Gray DAVIS 2

disambig sorta, bak<div>=</div><div><a href="https://www.latimes.com/nation/la-me-california-recall-schwarzenegger-20131006-dto-htmlstory.html">https://www.latimes.com/nation/la-me-california-recall-schwarzenegger-20131006-dto-htmlstory.html</a></div><div>=<a href="https://www.amazon.com/Tango-War-Struggle-Hearts-America/dp/1250091233">https://www.amazon.com/Tango-War-Struggle-Hearts-America/dp/1250091233</a>
<div class="a-section a-spacing-none" style="box-sizing: border-box; margin-bottom: 22px; background-color: rgb(255, 255, 255);"><h1 id="title" class="a-size-large a-spacing-none" style="box-sizing: border-box; padding: 0px; margin-top: 0px; margin-right: 0px; margin-left: 0px; text-rendering: optimizelegibility; margin-bottom: 0px !important; line-height: 1.3 !important;">The Tango War: The Struggle for the Hearts, Minds and Riches of Latin America During World War II Hardcover – September 18, 2018</h1></div><div id="bylineInfo" class="a-section a-spacing-micro bylineHidden feature" data-cel-widget="bylineInfo" style="box-sizing: border-box; margin-bottom: 0px; margin-top: 6px; background-color: rgb(255, 255, 255);">by <span class="a-declarative" data-action="a-popover" data-a-popover="{" closebuttonlabel="closeButtonLabel" close="Close" author="Author" dialog="Dialog" popover="Popover" name="name" contributor-info-b004q84896="contributor-info-B004Q84896" position="position" triggerbottom="triggerBottom" popoverlabel="popoverLabel" allowlinkdefault="allowLinkDefault" true="true" style="box-sizing: border-box;"><a data-asin="B004Q84896" class="a-link-normal contributorNameID" href="https://www.amazon.com/Mary-Jo-McConahay/e/B004Q84896/ref=dp_byline_cont_book_1" style="box-sizing: border-box; text-decoration-line: none;">Mary Jo McConahay</a> </div><a href="https://kpfa.org/episode/letters-and-politics-august-14-2019/">https://kpfa.org/episode/letters-and-politics-august-14-2019/</a>franco in sp also portugal fascist vs Mex Cardenas democrat (wanted to sell oil to loyalists)mex sent soaring axtecs to PI mcarthur; chile and arg signed up at the very end to get seat.smoking cobras brazilians ~ AH,  badly equipped but broke thru gothic line, rec'd coldnelson rock w/ disney (orson wells, aaron copeland) prop vs gebbels20k bit rubber battleship, 1 ton in fighter (not ct oxy mask and life raft;ussr germ had synth rubber3 yr no macy balloonsgraY DAVIS GPA OIL LUFTWAFFE KOCH DAD</div><div></div><div>sjsu --> ucsc </div>lgerston@ucsc.edu<div>professor emeritus of political science at San Jose State University, Larry Gerston examines the public policy making process.  His Public Policy Making in a Democratic Society: A Guide to Civic Engagement has been heralded for defining "hands on" citizen participation.  Recall! California’s Political Earthquake (with Terry Christensen), was selected as “outstanding academic book of 2004” by the American Library Association.  Larry’s Confronting Reality: Ten Problems Threatening to Implode American Society (and How We Can Fix It) addresses fundamental themes that Americans refuse to face.  His Not So Golden After All: The Rise and Fall of California, has been praised for comprehensively addressing the unique phenomenon known as California.</div><div></div><div> <a href="https://en.wikipedia.org/wiki/List_of_Governors_of_California" title="List of Governors of California" style="text-decoration-line: none; background: none rgb(255, 255, 255);">37th Governor of California</a> from 1999 to 2003</div><div>
</div><div>California’s dereg disaster began in 1996, when the state’s three dominant utilities banded together to force on their ratepayers “the largest corporate ripoff in American business history,” as Ralph Nader has put it...A bill, AB 1890, was drafted in SoCalEd’s offices. After a few perfunctory hearings, the legislature passed it unanimously and Governor Pete Wilson, then a presidential candidate, eagerly signed it. Some consumer and environmental groups were furious about a wide range of issues, most notably the reactor bailouts, which they worried (correctly) would prolong the operating life of deteriorating nukes and other polluters. So in 1998, as the bill was taking effect, a broad coalition put a repeal on the ballot. Surmounting virtually impossible odds, the coalition gathered more than 700,000 signatures in less than five months. Initial polls indicated the measure would be a close call, but the utilities spent $40 million, calling in their chits with labor, ethnic and other organizations around the state. The repeal went down, getting 27 percent of the vote.</div><div>
</div><div>=</div><div><a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html">https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html</a></div><div><h2 style="background-color: rgb(255, 255, 255);">Subsequent Events California's Energy Crisis</h2>California's new wholesale power market and customer choice program, which started in March, 1998, worked fairly well for about a year and a half. In the summer of 2000, retail electricity prices in southern California reached all time highs, and generation capacity shortages forced temporary power outages in northern California.Since then, coverage of California's energy crisis has been reported on television and in newspapers around the country. The complexity of problems, the contrasting views and sometimes conflicting solutions offered by politicians, government officials, and other stakeholders make it difficult to follow what has happened.To help bring the situation into better focus, the following paragraphs present a broad perspective of the crisis.<h3 style="background-color: rgb(255, 255, 255);">Three Major Problems</h3>California's energy crisis can be grouped broadly into three interrelated problems including (1) precipitous increase in wholesale electricity prices, (2) intermittent power shortages during peak demand periods, and (3) the deterioration of the financial stability of California's three major investor-owned utilities (IOUs)—Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E).<ol style="background-color: rgb(255, 255, 255);"><li>High Wholesale Electricity Prices: The price of wholesale electricity sold on California's newly created California Power Exchange (CalPX) starting escalating around June 2000, reaching unprecedented levels over the remainder of the year. From June 2000 through July 2000 wholesale electricity prices increased on average 270 percent over the same period in 1999.<a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_1" style="text-decoration-line: none;">(1)</a> By December 2000 wholesale prices on the CalPX cleared at $376.99 per megawatthour (MWh), over 11 times higher than the average clearing price of $29.71 per mwh in December 1999.<a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_2" style="text-decoration-line: none;">(2)</a> 

High wholesale prices resulted in a steep, but temporary increase in retail electricity prices in southern California in the summer of 2000. This is what happened. In July 1999, SDG&E's retail price freeze was eliminated as called for in California's industry deregulation plan, and SDG&E customers were exposed to unregulated retail electricity prices (PG&E and SCE's retail customers were, at that time, still protected from high retail prices by rate freezes imposed by the restructuring plan). SDG&E could now pass through the high wholesale prices to retail customers, and by July 2000 residential electricity rates had increased to approximately 16 cents per kilowatthour, up from about 11 cents per kilowatthour in July 1999.<a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_3" style="text-decoration-line: none;">(3)</a> To stop the increase in retail prices, the California legislature established a ceiling of 6.5 cents per kilowatthour on the energy component of electric bills for residential, small commercial, and lighting customers of SDG&E.

</li><li>Intermittent Power Shortages: Since 1999, California has experienced a significant increase in emergency conditions that in some instances have necessitated rotating blackouts (a rotating blackout is an involuntary curtailment of electricity usage). Stage 3 emergency notifications, which may necessitate rotating blackouts, have increased from 1 in 2000 to 38 through May 22, 2001 (see graph). Stages 1 and 2 notifications have increased from 91 in 2000 to 127 through May 22, 2001. In some instances Stage 2 requires voluntary curtailment of power usage.

