Special Election: Proposition 80

Known officially as “The Repeal of Electricity Deregulation and Blackout
Prevention Act,” Proposition 80 may be the most obscure measure on the Nov.
8 Special Election ballot. The name is misleading–the measure can’t prevent
blackouts and it doesn’t fully repeal deregulation. But it was written by
consumer advocates and backed by alternative energy interests and organized
labor, and Proposition 80 makes major changes in California’s electricity
market. The initiative was prompted by the state’s disastrous experience
with deregulation that was launched by the signing of AB1890 in the fall of
1996 and culminated in the electricity crisis of 2000-2001. The campaign in
favor of Proposition 80 is bankrolled principally by labor. The opponents
are funded by the energy industry, which launched a court
challenge–ultimately unsuccessful–to keep Proposition 80 off the ballot.

There are three critical components to Proposition 80.

First, and most important, it generally prohibits what is known as “direct
access.” This means that customers who currently buy their electricity from
the state’s largest investor-owned utilities–San Diego Gas and Electric,
Pacific Gas and Electric and Southern California Edison, which together
serve more than 10 million homes and businesses–will not be allowed to
switch and get their electricity directly from outside marketers known as
energy service providers, or ESPs. During the electricity crisis,
direct-access purchases crippled the major utilities, stripping them of
revenue as their major customers fled.

Second, it beefs up the enforcement authority of the California Public
Utilities Commission, the state agency that regulates the huge utilities,
and emphasizes the need for “just and reasonable rates.” It encourages an
aggressive powerplant construction program, which means jobs, skilled and
unskilled–a big reason for labor’s support.

Third, it requires that within five years all electricity retailers must
have up to a fifth of their power from renewable energy sources, thus
reducing dependency on carbon-based fuels, such as natural gas. Consumer
activists generally support this provision, although one critic noted that
that it would lock in a lower benchmark for renewable energy–20
percent–than has been urged earlier by environmentalists.

Opponents have outspent the backers by about 8-to-1.