Proposition 80
Utility regulation, specifically electricity. Who doesn't think we need that? Does the name Enron ring a bell?
Currently Californians receive about 70% of their electricity from investor owned utilities (IOUs), like Pacific Gas and Electric, which are regulated by the California Public Utilities Commission (PUC). But the other 30% of our electricity comes from other sources: namely, local publicly owned utility companies (like the Los Angeles Dept. of Water and Power and the Sacramento Municipal Utility District). They provide about 14% of the electricity used by Californians. The rest is provided by commercial electric service providers (ESPs) with a very small amount (4%) coming from the Dept. of Water Resources, and that is mainly to supply the State Water Project.
IOUs are currently regulated by the PUC. Publicly owned utilities are not. ESPs are only required to register with the PUC; they are not regulated with regard to rates and services. Proposition 80 would change that. Proposition 80 would also change some environmental legislation.
Currently, there is a requirement, known as the Renewables Portfolio Standard, which states that by the year 2017 one-fifth of the total electricity supply must come from renewable sources, such as wind or solar power. This is regardless of whether the electricity comes through an IOU, an ESP or a community choice aggregator (the group that is authorized to negotiate for electricity from providers other than the electric utility currently serving a particular location).
The current law also allows most consumers to pay a standard rate, regardless of the time of day or the season, despite the fact that IOUs pay varying rates that are time and date dependent.
Proposition 80 will change the current law in the following ways:
- The deadline for reaching the requirements of the Renewables Portfolio Standard will be moved up, from 2017 to 2010;
- ESPs will be under the control of the PUC with regards to energy procurement, contracting, resource management, efficiency standards and enforcement of requirements;
- Current IOU customers will be prevented from switching to ESPs (but Prop. 80 will allow current ESP customers to "grandfather" their direct access service).
- Will allow current direct access customers to switch to IOU service, but only under specified conditions. (However, this measure does NOT restrict either current or future service changes initiated by community choice aggregation).
- Puts into law a long-term procurement plan that would include a number of factors the PUC has already incorporated into its planning, but that have not yet become legal requirements;
- Puts into law current PUC practices regarding resource adequacy requirements;
- Deletes an existing provision that allows electricity providers to cease efforts towards increasing their renewable electricity sources once they reach the 20% mark.
Proponents of Prop. 80 say that we can't wait any longer to return to regulation. They point to the Enron debacle and warn that unless we regulate electricity providers, there is no way to prevent a similar situation from developing again. Opponents say that nobody wants another Enron, but we need to stop living in the past and start thinking about the future. Yet they have presented no ideas for avoiding a future Enron-like situation. What's more, their arguments for voting against Prop. 80 are downright nonsensical.
For example, opponents of this proposition say it will "make it extremely difficult to improve the State's standards for generating electricity for renewable sources, which could seriously undermine adoption of wind, solar, and geothermal technologies. Growth of California's green businesses could be placed at risk." Huh?
This proposition actually increases the speed with which renewable sources must reach the standards previously set, and removes the prior cap on potential increases to renewable energy requirements. How can either of those changes to current law be interpreted in any way that supports the belief that they will harm green business growth or make it harder to improve the State's standards with regard to renewable energy? There is no evidence to back up this assertion and the logic is flawed as well.
In an effort to promote the ideology of free enterprise, opponents of Prop. 80 seem to forget that electricity is not a luxury some of us can simply do without. People die when it's too hot and they can't turn on an air conditioner. Food rots when refrigerators are turned off for prolonged periods of time. Free market economics is all well and good for small ticket items and non-essentials, but we saw what it does to utilities. Say it with me one more time: ENRON.
Prop. 80 isn't perfect. It does remove some customer freedoms with regard to changing utility providers. But how can the PUC ensure that utility companies have the resources to meet all their customer's needs if they do not build some stability into the customer base? This is not about taking away freedom, it's about logistics and the realistic need to control customer flow.
Personally, I am very happy to comply with stricter direct access laws if it means having the freedom to turn on the lights when I need to without being price-gouged or having to fear that at a most inopportune moment, I might be subjected to a rolling black-out.