<table align="center" style=""><tbody style=""><tr style="line-height: normal;"><td style="line-height: normal; border-bottom: 1px solid rgb(255, 255, 255);"><table width="250" border="0" bgcolor="#FFFFFF" align="center" style=""><tbody style=""><tr style="line-height: normal;"><td style="line-height: normal; border-bottom: 1px solid rgb(255, 255, 255);">California's Declared Staged Power Emergencies, 1998--May 22, 2001</td></tr><tr style="line-height: normal;"><td style="line-height: normal; border-bottom: 1px solid rgb(255, 255, 255);"><img src="https://www.eia.gov/electricity/policies/legislation/california/caliemer.gif" alt="California's Declared Staged Power Emergencies, 1998--May 22, 2001" height="299" width="454" /></td></tr></tbody></table></td></tr></tbody></table>
<table border="0" cellpadding="6" style=""><tbody style=""><tr style="line-height: normal;"><td style="line-height: normal; border-bottom: 1px solid rgb(255, 255, 255);">Stage 1 emergency notice is declared any time that an operating reserve shortfall (less than MORC minimum) is unavoidable or, when in real- time operations, the operating reserve is forecast to be less than minimum after utilizing available resources.Stage 2 emergency notice is declared any time it is clear that an operating reserve shortfall (less than 5 percent) is unavoidable or, when in real-time operations, the operating reserve is forecast to be less than 5 percent after dispatching all resources available.Stage 3 emergency notice is declared any time it is clear that an operating reserve shortfall (less than 1.5 percent) is unavoidable or when in real-time operations, the operating reserve is forecast to be less than 1.5 percent after dispatching all resources available.</td></tr></tbody></table> </li><li>Three investor-owned utilities face severe financial problems: Because of high wholesale power prices and the imposition of retail price caps restricting recovery of these costs, California's three major IOUs are experiencing severe financial problems.The worst case is PG&E, which on April 6, 2001 filed for protection under Chapter 11 of the U.S. Bankruptcy Code. PG&E estimated that since June 2000 they have spent $9 billion for wholesale power with no reimbursement for those expenditures (referred to as unrecovered power costs).<a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_4" style="text-decoration-line: none;">(4)</a> SCE is in a similar situation to PG&E with respect to power purchase costs. In November 2000, SCE estimated their unrecovered power purchase costs at $2.6 billion.<a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_5" style="text-decoration-line: none;"> (5)</a> SDG&E estimated their unrecovered power costs at $447 million by December 2000. <a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_6" style="text-decoration-line: none;">(6)</a></li></ol><h3 style="background-color: rgb(255, 255, 255);">Factors Contributing to the Energy Crisis</h3>Although there is not universal agreement on the causes of California's problems, there is general agreement among industry leaders on a core set of factors contributing to the energy crisis.<a href="https://www.eia.gov/electricity/policies/legislation/california/subsequentevents.html#N_7" style="text-decoration-line: none;">(7)</a><ol style=""><li style="background-color: rgb(255, 255, 255);">Investment in new power generation capacity has not kept pace with the increasing demand for electricity. California's generation capability decreased 2 percent from 1990 through 1999, while retail sales increased by 11 percent. Further, no new generation capacity has been constructed in California for over a decade.</li><li style="background-color: rgb(255, 255, 255);">To meet its demand for power, California relies on about 7 to 11 gigawatts of out-of-state generation capability, of which a significant portion is hydroelectric capacity located in the northwestern United States. Reduced hydroelectric power generation caused by unusually low water levels in the northwest resulted in a reduction of power imports to northern California.</li><li style="background-color: rgb(255, 255, 255);">During 2000, approximately 10 gigawatts of generation capability was out of operation during some of the high demand times, which contributed to power shortages.</li><li style="background-color: rgb(255, 255, 255);">Path 15, the high voltage transmission line connecting southern California to northern California, became congested at times, reducing the flow of surplus electricity capacity in southern California to meet shortages in northern California.</li><li style="background-color: rgb(255, 255, 255);">Exacerbating the power shortages, many independent power generators were reluctant to sell power to PG&E, and SCE because of their financial troubles and the uncertainty of receiving payment for the power sold.</li><li style="">Shortcomings of the wholesale electric market rules established under the State's restructuring plan contributed to the increase in wholesale prices. Specifically, under the market rules, PG&E, SCE, and SDG&E were required to buy all of their power through the CalPX. They could not enter into forward long-term contracts for energy. When spot market wholesale prices increased because of power shortages and increasing generation costs, the utilities had no option but to purchase the high-priced power.</li><li style="background-color: rgb(255, 255, 255);">An increase in natural gas prices and the high costs of meeting California's power plant emissions requirements also contributed to the increase in wholesale electricity prices.</li><li style="background-color: rgb(255, 255, 255);">The three IOUs paid high wholesale prices for their power, but were unable to recover their costs because retail electricity prices were frozen. This situation, as noted above, resulted in the three IOUs accumulating enormous debts.</li></ol><h3 style="background-color: rgb(255, 255, 255);">Actions Taken to Contain the Energy Crisis</h3>The following actions have been taken by California and Federal Government authorities to help mitigate the energy crisis and to put into place permanent solutions to the problems California has been experiencing since the summer of 2000:June 28, 2000: The California Public Utility Commission (CPUC) reduced its buy-side price cap to $500 per megawatt for the real-time, ancillary services, and congestion management markets. The CPUC further reduced its price cap to $250 per megawatt on August 1, 2000.August 3, 2000: The CPUC issued a rate stabilization plan for SDG&E. The plan was designed to provide electricity price relief for some residential and commercial customers served by SDG&E.August 30, 2000: The California legislature passed a law (AB265) that established rate caps of 6.5 cents per kilowatthour for SDG&E customers. The rate cap was retroactive to June 2000, and it will be effective through 2002.December 14, 2000: The Secretary of Energy initiated an order requiring certain generators and power marketers to supply electricity to California's power system operator in order to help avert power outages.December 15, 2000: The Federal Energy Regulatory Commission (FERC) ordered remedies for California's wholesale power markets. The order, among other things, eliminated the mandatory requirement that the three IOUs sell and buy all of their power through the CalPX. The FERC also terminated the CalPX's wholesale rate schedule that enabled it to continue to operate. CalPX discontinued operating in January 2001.January 4, 2001: The CPUC granted PG&E and SCE an interim surcharge to raise rates. The temporary surcharge was in effect for 90 days.February 1, 2001: Governor Gray Davis signed into law AB 1X authorizing California's Department of Water Resources to purchase power under long-term contracts for sale to PG&E and SCE. This law was passed because, in part, the two utilities were financially strapped and unable to obtain long-term power contracts with power generators. This law is significant in that the State now becomes an active participant in California's power industry.March 27, 2001: The CPUC approved a 3-cents-per-kilowatt-hour average rate increase in an effort to support the financially strapped PG&E, and SCE.April 5, 2001: Governor Gray Davis released a plan to resolve the State's energy problems and to protect residents from volatile energy markets. The plan contains numerous elements aimed at increasing power supply, improving energy conservation, and stabilizing the electricity industry in California.April 9, 2001: Governor Gray Davis announced an agreement with SCE, and Edison International, SCE's parent company. In the agreement, SCE will sell their transmission system to the State of California for $2.76 billion. The sale is designed to help SCE recover from its financial difficulties. It must be approved by the State Legislature to be completed.hmmn: ]April 25, 2001: The FERC announced a plan to bring more stability, better control, and price relief to California's energy market. Among other things