facilities. 
"Energy is coming to California...," he said, adding that there are five 
power plants under construction in the state now. "Getting the market back on 
track will not require massive amounts of legislation." 
Another option is to re-regulate utility rates, Burton said. "I never found 
that was a burden on me before and I don't think it was a burden on 
ratepayers," he said. 
If lawmakers fail to solve the problem, consumer advocates will put a public 
power system initiative on the ballot that will pass overwhelmingly, Burton 
predicted. 
Spokesmen for power generators and utilities did not immediately respond to a 
request from The Associated Press for comment.


Copyright , The Sacramento Bee