Message Points

Recent legislative proposals designed to have the state play a dominant rol=
e=20
in developing, owning and operating power plants in California (SB6X--Burto=
n)=20
and buy PG&E and Edison's electric transmission assets (SB33X--Burton) are=
=20
taking California in the wrong direction and won't solve the State's=20
electricity crisis.
Two new bills are equally disturbing: AB60X (Hertzerg) would make plant=20
certification contigent upon the developer agreeing to sell the power to th=
e=20
state at "just and reasonable, cost based rates." SB39X (Spier) would make=
=20
power plant owners public utilities
The proposals represent a political solution, not a commercial, financial,=
=20
economic or technical solution. =20
As a political solution, these bills will not increase supply, decrease=20
demand, or get the utilities back on their financial feet.
In fact, it's worse than that. These bills will exacerbate California's=20
problems:
The transaction contemplated in SB33X is extremely complex, requiring=20
approval by state and federal authorities, bondholders, creditors and=20
others. California will be forced to spend an enormous amount of time and=
=20
resources trying to achieve the deal, with no certainty of success,=20
particularly in view of PG&E's public opposition. In the meantime, summer=
=20
approaches, and the gap between supply and demand remains staggering. This=
=20
complex, costly and litigious alternative will not lessen the serious threa=
t=20
of blackouts that California faces this summer.
SB6X would have the state finance, develop, own and/or operate power plants=
=20
in the state.

? Unfortunately, the proposal being offered will not solve the problem;=20
rather, it=01,s a significant step backward that will make matters worse in=
=20
California.

? The reason? Rather than remove California=01,s roadblocks to increased=
=20
generation and transmission investment, this proposal requires California t=
o=20
use taxpayer dollars to get into the business of financing, owning and=20
operating power plants and transmission.

? The best solution =01) recognized across the country and around the world=
=01) is=20
for the state to allow private companies to site new generation immediately=
.

? Once built, California could easily enter into contracts with private pow=
er=20
plant developers and avoid using taxpayers=01, dollars.

? Given government=01,s other failed experiments in other large scale=20
participation into public power, like TVA, BPA, NYPA, it is highly unlikely=
=20
that a California state agency will succeed in doing something that private=
=20
capital is better equipped and willing to do.

? In the short, the proposal is neither in the public interest nor rational=
.

? Issuing debt to build power plants and take over transmission systems cos=
ts=20
consumers money and takes money away from investments in schools and other=
=20
important priorities.

? We would be willing to work with the Legislature to help craft a bill tha=
t=20
gets more supply in California quickly, efficiently, and in an=20
environmentally sound manner, but this draft achieves only one goal: =20
creating more bureaucracy.