the plan gives the California Independent System Operator (California ISO operates the State's transmission system) more control of power plant outages, establishes price mitigation measures based on market principals, and requires new reporting obligations that will allow the FERC to better monitor the energy market in California.May 14, 2001: The FERC announced regulatory actions to increase reliable energy supplies in California and other Western States. The FERC streamlined regulatory procedures for wholesale power sales and for certification of natural gas projects. It also urged all hydroelectric licensees to assess the potential for increased generation capacity at their respective facilities.May 15, 2001: In March the California Public Utility Commission (CPUC) agreed to raise retail electricity prices to customers of PG&E and SCE. Today, the CPUC released a rate structure indicating exactly which customer classes will have their rates increased and by how much. Overall retail rates will increase an average of 19 percent, but low-income customers, medical baseline customers, and residential customers using power below 130 percent of baseline usage amounts will not have a rate increase.May 16, 2001: Governor Gray Davis signed Senate Bill 6X creating the California Consumer Power and Conservation Financing Authority. The California Power Authority will have broad powers to construct, own, and operate electric power facilities, and finance energy conservation projects.May 22, 2001: Governor Davis signed another emergency bill, Senate Bill 28X, designed to shorten the times for reviewing an application for a new power plant, and re-powering (i.e., upgrading) an existing power plant. The new law also allows new owners to pay emission mitigation fees in lieu of obtaining actual emission offsets when the new owner can show that emission offsets are not available.May 28, 2001: U.S. Department of Energy Secretary Abraham ordered the Western Area Power Administration (WAPA), a 15 State power marketing arm of the U.S. DOE, to complete planning and to seek outside financing for increasing California's transmission capacity. This action aims at reducing power transmission bottlenecks on Path 15, a high-voltage power line connecting northern and southern California (see item 4 under Factors Contributing to the Energy Crisis).June 19, 2001: The Federal Energy Regulatory Commission extended and broadened its price mitigation and market monitoring plan (issued in April 2001). The price mitigation plan will now apply to spot market sales 24 hours a day, 7 days a week, in all 11 States in the Western Systems Coordinating Council. The formula to calculate the market clearing price was changed to reflect the marginal cost of replacing gas used for generation, based on gas prices reported in Gas Daily for three spot market prices in California, adjust operating and maintentance expense upward, and eliminate the emission costs from the calculation (emission costs will be invoiced to the CA ISO and recovered separately). The price mitigation efforts will now apply to all spot market prices. When operating reserves are above 7%, the prices may not exceed 85% of the highest hourly price that was in effect during the most recent Stage 1 reserve deficiency period called by the ISO.July 18, 2001: The California PUC published for comment a draft rate agreement between the CPUC and the California Department of Water Resources (DWR). The draft agreement contains the mechanism the CPUC will use to set electricity rates to satisfy the DWR's revenue requirements and supports the DWR's power purchase program. The revenue requirements include the costs required to issue and pay off the bonds issued for purchasing power (authorized under AB 1X), costs for DWR's power purchase program, cost of load reduction programs, and operating costs. Comments are to be filed by August 1, 2001.September 20, 2001: The California PUC issued an <a href="http://www.cpuc.ca.gov/published/final_decision/9812.htm" target="blank" title="This will take you to another site. You are leaving EIA's website." style="text-decoration-line: none; background: url(" global="global" images="images" icons="icons" external_link.png="external_link.png" right="right" center="center" no-repeat="no-repeat" scroll="scroll" transparent="transparent" padding-right="padding-right" px="px" margin-right="margin-right">interim opinion</a> that suspended retail choice in California. The CPUC estimates that about 5% of the State's peak load of 46,000 MW is currently under direct access contracts, mostly with large industrial customers. Contracts in place will be allowed to continue until their expiration.October 5, 2001: U.S. District Court Judge Lew approved the California PUC and Southern California Edison's settlement concerning the lawsuit filed by SCE against the PUC in November 2000. SCE claimed the PUC had violated federal law and unconstitutionally took property by its actions in not providing sufficient retail rates for SCE. The settlement is intended to restore SCE's creditworthiness and enable it to begin purchasing power for its retail customers, limit ratepayer's cost of paying off SCE debt, and enable SCE to pay its debt over a reasonable certain period of time.January 10, 2002: Attorney General Bill Lockyer filed a suit against Pacific Gas and Electric Corporation because its proposed reorganization plan for its utility would be "a violation of California's unfair competition law." Under the plan, PG&E Corporation would acquire the utility's hydroelectric and transmission assets and transfer them into three new California-based companies, and therefore preempt many state laws and PUC jurisdiction.January 31, 2002: The California PUC issued a proposed rate agreement with the Department of Water Resources so DWR could issue bonds to pay back the General Fund. According to state law, the PUC "may enter into a rate agreement that would irrevocably commit ratepayer revenues to repay any bonds issued by DWR." A final decision is expected on February 21, 2002.February 21, 2002: The PUC issued two decisions regarding the adoption of a <a href="http://www.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/13450.htm" target="blank" title="This will take you to another site. You are leaving EIA's website." style="text-decoration-line: none; background: url(" global="global" images="images" icons="icons" external_link.png="external_link.png" right="right" center="center" no-repeat="no-repeat" scroll="scroll" transparent="transparent" padding-right="padding-right" px="px" margin-right="margin-right">rate agreement</a> between the PUC and the Department of Water Resources and cost recovery of the agency's <a href="http://www.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/13446.htm" target="blank" title="This will take you to another site. You are leaving EIA's website." style="text-decoration-line: none; background: url(" global="global" images="images" icons="icons" external_link.png="external_link.png" right="right" center="center" no-repeat="no-repeat" scroll="scroll" transparent="transparent" padding-right="padding-right" px="px" margin-right="margin-right">revenue requirements</a> for purchasing power under ABX 1. In the first decision, the PUC adopted a rate agreement that allows the DWR to issue bonds to repay over $10 billion in debt, including over $6 billion to California's General Fund. In the second decision, the PUC agreed to implement a cost recovery mechanism for DWR's revised revenue requirements for power purchases made on behalf of the state's three largest utilities: Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. The revenue requirement for the period covering January 17, 2001 through December 31, 2002 is $9 billion, which is significantly lower than the original requirement. The PUC adopted a 9.295 per kilowatthour charge for PG&E customers, 9.744 cents per kWh for SCE customers, and 7.285 cents per kWh for SDG&E customers. According the PUC revenue requirement order, "these charges shall apply to each DWR-supplied kWh included on bills rendered on or after March 15, 2002."March 21, 2002: The PUC voted to keep September 20, 2001 as the suspension date for direct access. According to the PUC's <a href="http://www.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/14209.htm" target="blank" title="This will take you to another site. You are leaving EIA's website." style="text-decoration-line: none; background: url(" global="global" images="images" icons="icons" external_link.png="external_link.png" right="right" center="center" no-repeat="no-repeat" scroll="scroll" transparent="transparent" padding-right="padding-right" px="px" margin-right="margin-right">decision</a>, customers can renew their contracts or change their electricity providers if they had contracts as of September 20, 2001. The PUC is hoping to impose an exit fee on these customers to provide DWR with more funds to cover the cost of purchasing power. Exit fees will be dealt with in a separate proceeding and order. 
