[PEN-L:33521] AB 1890

[Dan Scanlan <dscanlan@xxxxxxx>]

> There was little resistance to deregulation prior to the bill, AB
> 1890 being passed in 1996.

As I recall, every legislator but one -- who was absent -- voted for it.

More shennanigans coming? See following article posted by Nader's people.

Dan Scanlan

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PUC to Relax Rules for Gas Market

 State panel expected to OK decision critics say will raise prices

www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/12/28/BU68444.DTL

(SF Chronicle, Dec. 28) -- State energy regulators are poised to
loosen restrictions on Southern California's natural-gas market,
raising concerns among critics that it will open the door to
manipulative market tactics and needlessly drive up prices.

 The California Public Utilities Commission is expected to approve a
measure Monday by a 3-2 vote that would set in motion a controversial
decision approved in concept by the commission one year ago -- but
never given the formal go-ahead.

 If adopted, the new rules will allow unregulated marketers and
traders to buy and sell the rights to move gas over Southern
California's gas transmission system. Under the current system,
purchasers of natural gas are given priority rights to move their
supply.

 About 65 percent of California's gas moves through the system, which
is owned by Southern California Gas Co., a division of Sempra Energy
in San Diego. Sempra also owns an unregulated trading unit, as well
as San Diego Gas & Electric Co.

 The proposed move has generated fierce opposition from major gas
customers, consumer groups, politicians and even some of the
commission's own staff. Critics predict it will open Southern
California's gas market to some of the manipulative tactics that were
used to game the state's power market during the energy crisis in
2000 and 2001.

 If traders can buy enough capacity on the system, opponents say,
they can hold it hostage to the customers who need to have gas
delivered to them. "It will drive prices up for everybody, plus it
will drive power prices up if the people who generate electricity
have to pay more for natural gas," said Loretta Lynch, the
commission's president, who is opposed to the measure.

 Lynch and other opponents point out that the PUC stopped allowing
public comment in the matter more than a year ago -- before
revelations surfaced that gas traders actively lied about prices in
an effort to drive up indexes, and also that trading tactics
involving transmission systems were devised to needlessly drive up
prices.

 Under PUC rules, commissioners have to follow the record in reaching
their decisions. As a result, they will not be allowed to cite
evidence of market manipulation as a reason for opposing the rules.
The new rules would, on an accelerated basis, begin implementing a
prior decision to allow unregulated gas traders to buy space on the
pipeline system. That measure was approved on a 3-2 vote in December
2001. It has not been brought back up since then.

 The commission's staff has recommended a slower process involving
full hearings on the issue. But some commissioners, led by Jeff
Brown, who was appointed by Gov. Gray Davis, appear poised to adopt a
more aggressive schedule. Commissioner Henry Duque also voted in
favor of the measure last year, as did Commissioner Richard Bilas.
Lynch and Commissioner Carl Wood voted against the measure and still
oppose it.

 It is unclear how Commissioner Michael Peavey will vote on the
matter. He is a Davis appointee who was nominated to serve out Bilas'
term. Peavey could not be reached for comment Friday.

 In an interview, Brown defended the proposal, saying that it had
enough protections built in to guard against manipulative schemes,
and that Northern California already has the same system in place. He
pointed out that the measure has already been approved -- and should
not be allowed to languish. "A lot of deregulation was not
beneficial. In fact, some of it was disastrous," Brown said. "But
this is not in that vein. We have to be careful not to cast this in
the same light."

 In part, the disagreement is over the timing of the vote. It is the
last hearing of the year, after which Duque will no longer be on the
board, and Davis -- who was widely criticized for his handling of the
state's energy crisis -- will have all appointed all five
commissioners. Opponents were hoping to run out the clock in the
belief that a new, sans-Duque commission would sink the measure next
year. But its backers have moved aggressively to resuscitate it in
time.

 The measure is opposed by Southern California Edison, The Utility
Reform Network, a consumer advocacy group, as well as a host of
city-owned power utilities in Southern California and the California
Department of General Services, the state government's main
procurement agency, which is a major buyer of natural gas.

 Last week, state Sen. John Burton (D-San Francisco) wrote a letter
to the commissioners voicing his concern about the proposal and
urging them to meet with him before the vote is taken. But no meeting
occurred.
--

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Drop Bush, Not Bombs!
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"During times of universal deceit,
telling the truth becomes a revolutionary act."
George Orwell

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