With Governor Arnold Schwarzenegger's rejection of AB 2006, the state failed to pass the only major legislation this session aimed at reworking California's energy policy. Schwarzenegger issued a veto message September 25 that appears to lean toward the California Public Utilities Commission to settle outstanding electricity issues. "This bill creates a redundant and burdensome energy procurement process" that favors investor-owned utilities and could harm ratepayers, the governor said in his statement. Many provisions of AB 2006 are already in effect via AB 57-the bill that allowed utilities to step back into their role of energy procurement following the Department of Water Resources bailout-and various CPUC decisions, he said. The assertion that power availability and reliability "remains the cornerstone" of Schwarzenegger's energy policy was news to Assembly speaker Fabian N??ez (D-Los Angeles), author of AB 2006. "The go vernor has no plan of his own on the table," N??ez charged in a Saturday statement following the veto. As a result, "the energy marketplace is more confused than ever," he said. Senator Debra Bowen (D-Redondo Beach) claimed that the bill veto "sets the state for another energy crisis in the next two years." Bowen, coauthor of AB 2006, advised that the bill sought to keep regulatory decision making public and end the practice of cutting backroom deals at the CPUC. The bill also would have directed the commission to reject utility generation schemes if power plant proposals from other stakeholders proved to be less costly, better for system reliability, and of superior environmental benefit. "These guys want deregulation. They really haven't learned anything from history," said The Utility Reform Network senior lobbyist Lenny Goldberg, referring to the Schwarzenegger administration. He argued that AB 57, alluded to by the governor in his veto, was meant only as a short-term fix to ensure that credit-shaky utilities could cover procurement costs. Goldberg charged that the AB 2006 veto reflects the administration's desire to have regulators drive state energy strategies. "They have their two appointments coming along at the CPUC, and they want two deregulation appointees-they don't want the democratically elected Legislature to weigh in on policy," Goldberg said. N??ez indicated a similar suspicion about "the governor's comfort" in allowing the commission to handle the bulk of decision making. He said he will form a committee in the new legislative session to scrutinize actions taken by the CPUC. Deputy energy secretary Joe Desmond and the governor's office at large did not return calls before press time seeking explanation of the death of AB 2006 and the governor's overall energy policy. Schwarzenegger has, however, expressed general support for direct access, solar power, and the state's triagency Energy Action Plan. Commission president Mike Peevey this week praised the veto, claiming the measure would have limited regulators in helping the state accomplish its energy goals. Ken Smokoska, Sierra Club energy committee cochair, also welcomed the bill's failure, questioning why California should return to a regulated, utility-oriented market after having to rescue those same investor-owned utilities following the energy crisis. Smokoska added that the bill would have hurt efforts by cities and communities to aggregate their load and solicit bids from nonutility power providers. AB 2006 would have positioned utilities to recover through rates all costs of building new generation, which could potentially cut into savings to be reaped by communities in shopping for alternative electricity deals. The Sierra Club is now at work on a ballot initiative that would further the cause of municipal utilities in the state and strengthen community choice, Smokoska said.