As further actions develop, they will be added to this site. <hr width="55%" align="CENTER" style="background-color: rgb(255, 255, 255);" /> <h3>Endnotes</h3><a name="N_1" style="">1. </a>California Public Utility Commission, “California's Electricity Options and Challenges Report To Governor Gray Davis,” August 2, 2000.<a name="N_2" style="">2. </a>California Power Exchange website http://www.calpx.com.<a name="N_3" style="">3. </a>California Public Utility Commission and Electricity Oversight Board, California's Electricity Options and Challenges, Report to Governor Gray Davis, August 2, 2000.<a name="N_4" style="background-color: rgb(255, 255, 255);">4. </a>Pacific Gas & Electric Company, Press Release April 6, 2001.<a name="N_5" style="">6. </a>Southern California Edison Press Release, November 17, 2000<a name="N_6" style="">6. </a>San Diego Gas and Electric Press Release, February 6, 2001.<a name="N_7" style="">7. </a>Factors contributing to California's energy crisis have been documented in the following reports: Federal Energy Regulatory Commission, Order Directing Remedies For California Wholesale Electric Markets, December 15, 2000; California Public Utilities Commission and Electricity Oversight Board, California's Electricity Options and Challenges, Report to Governor Gray Davis, August 2, 2000; Anjali Sheffrin, Director of Market Analysis, California Independent System Operator, What Went Wrong With California Electric Utility Deregulation?, April 19, 2001.</div><div>=</div><div>dereg advisor:</div><div>
</div><div><a href="https://www.pbs.org/wgbh/pages/frontline/shows/blackout/interviews/freeman.html">https://www.pbs.org/wgbh/pages/frontline/shows/blackout/interviews/freeman.html</a></div><div>
</div><div>=</div><div><a href="https://www.thenation.com/article/californias-deregulation-disaster/">https://www.thenation.com/article/californias-deregulation-disaster/</a></div><div>
</div><div>wasserman 1/01</div><div>
</div><div>Blackouts, brownouts and soaring electricity rates have defined the political landscape of California since last spring. They’ve transformed the phrase “utility deregulation” into a household epithet. They’ve stopped in its tracks a nationwide wave of electricity restructuring that has already claimed two dozen states and was about to sweep the rest. And they’ve helped create a crisis whose economic and ecological shock waves will carry deep into the new century.</div><p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">The roots of this unnatural disaster lie in the corporate boardrooms of the utility companies now on the brink of bankruptcy. It was their mismanagement and greed that led directly to some of the greatest miscalculations in US business history. Those missteps, and their impact, were clearly predicted by consumer and environmental activists, who fought to prevent them. “This was a catastrophe we all saw coming,” says Dan Berman, co-author of Who Owns the Sun? “But the power companies had an agenda to push and the money to foist it on the public. Now we all reap the whirlwind.”<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">California’s dereg disaster began in 1996, when the state’s three dominant utilities banded together to force on their ratepayers “the largest corporate ripoff in American business history,” as Ralph Nader has put it [see Wasserman, “The Last Energy War,” March 16, 1998]. At the time, Pacific Gas & Electric (then the nation’s largest privately owned utility), San Diego Gas & Electric and Southern California Edison were caught in a squeeze between their big industrial customers, who were threatening to generate power on their own, and the burden of their own bad investments in obsolete generators, mainly nuclear power plants. They were also tired of having their rates regulated by the state’s ninety-year-old Public Utility Commission. What they wanted was to cash out of those bad investments, keep their big customers and make profits at will, without regulation.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">So they proposed the following: Regulation of distribution lines will stay intact. We will separate the business of generating power from the business of distributing it to the public. We will spin off much if not all of our generating capacity (though in fact much of this was done only on paper, with power plants merely being transferred to the distribution companies’ parent corporations). Then, as pure distribution companies, we will compete with other resellers for customers, who can choose their suppliers and even purchase “green” energy from companies selling wind and solar. Competition will rule. Prices will go down.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">The price tag for Californians? Somewhere between $20 billion and $28.5 billion in upfront “stranded costs,” i.e., direct paybacks to the utilities for their bad generating plants. These charges would be levied through “transition fees” and other surcharges, buried in customers’ bills but adding up to as much as 30 percent of monthly payments. During the time it would take to pay back those bad investments, retail prices would be frozen. The California Public Utility Commission would also get $89 million in ratepayer money to promote the new scheme, giving utilities a leg up on whatever competition might materialize.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">A bill, AB 1890, was drafted in SoCalEd’s offices. After a few perfunctory hearings, the legislature passed it unanimously and Governor Pete Wilson, then a presidential candidate, eagerly signed it. Some consumer and environmental groups were furious about a wide range of issues, most notably the reactor bailouts, which they worried (correctly) would prolong the operating life of deteriorating nukes and other polluters. So in 1998, as the bill was taking effect, a broad coalition put a repeal on the ballot. Surmounting virtually impossible odds, the coalition gathered more than 700,000 signatures in less than five months. Initial polls indicated the measure would be a close call, but the utilities spent $40 million, calling in their chits with labor, ethnic and other organizations around the state. The repeal went down, getting 27 percent of the vote.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">
<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">[SYSTEMS ANALYSIS?]<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">But in their haste to cash out, SoCalEd and PG&E made some critical miscalculations. Most important was their assumption that there would always be a surplus of cheap wholesale electricity. So they sold off too much of their generating capacity and had too little of their own supply at a time when rates were still frozen. Then came a hot summer and a cold winter. Natural-gas prices shot up. Some key generators went down. Storms knocked out transmission lines. The nukes had problems. The utilities found themselves at the mercy of independent producers who’d snapped up generating capacity and could manipulate the wholesale market. Having dismantled key efficiency programs, the utilities now realized that their customers, buying power at fixed costs, had little incentive to conserve. So demand quickly outstripped cheap wholesale supply, which now spiked up at the whim of those with power to sell. PG&E and SoCalEd became wounded, bleeding whales at the mercy of sharks they could not control.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color" /><p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">Companies like the North Carolina-based Duke Energy, Reliant of Texas and the Houston-based Enron, the nation’s biggest natural-gas distributor (and a key supporter of George W. Bush), made billions selling power at high rates to the companies that had just sold them their generators. By one estimate, since last spring PG&E and SoCalEd have spent $12 billion more on power than they were able to collect from their customers. In some cases, the two companies were forced to sell juice to consumers at a rate of $64 per megawatt-hour while paying $1,400 for it.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">Even rival utilities got into the act. Oregon’s Portland General Electric withdrew a proposed rate hike for its own customers when it realized it could sell power in California at a higher profit. At least two large bauxite smelters in the Northwest shut down and realized some $500 million in profits by selling into the southbound grid cheap electricity they were buying on long-term contracts with hydro generators. Selling power was, simply, more profitable than making aluminum. Perhaps most telling of all, the parent companies of PG&E and SoCalEd made as much as $3 billion selling power to electricity distributors, which were now pleading for state help to avoid bankruptcy.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">California Governor Gray Davis made repeated calls to the Federal Energy Regulatory Commission and other national bodies to help fix prices, guarantee supply and punish those companies gouging California consumers. But if the crisis has illustrated anything, it’s the inability of federal agencies to control powerful suppliers whose political clout is exceeded only by their ability to have their way with one of the world’s most complex entities, the electric-power grid. “Never again can we allow out-of-state profiteers to hold Californians hostage,” vowed a frustrated Davis. But at this point it’s not clear who could prevent it. Congress has debated national deregulation bills, but they’ve gone nowhere. And most were headed in the wrong direction, giving the private companies more license to mess with the system, not less.