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Enron Mail |
The author is a very well-know Republican, Dan Schnur.
Needed - Star to Guide Us As Gov. Gray Davis gets the state deeper into the energy business, PUC chair is no bright light Dan Schnur Wednesday, February 28, 2001 ,2001 San Francisco Chronicle URL: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/02/28/E D102858.DTL IN A DEAL that serves mainly to malign the good name of white elephants, Gray Davis last week proposed to solve California's energy crisis by spending several billion dollars of taxpayer money to purchase more than 30,000 miles of transmission lines from the state's utilities. In addition to offering to pay the privately owned utilities more than twice the book value, Davis will put the state on the hook for more than a billion dollars in desperately needed repairs to the transmission system. None of which will do anything to keep the lights on this summer when temperatures start to rise and the state's lack of power capacity leads to regular rolling blackouts. Davis' proposal also raises the question of which state employees will take on this highly complex and technical challenge. Since assuming control of the purchase of electricity from the utilities last month, state bureaucrats have been folded, spindled and mutilated in their efforts to negotiate prices with seasoned private sector professionals. California is currently paying more than $50 million per day for electricity, running up a bill that will exceed $2 billion by the end of February. Not reassuring is the prospect of the same negotiators being entrusted with the operation and upkeep of the power lines. Facing re-election next year, Davis knows that any rate increase would be political hemlock. So the governor's other primary objective would seem to be identifying other words to describe the rate increases Californians will soon pay. Doing great damage to Capitol thesauruses, Davis has announced something he calls a "dedicated rate component." The practical effect will be the expiration of the temporary 10 percent rate reduction and a permanent 9 percent rate increase. Translated into English from the original Davis-ese, the solution means most Californians will soon pay almost 20 percent more for their electricity. The billions of dollars in revenue bonds that Davis will issue have already been double-promised, both to pay back state coffers for the electricity currently being purchased and to subsidize the future cost of keeping the utilities solvent. It's a good bet that the 20 percent increase is just the beginning. Unfortunately, Davis' twin goals of spending billions of dollars to bail out the utilities and avoiding rate hikes are mutually and utterly contradictory. The reason that the utilities need saving in the first place is because the state has forbidden them from charging market prices for electricity. And the only way that the state can continue to offer artificially low rates is to either raise taxes, eliminate other spending programs, or pretend to subsidize the cost with the same bonds that have already been double-committed. Knowing that there's not nearly enough money available to allow Davis to keep all of his promises, the utilities themselves have done an admirable job of restraining their enthusiasm for the governor's proposal. Southern California Edison's leaders, recognizing a gun to their head when they saw it, signed onto the deal. PG&E seems ready to fight on, but they're not bargaining from a position of great strength. Public opinion is already solidly against the utilities, and it's not like they can start supplying power to Arizona if they can't come to terms with Davis. If the state is going to involve itself so deeply in the energy business, Davis needs to find some qualified assistance. Unfortunately, he has instead entrusted California's electricity future to a Democratic Party campaign worker with virtually no experience in energy or power-related issues. Just over a year ago, Davis appointed Loretta Lynch, a San Francisco trial lawyer and longtime Democratic campaign aide, to fill a vacancy on the state Public Utilities Commission. Less than 60 days after Lynch joined the commission, Davis promoted her to the chairmanship. Lynch prepared for her responsibilities through several years in state Democratic politics, including stints as assistant campaign manager for state Attorney General John Van de Kamp's unsuccessful campaign for governor in 1990, as deputy campaign manager for Dianne Feinstein's successful U.S. Senate campaign in 1992 and as campaign manager for Delaine Eastin's 1994 race for state superintendent of public instruction. For good measure, Lynch worked with aides to then-Gov. Bill Clinton in 1992 to squelch media investigations into the earliest reports of the emerging Whitewater scandal. This is the resume of someone whose only previous experience with electricity had been turning on and off the lights at state Democratic Party headquarters. Lynch's lack of experience and knowledge about energy has undoubtedly helped turn a significant problem into a full-fledged disaster. California's utilities spent months begging for permission and guidelines to sign long-term agreements with suppliers that would have greatly reduced electricity prices. Both the utilities and their suppliers say that Lynch and her fellow commissioners turned a deaf ear. As late as December, Lynch was still telling the news media that no emergency existed and that California had all the electricity it needed. All things considered, Davis might as well have named James Carville as commander of the California National Guard. More than 20 years ago, then-California Gov. Jerry Brown appointed another young campaign worker to a critically important position in his administration. Rose Bird, whose only prior legal experience was as a deputy public defender in Santa Clara County, was named as Chief Justice of the state's Supreme Court. By the time California voters made her the first Supreme Court justice in the state's history to be recalled from the bench, she had managed to overturn more than 60 death sentences. Until her death in 1999, Bird helped define an entire generation of California politics and public safety debate. Ironically, one of the keys to Davis' election as governor was his ability to distance himself from the legacy of both Brown and Bird. But Davis may have repeated his former boss's worst mistake when he named an equally inexperienced campaign staffer to lead the state agency that is tasked with the responsibility for solving California's electricity crisis. There is still time for Davis to avoid punchline status. But he must immediately replace Lynch with someone who possesses the experience and expertise to help lead California through this critical time. Davis, who is the most politically calibrated of governors, may already be heading in this direction. Polls show that Californians disapprove of the job the state PUC is doing by overwhelming margins. By the time voters learn that it's the governor's job to oversee the PUC, Davis may decide that keeping a political crony in such an important position is a luxury he can't afford. Because the last thing he wants is to head into a re-election campaign being forced to defend the Rose Bird of electricity. Dan Schnur, longtime veteran of California politics, was communications director for Republican presidential candidate John McCain and for former Gov. Pete Wilson. ,2001 San Francisco Chronicle Page A21
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