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Electricity: How officials keep public in the dark By Kent Pollock

(Published Jan. 28, 2001)

Government and energy industry officials scrambling for a solution to California's energy debacle have been struck by the same malady that permeates the crisis itself: Secrecy.

Secret bidding. Secret deals. Secret restructuring. Secret negotiating. Secret information. Secret teleconferences. Secret federal approvals. Secret "gaming" and manipulation, the governor suspects.

Only the insiders know for sure.

And now the public has been shut out of efforts underway to fix what has been referred to as one of the most costly public policy mistakes ever made. Negotiations among government, industry and elected officials have been conducted mostly behind closed doors or within private teleconference meetings.

How many times must secrecy take its toll before government values public scrutiny?

The prevailing secrecy, coupled with the fast pace of the solution process, creates an atmosphere where mischief can easily slip past unnoticed.

There aren't many issues more important to the public than having reliable and affordable electric service, yet there's been minimal public outrage that energy deregulation and efforts to cure its ill effects on California remain mostly shielded from public view.

From the closed-door debate over how to feasibly solve the problem emerge self-serving nuggets of informtion -- but precious little substance to build confidence that the same government institutions that got us into this mess are formulating a solution beneficial to the ratepayers and taxpayers who will ultimately pay for the deregulation boondoggle.

Earlier this month, PG&E's parent company quietly sought and obtained permission from federal regulators to restructure itself in a way that protects the gigantic corporation from responsibility for PG&E's growing debt. The restructuring was described in an obscure public notice as a stock transfer, but its potential impact on the sixth largest economy in the world is obvious.

Gov. Gray Davis was described by a spokesman as being "disappointed that the Federal Energy Regulatory Commission acted in the middle of the night without notice to all parties" affected by the restructuring.

Although elected officials and government agencies have expressed frustration with the secrecy that shrouds the power industry, they have yet to realize that their own secrecy contributes to the problem.

Davis has criticized the secret bidding process through which power is purchased by utilities, yet he has refused press access and mostly excluded consumer groups from negotiations that will ultimately affect virtually every Californian.

One marathon teleconference negotiating session lasted over seven hours and featured participation by federal regulatory officials, utility industry representatives, Davis, state Senate President John Burton, Assembly Republican leader Bill Campbell, Senate Republican leader Jim Brulte and Assembly Speaker Robert Hertzberg. Neither consumer groups nor the media were allowed to listen in on the session.

Burton has been highly critical of the veil of secrecy that protects utility operations from public scrutiny while continuing to perpetuate the darkness by participating in the closed negotiations.

"I don't know what's confidential about it [the power purchasing process]," Burton said recently, adding that obtaining pricing information from electricity bidding would "tell you to what degree you're getting screwed."

Burton has introduced a spot bill to require power wholesalers operating in California to report on their activities, but the bill at this point has no details regarding what disclosure would be required or how it would be enforced. And there is a question whether federal regulations requiring confidentiality might trump state legislation.

Any long-term solution to the deregulation crisis must include legislation requiring that all aspects of energy policy and sales be open to public scrutiny. Information about the cost of producing power and the process of selling it should be disclosed to the public despite industry protestations that sharing the information would somehow damage competition.

The governor should act by simply opening the entire process to the public and using technology to share information, ensuring public scrutiny of any forthcoming solution. Californians can now log onto the state's official Web site and watch elephant seals mate, or listen to hearings on ordinary bills in the Capitol, so why not provide Web-based audio and video of negotiations for an energy cure?

The quick and mostly hidden process of finding a solution to the energy crisis reminds some observers of the legislative process that put California on the road to energy deregulation failure in the first place. Deregulation legislation passed in 1996 with little scrutiny by the public or even other legislators. Sen. Steve Peace (D-El Cajon) summarized the devilish details of the complex law in a two-page executive summary for his colleagues' consideration before they voted quickly and unanimously in both houses to pass the legislation.

Current events indicate that we haven't learned from our mistakes. Some will say that concerns over secrecy are overstated since any deal will have to be approved by the Legislature in a very public process. But any lobbyist will tell you that a bill that arrives in a legislative hearing as a consensus piece is unlikely to prompt due deliberation or probing public examination.

When government turns over essential services like electricity to private companies, then it must at minimum require that brokering in the free market system be done in an open and accountable way. As things stand now, too much faith and trust are being sought by government and industry individuals with a demonstrated record of failure in the energy arena. How could opening a window on the process result in anything worse? It's an approach that's never been given the chance to fail.

As we have seen and experienced, the issue of secrecy in energy policy development has thus far left us, literally, in the dark.

Kent Pollock, a former Bee editor, is executive director of the California First Amendment Coalition.

http://www.sacbee.com/voices/news/voices05_20010128.html

-- Martin Thompson (mthom1927@aol.com), January 28, 2001

Answers

The water downstream will not be clear if the water upstream is muddied

Korean proverb.

-- Martin Thompson (mthom1927@aol.com), January 28, 2001.