California Supreme Court Puts Re-Regulation Proposition Back on the Ballot

Controversial Proposition 80, which seeks to re-regulate California's electricity market, should be put to a vote in the upcoming November 8 elections, according to the Golden State's highest court. The court's decision overturns a July 22 ruling of a lower court that would have kept Proposition 80 off of the ballot. The lower court ruled that Proposition 80 was unconstitutional on its face because it would expand the authority of the California Public Utilities Commission ("CPUC") to regulate the energy industry, a role that the court found to be reserved for the California Legislature under a constitutional provision giving the Legislature "plenary" authority over the CPUC. Not so, said the state's Supreme Court in a unanimous decision. Instead, the court held that Proposition 80 was not clearly unconstitutional and thus, the issue should be left up to the voters. However, the court managed to hedge its bets somewhat by saying that it could revisit the issue if voters approve the measure.



Drafted and sponsored by consumer group The Utility Reform Network ("TURN"), Proposition 80 would effectively re-regulate the California electricity market. In addition to expanding the CPUC's regulatory authority, the measure would roll back one of the few remaining central provisions of the state's 1996 deregulation law, direct access, and would prohibit large consumers not already doing so from purchasing their electricity from independent power marketers rather than from the state's investor-owned utilities. Proposition 80 would also mandate cost-of-service regulation for all of the state's retail energy-service providers. In the wake of the Supreme Court's decision, TURN has been proclaiming victory. However, the measure's opponents, including the Independent Energy Producers Association and Californians for Reliable Electricity, have pointed out that the Supreme Court could still strike the provision down as unconstitutional if it passes. [Case No. 05-169]