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">None of the two dozen other states that have deregulated have yet suffered a disaster on California’s scale, but the results have been decidedly mixed. By promising low rates and real competition, Massachusetts utilities beat back a 1998 repeal on the same day as the California repeal vote. Says Deb Katz of the grassroots Citizens Awareness Network, “Massachusetts rates are now some of the highest outside California. The only ones benefiting are the nuclear corporations that have had their bad debts paid on our back.” Similar stories are repeated in nuke-laden Illinois and Michigan. In Ohio ratepayers have been saddled with more than $5 billion in bad reactor debts, and no real competition is on the horizon. In Pennsylvania, citizen groups beat back some of the utilities’ stranded-cost demands. As a result, some margin has opened up for actual competition, and green energy suppliers have made some headway. But in Texas, which deregulated right in the midst of the California crisis, and in New York, which is doing it piecemeal, the results are not yet in. In two dozen other states that remain regulated, and in Congress, the term “gun-shy” might apply.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">In California itself, consumer advocates want to put a sweeping rollback on the 2002 ballot. Harvey Rosenfield of the Foundation for Taxpayer and Consumer Rights, an early AB 1890 opponent, and others believe the utilities’ ability to hoodwink the public will be severely constrained by recent memories of tripled electric bills and borderline survival. Gene Coyle, an energy analyst, says that if prices “shoot skyward again, a campaign should be winnable.”<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">The state and private utilities are now caught in a vise. San Diego Gas & Electric, which had fewer stranded costs to pay off and thus quickly escaped the rate freeze, was able to double and triple its rates last summer, infuriating Southern California consumers. Meanwhile, Governor Davis is soaking taxpayers to buy power to resell to SoCalEd and PG&E to save them from bankruptcy because their rates are frozen. But if they weren’t frozen, their rates would double and triple, infuriating the rest of the state.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color" /><p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">“It’s all been a big shell game,” says Oakland-based activist Paul Fenn (see <a href="http://www.local.org/" style="box-sizing: border-box; border-width: 0px 0px 2px; border-top-style: initial; border-right-style: initial; border-bottom-style: solid; border-left-style: initial; border-top-color: initial; border-right-color: initial; border-bottom-color: rgb(207, 14, 14); border-left-color: initial; border-image: initial; font-style: inherit; font-weight: inherit; margin: 0px; padding: 0px; vertical-align: baseline; background-color: transparent; text-decoration-line: none; line-height: inherit; opacity: 1; transition: opacity 0.2s; outline: 0px !important;">www.local.org</a>). “The distribution companies are causing panic by threatening bankruptcy with huge paper losses. But the parent companies are quietly taking huge profits while not accounting for all that stranded-cost money, which is tucked away in foreign and out-of-state investments. Meanwhile, the public gets no tangible assets in exchange for the subsidies. It’s an astounding ripoff.”<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">Through it all, dereg apologists are having a hard time explaining why two California power companies were immune to the crisis: the Los Angeles Department of Water and Power and the Sacramento Municipal Utility District. Both are owned by the public, and both maintain heavy commitments to renewables and efficiency. In 1989 Sacramento voted to shut its one nuclear reactor, and has since pioneered a major shift to solar, wind and biomass energy, with heavy commitments to conservation.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">During the crisis, rates charged by both companies have been stable. The two “munis” actually made money selling power to their embattled private neighbors, underscoring the fact that throughout the United States, public-owned power districts supply electricity cheaper and more reliably than the private utilities. The California crisis has already spurred grassroots movements in San Francisco, Davis and elsewhere to demand municipals of their own. “In the long run,” says author Dan Berman, “public ownership is central to any real solution to the problems of the electric-utility grid.”<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">So is conservation. At the peak of the crisis, Governor Davis ordered widespread efficiency measures that kept demand down without significant impact on the health and safety of the public. “Had the state been more aggressively pursuing efficiency all along,” says Coyle, “much of the crisis could have been avoided.”<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">Nonetheless, the constant drumbeat for more generating capacity will be hard to counter. And the widespread assumption is that any new power plants will be fossil- or nuclear-fueled. But every US reactor ordered since 1973 has been canceled. There are none now under construction here, and resistance would be ferocious, especially in light of nuclear power’s role in prompting the crisis in the first place. A year ago, natural gas would have seemed the logical choice for new generating capacity. But prices have soared and aren’t likely to come back down soon.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb" background-color="background-color">Which leaves what the consumer/environmental community that opposed AB 1890 has been arguing for all along–renewables. The most notable new Western power plant is now stringing its way along the Oregon-Washington border. It consists of 450 windmills with sufficient capacity to power 70,000 homes. With construction under way in February, electricity could be surging out by December 31, a far faster construction timetable than for any other source. The fuel supply will be cheap, stable and clean. Environmental opposition will be nil.<p style="box-sizing: border-box; margin: 0px 0px 20px; word-wrap: break-word; text-rendering: optimizeLegibility; border: 0px; font-family: " mercury="Mercury" display="Display" a="A" b="B" font-size="font-size" px="px" outline="outline" padding="padding" vertical-align="vertical-align" baseline="baseline" line-height="line-height" word-spacing="word-spacing" color="color" rgb="rgb">Thanks to 15,000 windmills built in the 1980s under Governor Jerry Brown (now mayor of Oakland), California once produced 90 percent of the world’s wind power. But the big utilities wanted little to do with them. Last year the world-leader’s mantle slipped to Germany, which built the equivalent of a large reactor’s capacity in wind power. Had California done the same, things might have been different. “The message is clear, ” says Coyle. “The power supply needs to be controlled by the public. And efficiency and renewables work. Do we have to go through this again to relearn those lessons?"<div></div><div>
</div><div><a href="https://www.latimes.com/nation/la-me-california-recall-schwarzenegger-20131006-dto-htmlstory.html">https://www.latimes.com/nation/la-me-california-recall-schwarzenegger-20131006-dto-htmlstory.html</a></div><div>
</div><div>LAT</div><div>
</div><div><div id="area-article-first-block" class="area" style="padding: 15px 0px 0px; margin: 0px; border: 0px; font-family: Georgia, " times="Times" new="New" roman="Roman" serif="serif" font-size="font-size" px="px" line-height="line-height" background-color="background-color" rgb="rgb"><div id="mod-a-body-first-para" class="mod-latarticlesarticletext mod-articletext" style="padding: 0px 10px 0px 0px; margin: 0px 0px 10px; border: 0px; line-height: 20px;">During Gray Davis' term as governor, California's state budget has gone from a record surplus to a record deficit.When the state treasury was flush with cash, the governor and lawmakers from both political parties pushed state spending to new heights. In part, that money was spent to expand programs -- especially in education -- that locked the state into future spending.But when the economy faltered and revenue sank, the governor and the Legislature kept spending at near the levels they established early in Davis' term. So now, instead of having billions in the bank, the state is borrowing billions from the future to pay today's bills.Republican Bill Simon Jr. has criticized Davis for his handling of the state budget, saying that he would bring smarter fiscal management to a state that has seen its fortunes reverse in recent years. Indeed, California's deep fiscal problems will be a front-burner problem for the next governor -- no matter who wins Nov. 5.