Governor reintroduces energy re-organization plan

By CMTA Staff

Capitol Update, Sept. 2, 2005 Share this on FacebookTweet thisEmail this to a friend

On August 31, the Schwarzenegger Administration reintroduced legislation to reorganize the state’s energy agencies.  AB 1165 (Russ Bogh, R-Beaumont) consolidates various energy functions and creates a cabinet-level Energy Department.

The department would combine the Energy Commission, the Power Authority, and some energy-related functions of the California Public Utilities Commission (CPUC).  The CPUC would still retain authority over electricity rates.  The bill would transfer electric transmission and natural gas permitting from the CPUC to the Energy Commission, which is presently responsible for power plant siting.  

AB 1165 is a slightly modified version of the energy reorganization plan submitted by the governor in June (Governor’s Reorganization Plan (GRP 3)), which was rejected by the Senate last month.  The Senate vote was largely expected and was along partisan lines.  Momentum for the plan fizzled in June when the state’s Little Hoover Commission recommended that the Legislature reject the GRP based on the legal opinions by both the Legislative Counsel and Attorney General.  They found that the GRP’s proposed transfer of certain function violated the California Constitution and exceeded the authority of reorganization statutes.  Both opined that the Constitution grants the CPUC regulatory authority over public utilities which cannot be transferred to another agency via the statutory reorganization process.

The new bill addresses many of the concerns expressed by the Little Hoover Commission, Legislative Counsel and Attorney General.  In response to Little Hoover concerns about investing too much power in the office of the Secretary of Energy and encroaching on the independence of the Energy Commission (which would be under the department), AB 1165 provides that the Secretary of Energy will serve as a member of the Energy Commission but not as Chair.  In response to concerns expressed by the Legislative Counsel and Attorney General, the bill clarifies that: (1) all ratemaking functions remain with the CPUC, including authority relating to the cost of electric transmission projects and (2) the California Energy Commission has authority to enact its own regulations for its functions rather than the new Energy Department.

The Administration’s aim in introducing AB 1165 is to improve accountability and give the governor’s office more control over state energy policies.  Having an Energy Department headed by a cabinet-level Secretary will go a long way toward accomplishing those objectives.  It will reduce fragmentation and duplication, and perhaps most important, increase accountability.
When energy policy is set by multiple agencies, things have a way of falling through the cracks – something that this state cannot afford, both in terms of energy supply and rates.

President Harry Truman had a sign on his desk that read: "The Buck Stops Here."  It’s time that the buck stop somewhere when it comes to California’s energy policies.  AB 1165 is an important step in that direction.  
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