When California began the process of deregulating its electricity system, it was a bold step that caught national attention. By watching closely how California proceeds, the entire country will either witness our mistakes or seek to replicate our successes.
Deregulation is a massive task that must be done right. We must ensure access, equal reliability and a level playing field for all customers. Ours must be a successful model.
The California Legislature worked hard to ensure that equality and consumer protections would be in place as we restructure our electric utility industry. After two years of effort, historic legislation AB 1890, authored by our colleagues Sen. Steve Peace, D-San Diego and Sen. Jim Brulte, R-Rancho Cucamonga won unanimous support from the Legislature and was signed into law by Gov. Wilson.
AB 1890 established a road map to responsible competition while steering clear of the mistakes made during the deregulation of the telecommunications industry.
We should learn from the mistakes. Telecommunications deregulation was a case study in what can go wrong. For example, after deregulation many customers received numerous bills for different components of a single phone number.
There was no accountability among providers, and customers did not know who to call to resolve a service or billing problem. To make matters worse, consumers were exposed to a constant barrage of harassment by telemarketers peddling unnecessary new services for imaginary savings.
That confusion may return if we allow out-of-state power marketers to take us down the same failed path. Recently, there has been a movement to push the California Public Utilities Commission (CPUC) to not only deregulate power generation but other elements of our electricity industry, as well.
Out-of-state proponents of this proposal want to “unbundle” electrical distribution services. They want to separate out metering, billing, service repair, customer service functions and more. Such a proposal promises the public the sort of confusion and harassment they experienced when phones were deregulated. Moreover, it could lead to increased costs for certain customers and impede access to others.
Though out-of-state power marketers are pushing their plan under the guise of “customer choice,” in fact, they will only be offering that “choice” to profitable electricity users they choose throughout the state. They want to pick and choose only the most lucrative customers. That may be good for out-of-state power marketers, but it is bad for California’s consumers.
In order to protect California’s consumers, we have introduced legislation that will re-clarify the Legislature’s original intent in supporting deregulation of the electric utility industry. Our legislation establishes objectives for metering and billing in a restructured electric industry. The objectives include:
– Prompt availability of direct access to the deregulated energy market for all customers.
– Protection of the metering and billing process, leaving no one at risk of fraud.
– Equal access to to all customers without unfair cost shifting.
We are confident that through the passage of AB 1890, the California Legislature deregulated the California electric utility industry and fixed what was not working, guaranteeing significantly lower electricity prices for California’s consumers.
If in the future it becomes evident that it is in the best interest of all Californians to introduce competition into a new segment of the industry, we expect that the same goals and principles will be followed.
All Californians must have access to any benefits created, and all customer classes must be heard and represented in any new plan introduced in this state.
It is our job to ensure that, and we will. Let’s be sure the electricity restructuring model California sets for the rest of the nation is a model of fairness and success; one that offers benefits to big users, average users and small users, without putting the interests of any one class of customer over another.
State Sen. Richard Polanco, D-Los Angeles, represents the 22nd Senate District.