Oppose Electric Deregulation

 The California Legislature is considering legislation to bring back electric deregulation. The first time around, electric deregulation was a disaster that brought blackouts and cost Californians $70 billion. AB 515 by Assembly Member Keith Richman is an attempt to revive this discredited idea. Citizens concerned about preserving reliable electricity should ask their Assembly Member to tell Keith Richman to withdraw his bill.

Sample Letter for Campaign

Subject: Stop Electric Deregulation

Dear [ Decision Maker ] ,

I am requesting you to ask Keith Richman to withdraw his bill on electric deregulation, AB 515. As a working member of IBEW Local 1245, I make my living helping deliver reliable electricity and gas to California citizens and businesses. I believe it is a serious mistake to try to push California into another dangerous experiment with electric deregulation. In the years 2000 and 2001 alone, California spent $40 billion more for electricity than in the prior two years. AB 515 will make it much more difficult to finance new generation in California and further postpone a real solution to our state's energy problems. I urge you to contact Assembly Member Richman and ask him to withdraw AB 515.

Sincerely,

Campaign Launched:
April 06, 2005


Background Information

 AB 515 is yet another attempt to plunge California into the failed experiment of electric utility deregulation. Deregulation resulted in the most expensive public policy disaster in the history of California. In the years 2000 and 2001 alone, California spent $40 billion more for electricity than in the prior two years. The deregulation fiasco was more expensive than the current Calfiornia budget deficit.

The current hangover of deregulation continues to plague California. The grandfathered direct access customers are the cause of the current uncertainty about future electric supplies. There would be no concern for reliability if investor-owned utilities served all customers and non-utility electric service providers were simply banned. It is insuperably complex to ensure reliability for all customers connected to the grid when about 15% of the load has no long-term obligation and electric service providers are not being subjected to the same obligations as investor-owned utilities.

AB 515 claims it will encourage construction of additional electric generation capacity. In fact, it would have the opposite effect. By making the utilities uncertain about the size of their future customer base, they will be unable to make the kind of long-term commitments needed to finance new generation, either directly or under contract.

Direct access customers can never be the basis for financing new power plants. There is no customer, or group of customers, with enough certainty of long-term demand to support financing for a 500 MW power plant. The numbers simply don't work. Moreover, any group of customers that is smaller than the group of all  utility customers will, by definition, be a less secure funding source than the group of all utility customers. AB 515 would guarantee that major new generation in California would be unfinanceable.

AB 515, and the concept of electric deregulation, should be emphatically rejected. it is embarrassing that elected officials in California continue to puruse deregulation in the face of all of the evidence showing that is has not, and cannot, work.