The Rolling Information Blackout

Much to the dismay of consumer activists, California's Governor Gray Davis has held exclusive meetings with the heads of Pacific Gas and Electric and Southern California Edison. The two companies, which helped craft the much-maligned 1996 deregulation law, have wracked up billions in unpaid wholesale energy bills they claim they can't pay. Few outside Davis' inner sanctum, from reporters to citizens, know exactly what goes on during Davis' closed-door meetings. The matter is aggravated by the fact that two of Davis' energy advisors have ties to Edison.

Most of the non-insiders are unsure how many meetings and conference calls have been held since the state's two-year old deregulated energy market went haywire and who besides PG&E and Edison have been included. What is known is that a deal on how and who will pay off the two investor-owned utilities's humongous debts is in the works.

The multibillion dollar question is this: What will the state get in return for paying off their debt, if anything? The size of their financial hole -- be it $13+ billion that PG&E and Edison claim, or a fraction of that 11-digit figure as ratepayer advocates insist -- is a matter of hot debate.

Fears that a Secret Deal Will Surface After November 2002 Elections

According to Davis' spokesperson Steve Maviglio, negotiations to resolve the energy crisis must be secret to allow Davis to cut a beneficial deal that allows the private utilities to pay their bills and stabilize the teetering deregulated market. That requires the state's administration to hold their cards close to their vests and hidden from the out-of-state generators, he said. The generators, which include Texas-based Enron and Reliant Energy, as well as Calpine, Duke and Dynegy, jacked up wholesale energy prices to unprecedented levels.

Up until the third week of February, Maviglio said the governor held three exclusive talks with the heads of PG&E and Edison, John Bryson and Robert Glynn respectively, since the beginning of the year.

"All information will be released at the appropriate time," Maviglio said, acknowledging the frustration of those outside the inner circle trying to be informed.

Since late February, Davis began meeting almost daily with the utility executives.

In the meantime, consumer and ratepayer advocates fear Davis will cut a deal that ultimately knocks up consumers utility rates, but only after the November 2002 elections when the governor is up for reelection.

"It is very troubling," said Mike Florio, senior attorney for TURN, a 25-year-old organization that works to protect ratepayers. Florio explains that his organization's role has been limited to letting the governor know what they like and dislike about the proposals he releases. Other activists, including those from the Foundation for Taxpayer and Consumer Rights, Global Exchange and California Public Interest Research Group, have had no access to the governor and/or limited contacts with key legislators.

"Everyone, except for a select few, is running into walls," said Doug Heller, consumer activist with the Foundation for Taxpayer and Consumer Rights. The foundation launched the successful insurance initiative in 1988 that led to more than $1 billion in customer rebates and rate rollbacks. The group may put an initiative on the ballot next year that would create a state power authority to run the electricity business if Davis and the legislators fail to protect the state's consumers.

Rushed Hearings, Although Billions of Dollars of Taxpayer Money Were on the Table

Heller says that late last January he got a call from a TURN lobbyist saying that he and another ratepayer advocate were heading to a meeting with Assembly speaker Robert Hertzberg (D-Van Nuys). Heller rushed to Hertzberg's office and waited outside his office door for 30-minutes but was never let in. Hertzberg's spokesperson Paul Hefner said he was unaware of the event, adding that the speaker has met with a number of consumer representatives.