</div></div><div class="float" style="padding: 0px; margin: 0px; border: 0px; font-family: Georgia, " times="Times" new="New" roman="Roman" serif="serif" font-size="font-size" px="px" line-height="line-height" background-color="background-color" rgb="rgb" clear="clear" both="both" height="height"><img src="http://articles.latimes.com/images/pixel.gif" height="1" width="1" alt="" style="padding: 0px; margin: 0px; border: 0px; line-height: 20px; display: inherit !important;" /></div><div id="mod-a-body-after-first-para" class="mod-latarticlesarticletextwithadcpc mod-latarticlesarticletext mod-articletext" style="padding: 0px 10px 0px 0px; margin: 0px 0px 10px; border: 0px; font-family: Georgia, " times="Times" new="New" roman="Roman" serif="serif" font-size="font-size" px="px" line-height="line-height">The seeds of the state's budget difficulties were sown in Sacramento and on Wall Street.When Davis took office in January 1999, the stock market was climbing toward a historic peak. The state's high-tech economy was turbocharged. Silicon Valley was booming.The surging stock market pumped new money into state coffers, helping to build a surplus of $8 billion in 1999-2000.State income tax receipts just from taxpayers exercising stock options and taking capital gains on the sale of assets more than doubled from nearly $8 billion in 1998-99 to $17.6 billion in 2000-01.State Finance Director Tim Gage said administration officials understood that the windfall from stock options and capital gains would not last forever and tried to set aside a portion of the extra money for one-time spending programs.Even so, the governor and lawmakers responded to the state's good fortune by embracing sharply higher spending, particularly for education. The state also embarked on a major expansion of health coverage for uninsured children, more college scholarships and raises for state employees. Lawmakers also gave back money to taxpayers in the form of reduced motor vehicle fees.In the first two budgets of the Davis administration, the state's general fund spending shot up by $20 billion, accelerating a growth trend that began in Gov. Pete Wilson's second term. Those spending plans won approval with solid support from Republican lawmakers.Susan Kennedy, cabinet secretary to Davis, said that when Davis became governor, he was determined to address "16 years of pent-up demand" for school funding, transportation and health care for uninsured children.During Davis' tenure as governor, state spending for kindergarten through high school education increased by $15 billion to $56 billion, a 37% jump.Per-pupil spending on California public schools has risen from $5,756 to $7,067 a year, a 23% increase since the last budget of the Wilson administration. From near the bottom, Davis administration officials said, California's spending per pupil has climbed toward a middle ranking compared with other states.Student fees for California residents at the University of California, state colleges and universities, and community colleges were cut 5% during Davis' first year in office -- with the state government stepping in to make up the difference. The reduction followed a similar decrease in the last year of Wilson's governorship. Those fees have not gone up.</div><div class="float" style="padding: 0px; margin: 0px; border: 0px; font-family: Georgia, " times="Times" new="New" roman="Roman" serif="serif" font-size="font-size" px="px" line-height="line-height" background-color="background-color" rgb="rgb" clear="clear" both="both" height="height"><img src="http://articles.latimes.com/images/pixel.gif" height="1" width="1" alt="" style="padding: 0px; margin: 0px; border: 0px; line-height: 20px; display: inherit !important;" /></div><div id="mod-a-body-after-second-para" class="mod-latarticlesarticletextwithadcpc mod-latarticlesarticletext mod-articletext" style="padding: 0px; margin: 0px; border: 0px; font-family: Georgia, " times="Times" new="New" roman="Roman" serif="serif" font-size="font-size" px="px" line-height="line-height">In an effort to extend health coverage to uninsured California children, enrollment in the state's Healthy Families program has increased more than twelve-fold to 624,000. The program is expected to cost the state $672 million this year, more than six times the amount in Wilson's last budget.During the boom years, lawmakers also reduced the fees charged at state parks and enacted tax breaks for business, teachers, research and development, child care and elder care.But when the tech bubble burst, the income tax windfall from stock options and capital gains abruptly ended. State revenue plummeted by 15%, the largest drop since the Great Depression. And the state's cash reserves were being eroded by $6 billion on spending for power purchases during the energy crisis."The speed with which the revenue dissipated was just shocking," said Tom Lieser, senior economist with the UCLA Anderson Forecast.Since the peak in early 2000, the stock market's steep slide has slashed income tax receipts by more than $10 billion, according to an estimate from the legislative analyst's office.Finance chief Gage said the stock market dive caught everyone by surprise. "No one saw this coming, at least not to this magnitude."While the downturn depressed revenue in many states, California and its high-tech economy suffered a particularly hard blow.<div style="background-color: rgb(255, 255, 255);">
</div></div></div><div></div><div>LAT</div><div>
</div><div><div>Ten years after recall, California still feels effects</div><div>
</div><div>Former Gov. Gray Davis in December 2005 with his official gubernatorial portrait and then-Gov. Arnold Schwarzenegger – the man who replaced Davis and oversaw major changes to California’s political system. (Rich Pedroncelli / Associated Press)</div><div>
</div><div>The state was changed — but not the way proponents hoped — by the seismic election that propelled Arnold Schwarzenegger into the governor’s office.</div><div>
</div><div>By Mark Z. Barabak</div><div>Reporting from Sacramento</div><div>OCTOBER 7, 2013</div><div>
</div><div>Ten years ago, California erupted in an anti-government, anti-establishment convulsion unlike any ever seen.</div><div>
</div><div>Disgruntled voters seized the chance for a rare do-over, recalling their staid and serious governor, Gray Davis, and replacing him less than a year after his reelection with one of the most famous and exuberant personalities on the planet. It was only the second time in U.S. history a sitting governor was booted from office.</div><div>
</div><div>The spectacle — a snap election featuring a color wheel of 135 candidates, including a former child actor, a porn star and a handful of professional politicians — shook California from its usual political slumber and captivated an audience that watched from around the world.</div><div>
</div><div>A decade on, the effects are still being felt, albeit subtly, and not the way proponents imagined, or the way actor-turned-governor Arnold Schwarzenegger, the chief beneficiary, so grandly promised.</div><div>
</div><div>Fundamental changes in the way California elects its leaders — a top-two primary system aimed at pushing candidates to the ideological center and an impartial redrawing of the state's political boundaries — will almost certainly change how Sacramento operates for years to come. Neither would likely have passed without Schwarzenegger sitting in the governor's office.</div><div>
</div><div>PHOTOS</div><div>10 memorable moments from the recall</div><div> </div><div>The upheaval helped deliver the state its current governor, Jerry Brown, a decades-long officeholder and scion of California's great political dynasty, whose worn-shoe familiarity appealed to voters in part because he was so unlike the upstart Schwarzenegger.</div><div>
</div><div>Less tangible, but also important, many say the historic election heightened awareness of state government and gave Californians a greater sense of empowerment, even if it failed to extinguish the flickering animosity toward Sacramento. For good or ill, the recall served notice on California's political class, and still looms as a threat over all those holding elective office.</div><div>
</div><div>"There's been a lot of momentum around fiscal and governance reform, particularly in the past five years," said Mark Baldassare, head of the Public Policy Institute of California, a nonpartisan think tank. "The desire to make changes started with the recall but didn't end with the recall."</div><div>
</div><div>FRONT PAGES</div><div>Browse The Times' coverage of the 2003 gubernatorial recall</div><div>
</div><div>Still, in many ways the special election proved a failure, especially measured against supporters' exceedingly high hopes.</div><div>
</div><div>The October 2003 ouster of Davis, a Democrat, was a primal response to the gridlock, partisan warfare, overweening special interests and mushrooming budget deficits that made the state capital a slough of dysfunction. "It was about changing the entire political climate of our state," as Schwarzenegger, a Republican, said in his first inaugural address.</div><div>
</div><div>When he left office more than seven years later — after sinking to the same abysmal poll ratings as Davis — the special interests were just as firmly entrenched in Sacramento, the partisan rancor was unabated and the budget deficit had more than doubled.</div><div>
</div><div>Among the most bitterly disappointed were those who had the greatest hand in forcing Davis from office and paving the path for Schwarzenegger's election, which was sealed in a separate vote on the same ballot.</div><div>
</div><div>"There was no substantive nuts-and-bolts change to California government, which was one of the main goals," said Ted Costa, the anti-tax crusader who launched the main petition drive that qualified the recall, sparking the brief, intense and sometimes zany campaign. Costa has largely retired from politics, owing partly to his frustration over the outcome of the recall.</div><div>
</div><div>That view overlooks Schwarzenegger's significant achievements, including an overhaul of the worker's compensation system, savings in welfare and healthcare programs, and meaningful pension and retirement concessions wrung from public employee unions.</div><div>
</div><div>He signed landmark legislation to fight global warming. Working with Democrats, Schwarzenegger also ushered the state into its most ambitious rebuilding program since the era of Brown's father, who oversaw the infrastructure development that still serves California half a century later.</div><div>
