Via Facsimile

Re: How to instantly solve the energy crisis: A better alternative than AB18X

Dear Governor Davis,

We know deregulation works if done properly. Pennsylvania deregulated at the same time as California and consumers there have saved billions.

Fundamentally, the reason the utilities are in default is over-regulation by the PUC. They are not allowed to buy power with long-term contracts and the PUC can force the utilities to sell for less than cost, for example.

You could fix this instantly by asking the PUC to fix these two items, and then asking the legislature to subsequently make that change permanent. This, along with acknowledgement by the state of the validity of the federal lawsuit brought by the utilities to recover their losses (which it appears they will win anyway), would instantly restore their credit-worthiness.

To keep rates down, simply ask the utilities yourself to institute, or have the PUC mandate, a special “rate freeze” for those low- and fixed-income people unable to pay an increase. And because the utilities can probably do a better job buying power than the state (because that’s what they specialize in), consumers may get an even better deal than if the government was involved. The PUC can even give them an “incentive” by letting them make a small profit if they can negotiate better power prices than the state. You are guaranteed in this approach that the consumer pricing is actually equal to or lower than what the state could negotiate and you align the interests of the utilities with those of the consumer.

This way, you solve the problem by fixing what was fundamentally wrong in the first place and you reduce government regulation and increase consumer-pricing options. In addition, you give the utilities a huge incentive to reduce the consumer price still further.

The detailed comparison of this plan vs. AB18x and the 14 ways this plan is better than AB18X is documented on this web page:

Over 300 people have viewed this page and all the comments I’ve received on the plan have been positive. Even lawmakers involved in AB18X haven’t been able to criticize this approach.

Best of all you can institute this yourself immediately, without waiting for legislation.



Steve Kirsch