Labor’s Plan to Resolve the California Energy Crisis

February 2001

Sharon Cornu, Communications Director, California Labor Federation, AFL-CIO

California’s energy crisis puts thousands of jobs at risk and hurts millions of consumers and workers. Utility workers face layoffs. Manufacturing workers are threatened by plant closings. Low-wage workers, middle-income households, and seniors have been hard hit by rate increases for nearly a year.

The cause of today’s crisis is a deregulation scheme that put unregulated out-of-state generators in control of prices and production. We support efforts by Governor Davis and legislators to ensure adequate power supplies at affordable prices. Such efforts are essential to California’s economic future.

The following 10 points of consensus were developed by California unions representing all regions and sectors of our economy. They are principles for united action and solid policy planning. We encourage all affiliates to endorse them, and to urge elected leaders to follow them, as we work together to resolve this crisis.
10 Point Plan

1. Create a California Public Power Authority to provide adequate reserves of electric generation capacity, including building of state power generation plants. Any plants financed by California taxpayers should be dedicated to serving Californians first. The existing workforce should be used for all operation, maintenance, and construction of power plants.
2. Utility companies must be kept from filing bankruptcy. In the event of financial underwriting or subsidy by taxpayers or ratepayers of utility companies, taxpayers and ratepayers should receive assets in return. Net undercollection costs should be shared by the utilities, independent generators and ratepayers. In the event of bankruptcy or severe service disruptions to businesses, all workers who lose jobs should be made whole. The state should contract back with regulated utilities to operate any state- owned assets. All collective bargaining agreements and successorship clauses should be recognized.
3. Utilities should be regulated, to the extent federal law permits, to provide reliable electric generation, transmission, and distribution.
4. Regulate plant maintenance procedures to coordinate necessary shutdowns and establish an inspection and enforcement mechanism to assure proper and safe maintenance.
5. Maintain the current permitting process, environmental, and labor standards for approval of future power plants. Emphasis should be placed on increasing transmission and natural gas line capacity to all regulated and municipally-owned utilities.
6. Revamp voluntary interruptions policy to protect large customers from insufficient notice and excessive number of interruptions, while allowing for planned and voluntary interruptions.
7. Direct access to unregulated energy marketers should be limited to large non-core users based on a fixed opt-out period. Regulated utilities must be able to plan for their power supply requirements. Pre-existing contracts must continue to be honored.
8. Fill the vacancies on the California Energy Commission with knowledgeable and pro-consumer and environmental appointments.
9. Increase the state’s commitment to programs that foster conservation.
10. In the event the energy crisis is not solved in the near future, the state should exercise its power of eminent domain to take control of power generating plants previously owned by the utilities as a way to force power generators to lower prices.

For more information see http://www.calaborfed.org/Legislation/energy-crisis.html.