The wrong energy path
 	 		 		 		
SFBG News | February 28, 2001 | The wrong energy path
 						 						
GOV. GRAY Davis continues to lead the state down exactly the 
wrong energy path. He's gone on national television to announce 
that California residents will have to cut back energy usage by 
10 percent this summer – and at the same time he's cut a deal 
with Southern California Edison that represents the beginnings of 
another massive sellout.
 						
In other words, he's happy to ask the consumers to make 
sacrifices – but he's not asking any sacrifices of the giant 
private power companies.
 						
Under the Edison deal (which hinges on Pacific Gas and Electric 
going along with a similar plan) the state would pay roughly 
twice the book value for the company's transmission lines. That's 
bad enough – the lines are old, poorly maintained, and not worth 
anywhere near the $2.76 billion Davis is offering to pay for 
them. But the fine print on the deal (which has received far less 
publicity) is even worse: Davis is offering to guarantee whatever 
remains of the utilities' debt by "securing" that debt with 
future rate hikes. And at this point, since the governor's plan 
is so vague, there's no way to tell how high the rates might have 
to go to cover that debt.
 						
The legislature (with the San Francisco delegation taking the 
lead) needs to pronounce the governor's plan dead on arrival and 
start negotiating with the utilities seriously, from a position 
of strength. As we said last week, it's a fine idea to buy the 
transmission lines (at a fair price), but the state should really 
be demanding the valuable hydroelectric dams that the utilities 
own. And until the companies demonstrate that they have sold off 
their own assets and returned money shifted to other corporate 
entities (see "Power Struggle 
[http://www.sfbg.com/News/021401.html] ," 2/14/01), there should 
be no deal to back outstanding debts with higher rates.
 						
Conserving energy is an excellent idea, but if Davis thinks he 
can demand that the average consumer cut back, while the giant 
private utilities get another multibillion-dollar bailout, he's 
signing his own political death warrant.
 						
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