--Laurie
Currently Californians receive about 70% of their electricity from investor owned utilities (IOUs), like Pacific Gas and Electric, which are regulated by the California Public Utilities Commission (PUC). But the other 30% of our electricity comes from other sources: namely, local publicly owned utility companies (like the Los Angeles Dept. of Water and Power and the Sacramento Municipal Utility District). They provide about 14% of the electricity used by Californians. The rest is provided by commercial electric service providers (ESPs) with a very small amount (4%) coming from the Dept. of Water Resources, and that is mainly to supply the State Water Project.
IOUs are currently regulated by the PUC. Publicly owned utilities are not. ESPs are only required to register with the PUC; they are not regulated with regard to rates and services. Proposition 80 would change that. Proposition 80 would also change some environmental legislation.
Currently, there is a requirement, known as the Renewables Portfolio Standard, which states that by the year 2017 one-fifth of the total electricity supply must come from renewable sources, such as wind or solar power. This is regardless of whether the electricity comes through an IOU, an ESP or a community choice aggregator (the group that is authorized to negotiate for electricity from providers other than the electric utility currently serving a particular location).
The current law also allows most consumers to pay a standard rate, regardless of the time of day or the season, despite the fact that IOUs pay varying rates that are time and date dependent.
Proposition 80 will change the current law in the following ways:
- The deadline for reaching the requirements of the Renewables Portfolio Standard will be moved up, from 2017 to 2010;
- ESPs will be under the control of the PUC with regards to energy procurement, contracting, resource management, efficiency standards and enforcement of requirements;
- Current IOU customers will be prevented from switching to ESPs (but Prop. 80 will allow current ESP customers to "grandfather" their direct access service).
- Will allow current direct access customers to switch to IOU service, but only under specified conditions. (However, this measure does NOT restrict either current or future service changes initiated by community choice aggregation).
- Puts into law a long-term procurement plan that would include a number of factors the PUC has already incorporated into its planning, but that have not yet become legal requirements;
- Puts into law current PUC practices regarding resource adequacy requirements;
- Deletes an existing provision that allows electricity providers to cease efforts towards increasing their renewable electricity sources once they reach the 20% mark.
Proponents of Prop. 80 say that we can't wait any longer to return to regulation. They point to the Enron debacle and warn that unless we regulate electricity providers, there is no way to prevent a similar situation from developing again. Opponents say that nobody wants another Enron, but we need to stop living in the past and start thinking about the future. Yet they have presented no ideas for avoiding a future Enron-like situation. What's more, their arguments for voting against Prop. 80 are downright nonsensical.
For example, opponents of this proposition say it will "make it extremely difficult to improve the State's standards for generating electricity for renewable sources, which could seriously undermine adoption of wind, solar, and geothermal technologies. Growth of California's green businesses could be placed at risk." Huh?
This proposition actually increases the speed with which renewable sources must reach the standards previously set, and removes the prior cap on potential increases to renewable energy requirements. How can either of those changes to current law be interpreted in any way that supports the belief that they will harm green business growth or make it harder to improve the State's standards with regard to renewable energy? There is no evidence to back up this assertion and the logic is flawed as well.
In an effort to promote the ideology of free enterprise, opponents of Prop. 80 seem to forget that electricity is not a luxury some of us can simply do without. People die when it's too hot and they can't turn on an air conditioner. Food rots when refrigerators are turned off for prolonged periods of time. Free market economics is all well and good for small ticket items and non-essentials, but we saw what it does to utilities. Say it with me one more time: ENRON.
Prop. 80 isn't perfect. It does remove some customer freedoms with regard to changing utility providers. But how can the PUC ensure that utility companies have the resources to meet all their customer's needs if they do not build some stability into the customer base? This is not about taking away freedom, it's about logistics and the realistic need to control customer flow.
Personally, I am very happy to comply with stricter direct access laws if it means having the freedom to turn on the lights when I need to without being price-gouged or having to fear that at a most inopportune moment, I might be subjected to a rolling black-out.
--Laurie
posted by LA Fosner at 4:32 PM
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