</div><div>RELATED</div><div>10 years later, Gray Davis strikes philosophical tone</div><div>
</div><div>Those accomplishments pale, however, when laid against the extravagant promises made during the recall. Schwarzenegger vowed to slash the size of government, stop deficit spending and end the pay-to-play culture of Sacramento, which he captured with stark simplicity in a TV spot: "Money goes in. Favors go out. The people lose."</div><div>
</div><div>None of those changes occurred, as Democratic, Republican and nonpartisan observers point out.</div><div>
</div><div>"In the larger sense of dramatically changing the direction of the state, we didn't accomplish what we'd hoped and expected," said Rob Stutzman, a GOP strategist who served as a Schwarzenegger spokesman during the recall.</div><div>
</div><div>Even the former governor has said he could and should have done more to address the structural problems — a boom-and-bust tax system, a crazy-quilt budgeting process — that continue to plague the state.</div><div>
</div><div>"It was a mistake," Schwarzenegger said in an interview before leaving office in January 2011. Instead of borrowing to paper over the deficit and add to the state's mountain of debt, he said, "I should've gone the other direction to early on solve the budget problem and use the political muscle I had that first year in office."</div><div>
</div><div>Still, even some let down by Schwarzenegger consider the recall a good and healthy thing.</div></div><div>=</div><div>human events bs:</div><div>...</div><div>January 2002, Davis signed off on an astounding 34% pay increase for state corrections officers. Just weeks later, the prison guards’ union contributed $251,000 to Davis’s campaign. Their contribution, argues former state GOP chairman Shawn Steel, “bought the prison-guard union of 26,000 a billion-dollar pay increase over the next six years.”In April 2003, Davis revisited prison spending in the light of the state’s $38-billion budget crisis. Rather than pare down the astronomical pay hike, Davis cut training for corrections officers by one-fourth, from 16 to 12 weeks.In June, the San Jose Mercury News reported a complaint by two state prison investigators that Davis was trying to close the prison internal affairs office in Rancho Cucamonga, even as internal affairs was investigating allegations of savage beatings against shackled prisoners. Legislators-including some liberal Democrats-are fighting the closure plans, which they see as an obvious favor to the union. The governor has portrayed the closing as a cost-cutting measure to save $1 million. Last month, the FBI got involved in the prison investigation.The 330,000-member California Teachers’ Association, on the other hand, received very different treatment when it failed to pay up. CTA President Wayne Johnson told the press in May 2002 that during a policy discussion in the governor’s office months earlier, Davis had pressured him to collect $1 million from union members and donate it to the governor’s re-election campaign. “Davis hit us up two or three times for a $1-million contribution,” Johnson told the San Francisco Chronicle. The union did not make the contribution, and Davis refused to back their demands for expanded collective bargaining rights regarding school curricula and textbooks. They did not get them.Davis’s top political advisor insisted at the time that there is “never a connection between contributions and policy.”The Chronicle reported May 2, 2002, on another controversy involving the California Public Employees Retirement System (CalPERS). Wealthy Democratic fundraiser Richard Wollack and the huge commercial real estate firm of which he is director, CB Richard Ellis, made $25,000 in direct contributions to Davis. Wollack also hosted a $2,500-a-head Davis fundraiser featuring former Vice President Al Gore. Simultaneously, CalPERS-whose executive board consists of prominent Democrats, some of them Davis appointees-decided to invest $100 million of the state pension fund in Premier Pacific Vineyards, which Wollack co-founded and where he serves as co-CEO. The Chronicle reported that it was the first time CalPERS had ever invested in an agribusiness.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">2</div><div style="text-align: left;">Bungled Energy Strategy</div><div style="text-align: left;">
</div></div>A combination of bad luck, incompetence, and greed doomed California’s experiment with electricity deregulation, but it didn’t have much to do with the universal media scapegoat, Enron.On the bad luck side, a drought reduced the amount of hydroelectric power available from the Pacific Northwest. A natural gas shortage later forced some utilities to demand higher prices to meet their expenses and keep the power coming.Also, California’s stringent environmental regulations, which make it nearly impossible to build new power plants in the state, made the state energy-dependent, leaving the door open for just such a crisis.But it was Gov. Gray Davis who signed off on $42 billion in vastly overvalued energy contracts in 2001. And it was Davis’s state energy traders who arranged for the state to pay prices for energy that were well above market.State Sen. Tom McClintock (R.)-then an unsuccessful candidate for state controller and now a gubernatorial candidate-sued last May to invalidate the contracts based on one negotiator’s blatant conflict of interest. Vikram Budhraja, a former senior vice president with Southern California Edison, was retained as a consultant to Edison International even as his firm was contracted by the state to negotiate California’s power deals with Edison’s subsidiaries.After the sweetheart deals were made, Edison’s stock surged. Among the beneficiaries was Budhraja, who bought Edison stock days after his consulting company received its contract to negotiate the state rates. He sold the stock eleven days later at a 40% profit, according to the Los Angeles Times. Budhraja’s financial disclosure forms indicate that he received more than $100,000 from EI while his state agency negotiated with them.State Attorney General Bill Lockyer (D.) refused to join the lawsuit, citing the fact that Budhraja had recused himself from some of the energy deals.Davis and some of his California apologists-including the members of the California Public Utilities Commission-are still blaming power suppliers and traders for “manipulating” the market and withholding power capacity. But the California Independent System Operator challenged this theory in a credible rebuttal last October. Moreover, even if the Davis defenders are right, it does not change the fact that Davis’s administration approved contracts for ridiculous prices.The state’s negotiators shocked one energy trading manager at the Bonneville Power Administration in Oregon, who was quoted in the Wall Street Journal in March 2001. “They agree to prices that make you wonder,” he said. “You’d at least think they’d check to see what the prevailing price is before throwing out their offer.”It also does not change the fact that Davis had the power to remove caps on residential energy prices, but failed to do so for purely political reasons. He thus removed economic incentives for both conservation and increased energy production. The San Francisco Chronicle recently defended Davis’s handling of the crisis by arguing “there was no public will to raise rates for consumers.” But this misses the point entirely. Instead of making residential consumers pay market prices for their own electricity-a move that could have cost him politically-Davis instituted random, rolling blackouts that created chaos and severe economic damage in many parts of the state. His failure to remove the residential energy price caps also meant that electricity rates had to be raised on businesses, further harming the state’s tax and employment base.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">3</div><div style="text-align: left;">Budget Deficit Deception</div><div style="text-align: left;">
</div></div>“California is not suffering a revenue shortfall. In the first four years of this administration, revenues have increased 25% while inflation and population combined have grown only 21%. The problem is that [general fund] spending has increased 40%.”These words are McClintock’s, and they provide the only explanation anyone needs for the $38-billion state deficit that was recently resolved through borrowing and budget trickery. The problem is a liberal state legislature and Gray Davis, who has repeatedly signed off on wild, irresponsible spending increases.Davis signed the state’s 2003 budget on Sept. 5, 2002. That budget only wiped out that year’s $23-billion shortfall through similar accounting trickery, but it was crucial to Davis’s hotly contested re-election campaign that he sign it and showcase purported spending “cuts.” In reality, the tough decisions about budget cuts were put off until after the November 5 election.Asked that day whether he would raise taxes after the election, Davis ducked. “I have no expectation one way or another,” he said.Just three months later, Davis announced that the budget deficit was actually $34.8 billion-roughly half the size of the state’s general fund and more than most states’ budgets. He then began drawing up plans to raise taxes.On September 27, Davis’s 2002 opponent Simon had predicted a $20 billion deficit for 2004. “We will soon, I predict, be looking back at the days when that $10 billion budget projection for next year’s deficit will look good,” Simon said, referring to an early fall prediction by the state’s legislative analyst.Davis responded by lashing out at Simon and other conservative doomsayers as “wrong.”Then, in mid-November, after the election, the Legislative Analyst predicted a $21 billion deficit. A month later, Davis finally came clean about the budget mess with an even higher number, fueling suspicions among many that he knew what was up all along.Former Republican State Assemblyman Howard Kaloogian wryly commented in a March 2003 op-ed, “There has never been a deficit in the Davis campaign contribution account.”<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">4</div><div style="text-align: left;">Job-Killing Family Leave Law</div><div style="text-align: left;">
