Dan Walters: An absolutely incredible tale

This article Appeared in the Sacramento Bee (Published March 27, 2001)

From the onset of his governorship two-plus years ago, Gray Davis has insisted, by both public words and private acts, that he and he alone would make his administration's major policy decisions. Legislators and lobbyists have complained that no one in Davis' office was empowered to give an up or down signal on pending legislation, and administration officials have recounted grimly - and very privately - tales about Davis' insistence on deciding even minuscule policy matters.

The governor once castigated one of his Cabinet appointees before her colleagues in the harshest possible language for making an environmental policy change without his approval. The most routine action by a state agency is trumpeted through the governor's media office. Davis has even joked about his micromanagerial tendencies.

It is, therefore, utterly incredible - in the precise meaning of the word - that Davis' handpicked president of the state Public Utilities Commission, a former political adviser, would raise electric power rates by billions of dollars without clearing it through Davis. Yet that's what the governor's mouthpiece asserts.

On Monday, PUC President Loretta Lynch - acknowledging what anyone with half a brain knew weeks ago - declared that power rates would have to jump sharply. She is proposing an increase of three cents a kilowatt-hour, about 40 percent, in areas served by private utilities to cover the massive costs associated with the current crisis, with a "tiered" structure to impose most of the burden on high- volume power users.

Even Lynch was fudging, however, when she insisted that the boost - from about seven cents a kilowatt-hour to 10 cents - would be "all that is needed going forward." In fact, as anyone who can do simple arithmetic can calculate, it's only the beginning of a series of rate jumps that will be needed to cover past debts and current wholesale costs. It's not improbable that ultimately, rates will double (not counting another nickel a kilowatt-hour that's imposed for delivery and other costs).

Lynch's public statement came just three days after Davis' aides briefed key legislators on the likelihood of sharp rate boosts. Throughout, however, Davis' spokesmen have insisted that the governor was not supporting such increases and continues to believe that the supply and price crunches can be handled "within the existing rate structure," as one euphemistic version put it.

The latest spin was issued by Davis' press secretary, Steve Maviglio, after Lynch's statement. "The governor has not had conversations with any (utility) commissioners about a potential rate hike," the Maviglio statement said. "It is still his hope and expectation that this matter can be resolved within the existing rate structure."

Clearly, the governor, who has been so insistent on doing things his way - a tendency bordering on obsessive-compulsive behavior - has gone into the bunker on this one, allowing Lynch to take the heat from consumer groups, which immediately denounced the proposed rate increase as a giveaway to the utilities.

It's cowardly, especially because the current crisis is largely a product of dithering by Davis and Lynch last summer when the first price-supply problems appeared. Had they acted forthrightly then, with such steps as long-term supply contracts, it would have been a relatively minor bump rather than a full-blown disaster that threatens the state's business climate and its solvency and will cause financial pain for Californians.

If California needs a utility rate increase, so be it. But we Californians would appreciate not being treated like children who need sugarcoating for the bad-tasting medicine. And we'd also appreciate not having our intelligence insulted with fairy tales from the Governor's Office.

DAN WALTERS' column appears daily, except Saturday.

Mail: P.O. Box 15779, Sacramento, CA 95852; phone (916) 321-1195; fax: (781) 846-8350