Energy Reregulation Initiative Defeated

By CMTA Staff

Capitol Update, Nov. 10, 2005 Share this on FacebookTweet thisEmail this to a friend

Prop. 80 was the most recent attempt to move California energy policy back toward a traditional, cost-of-service based system for electric supply. It would have eliminated future direct access and regulated current direct access suppliers more like utilities. If passed, it would have created a more hostile business climate for suppliers, independent power producers and large energy consumers, thus dampening new independent investment, reducing the amount of direct access over time and leaving the utilities with more control over energy development and supply in the state.

As we know, utilities (and their regulators) are mostly concerned with rates and service to small consumers. In addition, utilities earn profits for making investments in new plants and facilities, not innovative business models to improve service or add value to customers. Competition acts as a discipline to keep utility costs down and improve service to all customers (small and large).

Prop. 80 was similar to legislation introduced in nearly every year since the energy crisis of 2001. Proponents of the legislation and Prop. 80 blame direct access for the market manipulations and blackouts. The resounding defeat of Prop. 80 tells policymakers that the public doesn't buy that story and that future attempts, if any, to turn back the clock and eliminate customer choice will likely fail. The money and time devoted to defeating Prop. 80 was a very smart investment in future California energy markets. Every large industrial customer, whether they are on direct access or not, will reap the benefits.

Congratulations and thanks to the customers, suppliers and energy companies who joined in opposition to Proposition 80.
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