?Deregulation Lite? Bill Even Lighter

The most controversial energy bill of the season, which would create a partially deregulated market, was dramatically scaled back this week. The Senate Energy and Utilities Committee passed AB 2006 by Assembly Speaker Fabian N??ez (D-Los Angeles) on a 5-2 vote after amending it to keep cost-recovery rules in place, limit direct access, protect the renewables portfolio standard, and rein in the California Public Utilities Commission. The bill, sponsored by Southern California Edison, was opposed by Republicans and received lukewarm support at best from Democrats. ?This is the start of the process, not the end,? said a committee consultant. ?This bill is not going to get a majority vote or unanimous vote, unlike the other bill restructuring the energy market,? said committee chair Senator Debra Bowen (D-Redondo Beach). Although Bowen insisted the bill would return to her committee, the Rules Committee chair could decide otherwise. The speaker agreed to work with Bowen on language to reverse the tide of closed-door procurement deal-making at the commission and prohibit more large energy users from working out their own energy agreements?and saddling the remaining investor-owned utilities? ratepayers with higher energy crisis?related costs. A provision may also be added requiring that when investor-owned utilities line up new generation?be it through a utility-owned project or via a procurement contract?priority be given to the cleanest and most efficient power. Amendments to AB 2006 also include clarifying the definition and scope of an investor-owned utility?s integrated resource plan. According to Edison president Bob Foster, an integrated plan created under the bill would be far broader than the AB 57 process. It could factor in transmission, renewables, and energy efficiency over the long term. Before the June 29 hearing, attended by an overflowing crowd, business and industry groups held a press conference to slam AB 2006. ?It is bad energy policy, and even worse, it is terrible for ratepayers,? said Assemblymember Keith Richman (R-Northridge). Richman authored a bill that attempted to revive direct access in a far less constrained manner, but it died last week. The coalition, which refers to the bill as a ?virtual blank check,? includes Calpine, the California Manufacturers & Technology Association, the Silicon Valley Manufacturing Group, and the California Farm Bureau. They also ran full-page ads in the Los Angeles Times and the Sacramento Bee highlighting their opposition and praising Governor Arnold Schwarzenegger?s push to get the CPUC to nail down rules for utility procurement in accordance with AB 57 and promote a core-noncore market ( Circuit , April 30, 2004). Ratepayer advocates and Pacific Gas & Electric also oppose the bill, as do independent power producers and several businesses ( Circuit , April 23, 2004). Numerous cities, small businesses, local chambers of commerce, and utility employees? unions support the measure. N??ez?s bill will likely be the vehicle for the governor to advance his vision of direct access, said Richman spokesperson Dan Pellissier. It was sent on to the Rules Committee and is expected to return to the Energy Committee in August.

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?Deregulation Lite? Bill Even Lighter

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