San Diego Business Journal Inaction by FERC Could Lead to Prop. 13-Type Ballot Initiative in the Future

Californians must get real relief from high electric rates or they may rise in revolt.

That's what came out of a Nov. 14 meeting between Gov. Gray Davis and the Federal Energy Regulatory Commission.

The FERC met in San Diego as a follow-up to a hearing held Nov. 9 in Washington, D.C. Local leaders had called for additional discussions here to give San Diegans a chance to speak.

Davis, flanked by members of the California Public Utilities Commission and the California Energy Commission, told FERC regulators their original ruling didn't fix anything. Instead, it made matters worse.

"Your proposed solution to our energy crisis does nothing to lower prices for California consumers. Quite to the contrary, it is designed to bring our economy and our consumers to their knees," he said. "If that is your final solution, I predict you will spark a ratepayers' revolt."

Davis warned the revolt could come in the form of a ballot initiative in the same way anger over rising property taxes sparked passage of Proposition 13 in the 1970s.

Davis noted FERC's original ruling stated San Diegans were subject to "unjust and unreasonable" rates, but did nothing to alleviate those rates for customers of San Diego Gas & Electric Co.

Davis disagreed with claims from FERC members who said they did not have the legal authority to order refunds, despite its findings that the rates were unjust and unreasonable.

"We think it's imperative that you do so," he said. "If you don't do so, what was the purpose of making those findings in the first place?"

Davis urged FERC to take additional measures. Chief among them is to issue cease-and-desist orders to power providers engaging in price gouging, and to order refunds for San Diegans socked by high rates, he said.

Davis also urged federal regulators to impose hard price caps, which would remain in effect until a competitive market is able to emerge in California. Otherwise, San Diego will find itself in even worse shape next summer.

A third request was to allow the state to be the