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		 Subject: Utilities, Electric: Deregulation: California Utility Woes Attract 
National Attention


 
California Utility Woes Attract National Attention 
UTILITY BUSINESS STAFF 
? 
09/30/2000 
Utility Business 
Copyright 2000 by Intertec Publishing Corporation, a PRIMEDIA Company. All 
rights reserved. 

California is fast becoming the symbol for problems that can develop when the 
electric utility industry is deregulated.

Since becoming the first state to deregulate its retail market, California 
has had several power shortages this summer in which consumers were hit with 
skyrocketing electric rates. In San Diego, rates doubled and even quadrupled 
in the last two months. There's so much public backlash that members of 
Congress from California will hold hearings this month to examine the 
problem. 

Trade groups that represent the utility companies and public power 
organizations say deregulation is not at fault, but rather the specific way 
in which California opened its markets without accounting for supply and 
demand. They say there's not enough power generation to meet demand.

The state hasn't built any power plants for at least 10 years, in large part 
because of the resistance utilities face from environmentalists concerned 
about siting locations.

The National Energy Marketers Association, which represents wholesale and 
retail energy marketers, warned that suggestions about placing price caps for 
wholesale power markets would backfire. Instead, the group says Congress and 
states should eliminate regulations that harm competition in wholesale and 
retail power markets.

The group says the problem has been exacerbated by policies that increase the 
risk to build new power plants and a lack of uniformity for operating 
procedures and other requirements.

California's utility problems have also become an issue in the presidential 
campaign. Green Party candidate Ralph Nader has called on the state 
legislature and Gov. Gray Davis to pass a rate rollback law that doesn't 
include a balloon payment to compensate utilities for the money they would 
lose during a rate decrease.

"Electricity deregulation really brings about a collision of interests," 
Nader said. "It pits the interests of consumers - who are often unorganized 
and lack power against the interests of supplierswho are usually very 
organized, powerful and have a lot of money behind them. It shouldn't be that 
way."

Energy Issues Divide Bush, Gore

For the first time in 20 years, energy issues could emerge as a major issue 
in the presidential campaign. Both major candidates are trying to use the 
issue to their advantage.

The Democrats argue that Texas Gov. George W. Bush and running mate Dick 
Cheney - who are well-known figures in the oil industry - are in the back 
pockets of oil companies that have lobbied to drill on more public lands.

Republicans have criticized Vice President Gore for failing to develop a plan 
to address the country's long-term energy needs. The Republicans say that 
Gore and his running mate Joseph Lieberman are more concerned about winning 
the support of environmentalists than they are in developing an energy policy.

Gore and Lieberman support the development of alternative energy sources and 
tax credits for energy-efficient vehicles. They also have promised to block 
energy companies from drilling for oil or natural gas in the Arctic National 
Wildlife Refuge in Alaska or along the coasts of California and Florida.

Bush and Cheney favor increased domestic oil production to reduce U.S. 
dependence on foreign oil. Bush says he backs the moratorium on new drilling 
in Florida and California, but supports oil exploration in the Arctic refuge.

Both Gore and Bush support new federal regulations that would require lower 
sulfur levels in gasoline and cleaner engines in cars. 

Folder Name: Utilities, Electric: Deregulation 
Relevance Score on Scale of 100: 99

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