</div></div>Davis signed California’s unique paid Family Leave law last September (just before his narrow re-election). This law, which goes into effect next July, allows workers to take up to six weeks of leave with 55% pay, capped at $728 a week. The law’s guidelines are very lax: A worker could conceivably take a few weeks off, with pay, when a minor illness strikes another family member.A fee imposed on all workers will finance the program. Business owners are jittery at the prospect of mass paid absenteeism. If many employees take full advantage of the provision, California employers will be forced to spend millions training temporary replacements, providing another good incentive for business to move to Arizona or Nevada.Taxpayers will also take a hit. Given its record in making budget forecasts, there is little reason to credit the Democratic legislature’s estimate that the program will cost $117 million per year. The state’s Economic Development Department is assuming it will cost $600 million per year, and the California Chamber of Commerce has warned it may carry a $1 billion per year price tag.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">5</div><div style="text-align: left;">Business-Destroying Workers’ Compensation Law</div><div style="text-align: left;">
</div></div>In February 2002 Davis signed a bill increasing maximum weekly workers’ comp benefits from $490 to $602 a week. By 2007, it will climb to $840, meaning that injured workers will be able to collect the equivalent of $44,000 per year for not working.Davis had vetoed similar increases three times in three years-but 2002 was an election year.Because of Davis’s law, the premiums employers pay for workers’ comp insurance are skyrocketing for California businesses. The Alameda Times-Star reported last week that workers’ comp in California is expected to cost public and private employers $29 billion, three times what it cost in 1995. And that is despite a drop in statewide claims.One national company, Costco, blamed California’s workers’ comp rules for its weak earnings performance this year: the company has only one-third of its workers in the Golden State, yet they account for two-thirds of its workers’ comp costs.In an interview with the San Jose Business Journal, state insurance commissioner John Garamendi (D.) recently said, “I think the workers’ comp system will collapse if we don’t reform it. . . .Virtually every business in the state is being clobbered by worker’s compensation cost increases. It’s a serious economic problem for the state.”Now, facing the wrath of business owners, Davis has begun talking about revisiting his own terrible legislation by capping medical costs for injured workers-ignoring the obvious problems of excessive liability and the unjustified doubling of benefits.State Sen. Chuck Poochigian (R.) of Fresno told the Sacramento Bee that Davis’s new plan “falls woefully short by failing to address the most significant problems including skyrocketing litigation costs, over-utilization of the system and subjective medical claims.”<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">6</div><div style="text-align: left;">Driver’s Licenses for Illegal Aliens</div><div style="text-align: left;">
</div></div>Last month, Davis promised to sign a bill allowing illegal aliens to apply for California driver’s licenses. In September 2002, Davis had vetoed just such a bill, stating correctly that it could help terrorists attack America.“The tragedy of September 11 made it abundantly clear that the driver’s license is more than just a license to drive; it is one of the primary documents we use to identify ourselves,” Davis said in a veto statement. “Unfortunately, a driver’s license was in the hands of terrorists who attacked America on that fateful day.”Davis’s flip-flop on this issue is one of the more blatant examples of his pandering-in this instance, to the Hispanic community.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">7</div><div style="text-align: left;">In-State Tuition for Illegal Aliens</div><div style="text-align: left;">
</div></div>On Oct. 11, 2001, Davis signed a bill to grant lower in-state tuition rates at California state colleges to illegal aliens who have attended at least three years of high school in the state. The regents of the University of California system followed suit instituting a regulation extending in-state tuition to illegal aliens in the state’s public universities.The law clearly contravenes a 1996 federal statute that bars states from granting such privileges to foreign nationals if they are not also extended to Americans from other states. In fact, Davis had vetoed a similar measure in 2000, citing that federal law. This in-state tuition rule not only imposes an additional burden on California taxpayers, but also empowers illegal aliens to take spots at California state colleges and universities that otherwise would go to American citizens.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">8</div><div style="text-align: left;">Cross-Dressing as Civil Right</div><div style="text-align: left;">
</div></div>Two weeks ago, Davis signed a bill imposing a heavy fine on employers who refuse to hire so-called “transgendered” persons-namely transvestites and transsexuals. Employers-including, for example, church bookstores-will now face fines of up to $150,000 if they try to fire or refuse to hire cross-dressers. The San Francisco Chronicle reported that in Davis’s new law, “Gender is defined as a person’s identity, appearance or behavior, regardless of whether that identity is the same as the person’s sex at birth. Employers would still be able to use dress codes as long as workers are allowed to dress as the gender they prefer.”The law follows the one Davis signed in October 2001 under cover of the recent terror attacks, granting many of the rights of marriage to homosexual partners, including the right to adopt a registered domestic partner’s children. Many conservatives have argued that this law represented an end run around Proposition 22, which stated that only marriage between a man and woman is valid in California. Prop 22 passed in 2000 with 61% of the vote. To further shore up his support from the gay-rights lobby, Davis may go further in eroding Prop 22 by signing a bill (AB 205) that essentially guarantees all the rights of marriage to registered homosexual couples.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px;"><div style="background-color: rgb(255, 255, 255); text-align: left;">9</div><div style="text-align: left;">Killed Proposition 187</div><div style="text-align: left;">
</div></div>In November 1994, 59% of California voters enacted Proposition 187 to deny state-funded education, welfare benefits and non-emergency health care to foreign nationals illegally in the United States.U.S. District Judge Mariana Pfaelzer, however, ruled the initiative unconstitutional in 1998. Republican Gov. Pete Wilson appealed, seeking an eventual showdown in the U.S. Supreme Court. But Davis opposed Prop 187, and when he took office he asked the famously liberal San Francisco-based U.S. Court of Appeals for the 9th Circuit to “mediate” the case between the state, which he now governed, and anti-Prop 187 activists. The proposition’s supporters-59% of the state’s voters-had no voice in the process. Davis “negotiated” a deal with the proposition opponents to drop the appeal and essentially nullify the law.As a result, the cost of social services for illegal aliens continues to drain funds from the state and from local governments.<div align="center" style="border: 0px; outline: 0px; margin: 0px; padding: 0px; background-color: rgb(255, 255, 255);"><div style="text-align: left;">10</div><div style="text-align: left;">Tripled the Car Tax</div><div style="text-align: left;">
</div></div>In June, Davis illegally tripled the state’s car tax by executive order.State law allows the state controller-not the governor-to raise the car tax, but only on a month-to-month basis, and only if the state lacks the cash or financing to reimburse local governments for lost revenues. Even then, the tax hike can only be for the exact amount that the state needs to reimburse local agents.None of those conditions were met in this case: the governor hiked the tax indefinitely to the tune of $4.2 billion this year, even though the state doeshave the cash on hand to reimburse local governments.Republicans, led by McClintock, are already challenging this power grab in court, and encouraging taxpayers to save their receipts for a refund next year.With Davis’s hike, the average household will now pay the state $390 each year-up from $127-for the privilege of owning a car, according to the state Department of Motor Vehicles.On August 12, Davis suddenly did an about-face and called for a repeal of his own illegal tax hike. “I never intended for this burden to fall solely on the motorists of California,” he said, as if he had not known who would be paying the car tax.Davis’s change of heart is easily explained: the increased car tax will be due almost simultaneously with the recall election-and almost every California household owns at least one car.</div><div>=</div>