Chronologically Ordered LOCAL POWER News Index Local Power drafted the H Bond Authority with San Francisco Supervisor Tom Ammiano in 2001 Dec 18 Declared "Double Dip Day" at California Public Utilities Commission :

Commission May Approve $9 Billion PG&E Bankruptcy Bailout & Give Monopolies Blank Check to Pre-Buy California's Power For 5 Years

December 18 may prove a day of infamy in the continuing scandal called the California Energy Crisis, as Davis-appointed regulators, led by an ex-monopoly CEO, appear poised to rubber stamp yet another major bailout of an electric monopoly - on the same day that it quietly authorizes all three of the state's monopolies to go ahead and negotiate 5 year power contracts for the whole state on their ratepayers' backs for the first time since being paid billions to give up their monopolies in 1998 - 2001. The Double Dip would put Californians on the hook for over $ tens of billions of dollars going into the future as PG&E ratepayers are retroactively charged $9 Billion going back to pay for its bankruptcy, creating yet more downstream rate increases, subverting environmental and consumer regulation, and blocking California cities now seeking to leave their utilities for competitive electric service providers and to aggressively develop a renewable energy and efficiency technologies.

As a bailout candidate, Pacific Gas and Electric is less than credible, having (as the CA Attorney General has made clear) liquidated itself, collected billions of bailout funds already from its ratepayers and funneled $7 Billion or so of it to its unregulated holding company (PGE Corp), which then transferred the funds to an unregulated affiliate company (National Energy Group, also now bankrupt) based in Bethesda, Maryland just before PG&E (the regulated company we know and love) declared its "shell game" bankruptcy

Fact Sheet on San Francisco 50 MW Solar Power Facility Despite the public outcry about PG&E's "ringfencing" scandal and investigation, regulators appear comfortable going along with a plan to pay the bankrupt corporation $9 Billion and charge it (yes) to ratepayers, who will know nothing of the matter until it is too late, unless public outcry prevents adopt of the 5 Year Blank Check in coming weeks. Southern California Edison has already been bailed out at ratepayer expense by the CPUC.

To top things off, the Commission's eagerness to fast track "utility procurement" on the same day, authorizing electric monopolies to pre-purchase 5 years of power contracts throughout the state (worth $ Tens of Billions), remains unexplained, except by renewable energy, environmental justice and climate protection advocates who see the Blank Check as an underhanded way of forcing California's consumers to unknowingly leverage the financing for new offshore and onshore liquefied natural gas (LNG) terminals that the Bush Administration wants to build: and for gas-fired power plants that Davis hysterically permitted to be built in California over the past three years with no domestic fuel source to power them.

California is the 5th largest economy in the world, and 40% of the natural gas we burn here is for power plants, so the scale of upstream economic and environmental impacts from the CPUC's Blank Check is massive. With no private banker offering to underwrite the onshore and offshore LNG terminals, pipeline infrastructure, and global gas drilling, the idea of putting California ratepayers on the hook for 5 year monopoly contracts is an underhanded and convenient way of using ratepayer indebtedness to leverage private financing of the liquefied natural gas (LNG) terminals, pipelines and drilling, providing security for global energy companies to develop Middle East, Russian and Australian gas fields, as well as the new LNG terminals, to deliver the foreign fuel to California's power plants. Once California ratepayer purchase of the five years of power is guaranteed by the Commission's vote on December 18, the sale of the LNG fuel is de facto guaranteed, thus providing security for the private financing of a fuel delivery infrastructure: the LNG terminals.

But the deal is as much Democratic as it is Republican. The imported gas will fuel the 6200 MW of new gas-powered power plants (enough to power 1/6 of the state or more) built under former governor Davis' signature (and CPIC Commissioner Susan Kennedy's permit streamlining program as his staffer) in the past 3 years: thus the motive for the CPIC to give a 5 year blank cheque to the monopolies to buy power from the new plants, this securing their successful debt repayment. Both advocates of the 5 Year Blank Check admit that no party on record in the proceeding ever asked for more than a one year authorization. So why the rush?

Ex-Southern California Edison Michael Peevey, whom ex-Governor Davis appointed as President of the CPIC last year, is the principal sponsor of the Double Dip. He publicly claims to support renewable energy, yet the impacts of his actions will be to subvert the new Renewables Portfolio Standard law and block San Francisco and San Diego's plans to exit utility procurement and aggressively develop renewables/efficiency.

Commissioner Loretta Lynch has put out an alternate decision calling on a one-year authorization rather than a five year authorization to buy power, and a coalition of local and national consumer and environmental groups ("RAGE") including Local Power (Oakland), the Border Power Plant Working Group (San Diego), Marin Clean Alternative Energy Now (Marin), Greenpeace USA (Washington), and Public Citizen (Washington) is calling for approval of the "Commissioner Lynch Alternate" so that cities like San Francisco and San Diego are not blocked from switching to green power, and so the state's renewable energy law is not subverted by the state's electric monopolies.

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Founder and Director of Local Power, Paul Fenn is author of California's Community Choice law, AB117 or Chapter 838 of 2002, which allows municipalities to switch their communities to alternative energy providers - as well as author of San Francisco's 2001 voter-approved "Solar Bond" or "H Bond" authority, as well as a plan to use H Bonds and Community Choice aggregation to take 1/4 of San Francisco's electricity load off-grid by 2012 with solar power, wind power, conservation and energy efficiency technologies. Mr. Fenn is also author of new state "Solar Networking" legislation, Senate 697, sponsored by Pomona Senator Nell Soto. Local Power is based in Oakland, California and may be found at

Copyright 2003 by Local Power.