Kathleen Davis, Associate Editor
Action-star-actor-turned-Republican-politician Arnold Schwarzenegger was sworn in as the 38th governor of California on November 17 after ousting former Democratic governor Gray Davis. Now in charge of the world's fifth-largest economy, Schwarzenegger has pledged to move forward swiftly in all of his major efforts, and he has a specific set of plans for the state's energy markets.
Devil in the details
"I will restore stability to our energy system and stimulate private investment in electricity generation and transmission," the governor's campaign Web site stated. Schwarzenegger has a six-point plan for doing so:
• He will reform the 13 state agencies with sway over the markets and streamline the effort into one focus to stimulate investment and reliability.
• He will create a regulatory structure based on "other states and the FERC standard market design" while eliminating incentives for "gaming" the regulatory system.
• He will have the state invest in natural gas and transmission capacity.
• He will encourage conservation. (This is mostly aimed at commercial and industrial customers as the implementation hinges on allowing "rates to move up and down with changing electricity costs.")
• He will create reserve requirements for generators.
• He will address "overpriced legacy power purchase agreements."
"Government mismanagement has contributed to an energy cost crisis in California, putting the state at a competitive disadvantage," Schwarzenegger stated through his Web site.
Among the specifics of the new governor's six-point plan is the elimination or reformation of the California Power Authority to "support a sustainable energy policy," the merger of the California Independent System Operator and the PX, the implementation of real-time pricing for large customers, and the requirement that utilities meet a minimum reserve or pay a stiff penalty.
Schwarzenegger concluded, "As governor, I will explore options for renegotiating or otherwise reducing the cost of the $43 billion of overpriced electricity power purchase agreements that Gray Davis signed."
The buzz
CAEM, the Center for the Advancement of Energy Markets, is one industry group applauding Schwarzenegger's plan, stating in a release that "California may be poised for a dramatic turnaround in electric policy as a result of the election of Arnold Schwarzenegger."
"Frankly, I was shocked when I finally read the statement [on the campaign Web site]," said Ken Malloy, CEO of CAEM. "I expected the typical drivel and generalizations so emblematic of campaign documents. What I found was a detailed, sophisticated assessment of California's energy situation with a clear game plan for implementation, completely embracing competition and reliance on markets."
In the November 10 issue of the Wall Street Journal, Vernon Smith, winner of the 2002 Nobel Prize in economics, co-authored what was essentially an open letter to then Governor-elect Schwarzenegger that stated, "Mr. Schwarzenegger has the opportunity to leverage a historical confluence of events—a dramatic political win, enduring resentment over the energy crisis, and a solution attractive to a range of stakeholders—to craft a dynamic energy system that puts customers first while setting the scene for investment, innovation and development."
While doing research for this article, I ran across an interesting and unusual option on the Governor-elect's Web site: I could apply for a job with the transition team.
No kidding.
So, after completing all my notes, I decided I could spare a few minutes to see if I could snag a coveted position.
And, while there are plenty of options to choose from in the areas of open positions—over 900, in fact—I will warn you about one thing: That online form is really long. This is going to take you more than five minutes. I guarantee it.
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Still, I was not daunted. I made it through "applicant name" with flying colors. Then came a toughie: "positions sought." Well, luckily, there were five options. First, I chose what I thought were two obvious positions for my qualifications: public advisor for the energy commission and a job with the "green team." But, that left three more spots. I thought it might be fun to be chief of the home furnishings bureau. (I've watched enough "Trading Spaces" to do those offices up in style.)
Two more positions to go: poet laureate and deputy director of the arts council. (Hey, I have an MFA in poetry writing I'll have you know. I am, sadly, actually qualified for at least the poet laureate position.)
After answering, as honestly as possible, a slew of questions about my politics, child support payments (if any), tax returns and potential spouses in government office, I finished my application and sent it off with fingers crossed.
A couple of weeks letter, I got a very nice letter from David Dreier, chairman of Schwarzenegger's transition committee. He assured me that I will be evaluated with "full consideration." Watch out Sacramento. Here I come—either to decorate or promote a solid, sustainable energy policy.
